Progressive Grocer - November 2015 by ensembleiq

What’s in Store

Meijer’s flagship sets the stage for its other locations Page 24

Give to Get

Why cause marketing is good for grocers Page 104

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

©/TM/® The J.M. Smucker Company

Fido’s First Christmas

PG Pet tells how retailers can score with puppy needs, holiday treats Page 161

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

Multiple product forms and flavors offer all-day-long usage for the entire family! America's favorite1 peanut butter has a classic, creamy texture with 7g of protein per serving.

Add incremental purchases by offering convenient ways to enjoy peanut butter.

The fastest growing Jif segment1 now offers Natural Peanut Butter Spreads with a touch of honey, available in new 28 oz. and 40 oz. sizes.

Convenient tub, ﬂuffy texture, and exciting ﬂavors make it easy to snack with spreads.

With 85% less fat than traditional peanut butter, new Jif™ Peanut Powders expand category sales through new usage and new consumers.

Add excitement to the Hazelnut category with unique ﬂavors for expanded usage.

INCREASE CATEGORY AWARENESS WITH TARGETED MARKETING! Ask your sales rep about shopper marketing and promo opportunities available. 1 IRI MULO, Peanut Butter Category - 52 Weeks Ending April 19, 2015

©/TM/® The J.M. Smucker Company

What’s in Store

Meijer’s flagship sets the stage for its other locations Page 24

Give to Get

Why cause marketing is good for grocers Page 104

Fido’s First Christmas

PG Pet tells how retailers can score with puppy needs, holiday treats Page 161

Page 36 November 2015 • Volume 94 Number 11 $10 • www.progressivegrocer.com

Deli Cate

5 Year

tegory egory Captain

ars Running Running

Our track

record is

PROVEN.

November 2015

features

Volume 94, Issue 11

cover story

fresh food 132

in-Store bakery

Rise and Shine Distinctive breads and rolls make the department a true destination.

Store of the Month

Proving Ground Meijer tests new ideas at its fagship store that’s evolved to become its backyard lab.

104

Corporate SoCial reSponSibility

139

The Right Cause Trough giving, grocery retailers gain.

114

Store brandS

Private Eye Major retailers take a fresh look at their own brands.

grocery

produCe logiStiCS

Category ManageMent

Winning Game Plans Shopper-centricity is the ultimate prize in PG’s 2015 Category Captains Awards.

frozen & refrigerated 126 Meat

The Case for Meat Grocers are wise to ofer pricing and positioning that stress value and easy use.

118

Meal SolutionS

Easy Eats Shelf-stable solutions ofer quick preparation, satisfying fare.

Supply Chain Savvy Key trends in transportation and logistics transform produce shipments.

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

144

produCe Category Spotlight

The Surge in Citrus Year-round availability and high quality spur demand for juicy fruits.

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technology 150

Inventory replenIshment

The Future of Demand Forecasting Usage by grocers is lagging.

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equipment & design

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

154

seasonal DIsplays

Holidays on Wheels Mobile merchandisers go where the season’s action is.

operations 156

supply ChaIn

A Page From Other Playbooks Gartner’s Supply Chain Top 25 provides outside inspiration for grocers.

nonfoods 158

health, Beauty & Wellness

Pleasure Principle As family planning morphs into sexual wellness, grocers need to keep up.

161 pG pet

Holidays for Pets Help dog and cat owners celebrate with the right gifts and promotions.

| Progressive Grocer | November 2015

ADvErTisiNG sAlEs & BusiNEss Midwest Marketing Manager John Huff 224-632-8174 jhuff@stagnitomail.com Western regional sales Manager Elizabeth Cherry 310-546-3815 echerry@stagnitomail.com Eastern Marketing Manager Maggie kaeppel 630-364-2150 • Mobile: 708-565-5350 mkaeppel@stagnitomail.com Northeast Marketing Manager Mike shaw 201-855-7631 • Mobile: 201-281-9100 mshaw@stagnitomail.com Marketing Manager Janet Blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) jblaney@stagnitomail.com 630-364-1601 Account Executive/ Classified Advertising Terry kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@stagnitomail.com Advertising/Production Manager Jackie Batson 224-632-8183 • Fax: 888-316-7987 jbatson@stagnitomail.com Classified Production Manager Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com MArkETiNG & PrOMOTiON Director of Market research Debra Chanil 201-855-7605 dchanil@stagnitomail.com Audience Development Manager shelly Patton 215-301-0593 spatton@stagnitomail.com list rental The information refinery 800-529-9020 Brian Clotworthy reprints and licensing Wright’s Media 877-652-5295 sales@wrightsmedia.com subscriber services/single-copy Purchases 978-671-0449 or email at stagnito@e-circ.net

EvEnts • MEdia • REsEaRch • infoRMation uNiTED sTATEs MArkETs Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green

departments 10 EDiTOr’s NOTE: POWEr OF THE PEOPlE 12 PG PulsE 14 iN-sTOrE EvENTs CAlENDAr: JANuAry 2016 16 NiElsEN’s sHElF sTOPPErs/sPOTliGHT: BAkiNG suPPliEs/BAkiNG CHOCOlATE 20 MiNTEl GlOBAl NEW PrODuCTs: PAsTA, riCE AND NOODlEs 22 All’s WEllNEss: MAkE iT EAsy 166 WHAT’s NExT: EDiTOrs’ PiCks FOr iNNOvATivE PrODuCTs 168 THE suPPliEr siDE 170 THE lAsT WOrD: iN sEArCH OF rEliABlE sOurCEs

Jeff Friedman jfriedman@stagnitomail.com

CANADiAN MArkETs • Convenience • Pharmacy • Foodservice

President & CEO Harry stagnito Chief information Officer kollin stagnito svP, Partner Ned Bardic Chief Brand Officer korry stagnito vP & CFO kyle stagnito vP/Custom Media Division Pierce Hollingsworth 224-632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris Human resources Manager sandy Berndt Corporate Marketing Director Bruce Hendrickson 224-632-8214 bhendrickson@stagnitomail.com Promotion Director robert kuwada 201-855-7616 rkuwada@stagnitomail.com Director of Events ken romeo 224-632-8181 kromeo@stagnitomail.com Director of Digital strategy Matt McGuire 224-632-8180 mmcguire@stagnitomail.com Audience Development Director Cindy Cardinal

Arugula Salad with Pear Nectar Vinaigrette

Your shoppers ﬁnd this and other great recipes at goya.com

The ChefsBest® Excellence Award is awarded to brands that surpass quality standards established by independent professional chefs.

editor’s note by Jim Dudlicek

Power of the People

n this new age of shopper engagement, it’s the people that can make or break your operation, so it’s worth your time and efort to select the right ones. Tat was one of the overarching themes to come out of Progressive Grocer’s frst-ever Grocerant Summit last month, an exclusive two-day conference of retailers and suppliers focused on driving growth in supermarket foodservice. Te in-store experience is key to keeping satisfed consumers coming back again and again, and a well-schooled staf will set the tone. “Hire for attitude, train for skill” was the advice of Janet Hofmann, principal of HR Aligned Design, who stressed the importance of investing in a customer service-savvy workforce. It costs more to hire and retrain grocery talent that to retain it, Hofman noted, so stafng retention begins with great hiring decisions and continues with proper training, feedback, reinforcement and reward. Hofmann recommended looking to the hospitality industry — namely, full-service restaurants outside the grocery sector — to recruit a serviceoriented foodservice staf. On the fip side, a major failure with the fresh prepared shopping experience is stafng, specifcally what associates are doing and how they’re trained. Eric Le Blanc, VP of marketing, deli at Tyson Foods, in his presentation, “Te Consequences of Failure,” cited statistics showing that 41 percent of shoppers reported problems with their prepared food shopping experience in the past 90 days, and more than half of them used that as a reason to stop shopping at a particular store for at least a while. “Grocery competition is too intense for us to shrug of shopper disappointments,” Le Blanc declared. Strong leadership is therefore essential, and nothing brings a high level of culinary integrity to a banner like a corporate chef, according to a panel of retail chefs that included Jacki Novotny of Heinen’s, Deanna Stephens of Southeastern Grocers, and Charlie Baggs, who runs his own culinary innovations frm. And while some companies have looked to partnerships with celebrity chefs to lend gravitas to their foodservice oferings, Baggs suggested that with the right promotion and shopper interface, a banner’s own top chef could become a star. Te panelists asserted that retail foodservice needs the same level of detail and attention that restaurants receive. Such well-oiled teams would be in a great position to lead the grocerant movement. As noted by Penny Anderson of Te NPD Group, Millennials

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

With well-trained staff, attention to service and detail, and visually exciting presentations, grocerants can inspire shoppers and bring lift to the entire store. and families with children have driven restaurant declines; fast-casuals are leading in overall customer satisfaction, prompting other operators to up their games. Grocers have an opportunity with consumers who eat at home to save money, Anderson said, but must compete with other emerging channels, including “food-forward” c-stores geared toward convenience. She therefore recommended that grocers strive for the trifecta of customization, craveability and experience. Tat, in turn, will help grocers connect with consumers through a deeper understanding of mealtime, which is quality time that creates an emotional family anchor. Christopher Brace, CEO of Shopper Intelligence, in exploring shoppers’ emotional connection to “Dinner in America,” asserted that retailers must communicate with shoppers by understanding the emotional triggers behind their shopping and consumption behavior. Chef Steven Petusevsky, speaking on “Forging Your Culinary Path,” noted that a good grocerant program “can make all the diference for a supermarket.” With enthusiastic culinary-minded leaders, well-trained staf, attention to service and detail, and actionable insights on consumers’ relationship with food, grocery retailers can make foodservice a repeat destination for shoppers. And with delectable and visually exciting presentations, grocerants can inspire shoppers and bring lift to the entire store. PG Jim Dudlicek Editor-in-Chief jdudlicek@stagnitomail.com Twitter @jimdudlicek

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What’s trending on Progressivegrocer.com …

While the embattled Haggen and A&P remained high-interest topics, Brookshire Grocery Co.’s exploration to sell, J.K. Symancyk’s departure from Meijer, and Walmart’s recent round of headquarters layoffs and executive reorganization highlighted the latest roundup of top-trending stories on Progressivegrocer.com from Sept. 15 through Oct. 15.

Haggen Files Sale of $12M in Assets Back to Albertsons-Safeway

http://bit.ly/1GKEl1Q

Brookshire Grocery Co. Exploring Sale: Report http://bit.ly/1LunENJ

Walmart Reshuffles Executive Decks http://bit.ly/1PxllLI

Whole Foods to Cut 1,500 Jobs

Walmart Cuts 450 HQ Jobs

http://bit.ly/1LXFDbv

http://bit.ly/1L1RPam

J.K. Symancyk Departing Meijer for Academy Sports + Outdoors http://bit.ly/1Kedfk4

Smart & Final to Open 100 Stores Over Four Years http://bit.ly/1FsdzQy

Supervalu’s Sam Duncan to Retire Feb. 2016 http://bit.ly/1GlSF0H

Chris Litz to Become Publix VP of Fresh Product

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

http://bit.ly/1JVqiqm

Give her something to be thankful for all year long.

Invigorate milk sales and help improve the lives of families in need.

Call today to plan your 2016 activation with The Great American Milk Drive.® 1-800-945-MILK | retailers@milkpep.org

January 2016 is... National Hot Tea Month National Oatmeal Month National Slow Cooking Month National Soup Month

New Year’s Day National Bloody Mary Day

E-mail your calendar submissions to

National Cream Puff Day

awolfe@stagnitomail.com

National Chocolatecovered Cherry Day

It’s National Spaghetti Day, so promote pasta, sauce, cheese and, if you carry it, wine.

National Whipped Cream Day. Offer discounts on ready-made and DIY varieties.

National Bean Day Make sure the bakery and the cookie aisle are well stocked for National Shortbread Day.

National Tempura Day. Feature batterfried tidbits in your prepared food area.

Celebrate National Hot Tea Month by offering samples of traditional and herbal brews.

For National Oatmeal Month, share ways to use the porridge as an ingredient on your Facebook page.

National Hot Buttered Rum Day

National Gourmet Coffee Day

National Bittersweet Chocolate Day. How about a demo using bittersweet chocolate to make hot chocolate?

NRF’s Expo begins and continues through Jan. 19.

National Peanut Butter Day

National Hot Toddy Day. Set up a display to make apple hot toddies: apple cider, honey, lemons, cinnamon sticks and cloves.

Martin Luther King’s Birthday (Jan. 15, 1929) observed.

Invite customers to warm up with free samples that celebrate National Soup Month.

National Glazed Doughnut Day

National Popcorn Day. Build a display of poppers, popcorn, toppings and decorative serving bowls.

Make sure your Valentine’s Day inventory and promotions are ready to go.

For National Gluten-free Day, promote gluten-free treats throughout the store.

National Cheese Lover’s Day

National Chocolate Cake Day

National Hot Chocolate Day

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

National Hot Pastrami Sandwich Day. Run a special in the deli department.

National New England Clam Chowder Day. Sample this perfect cold-weather pleaser.

National Blueberry Pancake Day

National Freshsqueezed Juice Day National Strawberry Ice Cream Day Post on social media an indulgent smoothie recipe including both as ingredients.

Plan a cooking class to promote National Southern Food Day.

National Corn Chip Day. Feature corn chips with salsa, guacamole and other dips.

International Hot and Spicy Food Day. Ask customers to pin their favorites to your Pinterest page.

FMI Midwinter begins and continues through Jan. 26. National Pie Day – make sure the bakery is well stocked.

30 0

National Croissant Day. Bake them early — the aroma will draw customers to the bakery.

So profitable, it’s nutty. When you put our pistachios on the floor, wonderful things happen. One of the most profitable items you can display, W∑nderful Pistachios offer more profit per square foot than popular moneymakers bananas and peanuts. Maybe it’s our multimillion-dollar national TV campaign that gets people through your door. Or maybe it’s our eye-catching displays that make sure they have a handful of pistachios when they walk away. Either way, W∑nderful Pistachios always shell out. Scientific evidence suggests but does not prove that eating 1.5 ounces per day of most nuts, such as pistachios, as part of a diet low in saturated fat and cholesterol may reduce the risk of heart disease. See nutrition information for fat content. ©2015 Wonderful Pistachios & Almonds LLC. All Rights Reserved. WONDERFUL, GET CRACKIN’, the Package Design and accompanying logos are registered trademarks of Wonderful Pistachios & Almonds LLC or its affiliates. WP13965

Front End

Market Intelligence By The Numbers GroCErY’S ToP 10

Shelf Stoppers

Baking Supplies

Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Aug. 29, 2015)

Corn/Potato Starch Coconut Fruit Pectins Baking Chocolate Capers Cocoa Baking Powder Baking Soda Yeast-Dry Croutons

Total Category

Sales % Change Dollars (Millions) 2015 2014 $27.6 2.0% 5.0% 50.4 3.5 4.1 25.0 -9.8 3.6 142.8 30.6 3.4 25.0 1.4 2.4 50.6 3.8 2.4 31.4 -0.5 2.1 42.4 -11.8 0.1 42.4 -7.0 0.0 160.8 0.4 -0.5 $1,844.1

-1.8%

% Change 2015 1.8% -0.8 -11.6 23.0 -0.4 -0.3 -1.6 -11.9 -6.7 -0.6

Units 2014 1.6% 3.4 0.3 9.3 0.4 4.1 -0.4 0.5 0.3 -1.2

-3.3%

-1.7%

-1.8%

NielseN’s Spotlight Consumption Index: Baking Chocolate LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Baking is mainly a family affair, as demonstrated by the higher consumption of baking chocolate among families with children, especially in cosmopolitan centers, affluent suburban spreads and comfortable country settings, where disposable income is presumably more available to fund culinary forays into layer cakes and brownies. As for established couples, empty nesters and senior couples living similar lifestyles, many may be indulging their still-active sweet tooth with visiting family members such as grandkids.

CroSS-MErCh Candidates

Modest Working Towns

Plain Rural Living

Total

wITh ChILDrEN: startup Families

159

118

216

120

small-scale Families

135

133

Younger Bustling Families

177

144

103

Older Bustling Families

169

166

173

123

141

Young Transitionals

102

independent singles

senior singles

established Couples

157

125

102

empty-nest Couples

124

146

152

109

121

senior Couples

120

133

130

107

115

Total

132

100

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

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

Very High Consumption (150+)

High Consumption (120-149)

Average Consumption=100

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

• Yogurt • Fresh Produce • Cottage Cheese, Sour Cream and Toppings • Breakfast Food • Stationery and School Supplies • Nuts • Cheese • Coffee More oNLINE Dig up actionable e research and additional al intelligence at Progressivegrocer.com

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Progressive Grocer features highlights of its inaugural Grocerant Summit, including a snapshot of Groceryâ&#x20AC;&#x2122;s Place in the Changing Foodservice Landscape, The Consequences of Failure in connecting with consumers before they shop or meeting expectations in-store, and how to defne your bannerâ&#x20AC;&#x2122;s grocerant growth objectives and develop strategies for gaining a seat at the American Dinner Table. Hosted by

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Penny Anderson Director The NPD Group

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Mintel Global New Products Database Category Insights

Pasta, Rice and Noodles MaRket OveRview The dry pasta, rice and noodle market in the United States has performed well over the past few years, and is predicted to increase by 6 percent during 2013-18, reaching a total of $7 billion.

For more information, visit www.mintel.com or call 800-932-0400.

In line with the current emphasis on wellness, ancient grains with a healthy halo, including buckwheat, amaranth and quinoa, and sprouted grains, which have had their germination process activated by soaking, thereby increasing their gamma amino butyric acid (GABA) content, are starting to be used in more pasta, rice and noodle products.

key issues Attitudes about food are increasingly changing in North America as consumers are becoming more conscious about what they eat. For instance, nearly 40 percent of U.S. consumers cite whole grains as the most important nutritional attribute they seek when purchasing dry pasta, rice and noodles, followed by low sodium, high fiber and low fat. In light of this, brands have begun to address various nutritional attributes in their products.

Additionally, flavor innovation is taking place in the category. Although unflavored/plain varieties still dominate, accounting for 64 percent of total new product launches in the past year, cheese- and vegetableflavored items, as well as products incorporating ethnic flavors, are beginning to gain traction.

What Does it Mean? Pasta, rice and noodles positioned with specific health benefits, such as high-fiber or low-sodium products, have strong appeal, considering that many consumers are wary about what they eat. The rise in consumption of whole grains reflects the strong motivation

among consumers to switch to healthy alternatives, while lowsodium pasta, rice and noodles are likely to be well received among seniors who are susceptible to hypertension, so communicating the benefits of low-sodium products will be key for brands

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

operating in this segment. Given the huge potential for further expansion of flavored pasta, rice and noodles, consumers open to experimenting with a wider variety of flavors and tastes can be targeted with ethnically inspired innovations.

Registered dietitians are a wonderful resource in recipe design relative to healthful meal solutions.

All’s Wellness By Molly McBride

Make it Easy Harried shoppers appreciate quick meal ideas.

t seems that consumers are all on their way to somewhere else when they’re right in the middle of something. Grocery is an industry particularly subject to this rushed pace: Our customers want quality, taste, smell, appeal and nutrition in a snap. As retailers, we should consider this cohort of customers a focus and adapt meal solutions for those making it work on a tight schedule. When developing meal ideas, you should frst consider price point and lifestyle. Although “time is money,” and therefore convenience may mean an infated register receipt, using various brands, vendors and even ingredients can really change up the price tag. Consider your lower or value tier in creating meal ideas for on-the-go customers who are a little more sensitive to price. Tat said, generating meal solutions with natural or organic ingredients may resonate well with health-conscious customers less prone to “sticker shock.” Further, more indulgent, culinary-focused consumers could opt for true masterpieces that are made with innovative cooking styles and leave room for more creativity at home after purchase.

The Dietitian’s Role Registered dietitians are a wonderful resource in recipe design relative to healthful meal solutions. Te dietitian can pair up with a chef, or work alone to formulate diverse dishes that can extend the use of a meal’s ingredients. For instance, a large tub from the deli of ready-to-eat baked beans can be eaten solo, made into an easy pumpkin chili, puréed for a chip or

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

veggie dip, or thrown on a tostada, while a generous helping of cooked pasta from the deli case is perfect for primavera, Alfredo or a noodle casserole. Multiple easy recipes using minimal yet favorful ingredients can be advertised on packaging, nearby signage, takehome cards or even your company website. Te dietitian also has a terrifc grasp on allergens and free-from foods to facilitate decisionmaking at mealtime. Whether by medical necessity or dietary preference, customers may need to have certain meal components emphasized or eliminated. Te “Big 8” (wheat, soy, egg, milk, fsh, shellfsh, tree nuts and peanuts) encompass 90 percent of all food allergies, so ofering some alternatives (brands or dishes with rice four instead of wheat four, or seeds instead of nuts, etc.) can garner more attention from this community. Additionally, those avoiding gluten, lactose or animal ingredients could beneft from some creative dishes that address such restrictions. Finally, fast meals are available for the center or perimeter aisles in the forms of meal kits and par-baked/pre-cooked items. Whether DIY coleslaw in the produce area, with bagged cabbage and slaw pouches; par-baked baguettes in the bakery, which can be warmed to accompany salad; or heat-and-serve full meals, they certainly make life simpler. Other ready-to-eat answers, including reduced-sodium and low-fat selections, reside in the frozen section: Entrées, sides and vegetables can be promoted alongside grab-and-go or easyto-make dressing mixes. Customers continue to demand more from their retailers in terms of shopping experience. Teir fastpaced lives and long to-do lists sometimes equate to less opportunity for meal preparation and consumption. Create displays that acknowledges this time crunch but make an exciting meal presentation, all while accounting for price, lifestyles, recipes, nutrition, ingredients, food intolerances, preferences and the assembly needs of your busy customers. PG Molly McBride, RD, LD, is Cincinnati-based Kroger’s corporate dietitian.

Store of the Month

Meijer Knapp’s Corner

Proving ground

Our Retailer of the Year tests new ideas at its flagship store that’s evolved to become its backyard test lab. By Jim Dudlicek and Meg Major

rom click-and-collect grocery shopping to new foodservice ideas to emerging store-within-astore concepts, Meijer’s Knapp’s Corner fagship store is where it all starts. As the Michigan-based supercenter retailer’s fagship store and well-oiled test bed, Knapp’s Corner’s proximity to Meijer’s Grand Rapids headquarters — along with a seasoned and unfappable store management team — makes it an ideal setting for the company to try out and tinker with the most impactful ways to build and sustain meaningful customer connections. Radically remodeled as part of a $160 million capital investment purse established in 2013, which included six ground-up supercenters and fve major remodels, Knapp’s Corner showcases a slew of new concepts and department redesigns, as well as a completely new exterior and an expanded fresh food area, all of which, in varying degrees, infuence the look of Meijer’s other new stores and future remodels. “A supercenter, by default, makes it important for us to continually challenge ourselves about how to deliver great service,” says Hank Meijer, company co-chairman. While the rebuild didn’t add square footage to Knapp’s Corner’s footprint, the redesigned interior layout has resulted in increased selling space. A full range of products across the full retail spectrum is integral to the Meijer shopping experience, but the fresh food presentation here is truly the centerpiece.

Screaming Fresh “You come in the food side, and it screams fresh,” declares Mark DeVries, Knapp’s Corner store director, a 40-year Meijer veteran. Meat and produce are the primary support pillars of the fresh Photos by Vito Palmisano

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

TEAM KNAPPâ&#x20AC;&#x2122;S CORNER From left: Mark Saczynski, fresh line leader; Emily Wood, bakery team leader; Mark DeVries, store director; Paul Mousseau, meat team leader.

Store of the Month

Meijer Knapp’s Corner

Lovin’ the oven the in-store bakery offers custom and everyday cakes and cookies, and bakes fresh bread four times daily.

journey — as well they should be — as the store’s top two departments. Featuring a single-tier Certifed Angus Beef (CAB) program, the full-service meat department is stafed by in-store butchers providing custom cuts to bolster its shift to a more traditional butcher-shop environment.

“Part of being progressive is retaining and investing in areas that shoppers still want, which many have walked away from and where we feel we can make a diference, such as in fresh meat,” Hank says. “We’re still building a trade [occupation] for meat cutters.”

in cooperation with

F RUC H T H A NDEL MAGAZINE

Messe Berlin North America 520 William Street · Suite E Fredericksburg · Virginia 22401 Tel +1.540 372-3777 Fax +1.540 372-1414 berlin@b-for.com

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

Store of the Month

Meijer Knapp’s Corner

Meijer Knapp’s Corner 1997 E. Beltline N.E. Grand Rapids, MI 49525 Grand opening: Aug. 19, 1997 Total square footage: 233,000 Selling area: 178,303 square feet SKUs: 350,000-plus Employees: 200 to 250 Checkouts: 19 staffed, 18 self-scan Hours: 24/7, closed only on Christmas Day

Te grocer’s fresh meat prowess is clearly paying of, as evidenced by Meijer’s recent recognition as the CAB brand’s 2015 Retailer of the Year.

Vista of Freshness Te produce department features a brightly colored wall of produce and fresh-cut fowers, creating a vista of freshness, with some 600 varieties of fresh fruits and vegetables. Te in-store bakery boasts an assortment of custom and everyday cakes and cookies, and bakes fresh bread four times daily, while the service deli ofers extensive choices, refective of shifting customer demographics, alongside multiple solutions for family meals, which allow customers to purchase fresh, madeto-order sandwiches, sushi, pizza and more. Tere’s café seating inside and out, and the meal solution area features window views so shoppers can see product being made by hand, including meats, bread and pizza. Signage like “Dinner Made Easy” and “Fresh Food Every Day” further drives the message home. An aptly set wine display ofers pairing suggestions near the stafed cheese island, where a sign encourages shoppers to “Ask Our Cheese Steward” for advice on an array of specialty items from around

wasabi lobby The sushi station helps to address shopper demand for more diverse menu choices.

the world. Nearby, a bar of olive oil and vinegar selections enables customers to taste selections and fll their own bottles.

Differentiation begets Motivation Upgrades to the health, beauty and wellness department include wider aisles, lower illuminated shelving and enhanced signage. Te pharmacy features two drive-up windows and an expanded interior to accommodate an enhanced consultation room with frosted doors, additional windows, and larger waiting and pharmacist consultation areas. Additionally, a hearing center assists customers who are purchasing hearing aids

November 2015 | progressivegrocer.com |

Store of the Month

ProGreSSive concePtS Knapp’s corner reflects Meijer’s commitment to specialty cheese (above left), a fresh pizza program for prepared foods, and a storewithin-a-store partnership with Sketchers.

Meijer Knapp’s Corner

and allows them to meet with a specialist who will check their hearing and related devices. Enhanced customer interaction is a key focus of Meijer’s pharmacy operations. “An important part of where we’re diferent is the investment we make to every department as its own business, particularly those that have high household penetration, such as pharmacy,” afrms Hank. Tis includes the retailer’s free prescription program, as well as clinical services and immunizations designed to promote family health. “Te basic motivation for all that we do begins with food and drug, which really drives trips,” he adds. “But we also strive for diferentiation in general merchandise departments, with quality and value.” Te home area boasts a boutique design with vibrant displays of towels, bedding and housewares, while the apparel departments feature a “shop” concept with 12-foot walls and special lighting to highlight products, along with updated ftting rooms.

Sketching Bright Progress Knapp’s Corner features the retailer’s frst Sketchers store-within-a-store shoe department. Te 804-square-foot concept shop, piloted here to enhance

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

the shoe-buying experience, is rolling out this fall to four other Meijer stores in Greenwood, Ind.; Midland, Mich.; Marysville, Ohio; and Grafton, Wis. Noting that dedicated ambient lighting and sound help immerse shoppers in the experience of a standalone shoe store, Hank says the Sketchers concept shops — which feature four video screens to present product information and lifestyle news — “strengthen our commitment to customers and give families a convenient place to shop for shoes together.” Another bright spot amid Meijer’s transformative in-store oferings is its partnership with East Cleveland, Ohio-based GE Lighting to help shoppers navigate the many light bulb options currently available. Indeed, with incandescent light bulbs being phased out, there’s much more involved in the customer purchase decision than choosing light bulbs based on wattage alone. As such, Meijer sought to help enhance the customer experience for a category that’s become much more technologically advanced. As the frst retailer in the country to partner with GE on this type of program — which required a complete remodel of the lighting aisle — the brilliant collaboration has helped make

Store of the Month

SPIRITED SUCCESS Beverage alcohol has been an area of significant investment for Meijer — so much so that the company is the largest retailer of beer and wine in the state of Michigan. The store features numerous varieties of home-state products, as well as single batches of some liquors created exclusively for Meijer.

Meijer Knapp’s Corner

Meijer’s lighting aisle experience simpler and more intuitive. Not only can customers choose among halogen, covered CFL, CFL and LED models, they also have access to detailed information through displays and TV monitors to help them make a decision on the right option for them in a “good, better, best” framework. “It’s an exclusive partnership that represents a point of discovery for the shopper, as well as being mutually benefcial for both Meijer and GE, as it provides opportunities for us to grow together,” Hank points out. “As a midsize retailer, we’re still large enough to move scale, particularly in the late fall. Daylight Saving Time is one of the most popular seasons for light bulbs at Meijer stores, which traditionally see category sales increase by up to 40 percent in the weeks surrounding the end of the time period.”

Seasonal Backing Seasonal selling events are major for Meijer, because of their ready-made ability “to provide a way to take fresh into GM and apparel with visual cues such as colors, fabrics and themed assortments,” explains Hank.

Local Motion Meijer is dedicated to the products of its home state and the regions in which it operates, spending up to $100 million with local growers, mostly in Michigan and Ohio. The Grand Rapids, Mich.-based grocer works with more than 125 local growers — up 25 percent during the past two years alone — within its six-state footprint, and of those, more than 70 are in Michigan. For example, Meijer annually sources more than 1 million pounds of Michigan asparagus and nearly 4 million pints of Michigan blueberries. The company also sources Michigan-grown on-the-vine tomatoes during all four seasons of the year, and sweet peppers nearly year-round. In addition, Meijer partners with the Michigan State University Product Center for Food-Ag-Bio. In 2015, 16 small businesses with Michigan-made grocery items will appear on the chain’s shelves state-wide. This year’s lineup will include strawberry syrup by Jessica’s Natural Foods in Birmingham; walnut and almond granola from Pure Blend Granola in Clawson; hot salsa from Mrs. Pruitt’s Cha-Cha Salsa in Detroit; ginger teas from Foods for Thought in Honor, and from Sweetwaters in Ann Arbor; and multigrain flatbread and pizza crusts by Easy Artisan Bread in Tecumseh.

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

On the day of PG’s visit in late August, the store was beginning to wind down its annual back-tocollege selling event, and was in the thick of its back-to-school selling season, both of which are integral to Meijer’s autumn in-store eforts. With back-to-school factoring as one of its key seasonal campaigns, Meijer hosts more than 20 Meijer Mania events for colleges and universities across Michigan, Illinois, Ohio, Indiana and Kentucky. Te retailer’s partnership with a variety of local institutions of higher learning aims to help ease the transition for incoming college freshmen. From midAugust through early September, the chain brings students from campuses to local Meijer stores for the late-night events, which include contests, prizes, free samples, DJs and photo booths. Meijer began throwing in-store parties for freshmen about a decade ago to give students a chance to get to know their peers in a fun environment, and to introduce the Meijer brand to those who may not have grown up shopping at the Midwest supercenter — some of whom may learn how to pronounce the retailer’s name for the frst time. Te high-energy events generate ample interest among students, who are known to showcase their creativity and school spirit on social media. In total, an estimated 40,000 students — about 1,700 freshmen per event — will bus from campus to their local Meijer store location for a night of festivities. Typically, a DJ will get the crowd pumped up while students participate in interactive games and contests, snap pictures in the photo booth, and stock their carts with snacks and school supplies. Meijer also provides samples and coupons, and occasionally hosts big-ticket giveaways.

Trend Factory Last April, the Knapp’s Corner store piloted Meijer Curbside, a click-and-collect service that has been revamped based on customer feedback. More than 40,000 of the most commonly

shopped-for items are available on Meijer.com through this service, which ofers the convenience of online ordering and drive-through pickup. Te service enlists specially trained team members to hand-select every item in a customer’s order and shop according to special instructions and personal preferences. With more than 75 percent of weekly orders

coming from repeat customers, Meijer plans to roll out a program expansion soon. Knapp’s Corner is home to other innovations as well. It was constructed to LEED-compliant standards, which included reclaiming the steel and concrete that was removed from the existing building and will be recycled. Additionally, the refrigeration compressor racks will be replaced with a new,

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Store of the Month

Meijer Knapp’s Corner

briGht idea the Ge Lighting destination aisle helps shoppers navigate evolving bulb technologies.

more energy-efcient system. Meijer was an early adopter of self-service checkout; there are 18 self-scan lanes at Knapp’s Corner. “Tis represents exceptional service for some customers and limited service for others,” Hank notes, “but we took the time from the outset to invest and help customers become comfortable with the technology,” which he says will remain a work in progress, not only for Meijer, but for all retailers, given the fast pace of technology and ever-changing customer preferences.

Simply Give hits New Milestone Meijer’s fall Simply Give campaign generated more than $3 million for food pantries throughout the Midwest — the most in the program’s history. The grocer’s customers donated more than $809,000 during the fall Simply Give campaign that began in late July during the second annual Meijer LPGA Classic presented by Kraft. That commitment to supporting hungry families, combined with a donation from Meijer, raised the fall campaign total to more than $3 million, making it the most successful campaign since Simply Give began in November 2008. “We cannot thank our customers, team members and food pantry partners enough for continuing to rise to the challenge and help us feed hungry families in the communities we serve,” says Co-chairman Hank Meijer. “It’s inspiring to see this level of engagement.” The Grand Rapids, Mich.-based retailer began its Simply Give program as a way to help local food pantries throughout

Overall, Meijer has kept its shopping experience on trend for customers, with Knapp’s Corner serving as a shining example for the company’s other 220-plus stores. Of course, some things really never change, like the basics of what people want from their local retailer: good selection, good quality and a good value. Comfort food helps, too. As Hank remarks, “While trends come and go, we still sell a lot of doughnuts.” PG

the Midwest achieve their mission of feeding hungry families. Thanks to the fall campaign, which ended in midSeptember, Simply Give has generated more than $18.6 million for those partners to restock their shelves and feed hungry families. The total includes an estimated $750,000 donation from the Meijer LPGA Classic to the Simply Give program. But more importantly, those donations stay local, according to Janet Emerson, Meijer’s EVP of retail operations. “We know how important it is to our customers that their generous donations remain local,” Emerson notes. “That’s why each of our stores partners with a food pantry in their community during the Simply Give campaigns.” During each of Simply Give’s three annual programs, customers are encouraged to purchase a $10 Simply Give donation card upon checkout. Once purchased, the donation is converted into a Meijer Food-Only Gift Card and donated directly to a local food pantry selected by the store. “Hunger is a problem that continues to increase in all of our communities,” Hank says. “The Simply Give program gives everyone a chance to work toward ensuring no one has to live without food.”

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

It’s P∂M Time. Go Crazy!

It’s time to stock up on P∂M P∂MS, P∂M Wonderful 100% Pomegranate Juice and P∂M Wonderful fresh pomegranates and watch your sales grow. P∂M will be supported by a multimillion-dollar marketing campaign with in-store POS, promotional support, a P∂M family FSI and an anticipated Crazy Healthy 1.5 billion PR impressions. To sweeten the deal, P∂M Wonderful is spending over twenty million dollars on TV – the biggest media buy in our history. And with 62% of P∂M Wonderful consumers cross-purchasing P∂M fresh products, you’d be crazy not to join our Crazy Healthy family. To order bins and take advantage of the largest merchandising team in produce, contact CustomerService.POM@Wonderful.com or call 877-328-7667.

Winning game PlanS Shopper-centricity is the ultimate prize for the winners of PG’s 2015 Category Captains Awards. By Jim Dudlicek, Bridget Goldschmidt and Jenny McTaggart

ell the sizzle, not the steak. Tis catchphrase, coined by stockbrokers in the 1980s, is taking on an almost literal relevance in the current era of grocery retailing. Supermarket shoppers don’t just want the steak — they also want to know how to prepare it, what’s the best cut for a specifc occasion, how to garnish it, what else to eat with it, what to drink with it, how to present it. Te retailer that can deliver on all of that in the most efective manner — whether brick-and-mortar, e-tailer or hybrid — is going to wind up the winner. Te concept of category management is undergoing a historic transformation. Te cutting-edge concepts that

emerged some 20 years ago are being rewritten to take better advantage of the advancements in data collecting, technology and shopper marketing that have emerged in the past two decades. Retailers and suppliers need to look beyond the aisle toward shopper-centric solutions that encompass multiple departments through creative cross-merchandising. Te idea of occasion-based retailing to satisfy specifc need states — from snacks to parties to the evening meal — is the new order of the day. Te rise of multiple new channels that have tipped the scales away from traditional supermarkets’ long-held dominance over grocery shoppers make such innovation a must for retailers to remain relevant in an age when consumers want it now, and they want it their way.

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

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Category ManageMent In their 19th year, Progressive Grocer’s Category Captains awards honor CPG companies for category management prowess, demonstrated through their partnerships with grocery retailers. Tis year, there were 80 total winners among those selected as Category Captains, our top honor, and Category Advisors, our honorable-mention designation.

Creating Destinations In every department of the store, suppliers continue to show their understanding of retailers’ needs to address shopper demands and ofer innovative ways to achieve them, elevating the visibility and relevance not simply of their own brands, but also of their entire categories and, increasingly, other categories store-wide. As retailers and suppliers work to further unravel the mysteries of Big Data, shopper analytics are becoming an increasingly important guide on how to deliver solutions. Excelling with insights are brands like Tyson in deli prepared foods, Idahoan in center store, Smucker’s in organic juices and Pharmavite in vitamins and supplements. Destinations are a growing theme. For example, Bimbo USA is building sales in the bread aisle for its retail partners through customized assortments. Gallo Winery is scoring with store-within-astore merchandising. Smucker’s is generating new excitement for baking mixes with occasion-based strategies. Kellogg’s ofers its retailers a Healthy Living destination within the frozen department, where a boost is defnitely needed. And Nestlé Purina is helping re-establish the pet aisle as a destination in the grocery store. Meanwhile, in a mature category like canned tuna, Bumble Bee is leveraging trends for snacking, protein and variety with new favors and convenience packaging. Health and wellness continues to rise as a need state in multiple departments. Enjoy Life Foods, now backed by new owner Mondelez International, demonstrates leadership in free-from foods, helping its retail partners engender loyalty among allergensensitive consumers. Fresh Express is driving the bagged salad category with functional products. Abbott and Bayer are creating need-based destinations throughout the in-store pharmacy. Working together to understand consumer behavior is a crucial element for retailers and manufacturers to deliver sustainable category growth. Such partnerships will be essential for grocers to remain relevant and generate excitement for a consumer base that increasingly demands turnkey solutions that transcend traditional aisle boundaries.

Methodology Progressive Grocer’s annual Category Captains competition applauds the outstanding category management initiatives implemented in the retail grocery sector over the 12-month period ending Sept. 8, 2015. The list of winners reflects some of the best strategic thinking and execution in the category management field, as revealed in the winning companies’ summaries on the following pages. Our Category Captains awards program is predicated on the accuracy and completeness of the entries submitted for consideration, all of which are weighed on an equal footing. As such, the best entries not only deliver a selection of facts relating to a manufacturer’s or a brand’s most recent category management achievements during the specified measuring period, they also tell a compelling story of challenges confronted, strategies developed and implemented, and the collective results of trading partners working together toward a common goal. In essence, the actual entry submitted is the key to the judging process in this competition. In winning entries, a company’s importance and influence in a given category are represented as comprehensively as possible. This keeps the awards process dynamic from year to year, as well as leaving open the possibility that up-and-comers can be recognized alongside well-established players. The award criteria factored into the judging of the entries were as follows: Product innovation Creativity in merchandising, marketing, promotion and advertising Consumer insights Innovative, dynamic category management tools Demonstrated commitment to meeting retail customers’ specific needs Effectiveness at differentiating a line or brand within a category Effectiveness at lifting sales for a brand’s products in the category Effectiveness at lifting an entire category’s sales for a retailer Effectiveness at facilitating shopper-centric solutions Fact-based evidence of market-specific or account-specific sales results that support the vendor’s claims of excellence To win the premier Category Captain award, contestants are required to demonstrate excellence in all of the above criteria in their entries. Category Advisors also exhibit high competence, but to a lesser degree and/or in fewer of the above areas, and thus are ranked lower overall than the threshold set for Category Captaincy. Both designations reflect outstanding contributions to the industry at the category level.

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

MUCHAS

GRACIAS!

Avocados From Mexico is honored to be recognized as a Category Captain for our innovative and strategic eďŹ&#x20AC;orts driving growth within the avocado category. With the support of our retail partners, we are able to continue our success as the #1 selling avocado in the U.S. with more than 1.5 billion pounds of avocados being supplied. Avocados From Mexico is committed to providing the tools and resources necessary to address the consumer needs for our retail partners, while continuing to support and help grow their produce business.

Trade.AvocadosFromMexico.com

Category ManageMent GROCERY – FOOD & BEVERAGES

Canned & Packaged Beverages – Juice

Category Advisor Flowers Foods (Bread)

Category Captain The J.M. Smucker Co.

Category Captain McKee Foods (Sweet Goods)

Category Captain Anheuser-Busch

Canned & Packaged Beverages – Soft Drinks

Category Advisor MillerCoors

Category Advisor Dr Pepper Snapple Group

Alcoholic Beverages – Wine

Category Advisor LaCroix Beverages Inc.

Category Captain E&J Gallo Winery

Canned & Packaged Beverages – Tea

Baby Food & Consumables

Category Advisor The Coca-Cola Co.

Alcoholic Beverages – Beer

Category Captain Nestlé Nutrition Baking Ingredients – Mixes Category Captain The J.M. Smucker Co. Category Advisor Pinnacle Foods Baking Ingredients – Oils Category Captain The J.M. Smucker Co. Breakfast Category Captain The Kellogg Co. Category Advisor General Mills Category Advisor Nestlé Nutrition

Canned & Packaged Foods – Dry Packaged Potatoes

Canned & Packaged Foods – Olives Category Advisor Musco Family Olive Co. Canned & Packaged Foods – Pickles Category Captain Pinnacle Foods Canned & Packaged Foods – Seafood Category Captain Bumble Bee Seafoods

Category Advisor The Hershey Co.

Category Captain The J.M. Smucker Co. (Fruit Spreads)

Category Captain Enjoy Life Foods Gum

Snacks

Category Advisor ConAgra Foods

Category Captain Ferrero USA (Bread Spreads)

Category Advisor The J.M. Smucker Co.

Free-from Foods

Canned & Packaged Foods – Dry Pasta

Category Captain Mars Chocolate North America

Category Captain Massimo Zanetti Beverage USA

Category Captain The Kellogg Co.

Category Captain Wm. Wrigley Jr. Co./Mars Inc.

Canned & Packaged Foods – Spreads

Canned & Packaged Beverages – Coffee

Crackers

Category Captain Idahoan Foods

Candy

Category Advisor Ferrero USA

Category Captain The Kellogg Co.

Category Captain Jack Link’s (Meat Snacks) Category Advisor Flagstone Foods (Salty Snacks) Toaster Pastries Category Captain The Kellogg Co.

FROZEN FOODS Breakfast Category Captain The Kellogg Co. Ice Cream & Novelties Category Captain Unilever USA Meat Substitutes

Category Captain The J.M. Smucker Co. (Nut Butters)

Category Captain The Kellogg Co.

Category Advisor Hormel Foods (Nut Butters)

Category Advisor Pinnacle Foods

Commercial Baked Goods

Vegetables

Category Captain Bimbo USA (Bread)

Category Captain Pinnacle Foods

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

Together, they mean business.

Nearly 9 in 10 berry buyers say they’re up for trying P∂M P∂MS. Not only are they the #1 seller in the category making up 85% of all fresh arils sales when they’re in season, P∂M P∂MS can actually double category revenue. P∂M P∂MS consumers spend 50% more per shopping trip than the average shopper*. And our sales are supported by a huge national ad campaign–including TV, FSIs and PR. Just put these two together, and get ready for some crazy healthy business. Order P∂M P∂MS now at CustomerService.POM@Wonderful.com or contact your W∑nderful Brands sales representative at 877-328-7667.

*Source: IRI 12 weeks ending December 28, 2014, Total Arils Dollar Sales, MULO & Total US Grocery. POM fresh pomegranates landscape study, nationally representative online survey, ﬁelded March 2013.

Category ManageMent GROCERY — NONFOODS

PERIMETER

Laundry Detergent

Baked Goods

Category Captain Green Giant Fresh

Category Captain Seventh Generation

Category Captain CSM Bakery Products

Fresh-cut Fruit

Pet Care

Dairy — Yogurt

Category Captain Del Monte Fresh Produce

Category Captain General Mills

Fresh-packed Vegetables

Deli — Prepared Foods

Category Advisor Dole Fresh Vegetables

Category Captain Tyson Foods Inc.

Mushrooms

Deli — Meat

Category Captain Monterey Mushrooms

Category Captain Nestlé Purina Pet Care

HEALTH, BEAUTY & WELLNESS Adult Incontinence Category Captain Procter & Gamble

Category Captain Hormel Foods

Adult Nutrition Category Captain Abbott Nutrition Category Advisor Nestlé Nutrition Diet/Nutrition Category Captain Abbott Nutrition Oral Electrolytes Category Captain Abbott Nutrition OTC Analgesics Category Captain Bayer HealthCare OTC Upper Respiratory Category Advisor Bayer HealthCare Category Advisor Reckitt Benckiser

Heat-and-eat Entrées Category Captain Hormel Foods Refrigerated Pasta & Sauces Category Advisor Rana Meal Solutions Refrigerated Salad Dressing Category Advisor Litehouse Foods Superpremium Juice Category Advisor Bolthouse Farms

Cauliflower

Packaged Salads Category Captain Dole Fresh Vegetables Category Captain Fresh Express Pears Category Advisor Pear Bureau NW Potatoes Category Captain United States Potato Board Category Advisor Idaho Potato Commission Tomatoes

PERIMETER – VARIABLE/ FIXED-WEIGHT PRODUCE

Category Advisor NatureSweet

Avocados

Category Captain Mann Packing Co.

Skin Care

Category Captain Avocados From Mexico

Category Captain Unilever USA

Bananas

Value-added Produce

Category Advisor Stemilt Growers LLC

Vitamins/Supplements

Category Captain Chiquita Brands

PERIMETER — OTHER

Category Captain Pharmavite

Berries

Automated Retail

Category Advisor Bayer HealthCare

Category Captain Dole Fresh Vegetables

Category Captain Outerwall

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

at CSM, we CONNECT. bakeries and businesses CREATE. people everywhere ENJOY. We take pride in using our expertise and capabilities from around the world to create solutions that drive success for our customers so they may better serve their customers. Learn more at csmbakerysolutions.com

Grocery -—— Food & BeveraGes

Alcoholic Beverages — Beer

Category Captain

Category Advisor

Anheuser-Busch

MillerCoors

Alcoholic Beverages — Wine

display locations for wine is the produce department, due to the heavy cross-purchasing behavior there. Tese fndings, along with the rest of the insights gained from its research, allowed Gallo to better advise its retail partners. Shortly after the research was completed, Gallo conducted a full chain analysis with a customer, and ended up identifying new opportunities to help it compete more successfully. Gallo ultimately helped the retailer grow the category to capture its fair share of the market, while also growing the important premium-plus-price segment and supporting local brands. In the frst 14 weeks since implementing changes, the total wine category was up 30 percent (versus 2 percent pre-test), with average weekly sales growing by more than 23 percent. Te department reinvention saw such great success that the retailer plans to continue expanding the concept.

Anheuser-Busch used its Retail Feature Tool to help its partners better execute their feature advertising strategies. Since beer is a high-trafc category with anywhere from 200 to 600 SKUs in a set, retailers are faced with many choices in their planning. Additionally, they must navigate laws that restrict contracts and market-level pricing. Anheuser-Busch’s tool divides the category according to its key segments (premium, import, craft, value and premium plus) and pack sizes; then it analyzes beer data according to household penetration and total dollar distribution. If retailers want to go further, they can look at data on a national, regional or local level. Te tool also leverages previously unavailable data collected through the use of InfoScout’s mobile panel. Tis allows retailers to better connect to their beer shoppers, and ultimately execute the best advertising combinations in individual markets. Retailers using the tool are seeing increases in trafc and incremental rises in beer dollars. Earlier this year, one retailer in a top metropolitan market implemented a feature program based on the tool’s analysis. In the two months since the program’s launch, retail beer dollars are up 8.5 percent, incremental sales dollars from beer features are up 65.1 percent, and the retailer’s share of market is up 0.8 percent, which is nearly $50,000 per week in beer sales.

Category Captain

E&J Gallo Winery

As wine consumption continues to grow, E&J Gallo Winery has urged its retailer partners to re-examine their department strategies to ensure they’re meeting shopper needs. To better understand the category, the wine maker conducted the largest-ever study on optimizing the retail environment for beverage alcohol. Tis study examined every aspect of beverage alcohol strategy, from department location and confguration to display optimization and cross-merchandising. Gallo found that the wine department performs best when confgured in a store-within-a-store format merchandised using multiple gondolas. Meanwhile, one of the best

MillerCoors added excitement to the beer category this year with its Grilling with Guy program. Te company joined forces with restaurateur Guy Fieri to create a customizable program in which retailers could leverage beer-related recipe content from the Grillwithguy.com mobile site. Many grocers created occasion-based displays — some out of the beer department — providing an impulse-shopping and basket-building opportunity. Shoppers could engage digitally in the store on their mobile devices, or through Tweets and Facebook posts by Fieri himself. Some of the country’s leading grocers got on board with the program, including one regional chain that integrated the program into its weekly ad. Another regional chain tested the program during a special burger promotion, and then decided to go full-force after seeing the positive results. In a similar vein, several grocers tied the program into the football season and saw sales in meat increase as a result.

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

! H A A . A . . A a l A l i z SKU

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Grocery -—— Food & BeveraGes

Baking Ingredients — Mixes

Category Captain

The J.M. Smucker Co.

Baby Food & Consumables

Category Captain

Nestlé Nutrition

Nestlé Nutrition’s Gerber brand continued to bring category management insights and consumer innovation to the infant nutrition category in the past year. Te company released a “Path to Purchase” study to its retailer partners during the second quarter of 2015, summarizing the impacts of mothers’ decisions to shop at certain retailers, buy certain brands and purchase certain product segments. Te study included important insights on how moms’ online activity plays an important role. In terms of product innovation, in the spring Gerber introduced new “Lil’ Bits” 3rd Foods fruit-and-vegetable purée recipes in plastic tubs. Post-launch results show that 3rd Foods plastic tubs have been more productive than Stage 3 glass-packaged purées.

Te baking mix category has experienced fat or declining sales in the past few years, so the category management team at Te J.M. Smucker Co. worked to uncover new ways to engage shoppers and reverse the trend. Its research found that baking continues to evoke positive emotions, and that shoppers are motivated to bake for specifc occasions. Some of the barriers to baking, however, include time and perceived lack of convenience. Millennials, who account for $200 billion in annual spending power, were a particular area of focus. It appears that this group will require diferent messaging tactics compared with other generations, as these shoppers have less confdence in their baking skills and don’t have all the necessary tools to bake. While meal solution end caps and displays have been prevalent for years, Smucker’s leveraged its learnings in a new way by creating baking solutions. Tese solutions can be built around a theme, or can appeal to a more basic occasion such as a homemade snack. Smucker’s research also identifed that shoppers seek better-for-you options beyond low-sugar/ sugar-free and gluten-free claims, and are interested in simple ingredients. As a result, the company launched the Pillsbury Purely Simple line last February. Since the launch, the products have generated more than $500,000 in sales.

Baking Ingredients — Mixes

Category Advisor

Pinnacle Foods

Suppliers and retailers are facing some important consumer shifts in the baking aisle that need to be addressed. Tree of these issues include the consumer trend of cutting back on sweets, the growing popularity of the in-store bakery, and a need for smaller portion sizes (many of the current options are too large for smaller households). Pinnacle Foods,

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

maker of Duncan Hines, addressed these challenges in the past year via its category management eforts. Specifcally, the company developed a line called Duncan Hines Perfect Size. Te product includes cake mix, a disposable pan and frosting — and its smaller portion size is perfect for one-to-two-person households. Since its launch last May, Duncan Hines Perfect Size has generated $769,000 in sales, with 45 percent ACV distribution. Additionally, it has received tremendous, positive feedback from retailers and consumers alike, according to the company.

Number 1! 5 Years and Running

Dole Category Development takes top honors — for the ±IWK \HDU LQ D URZ Because of our attention to retail partners, commitment to category growth and unparalleled management, Dole has a long history of award-winning category development. For the ﬁfth consecutive year, we’ve taken home the Progressive Grocer “Category Captain” award for DOLE® Packaged Salads and DOLE® Berries!

Bragging Rights: Industry-Leading Category Management

Dole offers our retail partners innovative, creative and profit-generating category management across the produce aisle. For the past five years, DOLE® Packaged Salads, DOLE® Berries and fresh packed vegetables have been among the most awarded categories in the industry. For 2015, our key shopper insights and innovative programs have resulted in top awards for the fifth consecutive year!

Berries

Packaged Salads

We’d love to talk to you and share testimonials direct from our retail partners. Contact your local Dole sales representative, or call 831-641-4200 to learn more. © 2015. TM & ® Dole Food Company, Inc.

Grocery -—— Food & BeveraGes

Baking Ingredients — Oils

Breakfast

The J.M. Smucker Co.

The Kellogg Co.

Category Captain

Specialty oils are one of the hottest segments in the cooking oil category. To further investigate the growth opportunities in this area, the category management team at Te J.M. Smucker Co., maker of iconic brand Crisco, commissioned a custom study to learn about consumer attitudes toward and preferences for coconut oil in particular. Trough its research, Smucker’s learned that while 27 percent of respondents said they were already coconut oil purchasers, they didn’t perceive that there was a dominant brand. Te company saw an ideal opportunity to launch Crisco Coconut Oil. Before the launch, however, Smucker’s did its homework to discover the most popular attributes of coconut oil and to learn more about consumers’ favor preferences. Last February, it ofcially launched Crisco 27-ounce Organic & Refned Coconut Oil. Retailers have quickly embraced the new item: At one retail chain, since the product has gone into full distribution, average weekly category dollar sales have grown 10 percent, with specialty oils growing more than 13 percent. Crisco Coconut Oil contributed more than 60 percent of the specialty oil growth, according to Smucker’s.

Category Captain Kellogg’s continues to lead in innovation and productivity in the breakfast aisle with its work in the cold cereal, hot cereal and on-the-go breakfast categories. Seventy percent of Americans believe breakfast is the most important meal of the day, according to Kellogg’s research. Cold cereal is the anchor center store category in breakfast, with sales reaching $9 billion. During 2015, Kellogg’s identifed two opportunities in the segment: driving fun in the aisle and providing more “simple health” oferings. Fun was provided via new licensing opportunities, including Kellogg’s Disney Frozen Cereal. Meanwhile, to address health concerns, Kellogg’s suggested blocking its Origin oferings, along with other simple health products, together. It also encouraged retailers to shelve their aisles by target age fow, which includes Kid Friendly, Family Friendly and Adult Health Central. Tis approach has encouraged shoppers to spend more time in the aisle and shop multiple categories, including granola, breakfast snacking and toaster pastries. As for hot cereal, Kellogg’s repackaged its successful Special K Hot Cereal from a twin pack to a single-serve bowl, which helped boost unit velocity. Te brand also advised retailers to increase space in their hot cereal sections when possible. Kellogg’s continued to provide thought leadership for the small but growing breakfast-on-the go segment, studying how retailers can create an intentional set, improve shelf shopability and develop of-shelf display options. Contributing to all of its breakfast business, Kellogg’s in 2015 embarked on a syndicated data partnership with Kantar, called RichMix, which has allowed the brand to better optimize retailers’ portfolios. Meanwhile, Kellogg’s continues to test virtual technology with its ShopperMX solution.

Breakfast

Category Advisor

General Mills

Ready-to-eat cereal is one of the most critical center store categories, as General Mills sees it. Tis year, its category management team continued to provide proprietary insights and strategies in distribution, merchandising, shelf work and pricing, while the company made some notable strides in product development to keep consumers coming back for more. General Mills has committed to remove artifcial favors and colors from all of its

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

cereals, aiming for 90 percent completion by the end of 2016. Meanwhile, its employees developed a way to separate oats from gluten-containing grains, allowing the company to market several of its Cheerios brands as gluten-free. In its work with retailers, General Mills focused on the importance of size variety and helped retailers set their cereal shelves according to various metrics specifc to each customer. Its new products, including Star Wars Cereal, Nature Valley Muesli and Nature Valley Granola Bites, brought excitement to the category while continuing to drive growth.

Grocery -—— Food & BeveraGes

Candy

Category Captain

Mars Chocolate North America

Breakfast

Category Advisor

Nestlé Nutrition

Nestlé Nutrition, maker of Carnation Breakfast Essentials, continued to boost the convenient breakfast solution category in the past year. Its iconic brand saw double-digit year-to-date growth, which helped ofset category declines. Nestlé Nutrition demonstrated category leadership through investment in research and product innovation. In the frst quarter of 2015, the company shared research results that highlighted key recommendations. Retailers that applied the learnings saw positive category growth, according to Nestlé. Its innovation focused on consumer trends regarding high protein and the need for more convenience. New products from the company included Carnation Essentials Grab ‘n Go! Protein Smoothies and Carnation Essentials High Protein Ready-to-Drink.

Sales of seasonally wrapped confectionery are up 15.5 percent in the grocery channel, thanks in part to the category leadership of Mars Chocolate North America and its retailer partners. Recognizing that two-thirds of overall seasonal purchases are impulse, Mars Chocolate developed a year-long comprehensive strategy, including a one-stop Halloween solution center that rolled out in fall 2014. The solution center engaged shoppers and encouraged impulse buying at the point of sale. Retailers could choose from one of two eyecatching focal-point Halloween display options: a tall spooky tree and a graveyard entrance featuring the M&M’s characters. In total, Mars Chocolate provided more than 7,000 Halloween seasonal focal points. One national grocery retailer saw stores with the displays achieve 4 percent higher unit sales than its other stores. The program was such a success that Mars expanded it this year to include 11,000 Halloween displays in five styles.

Candy

Category Advisor

The Hershey Co.

One of Hershey’s major category management initiatives this year was a new holistic merchandising solution designed for self-checkout. Te company developed and tested the initiative at a regional grocery chain, and has since scheduled a full rollout at the retailer’s other stores for 2016. In developing the concept, Hershey’s category strategy and insight team leveraged the company’s insights-driven performance model while working in conjunction with its front end team. Te innovative solution combines queue lane optimization with pointof-purchase merchandising in self-checkout, catering to the growing number of shoppers who opt to purchase their products this way. Hershey and a rack manufacturer designed the fxture, which adds more than 144 feet of merchandisable space. Retailers can now add such power categories as grab-and-go meal solutions, and indulgent or better-for-you snacking options. Te queue lane optimization, meanwhile, creates a single-fle

line at self-checkout and helps put an end to customer anxiety. According to Hershey, the retailer that tested the solution has continued to see double-digit results across all of the categories merchandised.

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

RECOGNIZED 13 YEARS IN A ROW for business building Category Management excellence.

PROFITABLE VOLUME GROWTH Nature Made has contributed $65.4MM in growth to the VMS category in 2015, which is 24% more growth dollars than any other brand in the category.*

SUPPLY CHAIN EXCELLENCE

INNOVATION

SHOPPER ENGAGEMENT/ ACTIVATION

COMMITMENT TO HIGH QUALITY **

VMS/PHARMACY HEALTH & WELLNESS AFFINITY

Pharmavite Customer Value Proposition “A trusted, strategic partner who provides innovative shopper-based insights and solutions that create loyalty among shoppers to our customers’ categories and Pharmavite’s products” *Data source is Nielsen : US xAOC - YTD 2015 period ending 10/3/15. **Find those Nature Made USP Verifed products on NatureMade.com/USP

Grocery -—— Food & BeveraGes

Candy

Category Advisor

Ferrero USA

As Ferrero USA sees it, grocers aren’t getting their fair share of premium chocolate sales. Te candy maker set out to change that in its recent category management eforts. Ferrero Rocher’s team approached the challenge with a combination of shopper insights, merchandising best practices, and in-store architecture aimed at driving retail innovation. Its tools included learnings from IRI Shopper studies, as well as path-to-purchase research, retail discovery assessments, and in-store architecture development and testing. Te company developed innovative consumer strategies and new merchandising and marketing tactics to promote everyday sharing and gifting sales in grocery. It tested a new initiative, which featured a premium chocolate shelf boutique as well as a mobile gifting display with related items, with a leading grocery retailer. Te test store outpaced control stores, with an impressive 16 percent jump in sales. Additionally, retail margin improved 14 percent. Ferrero now plans to share its fndings as part of a category leadership initiative called Go for the Gold.

Canned & Packaged Beverages — Coffee

Category Advisor

The J.M. Smucker Co.

A proliferation of new items in the cofee aisle has made shopping more confusing for the average consumer. Over the past year, Te J.M. Smucker Co., marketer of the Folgers and Dunkin’ Donuts brands, set out to make the warm-beverage aisle more shopper-friendly and lucrative for its retailer partners. Smucker’s commissioned several research studies to understand

Canned & Packaged Beverages — Coffee

Category Captain

Massimo Zanetti Beverage USA

Massimo Zanetti Beverage (MZB), marketer of the Chock Full of Nuts and Hills Brothers brands (and a private label supplier), saw an opportunity in 2014 to provide muchneeded insights and guidance to food retailers, given the unprecedented changes occurring in the cofee category. Te company invested in insights focused not only on understanding category and retail dynamics, but also on cofee consumer attitudes and shopper motivations. Its fndings became the foundation for a new merchandising strategy. New best practice recommendations focused on three areas: category/product segmentation centered on understanding shoppers’ individual preferences and taste profles, aisle optimization, and efcient assortment recommendations. One grocery retailer adopted the recommendations in full and rolled out an expanded cofee set, optimized category fow and space allocation by segment, and increased assortment. As a result, the retailer’s overall cofee business grew three times faster than the overall food trade (23 percent versus 7.5 percent) for the 52 weeks ending July 4. Most notably, its largest cofee segment — ground — grew 9.3 percent, despite a 2.3 percent decline in the total U.S. food market.

how shoppers navigate the aisle. In-store audits examined aisle fow, space allocation and assortment, and a warm-beverage market structure was developed to understand shopper dynamics. Eye-tracking research was also conducted. Meanwhile, consumer segmentation was linked with household panel data to provide custom retail shelving recommendations. Based on its new insights, Smucker’s saw opportunities to optimize aisle dollar sales and shopability. Te brand identifed best-in-class aisle fow as leading with cofee, placing complements like flters, creamers and cocoa in the middle, and anchoring with tea. It also determined that cofee should have more space allocated to it based on the growth and size of the business, and to allow for the expansion of new items. Since implementing the research in its stores, one retailer has seen dollar growth increase 3.8 percentage points higher than the rest of the market in dollar sales, and 6.9 percentage points in units. Other customers are beginning to implement many of the recommendations, too, with positive results, according to Smucker’s.

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

A TASTY ENCORE

YEAR AFTER

014

For six consecutive years, Nutella , the original hazelnut spread is honored to be recognized for leadership and innovation. Nutella is the #1 selling branded hazelnut spread in the U.S.* and Ferrero is committed to driving growth that is essential in maximizing sales and profits in the spreads category. ÂŽ

*Source: IRI Total MULO+C, 52 WE 10.04.15

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Grocery -—— Food & BeveraGes

Canned & Packaged Beverages — Juice

Category Captain

The J.M. Smucker Co.

In the past year, The J.M. Smucker Co.’s Smucker Natural Foods division set out to better understand the consumer decision process in the organic juice category. The company’s research discovered that shoppers purchase organic products for both their perceived health benefits and low environmental impact. The first decision in organic juice, however, is by usage occasion. The three main usage occasions driving shopping behavior are seasonal, everyday and concentrates. Based on its findings, J.M. Smucker developed new shelf-merchandising concepts, end aisle displays based on time of year/seasons, and promotion evaluation based on cross-purchasing within juice. The company also identified different need states of juice shoppers (wellness, authentic and vitamin), and used this data to create an organic juice platform to help educate retailers. This work is helping to drive category growth: In the most recent 52 weeks, J.M. Smucker’s top two conventional retailers have seen increases of 9.3 percent and 28.6 percent, respectively, in organic juice, far surpassing growth numbers in conventional juice.

Canned & Packaged Beverages — Soft Drinks

Category Advisor

Dr Pepper Snapple Group

When a midsize supermarket chain sought to optimize its beverage aisle, Dr Pepper Snapple Group stepped in with a well-thought-out plan that ultimately helped grow sales in the category. Te beverage maker worked with Fifth Dimension on aisle optimization using virtual aisle technology, and also employed Kantar’s RichMix for help with assortment considerations. Te retailer agreed to let its private label space be allocated based on aisle methodology, which allowed for greater optimization and better assortment across all beverage categories. Te categories that received increased space included water, enhanced water, sparkling water, and energy and sports drinks, while private label carbonated soft drink and bulk water space was reduced to allow other beverage categories to grow. Eight weeks after the changes, the test store was up 6 percent. Te retailer is already rolling out three more stores featuring the new beverage space allocation and assortment.

Canned & Packaged Beverages — Soft Drinks

Category Advisor

LaCroix Beverages Inc.

As sales of carbonated soft drinks and diet soft drinks have collectively fallen more than $1.2 billion in the past seven years, sparkling waters have increased nearly $700 million. LaCroix, a leading supplier of sparkling water, has contributed to this growth by developing a diverse portfolio of naturally essenced favors. To date, LaCroix has 12 core favors, as well as two themed line extensions. In 2014, LaCroix released LaCroix Cúrate, combining French and Spanish infuences to create a bolder favor profle. Te new product has appealed to a larger demographic and helped increase retailer margins due to its higher price point. Te company also recently launched LaCroix Nicola, which encompasses the same favors as a cola without the sugars typically associated with a cola profle. Over the course

of the past year, retailers have committed to impressive sparkling block sets, as well as national ads and of-shelf display space, for the LaCroix brand.

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

Grocery -—— Food & BeveraGes

Canned & Packaged Beverages — Ready-to-drink Tea

Canned & Packaged Foods — Dry Packaged Potatoes

Category Advisor

Category Captain

The Coca-Cola Co.

Idahoan Foods

Canned & Packaged Foods — Dry Pasta

BFY pasta be shelved near, but separate from, traditional pasta. Te company also stressed the importance of assortment in the BFY segment. Retailers need to ofer a diversity of health claims but not oversaturate the section with brands and forms. ConAgra also studied the importance of pasta’s relationship to sauce as part of an overall meal solution for shoppers. Te company advised its retailer partners to focus on the meal solution relationship to deliver convenient dinner options. Another key insight was that meal solutions can take many forms, and retailers should consider “good-better-best” options based on specifc circumstances. An overarching meal solution program, which could pair pasta and sauce with other meal options as part of a shopper marketing event, would ft as a “best” meal solution option.

Over the past several years, ready-to-drink (RTD) tea has experienced a signifcant increase in popularity. In fact, the category is projected to grow four times faster than the nonalcoholic RTD beverage category as a whole, according to Euromonitor International. One of the primary drivers of this category is Gold Peak Tea, made by Te Coca-Cola Co. Coca-Cola has striven to employ merchandising tactics rooted in shopper marketing insights and focused on bundling Gold Peak with food. Te company’s research found that RTD consumers enjoy drinking tea with conveniently prepared family meals. As a result, it helped its large-store retailer partners merchandise Gold Peak Tea with meal-specifc food items through a number of turnkey shopper marketing programs incorporating merchandising racks, point-of-sale materials and more. Specifc examples include a deli promotion pairing a Gold Peak Tea multiserve package purchase with a coupon for chicken fngers, and a “tea season” promotion bundling two multiserve packages of Gold Peak Tea with dinner rolls. Tese programs have received great feedback, according to Coca-Cola; in fact, one merchandising program at a large-store retailer experienced a 63 percent lift.

Category Advisor

ConAgra Foods

ConAgra Foods’ private brands division helped the private label dry pasta segment remain steady over the past year, while the overall category experienced a 3 percent decline. Te company rolled out multiple solutions, including new recommendations for how to sell better-for-you (BFY) pasta and an analysis of pasta’s relationship to sauce. Its research has uncovered that BFY shoppers represent a cohort of sorts: Tey may switch within BFY claims (such as gluten-free and reduced-carb), but are unlikely to leave for traditional pasta. Because of this pattern, ConAgra recommended that

Idahoan Foods, a share leader in the dehydrated potatoes category, continued to drive an increase in category household penetration during the past year by ofering relevant new products and aiding its retailer partners in smart category management. Te company worked with Advantage Sales and Marketing’s SMARTeam to create a robust path-to-purchase study, which helped it better understand shopper and consumer behaviors. Its new learnings inspired the company to create in-store perimeter meal solutions to encourage basket building and give the category exposure in higher-trafc areas. Idahoan joined forces with retailers and other suppliers to create programs that included dehydrated hash browns with eggs, and favored mashed potatoes with rotisserie chicken. Meanwhile, the company launched a line of Reduced Sodium Flavored Mashed Potatoes, based on strong demand for a diet-friendly version of its regular potatoes. Te new product has already proved to be incremental to the category, with 21 percent of buyers new to the category. Idahoan also introduced family-size oferings in the favored mashed segment. Further, the company worked with several major retailers this year to update store clustering, improve shopability of the potato category and optimize assortment, among other initiatives.

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

THANKS A BUNCH! Chiquita would like to thank our valued retail partners for selecting us as Category Captains once again.

Fresh Express would like to thank our valued retail partners for selecting us as Category Captains once again.

We are committed to bringing our consumers the best, most ďŹ&#x201A;avorful fresh produce possible.

Grocery -—— Food & BeveraGes

Canned & Packaged Foods — Pickles

Category Captain

Pinnacle Foods

Canned & Packaged Foods — Olives

Category Advisor

Musco Family Olive Co.

Musco continued to enjoy success after launching Olives to Go single-serve multipack ready-to-eat cups several years ago. Te product brings new shoppers to the category: 33 percent of buyers haven’t purchased olives before. Olives to Go also resonates with Gen X and Millennial shoppers who are more health- and weight-conscious. As a result, it now ranks in the top 10 for repeat purchases among all olive items at a major retail chain. Musco also invested in new programs and technologies in an efort to help turn a commodity into a branded — and consumer-demanded — category powerhouse. With grocery stores nationwide, the company kicked out e-mail blasts, website features, direct mail, and ofers, some with retailer mobile apps. Musco additionally participated in an SV Linx program for independent retailers with no loyalty programs, as well as a 360 Connect program, and a DeCA digital coupon delivered to commissary shoppers. Te innovative packaging format of Olives to Go has allowed it to expand to grocers’ perimeter departments as well: Single cups will soon be sold in the bagged salad area, as well as in grab-and-go deli sections.

Canned & Packaged Foods — Seafood

Category Captain

Bumble Bee Seafoods

Bumble Bee Seafoods brought innovation to the canned seafood category this year by launching Bumble Bee Seasoned Tuna Pouches and Bumble Bee Seasoned Tuna Kits. After forming a cross-functional internal team and conducting research, Bumble Bee identifed the need to bring more consumers into the category and convert them to lifelong buyers. Working with IRI ShopperSights to take

Pickles make up the largest segment in the pickle/pepper/relish (PPR) category, but several challenges have hindered their growth in the supermarket channel. For one, there’s been little or no innovation in the segment. Meanwhile, consumer research suggests that shoppers forget to make their pickle purchases or give up the segment once they get older. Pinnacle Foods, maker of Vlasic pickles, worked to change things in the pickle segment by ofering Vlasic Bold & Spicy Pickles — a product that appeals to younger “pickle enthusiasts” and “excitement seekers.” Te line ofers three dynamic favors — Sweet Heat, Salsa Blend and Sweet Chipotle — in red packaging that diferentiates them from the current pickle selection. Retailers’ feedback was tremendous and positive, according to Pinnacle. Since the product’s launch in July 2014, the line has generated $2.7 million of new base sales in the shelf-stable pickle segment. Meanwhile, panel research indicates that 28 percent of Vlasic Bold & Spicy volume is incremental to the segment.

deeper dives into category usage data, the supplier saw that shelf-stable tuna rose to the top as the most viable product. Leveraging research on growing snacking trends, including the demand for healthy protein, the company developed the new products. During the testing phase, Bumble Bee teamed with supermarket retailers to try out product feasibility, acceptability by category consumers and nonconsumers, and product aisle placement using JDA and new shoppers for the aisle. Te products sourced 40 percent of the product triers from households that were new to the category; outperformed the competitive set, with an index of 332; and delivered on portability and instant usability.

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

Grocery -—— Food & BeveraGes

Canned & Packaged Foods — Spreads

Category Captain

Ferrero USA (Bread Spreads)

The J.M. Smucker Co. (Fruit Spreads)

Ferrero USA’s Nutella brand continued to lead the hazelnut spread segment in center store, helping retailers to plan for even more growth to cater to loyal Gen X and Y buyers. In the past year, the company delivered on two fronts with both product and merchandising innovation. Nutella & Go Bread Stick quickly became the second-fastest mover in all of spreads. Te company supported merchandising by conducting shopper studies to provide learning on how to maximize sales by leveraging shopper insights and best practice analysis to include control store tests. Nutella shopper insights research afrmed that hazelnut is now a mainstream segment, according to the company. Hazelnut is also one of the most productive segments when sales per item stocked is compared. In another merchandising initiative, the Nutella team initiated a display optimization campaign to drive incremental sales of bread spread-related products. Te sampling program featured numerous national and store-brand products coordinated by Te Wilson Group; participating retailers enjoyed higher sales rates.

While consumer interest in products with high sugar content has declined, the desire for sweetness hasn’t — leaving an opportunity in the fruit spread category. Tis year, Te J.M. Smucker Co. has answered the call by introducing Smucker’s Fruit & Honey, a line of fruit spreads naturally sweetened with honey. Te company realized that the launch would require a re-evaluation of the current spread set, so it developed a shelving recommendation to capitalize on the growth of the natural and gourmet segments, and also to drive new buyers to the category. Smucker’s marketing plan employed the path to purchase to engage with shoppers at multiple touchpoints. In-store marketing displays and creative honeycomb shippers were designed to drive shopper excitement. Te brand also invested in communicating pairings and alternative uses that combine Fruit & Honey with perimeter categories. At one national retailer, Smucker’s category management and sales teams worked to optimize the fruit spread section and adjacencies within the set to drive shopability. In addition to an optimized set, the brand devised a co-promotion with the top-performing peanut butter UPC on shelf to drive trial usage. Ad placement combined with an end cap display helped drive 4.5 percent growth in the category, which in turn helped ofset declines in other segments.

Canned & Packaged Foods — Spreads

Category Captain

The J.M. Smucker Co.

(Nut Butters) Te nut butter category has two consumer trends going for it: the increase in on-the-go meal occasions and an emphasis on protein. Te J.M. Smucker’ Co.’s Jif brand capitalized on these trends by launching Jif To Go Dippers and Jif Peanut Powder. Te Dippers present an all-in-one pretzel-andpeanut-butter snack that can be consumed on the go. Jif’s category management and shopper insights groups used market research to optimize the set and ensure optimal placement for the on-the-go snacking items. Te team helped gain incremental

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

placement in snacking aisles and checklanes, expanding the reach of peanut butter throughout the store. Not surprisingly, Jif To Go Dippers have brought new buyers into the category and have driven category expansion with existing buyers. Te product has driven 10.2 percent of volume to be incremental to the category overall. Jif Peanut Powder, meanwhile, is a new ingredient that came out of the Jif team’s consumer research. Te product is primarily used in dry applications such as smoothies and baked goods. Jif’s research found that optimal placement for the new item would be the peanut butter set. Seventy-six percent of peanut powder sales have been incremental to the category. Jif supported the launch of both new products with strong marketing and in-store support.

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Grocery -—— Food & BeveraGes

Canned & Packaged Foods — Spreads

Commercial Baked Goods — Bread

Hormel Foods (Nut Butters)

Bimbo USA

Category Advisor

In an efort to meet future consumer demand, Hormel Foods’ Skippy peanut butter brand rolled out the Skippy Natural peanut butter line. Te company also employed a new merchandising scheme to improve growth in its brand, as well as the overall peanut butter and jelly category, in a select regional grocery store chain during the frst quarter of 2015. At 12 feet, the new and improved peanut butter and jelly display set increased the vertical space allocated to peanut butter by about 2 feet. Specifc product additions were based on the latest category review at the time of the proposal, and the new allocated space replaced fve slow-moving and declining jam/ jelly products with 11 Skippy peanut butter items, including two new varieties: Skippy Natural Creamy and Skippy Natural Chunky. Before the new display setup, the nut spread category at this retailer was down 7 percent in dollars and 5 percent in units. After the new display setup debuted, the 26-week results saw successful metrics and sales for the nut spread category. Total nut spreads increased by 8.1 percent in dollars and 130,700 units, and Skippy products increased by 2.6 percent in units. Lastly, the two new Skippy items added a further $142,000 to the peanut butter and jelly category.

Category Captain

Bimbo helped a Southeast regional grocer build same-store sales, using space-tosales recommendations that yielded overall growth while the rest of the market held fat. A key innovation was the diferentiation of premium and mainstream stores. Developing the right assortment on a store-by-store basis allowed consumers to see more selection, while delivering the freshest product available and driving down waste. Identifying stores by diferent demographics enabled vendors to focus on the main items that are selling for each subcategory. For example, a store with one breakfast/premium assortment will ofer the top two sellers in each subcategory, like English mufns and bagels, while spreading out on the mainstream commodity wheat and white bread that dominate sales at this particular store. As such, vendors were able to maintain shelf conditions that consumers and stores found acceptable, while ofering fresher product and less shrink. Bimbo also developed buying occasion zones for Italian breads, breakfast breads and premium assortments, resulting in overall sales growth. Te retailer has shown major growth in diferentiating items such as wide pans, buns, English mufns and bagels. Traditional wheat and white breads are down, as consumers are trading up from private label to branded oferings, bringing up the overall basket ring at the register.

Commercial Baked Goods — Bread

Category Advisor

Flowers Foods

Flowers Foods delivered impactful benchmarking, promotion analysis, assortment studies and outstanding in-store execution. Leveraging the latest technology, Flowers automated the process of generating consistent, store-specifc planograms across thousands of stores, using a retailer rule-based approach that allows for accurate, on-the-fy adjustments and provides real value to retailers. With a shopper-centric mindset, company research found smaller households were frustrated with the size of a loaf of specialty premium bread. Flowers saw this as an opportunity to increase purchase frequency and basket size by developing a loaf sized for these households. Last May, the company began test marketing Cobblestone Bread Co. “right-sized”

loaves in the Southwest. With fewer slices than a normalsized specialty loaf — and an attractive price point — these loaves are driving specialty premium loaf unit growth and contributing signifcantly to dollar growth. In September, the availability of these smaller loaves was expanded to Flowers’ entire distribution footprint. November 2015 | progressivegrocer.com |

Grocery -—— Food & BeveraGes

Commercial Baked Goods — Sweet Goods

Category Captain

McKee Foods

The Kellogg Co.

Crackers

and pretzel crisps. For portable snacking, Kellogg used insights and trend-driven focus to identify expansion opportunities, and leveraged occasion-based solutions to deliver incremental purchases. Kellogg contributed to category growth through food solutions that meet multiple daypart needs. At key retailers, Kellogg conducted in-store tests to expand the “in-and-out” purchase, including store-withina-store concepts and checklane solutions; innovative rack and dump-bin vehicles within the perimeter allowed retailers to place highpenetration immediate consumables like its On Te Go Cups in an organized manner. Kellogg also conducted research to develop an on-thego segment across core categories of cookies, crackers and snacks. Tis new understanding will be used to aid in the launch of innovative items to meet a growing consumer need.

Nationwide, the baked sweet goods category is faced with almost fat growth, a result of changing shopper behavior, an aging population and competition from other snack categories. McKee Foods, maker of Little Debbie snack cakes, saw an opportunity to engage Hispanic shoppers, working closely with a major Southwest regional grocer to leverage its position in this demographic. With nearly three-quarters of Western Union (WU) users identifed as Hispanic, Little Debbie and Western Union collaborated on a shopper marketing program, ofering coupons for free Little Debbie items with each WU transaction, to pull consumers into center store. Results exceeded expectations, with redemptions approaching 30 percent, leading to another partnership centered on Hispanic Heritage Month this past September. McKee’s focus put the shopper at the center of marketing eforts and provided better selling opportunities to its independent distributors. As a result, the company developed platforms to boost its position as advisor to retail category managers in regard to snacking trends, category insights and fact-based solution delivery. As a result of rethinking its strategy for achieving growth in today’s competitive landscape, McKee delivered solutions resulting in double-digit growth for its brand and consistent growth for the category. Te process allowed McKee to provide its retail partners with programs that are relevant to shoppers’ needs.

Category Captain

The Kellogg Co.

Te Kellogg Co. demonstrated leadership in the cracker category, whether a mature segment like pantry crackers (down just less than 1 percent in the last year) or a more ontrend one like on-the-go products (up nearly 2 percent). In the pantry, Kellogg focused on category-frst solutions that leveraged artisanal cuisine infuences and expanded hand-to-mouth snacking. Its retailer partners had growth rates that outpaced center store and the total market by overindexing in shelf space and sustainable innovation, dominated by trendy varieties like focaccia, Tuscan cheese, rosemary and olive oil, pita, fatbread,

With the $6.1 billion cookie category a bit soft in the past year, Te Kellogg Co. focused on introducing seasonally relevant rotations and leveraging cross-category trends that create excitement. Kellogg expanded relevant, ontrend oferings within its portfolio, such as its Simply Made cookies, ofering a cleaner label and delivering solid growth over the prior year. Te company tapped further trends through co-branding with Jif peanut butter and M&M’s candies. Additionally, Keebler Fudge Stripe Red Velvet and Fudge Stripe Cookies & Crème delivered against consumer expectations for seasonally relevant rotational oferings that provide intrigue and interest, driving seasonal and rotational cookie dollar sales up 76 percent since 2012. Kellogg ofered its retail partners category leadership through Nielsen Market Structure Analysis, providing learning on the shopper decision hierarchy, defning competitive sets to address shopper needs and developing a planogram strategy that refects how consumers shop the category. Kellogg’s partnership with InContext Solutions and its ShopperMX solution allowed in-store visualization and testing. Tis year, Kellogg began a syndicated data partnership with Kantar that shows retailers how best to optimize their portfolios, and the monetary benefts of adding and removing items.

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

Doubly Delicious

Two years running, we're honored to be voted the favorite of both consumers* and retailers.

800.746.7999 â&#x20AC;˘ Idahoan.com *Based in part on Nielsen sales data, 52 weeks ending 10.3.15

Grocery -—— Food & BeveraGes

Gum

Category Captain

Wm. Wrigley Jr. Co./ Mars Chocolate North America

Free-from Foods

Category Captain

Enjoy Life Foods

Annual sales growth of 50 percent is a stellar achievement, and it’s what Enjoy Life Foods helped deliver for its retail partners in the free-from food category, which is truly on fre. Acquired earlier this year by Mondelez International, Enjoy Life developed a symbiotic relationship among its brand, shoppers and retail partners by being transparent with consumers on the products it produces, reactive to consumer feedback to improve those products, and forward-thinking to make products more accessible in a category that was launched based on exact needs. Ofering more than 50 products across eight categories, Enjoy Life used a shopper-centric strategy focused on its allergen-sensitive target consumer. Te company used a combination of analog and digital tools to provide information about ingredients, product variety, and cutting-edge technology like geolocation partnerships to help drive trafc to Enjoy Life retailers, ultimately lifting total basket ring. Snacks — Meat Snacks

Category Captain

Jack Link’s

Meat snacks are hot, with 11 percent growth in the past year, and Jack Link’s is leading the way. With a dedicated business team focusing on category management, business analytics, shopper insights and consumer insights to ensure that retailers nationwide are making the best decisions for their meat snack sets, Jack Link’s was able to strengthen market share, increase sales, improve gross margin, increase return on investment and gain customer satisfaction. Armed with extensive research to get a better

Wrigley and its parent company, Mars, drove innovation and profts for retailer partners looking to revamp their front ends for maximum impact. With household penetration of gum declining, Wrigley sought to stress the fun element of chewing with line extensions to its iconic Juicy Fruit brand, adding Starburst candy favors and Fruity Chews in convenient carcup packaging that helped boost gum usage among under25s. Research showed shoppers were ultimately not purchasing impulse items at checkout because they weren’t top of mind. Te answer: an innovative LED display, now in more than 3,500 grocery stores, that drove both conversion and dollar sales increases of about 10 percent for the total category. Wrigley used a new methodology that was able to get at individual shopping occasions in a select retailer/ channel so that decisions and trade-ofs on a given shopping trip were captured. Te consumer was placed in the context of shopping in a virtual environment with specifc assortments. Te discovery: Flavor territories were a key decision at shelf for both immediate and future consumption. Further, Wrigley developed a strategic approach for retailers to maximize sales in transaction zones to ofer choices that reward shoppers for fnishing the errand, refresh them after a long day and remind them to grab a forgotten item — thus driving growth by increasing sales of impulse items to more shoppers. understanding of protein snacking trends, Jack Link’s teamed with retailers to expand and grow this dynamic subcategory. It developed custom space and assortment recommendations for the grocery channel, demonstrating that permanent secondary placements drove impulse purchases. With one Midwest retailer, Jack Link’s secured placement on the front end, expanded to restaurant checklanes and eliminated an underperforming subcategory within the salty snack aisle, leading 78 percent meat snack category growth at the retailer, and 19 percent growth in the Midwest. Meanwhile, fve additional placements at a Southeast retailer brought a 34 percent sales rise for the category there, and a 21 percent gain for the category within the region.

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

Make Your Moments Golden

Ferrero Rocher , the premium chocolate te brand with the #1 and #2 selling SKUs in n the U.S. Premium Chocolate segment,* is honored to be recognized for the 3rd consecutive year for excellence in Category Management leadership, innovation and impressive results! ®

*Refers to Rocher 12-count and 3-count SKUs, respectively. IRI Total US MULO+C Latest 52 WE 10/4/15.

2014 2014

2013 2013

Grocery -—— Food & BeveraGes / NoNFoods

Toaster Pastries

Category Captain

The Kellogg Co.

Snacks — Salty Snacks

Category Advisor

Flagstone Foods/Treehouse Foods

Building on consumer research over the past four years, Flagstone Foods (an operating company of Treehouse Foods) teamed with a major Southeast regional grocer with a strong desire to focus and reinvent its existing private-brand trail mix business. Using its category segmentation and insights work, Flagstone urged a base assortment recommendation that included a two-tiered assortment consisting of both the regular private brand and a premium label. Accordingly, the retailer created a more prominent trail mix section adjacent to the snack nut section and supported the category with temporary price reductions, features and display merchandising, including the use of shippers. As a result, category sales experienced double-digit growth, while sales of private label hit triple digits, bringing an overall fourfold increase in share of category. Flagstone’s insight-driven innovations drove revenue and proft.

Grocery —— NoNfoods Laundry Detergent

Category Captain

Seventh Generation

Leading green manufacturer Seventh Generation helped a national retailer revise its existing shelf merchandising strategy to better meet consumers’ needs and drive category sales performance. Consumer research and sales performance data revealed a need for more laundry detergents that cater to people with sensitive skin. Over the past four years, the “free-and-clear” segment has grown 2.5 percent, while the overall category has declined 2.1 percent. A separate analysis of natural

Te Kellogg Co. is a giant in this $815 million category with its iconic Pop Tarts line. Innovation was a key strategy for success over the past year, with new products drawing households to the category and many adding them to their everyday purchases. Kellogg demonstrated that households that purchase both innovation and core spend more than twice as much as those that just buy core. Te company used line extensions and limited editions to remind lapsed users about the category through exciting new favors and food news. New platforms, such as a Peanut Butter and Jelly Pop Tart, recruited new households by addressing unmet needs or barriers to consumption. Kellogg refreshed packaging to improve fndability at shelf, increased displays and established four key principles for shelf success that had retailers who employed them outpacing category velocity. Shopper insights partnerships with Kantar RichMix and InContext Solutions further allowed Kellogg to remain a leader in the category. laundry shoppers’ purchase transactions indicated that the purchase overlap of natural brands — such as Seventh Generation — is higher with free-and-clear versions of conventional laundry detergent brands. Seventh Generation began changing its on-pack labels to emphasize the benefts of free and clear; then it worked directly with one of its retailer partners to improve the laundry detergent planogram. Te change involved grouping the two leading natural laundry detergents together with the leading mainstream premium brand, which included some of the mainstream free-and-gentle laundry detergents. Since the retailer made the change, green liquid laundry detergent sales have grown 17 percent over last year, with Seventh Generation driving the growth, at 20 percent.

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

Your customers want to clean their homes without dirtying the planet. Give them Four MonksTM Cleaning Vinegar. Environmentally- and family-friendly All-purpose cleaner Aroma Controlled or Citrus Mint scent Available in three convenient sizes: 128 oz., 64 oz., and 24 oz. spray!

Call 800-323-4358 to order!

FourMonksClean.com ÂŠ2015 Mizkan Americas, Inc.

Grocery -—— NoNfoods / frozeN foods FROZEN FOODS Breakfast

Category Captain

The Kellogg Co.

Pet Care

Category Captain

Nestlé Purina Pet Care

As the leading pet care company in U.S. supermarkets, Nestlé Purina Pet Care provided dedicated category management experts to work with customers across the country in testing and implementing new growth strategies. Its customer teams focused on such areas as collaborative joint business planning and joint scorecarding, consumer segmentation, category segmentation, consumer/shopper insights, and custom planogram work, among others. The company also helped its retailer partners with pricing strategies and merchandising tactics, including store-within-a-store concepts. On the product innovation front, Nestlé Purina launched such important items as Purina One Beyond, Cat Chow Naturals, Cat Chow Indoor, and Dental dog and cat treats. Its efforts seemed to pay off: The pet category is now worth more than $57 billion annually, and continues to grow. Ice Cream & Novelties

Category Captain

Unilever USA

Growth returned to the ice cream category, driven by the superpremium segment in both packaged ice cream and frozen novelties, and Unilever led the way in both. With a softening in better-for-you demand and a greater desire for real, less complicated ingredients, brands like Unilever’s Ben & Jerry’s, Breyers Gelato Indulgences and Talenti drove volume growth. Innovations such as Cookie Core, “Double Dipped” technology and Popsicle Mystery Middles, and co-branding with Tootsie Roll candy and Disney’s “Frozen,” created

Breakfast is buttressing an otherwise fat frozen aisle by delivering innovation and convenience, with Te Kellogg Co. as the leader. Its strategy this past year was about building on a foundation of insights to bring strong growth plans to retail customers. Eggo, a pillar brand for the category, represented the point of entry, with the highest trial and a balanced portfolio to meet a diverse consumer group with both carrier and prepared entrée SKUs. Kellogg’s investment in aisle insights supported a series of shelving principles that were commercialized across retailers to best meet the needs of the frozen breakfast shopper and drive an incremental lift in sales. Coupling aisle insights with specifc shopper afnities by account allowed for local relevance and partnering to build assortment and shelving plans. Innovations like Special K savory handhelds fueled double-digit growth in the entrée segment. Kellogg continued to demonstrate category leadership by investing in shopper, consumer and department-led insights, including a Millennial attitude and usage study, a parents study to understand the weekday breakfast occasion, and an annual insights review to demonstrate occasion and consumption insights relevant to the category. excitement in the category. Unilever continued to expand superpremium shelf space in both novelties and packaged ice cream to capitalize on the strong trajectory of this pricing segment. In the Northeast, Unilever created and executed the concept of “Bring the Ice Cream Truck Home” for its Good Humor brand, with bright-red in-store visibility vehicles and the best-selling out-ofhome SKUs ofered in an in-home multipack. Other in-store visibility initiatives were pushed across several retailers, with strong results, making ice cream as fun to shop as it is to eat. Unilever continued to move the category forward with great innovation, shelving solutions and exciting in-aisle executions.

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

Frozen Foods

Meat Substitutes

Category Captain

The Kellogg Co.

As the brand leader in this growing category, Kellogg was actively engaged in driving its evolution from meat substitutes to veggie cuisine with plant-based protein through innovation with a broader range of veggie foods that appeal to both meat reducers and healthy lifestyle seekers alike. Kellogg positioned itself as the category leader by pioneering in-aisle solutions in regard to merchandising meat substitutes adjacent to natural/organic and gluten-free, versus as a stand-alone category adjacent to various less relevant categories. Te strategy was built around driving trafc and inspiration for shoppers who traditionally have viewed frozen as not having options for them, because of its perceived lack of health credentials. Retailers that adopted a Healthy Living destination within frozen experienced category velocities greater than those that maintained the stand-alone category. Kellogg invested signifcantly in research and insights to drive the category, including structural and package graphic updates for better perceptions of taste, health and brand equity; an online community of category consumers to keep track of consumer interests; a study of barriers to entry; and research into which foods are most likely to be swapped for meat substitutes and frozen veggie products.

November 2015 | progressivegrocer.com |

Frozen Foods / HealtH, Beauty & Wellness

Meat Substitutes

Vegetables

Category Advisor

Category Captain

Pinnacle Foods

Although the $409 million frozen meatless category is growing, challenges still include mainstream consumer reluctance, desire for a better favor experience, and lack of innovation. Pinnacle Foods’ Gardein brand aimed to reverse that negative taste perception while attracting key consumers and helping them move toward “eating healthier, more sustainable proteins,” and thus drive category growth and improve margins for retailers. Gardein Fishless Filets addressed consumer needs for healthier alternative proteins, appealing to both vegetarian and mainstream shoppers. Gardein became the category’s primary growth driver, drawing positive feedback and results from retail partners and consumers for bringing unique and delicious innovation into a growing but somewhat repetitive category. Results indicated great potential for further category growth.

Te frozen vegetable category — the third largest in the frozen aisle, with sales in excess of $3 billion — is the frozen department’s “gateway to healthy eating,” yet consumer perception lingers that frozen veggies are overly processed and lack favor. Pinnacle Foods worked to reverse this perception with its Birds Eye Steamfresh Protein Blends and Flavor Full lines, designed to up the ante on favor, attract Millennials to the category and expand opportunities for retailers. Pinnacle’s eforts drove the category into positive territory this past summer; purchases indexed higher among Millennial shoppers, and the new lines drove overall basket ring. More than half the volume comprised new buyers and additional purchases, and one major retailer reported triple-digit lifts. Health-focused innovation drove frozen category sales for Pinnacle’s retail partners.

HEALTH, BEAUTY & WELLNESS Adult Incontinence

Category Captain

Procter & Gamble

As the population ages, so does the market for adult incontinence products — about 5 percent a year since 2011. Procter & Gamble drove category growth with innovation and merchandising aimed at the key factors: aging, obesity, larger pack sizes and premiumization. Even with consistent growth, P&G leveraged further opportunity to disproportionately drive household penetration: One in three women age 18-75 experience some level of incontinence, but only one in nine shop the category. Products like P&G’s Always Discreet are closing that gap, bringing nearly 3 million new users to the category by delivering a modern feminine solution that women will trust. In the past year, P&G narrowed the gap to one in eight, bringing double-digit

incremental growth to the category. Media recognition and consumer support further buoyed P&G’s eforts to drive profts for its retail partners and satisfy a growing demand in a category set for continued growth.

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

HealtH, Beauty & Wellness

Adult Nutrition

Category Advisor

Nestlé Nutrition

Adult Nutrition

Category Captain

With an ongoing commitment to the category, Nestlé Nutrition’s Boost brand drove category dollar sales growth and dollar share. Nestlé worked to attract new users and grow sales for the category through product innovation and the Boost Great Taste Guarantee, a campaign that drove excitement in the category by taking the risk out of product trial. Te campaign was promoted nationally via print, FSIs, website, email, paid search and medical marketing. New items such as the 100-calorie Boost Calorie Smart were based on key consumer insights: interest in fewer calories per serving, and the desire for smaller sizes for those who want the nutrition, but have trouble consuming more than 4 ounces in one sitting.

Abbott Nutrition

Abbott Nutrition is a strong leader in a $1.1 billion therapeutic nutrition category up more than 4 percent nationally in the past year and anticipating growth more than double that in the next fve years, driven by an aging population, health care reform and healthy-aging awareness. Positioning itself as retail’s best-in-class strategic business partner, Abbott revised a full-assortment model set to improve shopability and lead consumers to higher margin tradeup SKUs, and implemented a new set across all stores through a web-based tool to develop enhanced consistency for customers. Key tactics: locating therapeutic nutrition in the HBC section or next to pharmacy, adding a larger set in high-indexing center-store format stores, remerchandising to clearly delineate brand and trade-up packs, and balancing oferings of balanced, diabetic and other wellness-targeted products. Tis strategy helped retailer partners outperform the category and post signifcant gains in market share.

Diet/Nutrition

Category Captain

Abbott Nutrition

In a $4.6 billion category up nearly 4 percent, Abbott Nutrition worked with a national retailer looking for recommendations on how to become the leading convenient destination by helping customers meet a variety of nutritional needs to live a healthier lifestyle and manage weight through a curated assortment. Te partnership aimed to increase retention and conversion, win frst purchase, build the basket, enhance shopability, and drive trial and category awareness, thus improving

category margin. Key tactics: Expand on subcategories growing the business, such as performance and balanced nutrition; expand on health-and-wellness oferings in high-indexing stores; merchandise multipacks with single-bar options to encourage trade-up; win the peak healthand-wellness season via promotions; capture additional frst-time customers with couponing; and align BIC merchandising with vertical brand blocking and clear subcategory blocks, with secondary placement of nutritious snack oferings in the diet/ nutrition and snack sections. Te retailer had projected a year-over-year decline; instead, the partnership delivered double-digit gains.

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

HealtH, Beauty & Wellness

Oral Electrolytes

OTC Analgesics

Abbott Nutrition

Bayer HealthCare

OTC Upper Respiratory

levers: ease of purchase, selection and product, and promotion. From this came three strategies: Manage by need state, develop a layout that refects shopper insights, and provide impactful signage at the shelf. Bayer is currently working with several retailers to test new shelf confgurations and signage for the category. Impressed by Bayer’s incorporation of critical shopper insights to enhance shopability, PG looks forward to learning the results achieved by the company’s retail partners.

Category Captain Oral electrolytes are a $4.5 billion business nationally, with dollar sales up more than 2 percent. With seasonal items peaking during summer and cold and fu season, a national retailer implemented a multivendor modular display program to act as a secondary placement vehicle during peak season, provide a one-stop-shop vehicle and maintain inventory levels. Abbott Nutrition secured dual placement of its new Pedialyte SKU, resulting in signifcant gains in dollar sales, household penetration and entry of noncategory buyers. Historically, oral electrolyte shoppers were predominantly parents purchasing the item for a sick child, but adult usage has increased 57 percent in the past two years. Abbott’s collaborative merchandising strategy — attract new shoppers while providing a centralized buying location within pharmacy — drove trial and awareness for the category and brand outside of the baby aisle, and encouraged repeat trips. Promotions were further supported by long-term price reductions to support seasonality, and direct mail communications and digital activations.

Category Advisor

Bayer HealthCare

Tere are a number of shopper challenges facing this $7.4 billion category: Consumers sufer multiple conditions when shopping for category products, with many common symptoms; shelves are difcult to shop, with most shoppers having to choose from among 300 items on average, and many outlets ofering even more; and manufacturers haven’t helped matters by ofering products with descriptions that often confuse shoppers. To bring clarity to the path to purchase, Bayer HealthCare undertook a foundational research study that identifed three loyalty

Category Captain Analgesics is a $4.5 billion category; household penetration is more than 80 percent, with consistent but largely unchanged volume and gross margin. While three basic conditions — pain, heart health and sleep — drove the category, Bayer HealthCare believed that, rather than focusing on the conditions themselves, the greatest opportunity for retailer growth across the category could be achieved by focusing on the solution rather than the products. Bayer understood that retailers needed to move beyond the planogram to a 360-degree approach that embraced in-store promotions, feature ads, digital communication and online programs. Tis approach leveraged crosspromotional opportunities, greater shopper engagement and better overall banner perception. Conducting extensive shopper research and analysis, Bayer pinpointed three condition-based opportunities for retailers to target: internal pain, sleep and heart health, each tied to specifc shopper demographics. Results were impressive, with volume sales rates increasing across all analgesic segments during the 30-week test period.

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

ÂŠ2015 Blitz-Weinhard Brewing Co., Milwaukee, WI * Flavored Malt Beverage

HealtH, Beauty & Wellness

OTC Upper Respiratory

Category Advisor

Reckitt Benckiser

One in two consumers sufer from upper-respiratory ailments over the course of a year — that’s clear motivation to drive growth in this category. Reckitt Benckiser (RB) recognized the need to fnd a manageable, strategic way to make the shopping experience smarter and easier. RB and its Mucinex and Delsym brands led an initiative to develop an objective, category-centric future vision and strategy, discovering that OTC solutions are highly important to consumers in the upper-respiratory category, and will become even more important in the future. “Te category is very well positioned for continued growth, but it won’t simply happen organically, as manufacturers and retailers will need to partner even more closely to leverage the changing dynamics in health care, shopping, consumer attitudes/motivations, and more,” RB notes. “Te shopper journey is going to change, and RB is now working with retailers to share not only what this new journey will look like, but what touchpoints along the way are the most critical to drive long-term consumer loyalty to a brand, and long-term shopper loyalty to a retailer.”

™

A CREATIVE AND COLLABORATIVE APPROACH Proud to be a 2015 Category Captain

HealtH, Beauty & Wellness

Skin Care

Vitamins/Supplements

Unilever USA

Pharmavite

Category Captain Over the past 20 years, the personal cleansing category has nearly doubled in sales, to $4.4 billion, but the past year saw a slowdown as the category reached saturation level, as well as displaying early signs of commoditization. Unilever saw the creation of new shower formats and products with additional benefts as the next stage of development. Tis year, Unilever’s Caress brand launched the frst body wash with microbead capsules that release scent all day. Te product delivered higher product benefts, warranting a higher price point at retail and creating a premium segment within the category. Tis innovation brought excitement and awareness to a large yet dormant category, and launched a platform for enhanced benefts that will potentially change the way consumers shop for a need. Teaming with Kantar, Unilever’s category management team educated its retail partners, establishing the key growth drivers of the category for the next fve years. Innovative items received eye-level placement to encourage trial, while disruptive shelving and packaging broke up the consumer’s routine of grab and go. As a result of such work, Unilever reported a signifcant depth of incremental distribution across planograms at its major grocery accounts nationwide.

Category Captain

Pharmavite identified that the majority of consumers who visit the vitamin category are searching for a specific need state that particular products help consumers to address. In response, Pharmavite developed a proprietary need-state landscape design that collapsed the 80-plus product segments into 19 simple health solution platforms. The company also created six distinct consumer segments based on consumer age, gender, attitudes toward health and wellness, and, specifically, motivation for buying, assigned to one of the six consumer segments based on the consumer group with greatest propensity to buy products addressing that specific need state. This allowed Pharmavite and its retailers to position the groups of products that comprise the need states adjacent to one another, to facilitate transaction building. Pharmavite worked with retailers to develop special ad events that proved highly successful in elevating the overall transaction size per purchase occasion, as well as in driving incremental sales lifts not only for the large-count-size items advertised, but also for the nonpromoted small-countsize items within the brands. The large-count-size ad strategy also reduced the participating retailers’ lost category sales leakage to the club channel.

Vitamins/Supplements

Category Advisor

Bayer HealthCare

In response to softening sales, Bayer HealthCare sought to identify and leverage the insights that could help guide future growth and determine path to purchase for the entire category. Te single most critical fnding was that 89 percent of category purchases are planned before entering the store. Tus, the category can’t rely solely on in-store vehicles or promotions to drive volume; retailers must work with brands and focus on developing not only in-store solutions, but also pre-store, account-specifc activation vehicles that can leverage this dynamic. Since this new approach has been adopted, the category has seen a major turnaround, with the most impressive results in the large adult-multivitamin segment. Not only has the category benefted, but Bayer brands have also outperformed these results. November 2015 | progressivegrocer.com |

Perimeter

Baked Goods

Dairy — Yogurt

Category Captain

CSM Bakery Products

General Mills

CSM set out to grow the cake category of a Northeast regional grocery chain through buyer conversion in dessert cakes by embarking on an exclusive licensing agreement with Te Hershey Co. Te weight of the Hershey’s brand, married with CSM’s baking expertise, allowed its partners to ofer a diferentiating and proftable program to boost incremental sales. Te goal was to drive dessert cake dollar and volume growth and grow market share by converting nonpurchasers, while also exciting existing cake customers with the new Hershey’s and Reese’s cake SKUs. Te results: Te Hershey’s cakes represented a ffth of the retailer’s total dessert cake sales and a quarter of dollar growth, while driving weekly cake sales as high as triple digits over the prior year in certain weeks. Te efort was supported by a merchandising and promotional plan that included sampling events, print ads, product demos with coupons, a Facebook post with coupons, and perimeter and holiday displays that were instrumental in driving impulse purchases.

Yogurt has been one of the fastest-growing and innovative categories in the dairy case as well as total grocery, on track to hit $9 billion in the next fve years. Earlier this year, General Mills released a new yogurt category growth story based on category insights that highlight opportunities to optimize the shelf set, assortment and merchandising. Te key messages of the category growth story were to lead the expansion of consumption through snacking, wellness and changing consumer demographics. General Mills guided retailers on how to allocate the optimal mix of segments and brands on the shelf to drive growth, particularly as regular single-serve cup sales gained momentum and Greek trends started to plateau nationally. On the innovation and wellness side, General Mills reduced sugar by 25 percent in each serving of Yoplait Original, launched the mousse-like Yoplait Greek 100 Whips, and rolled out Plenti, a combination of Greek yogurt, whole grain oats, and fax and pumpkin seeds. Cobranding with licensed characters added further excitement and interest for younger users. General Mills focused on brand building, gathering consumer insights and innovation to maximize retailers’ space and profts.

Deli — Prepared Foods

Category Captain

Tyson Foods Inc.

Strategy Shopper Planning at Tyson is an integrated discipline using consumer and shopper insights to connect emotionally with shoppers to better meet their needs along the decision journey, inspiring them to purchase and grow this category. Tis tactic leverages a deep understanding of pre-shop, shop and post-shop behavior to infuence consumers, creating better solutions and enhancing the shopping experience, and resulting in increased sales, category loyalty and an overall stronger retail partnership. A recent retailer cam-

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

paign was designed to increase awareness and drive trafc while leveraging a larger total-store theme. By creating synergies to the total store strategy and branding the category materials appropriately, the campaign consistently exposed shoppers to the category, regardless of the department. Te effort also featured a strong out-of-store presence: local radio and billboards, plus digital components like Pandora and Twitter. Further analysis revealed additional opportunities that were addressed by launching new regional product options. Marketing tactics generated millions of impressions, while the total campaign generated a signifcant sales increase and reversed a two-year sales decline in the category.

#1 Pouch

Keeping shoppers in aisle longer**

Developmentally appropriate nutrition

brand*

Innovation

The Formula for Happiness

Driving Category

Growth & Profit Through Innovation

Gerber is the only brand that offers an innovative line of products that are part of a nutrition feeding system based on a baby’s development from birth to preschool. This stage-based approach keeps shoppers in the baby aisle longer and ultimately results in a higher lifetime value of the shopper. ®

Contact your Nestlé Nutrition Sales Representative for more information. Gerber.com *Source: Nielsen xAOC data—latest 12 weeks ending 2/22/14 **Source: Néstle Kantar Analysis 2011

Perimeter

Deli — Meat

Heat-and-eat Entrées

Category Captain

Hormel Foods

Refrigerated Pasta & Sauces

was grounded in the insights gleaned from focus groups that pesto is highly versatile when used as a “secret ingredient” to diferentiate or enhance a wide range of foods. Te program included a new larger-size pesto product, a free-standing insert, digital couponing, retailer promotions, recipes at the shelf and online, website and social media announcements, and television PR support. A program with similar levels of support subsequently launched in October 2015. Tis approach to the category resulted in tremendous in-market success: Rana continued to drive category growth in both the pasta and sauce segments at rates double that of all other retailers, according to IRI data for the 24 weeks ended Aug. 9, 2015.

Faced with a declining service deli category, Hormel Foods worked with a retailer to emphasize premium private labels and remove duplication from the category assortment. Comparative rest-of-market analysis revealed opportunity gaps in a premium private label segment. Additionally, premium shoppers demonstrated the most loyalty to the service deli department. Hormel looked at market-level and store data to identify gaps in the category, as well as consumer trends to develop its strategy. Accordingly, the company focused on premium oferings and priced them in line with branded oferings. Te team also reduced branded items and continued its evolution of inventory in the set to reduce markdowns and increase labor efciencies and clarity of assortment for customers. Data revealed that the deli meat category was experiencing double-digit declines, with a signifcant loss in profts. Hormel aligned multiple strategies to improve overall shopability, increase sales and productivity, and reduce shrink. Strategies included tightening up clusters for localized inventory to reduce markdowns and, essentially, putting the right products in the right stores in the right amounts. While assortment was reduced by 10 percent, sales trends climbed 4 percent to 6 percent and shrink improved by up to 150 basis points.

Category Advisor

Rana Meal Solutions

Rana Meal Solutions ofered an improved value proposition by including a range of category-leading favors, each one distinguished by the use of premium ingredients, and combined this with a selection of unique varieties to expand the reach of the refrigerated pasta and sauce category. In 2015, the company began to complement its award-winning in-store demo experience with more broad-based 360-degree marketing events, meal solution programs and retailer-specifc programs. Te Summer of Pesto event

Following a major company’s pullout from the heat-and-eat category, a large Western retailer asked Hormel Foods to demonstrate why heatand-eat was still a viable category and to provide a solution for the category’s growth. By leveraging data and insights such as the retailer’s internal shopper data, IRI data and macrotrend reports on consumer habits, Hormel developed the frst standardized planogram for the refrigerated food category, and initiated assortment and positioning changes to help close the opportunity gap. With this schematic development, the company expanded the assortment of its products for the retailer, as well as in the whole category. Product expansion resulted in a 12.6 percent increase in sales for the heat-and-eat category, as well as a 75 percent increase in Hormel’s entrée sales. Te company identifed an approximately $600,000 opportunity in the poultry entrée protein segment for assortment optimization, and redesigned the planogram to improve the set fow, creating cleaner blocks for barbecue, traditional entrées and ethnic varieties. By bringing in new items the retailer hadn’t carried in the past, Hormel gained new distribution on four entrée items.

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

Perimeter -—— Variable-/Fixed-weight Produce

Superpremium Juice

Category Advisor

Bolthouse Farms

Refrigerated Salad Dressings

Category Advisor

Litehouse Foods

Litehouse Foods continued to lead the booming refrigerated dressing category, which boasts sales of nearly $340 million and 5 percent annual growth, through innovations in products and in-store merchandising. Responding to consumers’ demands for healthier, “cleaner” foods for themselves and their families, and corresponding sales increases for foods with natural/organic, non-GMO and gluten-free label designations, Litehouse introduced extensions, revamped its organic line, introduced a clean-label dressing and added favors to its industry-leading products. Te company didn’t take a blanket approach to its customers; rather, it worked market by market, store by store, to customize its product ofering to the unique needs and tastes of consumers. Its goal was always to support not just sales of its products, but also the entire produce category. Over the past year, Litehouse dollar sales grew by 9.5 percent, and its ACV by an incremental 2.7 percent. Keeping the shelf fresh with innovative favors, packaging with a new look and feel, and crosspromotions helped keep the refrigerated dressing category as fresh as the produce that Litehouse’s products sit next to on shelf, while its consumer-driven promotions throughout the year engage consumers, ofering new recipe ideas and highlighting versatility through its products.

Perimeter -—— Variable-/ Fixed-weight Produce Avocados

Category Captain

Avocados From Mexico

As the reigning category leader, Avocados From Mexico (AFM) executed aggressive marketing programs to build brand momentum and consumption. Last February, AFM became the frst-ever fresh produce brand to air a commercial during the Big Game, reaching more than 110 million viewers. Te “First Draft Ever” TV ad was supported by a multitude of engagement activities across social media channels.

Te high-growth premium juice category has become inundated with so many new product entrants that retailers have become confused as to what’s considered premium juice, which items to stock and how to set their shelves to optimize sales. Employing key analytical tools such as market structure and source-of-volume studies, Bolthouse Farms provided clarity and guidance to retailers on the evolution of the premium juice category, which splits into two subcategories — superpremium and ultrapremium — while ultrapremium divides into the clean and functional subsegments. Ultrapremium can be highly incremental to the total premium juice category and its growth in the past year was driven by wider acceptance and distribution in major retailers, but bringing in too many items can cause a loss in SKU productivity. Bolthouse is consulting with national and regional retailers on the rollout of ultrapremium items like its newest entry into the clean ultrapremium subsegment, Bolthouse Farms 1915, as well as merchandising strategies across the entire premium juice category.

AFM also leveraged shopper insight and technology to develop such strategic promotional programs as a research tool that segments consumers by avocado consumption behaviors, attitudes, purchase drivers and habits. Leveraging consumer research, the brand rolled out redesigned permanent POS wire-rack displays incorporating simple “howto” messaging for the storage, selection and preparation of avocados. Te mobile wheeled displays also featured a taller bottom shelf for complementary items, while special top-shelf pockets for recipe cards or taco spices further promoted usage ideas. Further, AFM’s iAvocado app ushered the category into the digital marketing age. Tanks to AFM’s eforts, avocados continued to gain dollar sales as consumer interest and consumption grew.

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

Perimeter -—— Variable-/Fixed-weight Produce

Bananas

Berries

Category Captain

Chiquita Brands

Dole Fresh Vegetables

Cauliflower

purchases since introducing Crumbles; similarly, a national retailer posted gains of 29 percent in dollars and 19 percent in units in total caulifower sales after rolling out the product. When the item was on promotion, retailers could anticipate a lift of up to 30 percent. Additionally, GGF supported retailers with various premium services, including planogram schematics, category management, point-of-sale materials, and recipe cards featuring creative ways to use caulifower. To further increase momentum and consumer buzz, GGF worked with a blogger network and employed resources like Green Giant’s and Box Tops for Education’s Facebook, Twitter and Pinterest pages to communicate directly with consumers, as well as using its YouTube channel to post videos of easy-to-make recipes.

During the past year, Chiquita Brands worked to elevate the banana category by re-engaging with consumers. In September 2014, the brand launched the Cooking Lab Recipe Contest to encourage consumers to create their own Chiquita banana recipes. Chiquita supported retail partners with a dedicated campaign microsite, in-store marketing materials, a sweepstakes, online and mobile advertising, and PR campaigns, as well as a tailored Cooking Lab option that could include a retailer’s own chef, nutritionist and predetermined ingredients. One retail partner in this promotion outpaced the remaining market by 12.1 percentage points in banana dollars and 16.4 percentage points in volume. Seeking new partnerships between bananas and other products/brands, Chiquita commissioned a total store connectivity study from Nielsen in late 2014. Te study, which found that bananas are one of the most connected fresh categories in the store — they’re strongly linked to 135 categories representing 63 percent of total store dollars, and span 12 departments — helped Chiquita create a broad but focused approach to meet consumer priorities regarding breakfast, snacking and healthy eating by leveraging bananas’ proximity to other produce, their connectivity with occasion-specifc items across the store, and their trip and buyer connection.

Category Captain

Green Giant Fresh

Tis past summer, Green Giant Fresh (GGF) expanded the caulifower category by introducing Caulifower Crumbles to its product line. Recognizing rising demand for caulifower, GGF brought innovation to the category by addressing consumers’ desire for healthy meal options in a convenient, versatile, ready-to-use form. Since the product’s June launch, total caulifower sales at retailers that have added it to their assortments are outpacing national rates. Two Northeast retailers saw double-digit gains in total caulifower sales over the prior year in dollars and

Leveraging insights gleaned from a study on the berry variety buyer, Dole’s category development team helped retailers surpass national growth in berries by up to 12 points, securing additional weeks of feature support. Other retailers exceeded national growth in berries by more than six points with incremental ads for raspberries and blackberries, according to IRI. Dole’s study helped its retail partners change how they write circular ads: Instead of running singular-focused berry ads, they targeted multi-berry buyers with ads featuring all four berry types, based on availability. Tose featuring multiple berries within an ad collectively experienced a 48 percent higher promotional lift, IRI found. Dole also identifed the key holidays most efective by berry type, as well as key weeks within a month to promote. Tese promotion and pricing adaptations propelled new category growth in 2015 after marginal growth the previous two years. Dole’s study also led to new pricing and promotion strategies. Te brand teamed with one of the largest U.S. retailers in produce on the introduction of clustering throughout its marketplace. Te retailer saw total berry growth of 16 percent in dollars and 5 percent in units after the new clustered planograms went into effect, according to FreshLook.

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

You may not realize it, but by using the name Kleenex® as a generic term for tissue, you risk erasing our coveted brand name that we’ve worked so hard for all these years. Kleenex® is a registered trademark and should always be followed by a ® and the words ‘Brand Tissue’. Just pretend it’s in permanent marker.

Perimeter -—— Variable-/Fixed-weight Produce

Fresh-cut Fruit

Fresh-packed Vegetables

Category Captain

Category Advisor

Del Monte Fresh Produce

Dole Fresh Vegetables

Del Monte Fresh Produce determined that a midsize multistate retailer’s fresh-cut fruit category sales for the year were down more than 10 percent in both dollars and units. Te sales decline could be attributed to a lack of adequate personnel, resulting in out-of-stocks, inconsistent product quality and a lack of category support. Over the past year, Del Monte Fresh helped the retailer transition to a new fresh-cut program, advising on item selection and matching best-sellers with similar Del Monte items, based on variety and size; using IRI syndicated data to identify the bestselling items in the market to ensure that the fresh-cut fruit product mix was optimal; and employing Nielsen’s Spectra target segmentation tool to identify stores with the greatest sales potential and to customize planograms for select stores. Te new program paid of for the retailer, as the category experienced sustained growth in its stores. Product quality remained consistent and out-of-stocks were reduced considerably. Dollar and pound sales were up 8.1 percent and 8.7 percent, respectively, through eight periods, and sales continued to increase steadily over last year. Finally, greater monitoring of store-by-store sales and inventory helped to lower the retailer’s cut-fruit shrink rate by nearly one percentage point.

Dole teamed up with retailers to position itself for the emerging “darker greens” that consumers are demanding. To that end, the company worked with retail partners to identify and provide solutions to maximize “darker greens power” products optimizing health benefts, including broccoli, kale, spinach, caulifower and Brussels sprouts. Additionally, being able to supply retail partners with fexible order guidelines and delivery procedures paid dividends for Dole’s partners, which experienced signifcant growth in dollars and pounds compared with their competitive landscape: One major retailer was able to increase commodity vegetable purchases by 12.9 percent from a year ago. A key challenge for commodity vegetables was to keep up with consumer demographics to sustain year-over-year growth. Tis ongoing generational shift resulted in retailer and grower portfolio adjustments toward Generation X and Millennial consumers. Over the past year, collaborating with individual retailers provided valuable insights for Dole, helping it readjust its portfolio of new product launches aimed at Gen Xers and Millennials. While Dole had a great year in 2015 with commodity vegetables, its focus continued to be on discovering valuable insights that provided retail solutions, thereby accelerating sales and proft performance.

Mushrooms

Another customer, in the West, wanted to maximize category sales and profts so it could support other department promotions. Monterey’s promotional strategy grew category sales 7.2 percent, category net profts 7.9 percent, category units 4.3 percent and category pounds 6.6 percent. A third customer, in the South Central region, wanted to grow organics to 15 percent without sacrifcing category profts. Monterey helped the retailer increase organic mushroom sales from a 3.6 percent to an 8.1 percent share of category sales, while sales rose 8.8 percent; net proft, 9.2 percent; units, 3.1 percent; and pounds, 5 percent. Although the last 52 weeks ended with an average of 8.1 percent of organic sales, the last three periods showed organic share of the category at 15 percent and above.

Category Captain

Monterey Mushrooms A Monterey Mushroom customer, located in a highly competitive Southwest market, wanted to increase existing customers’ transactions across the store. After Monterey fne-tuned its assortment, setting everyday retail prices and implementing a promotional strategy that rotated all items over an eight-week period, the retailer saw units increase 7.1 percent, total category pounds rise 10.1 percent and sales go up 3.5 percent, while category shrink dollars fell 23.8 percent versus the prior year.

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

Celebrating Category Leadership Success THANK YOU for helping us earn the 2015 awards for Category Captain and Category Advisor

Perimeter -—— Variable-/Fixed-weight Produce Packaged Salads

Category Captain

Dole Fresh Vegetables

In 2015, Dole drove packaged salad dollar and unit growth of 6.6 percent and 6.3 percent, respectively. Te company’s exclusive retail partners experienced signifcant category growth of 11 percent, driven by high Dole conversion rates. For national retailers, Dole’s dedicated teams provided localized support to leverage insights to drive retailer business decisions, helping its partners attain double-digit category growth rates. For example, category development and shopper marketing employed internal shopper data to drive targeted consumer marketing programs that had a signifcant impact on category results, with up to 39 percent higher redemption rates driving increased frequency. Dole’s regional retail partners outpaced competitive dollar and unit trends by 0.9 percent and 0.2 percent, respectively. At one Western regional retailer, Dole teamed with a refrigerated dressing company to grow sales and baskets, boosting the retailer’s overall salad category, driving the Dole brand and increasing sales of refrigerated salad dressings over last year. For its wholesale partners, Dole recognized that the “One Dole” approach (sales/category development/shopper marketing) could better engage independent chains to maximize performance and efciency. At one Midwestern independent retailer, Dole grew both brand and category sales by double digits, while average independent growth was 8.7 percent.

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

2014

No one stirs up data on coffee like Massimo Zanetti Beverage Massimo Zanetti Beverage is pleased to be recognized as a Coffee Category Captain by Progressive Grocer Magazine. We invite you to discover how our proven category research can help you increase sales and drive growth in the coffee aisle. For a CustoMiZed evaluation oF your CoFFee CateGory, ContaCt susan laMBert at slaMBert@MZB-usa.CoM today.

COFFEE CRAFTED LIKE NO OTHER.

Perimeter -—— Variable-/Fixed-weight Produce

Packaged Salads

Pears

Fresh Express

Pear Bureau NW

Potatoes

promotion. Bulk potato market share increased by 10.3 points, and bulk potato velocity by 34.6 percent; incremental sales delivered were $3,896. Total shopper trips to the potato category edged up by 0.4 percent, and total spend per trip increased $0.06 per trip from the prior year, with trips increasing signifcantly for smaller potato varieties. Overall, market share gains in the test stores resulted in $16,349 in incremental sales. In this test, marketing tactics that focused on single potato types were more efective at driving market share increases, bulk potato promotions of all varieties were efective in driving sales growth, and featuring potato salads in the deli was efective in increasing sales velocity and market share, especially during the summer.

Category Captain Fresh Express launched three Healthy Plus Salad Kits this year, each of which delivers on such relevant functional benefts as heart health, digestive health and antioxidant therapy. Results indicated that these SKUs helped fuel accelerated and incremental growth within the bagged salad kit segment. Among retailers carrying all three SKUs, segment sales were up 40 percent, assortment expanded 34 percent, and overall velocities improved 38 percent, according to IRI. Also this year, Fresh Express introduced the Greek Yogurt Caesar Kit; with $2 million-plus in sales so far, this item helped drive solid incremental consumption without signifcantly afecting sales of existing Caesar Kits, which continued to enjoy double-digit growth. Additionally, Fresh Express built a set for an independent regional account that ofered the following improvements: All organic products — salads and other produce — were grouped together, creating a one-stop shop for organic shoppers; similar types of salad items were grouped better, so shoppers had less searching to do; and space was expanded for top sellers and contracted for slower-moving items. Tese eforts boosted the retailer’s category dollar sales by 16.7 percent year over year — almost twice the U.S. growth rate of 8.6 percent for the same period.

Category Captain

United States Potato Board

To grow category sales, the United States Potato Board (USPB) developed a nine-month category optimization (CO) program, in partnership with selected retailers, to adopt best practices and measure sales results. During the latest CO program, the USPB worked with a retail partner from May through November 2014 on in-store signage, recipe cards, circular ads, deli and bulk potato promotions, and in-store demonstrations. Overall market share and velocity for bulk potatoes in test stores increased signifcantly during the

Category Advisor Pear Bureau NW’s domestic marketing team coordinated promotional activities with retailers throughout the United States and Canada. At the beginning of each pear season, the bureau’s managers analyzed individual retailers’ pear category performance, and then met to create uniquely tailored and efective season-long promotions. Te agreements were customized to ft the bureau’s crop manifest, which included improving the total category through expanded variety and size (like small fruit for 2015-16) and creating a season-long outlook with the buyers, and also covered cooperative advertising, sampling activities, display contests, cross-merchandising and joint promotions, as well as training, education and support for all pear needs. Seasonal promotions were set up during the year to capitalize on market opportunities. Two of the bureau’s leading retailers increased sales by 40 percent by following its best practices: ofering an assortment of sizes and varieties, including bagged pears; incorporating conditioned fruit, which can increase sales by as much as 19.5 percent, based on the bureau’s retailer data; holding bureau-sponsored sampling events; and setting up cross-merchandising and secondary displays.

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

NE W

SEASONED TUNA

Recipe Ready or On-The-Go! Jalapeño l Lemon & Pepper l Chipotle Spicy Thai Chili l Sun-Dried Tomato & Basil

BOLD FLAVOR! 2.5 oz POUCHES

READY TO ENJOY! KITS 3.6 oz WITH CRACKERS

Perimeter -—— Variable-/Fixed-weight Produce

Potatoes

Tomatoes

Category Advisor

Idaho Potato Commission

NatureSweet

Te Idaho Potato Commission (IPC) continued to provide data, such as recent research it conducted on Hispanic potato shoppers and how their buying patterns are unique in the category, to help retailers enhance their ad plans and show them how featuring potatoes in their produce departments will bring up the entire category. Te IPC also created a laminated, double-sided point-of-sale sign to identify Idaho potatoes in bulk at retail, displaying the “Grown in Idaho” seal and the words “Produce of USA.” Te sign provided a great way for retailers to let customers know that they were buying Idaho potatoes, even when the potatoes weren’t in a bag identifying them as such. Further, the commission continued to present all retailers interested in improving potato category sales with in-depth analyses. Using proven statistics and pictures from fve of a retailer’s stores, preferably with fve distinct potato sets, the IPC analyzed the layouts and visited all competition within a 5-mile radius of each analyzed store, and then prepared PowerPoint presentations featuring confdential, no-charge category reviews for the retailers, along with recommendations on how to improve sales across the entire category. Retailers that put these recommendations into practice saw positive results.

Several tried-and-true ongoing NatureSweet promotions included the brand’s SunBursts MVP program, which takes place every January and focuses on healthy snacking with sweet golden SunBursts tomatoes. Springtime provided a focus on salads, with NatureSweet continuing its partnership with Fresh Express to help consumers craft the perfect spring salad while saving money on multiple salad-worthy products. NatureSweet’s midsummer Glorys of Grilling promotion ofered creative recipe booklets and an interactive contest encouraging consumers to submit their own recipe creations using robust Glorys tomatoes for a chance to win some Weber grill prizes. Te brand’s newest product, Constellation, ofers a 24-ounce retail package of tomatoes for every usage occasion. Incorporating fve tomatoes — two for salads, one for snacking, one for cooking and one for slicing — into a medley pack to help drive consumer education on usage occasions, Constellation delivers an optimal amount of tomatoes in a format that meets consumers’ desire to enjoy and use the favorful items.

Value-added Produce

Category Captain

Mann Packing Co. Noting that Mann’s Sugar Snap Peas is the No. 1 vegetable segment in the Central U.S. region, a prominent retailer in the region leveraged Mann’s expertise to grow its overall category by focusing on snap pea sales. Mann’s growth strategy was to provide a comprehensive snap pea assortment that could apply to all usage, meal occasions and household sizes. By adding a larger-size snap pea SKU, the retailer added 16 percent of incremental revenue to its snap pea business. Te higher-dollar-ring 32-ounce item

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

increased the overall dollar value of each basket, boosting overall proftability. Tus, the retailer outpaced the rest of its market in snap peas and overall category growth. Additionally, a prominent Great Lakes retailer transitioned its private label items to Mann’s Family Favorites. By creating clear segment and brand block areas for the new shelf set, Mann’s improved its look and overall consumer appeal. Mann’s also increased product diversity by adding to the set’s organic selection. Te retailer’s organic share of business is now double the rest of its market and growing twice as fast. Also, new innovative products such as Mann’s Culinary Cuts, Power Blend and Kalettes, the last a natural kale/Brussels sprouts hybrid, have launched.

IRRESISTIBLY ORGANIC Introducing Delicious, Organic Fruit Flavored Snacks New Jelly Belly® Organic Fruit Flavored Snacks are made with real fruit juices and all non-GMO ingredients. They are USDA certiﬁed organic, vegetarian, gluten free, with no gelatin or dairy. Kids will love the six fun rainforest animal shapes while moms will love providing a delicious, organic snack. Available in three great ﬂavor assortments: Strawberry Apple, Berry Cherry and Assorted. Look for more products in the Jelly Belly Organic Line soon!

Kosher Certified

Perimeter -—— Variable-/Fixed-weight Produce

Value-added Produce

Category Advisor

Stemilt Growers LLC

Stemilt expanded its longtime category management program, FruitTracker, to provide its customer base and the entire industry with category insights in an easy-to-read infographic format. “Stemilt-O-Graphics,” published monthly throughout the apple and pear seasons, and once leading up to cherry season, informed retailers how each category was performing on average in the United States. Stemilt also provided insights and tips for retailers to maximize their categories or, in some cases, reverse a negative trend at their stores before a problem escalated. Additionally, individual Stemilt-O-Graphics went out to retail partners that allowed their data to be accessed by Nielsen Perishables Group. Te simple structure enabled the company to expand FruitTracker to retailers that it wasn’t serving regularly before. Using category data for apples, pears and cherries, Stemilt gave each of its retail accounts an overview of its apple and pear categories and how it stacked up against the rest of its market. Te company’s merchandising team delivered these insights in person and worked with retailers to strengthen their apple and pear categories through specifc promotions and merchandising strategies. Further, Stemilt continued to focus on branded pouch bags through its Lil Snappers kid-sized fruit program and new Fresh Blenders apples for juicing/smoothies.

2012

2013

2014

2015

Four years in a row –

the best keeps getting better. Total Pages Page Share

Progressive Grocer

Supermarket News

2015 808 46.66%

2015 245 14.13%

2014 689 38.77%

2014 375 21.10%

Grocery Headquarters

2015 2014 679 714 39.21% 40.13%

Source: 2015 Inquiry Management Systems

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

There’s a reason Progressive Grocer outperforms the competition – the best content, backed up by integrated information and marketing resources that let you: 1. Reach the right retailers 2. with the right message 3. in all the right ways. Suppliers face challenges like never before. Progressive Grocer, its allied brands, and powerful resources like integrated research and database solutions from Stagnito Business Information, help suppliers target all the retail executives who can lead to the success of a brand. Call Jeff Friedman at 201-8557621 to learn how Progressive Grocer can increase the impact of your b-to-b marketing program.

the

brand

# free-from Baking Chocolate

43 driving

(with is

sales*) % growth

Categoy

the

again!

Free-From: wheat, dairy, peanuts, tree nuts, egg, soy, fish, & shellfish

Enjoy Life, the fastest growing company in Gluten-Free Baking Supplies, unveils the latest innovation in plant-based, Free-From Baking Mixes â&#x20AC;&#x201D; driving incremental sales in a category ripe for innovation. enjoylifefoods.com

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*Source: SPINSscan Conventional (powered by IRI) Brand Ranking Report; 52 weeks ending 4/19/2015. Dollar Growth based on Dollar volume for current period versus year ago and is on items currently coded as CERTIFIED and LABELED GLUTEN FREE. Fastest Growing Company in Baking Supplies claim based on TDP Chg vs year ago.

Perimeter -—— Other

Automated Retail

Category Captain

Outerwall

Last year, Outerwall’s Redbox movie and video game rental kiosks introduced Redbox Play Pass, a loyalty program allowing customers to earn points and rental credits through various activities. Since the November 2014 launch, the program scaled to 2.3 million members by the end of the second quarter of 2015, with results showing that members rented nearly twice as frequently as nonmembers. Te newest ofering from the company’s Coinstar division, Coinstar Exchange, helped retailers tap into the burgeoning gift-card exchange market. Outerwall also launched successful cross-promotions between Coinstar and Coinstar Exchange services with Redbox, driving incremental business opportunity across the company’s brand portfolio. Meanwhile, Outerwall’s ecoATM service recycled more than 5 million devices — more than double last year’s number — with 2,200-plus kiosks in the United States recognizing more than 5,500 devices. By conducting research, developing insights and working with retail partners to better manage the front of the store, or “post-register zone” (PRZ), which represents an untapped opportunity for retailers, Outerwall’s category management team achieved success: Over the past year, the company’s core business added $2.3 billion to the automated retail sector, continuing to drive revenue in an otherwise underused retail space. PG

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

Feature

Corporate Social Responsibility

The Right

Cause

Through giving, grocery retailers gain. By Joan Driggs

ust about every grocery retailer engages in charitable giving — or cause marketing or corporate social responsibility (CSR) — and yet it’s viewed as a great diferentiator, particularly relevant in an increasingly competitive marketplace. Initiatives that address everything from food insecurity to cures for diseases are executed with the intention of impacting the cause, infuencing consumer behavior and enhancing corporate reputation. Respondents to the “2015 Cone Communications/Ebiquity Global CSR Study” say they have a more positive image of (93 percent), are more likely to trust (90 percent) and are more loyal to (88 percent) companies that support social and environmental issues. Beyond the reputational boost, companies can reap real fnancial rewards from CSR eforts. Retailers indicate that the top three benefts of CSR are an enhanced image in the community, loyalty and increased customer engagement. But there are many spheres of giving — from hyperlocal to global — as well as layers of complexity. With the need for support as great as it is, grocery banners make difcult choices on which causes to support. “I’ve never met a not-for-proft mission I didn’t love. Tey all want to improve and help the world in a special way,” says Joanie Taylor, director of community relations at Schnuck Markets, based in St. Louis. Supermarket banners need to consider their core mission as they determine which causes to aid. Toughtful curation of initiatives will also help alleviate the charitable whiplash aficting their shoppers. Consumers are no longer drawn to the cause ribbon of the day; rather, they want to feel good about their support — in terms of where their money is going, the brands they support and the time they invest.

The Causes That Align For many years, Schnucks, a chain of 98 stores in the Midwest, tried to be all things to all people, recounts Taylor. As the company approached its 75th anniversary in 2014, it took a more introspective view of its mission and how it aligned with the many causes it supported. Schnucks supports two avenues of giving: corporate and customer-supported. Corporate support is focused on three areas: hunger, human services, and health and wellness. For customer-supported initiatives, the retailer partners with eScrip, through which qualifying not-for-profts can earn a percentage of sales from supporters who register and shop at Schnucks. “It’s good business because it’s tied to customers who support us,” asserts Taylor, “and we in turn can support what’s important to our shoppers.” As a regional chain, Schnucks is dedicated to causes that are local to its stores. For more than 30 years, the grocer has supported Operation Food Search (OFS)

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

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

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

Feature

I’ve never met a not-for-profit mission I didn’t love. They all want to improve and help the world in a special way.” —Joanie Taylor, Schnuck Markets

Corporate Social Responsibility

by providing food donations and fnancial contributions to the nonproft organization dedicated to ending hunger in the St. Louis area. In the past fve years, the company has ramped up its eforts with the creation of Meat Rescue, which ensures safe handling of meat donations to food banks. During a six-month period in 2015, for example, Schnucks added more than 500,000 pounds of meat protein to its other food contributions. Over the course of a year, Schnucks donates 11 million pounds of food, or the equivalent l of 6.25 million meals. According to Taylor, every third meal provided by OFS comes from Schnucks. Ahold USA’s charitable eforts came together in 2012 through the unifcation of Giant Carlisle’s Our Kids Foundation and Stop & Shop/Giant Landover’s Family Foundation. Te combined entity, now known as Our Family Foundation, exercises a Better

8 Tips for a Successful ‘Give’ The support that retail banners provide nonprofit organizations ranges from the hyperlocal, such as employee scholarships, to local, regional, national and even international efforts. While children and hunger are widely supported, other popular causes are environmental, emergency aid and finding cures for diseases. Even turnkey corporate social responsibility initiatives should demonstrate a spin unique to the retail banner driving the charge. Creativity is a must, and here are some other considerations for successful programs: Programs should support the banner’s mission. Programs should last four weeks in length to maintain the energy. Retailers appreciate turnkey solutions. The best events include a donation of time and expertise of employees. Internal champions are usually the catalyst for success. When initiatives better the business, it’s a win-win. Consider educating shoppers and employees on ways to reduce the environmental impact of the store(s). Partnering with other organizations is a great way to extend resources. Know your strengths, and find a partner that shores up your weak spots. Make it measurable: from money raised, the number of participants (new and existing customers), or an increase of sales of featured products. Need some ideas? Visit Progressive Grocer’s monthly events calendars.

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HeadInG oFF HunGer Schnuck Markets has supported operation Food Search for 30plus years in the St. Louis area.

Neighbor strategy. In 2014, the company’s divisions, comprising Giant Landover, Giant/Martin’s, Stop & Shop New England and Stop & Shop New York Metro, donated $67 million to eforts focused on hunger (47 percent of all giving), children (31 percent) and building healthy communities (22 percent). Supported by skills, volunteerism, and fnancial and product support, the community-focused strategy aims to improve quality of life. Ahold USA operates about 770 supermarkets in 14 eastern states, in addition to online grocery delivery provider Peapod. Being a “good neighbor” is critical to the company’s goal of ofering value and better places to shop. As Ahold COO James McCann told Progressive Grocer in late 2014: “We know we’re not going to become a great retailer unless we’re also a great place to work, and a great neighbor in the communities which we serve and where we live. Every single one of our divisions has been a key player in their communities and has continuously found ways to give back.” Te grocer’s 120,000 associates are credited with bringing its Better Neighbor promise to life. By em-

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

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VeGGie SeNSe Raley’s supports a “veggie petting zoo” at the Fruit -to-Root Literacy Fair. Kids get to touch, smell, and taste vegetables they might not be familir with.

Corporate Social Responsibility

powering associates at the store level — through training, encouragement and honest feedback — the company has created a motivated group with a common mission. Te company’s Our Family Foundation’s Fighting Child Hunger grants are awarded across all Ahold divisions and supplemented by volunteer grants that support regional food banks through associate volunteerism. Te foundation disbursed more than $13 million in 2014. Not just at Ahold, but across the entire industry, retail executives assert that a common denominator of successful programs is having associate involvement.

Filling the Need Gaps Raley’s, based in West Sacramento, Calif., works from its Purposeful Giving pillars: Simply Sustainable, supporting the environment and sustainable practices; Local Spirit, supporting organizations in the local community; Healthy Habits, encouraging

Beyond the Cash Register Retailers should take advantage of the many ways they connect with shoppers to create awareness of, and generate support for, corporate social responsibility (CSR) initiatives. The “2015 Cone Communications/Ebiquity Global CSR Study” notes that “consumers stand ready to support or punish a company based on its CSR efforts.” The report indicates that consumers are as likely to make a purchase in support of a cause (89 percent) as they are to boycott a business (90 percent), but that increasingly, they’re looking for different ways to engage. American consumers, for example, indicate a willingness to donate (79 percent), volunteer (70 percent) or directly participate in a dialogue (69 percent). Commonly supported by donation matching, supermarket CSR programs routinely solicit donations through checkout programs, either via POS signage or verbal requests from associates. Other initiatives include in-store POS, on-package messaging, in-store events, advertising/ad circulars, and social media. The most common partnerships are with food banks and CPG partnerships, where turnkey programs are executed at store level. Retailers also team with local organizations around events and volunteer services. According to the Cone/Ebiquity CSR study, since “CSR in the U.S. is as much about building and protecting reputation as driving sales, companies must integrate CSR efforts into their entire brand experience.” Building engagement beyond the cash register ensures a deeper connection to both the retail banner and the cause.

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healthy lifestyles and d ftness; and Plentiful Plate, providing quality food products and healthy choices. “We serve a variety of communities, and Purposeful Giving allows us to streamline those requests in a meaningful way,” explains Chelsea Minor, director of public afairs for the 127-store chain operating in northern California and Nevada. “It’s our employees’ and team members’ time and our unique resources, knowledge, our food system — how to eat, how to source vegetables and fruit, how to create balanced meals, etc. — so we created Purposeful Giving to align with health and happiness. It’s an evolution. We’re trying to redefne the ways we give. It’s not just monetary donations; it’s also using our knowledge to beneft the organizations we partner with.” Te company’s vision is to “infuse life with health and happiness by changing the way the world eats, one plate at a time,” according to President and CEO Mike Teel, as posted on Raley’s website. One major initiative that supports this is Food for Families, which this summer launched its “refresh” campaign to provide more fresh fruits and vegetables to food banks. From mid-June through July, shoppers at Raley’s, Bel Air and Nob Hill Markets donated $1 and Raley’s matched the frst $25,000. In the summer of 2014, customers, team members and businesses raised more than $460,000 to fght hunger in their communities. Tis past summer, the program raised $622,000 for food bank partners. Te retailer works with the Center for LandBased Learning to support beginning farmers and supplement its fresh Food for Families initiative. Tis past May, ground was broken on a new urban farm that is open to the public for produce purchases and ofers volunteer opportunities. One-quarter of the produce supports Food for Families food banks. Additionally, through its support of the Food Literacy Center, Raley’s supports a “veggie petting zoo” as part of a Fruit-to-Root Literacy Fair. Rather than animals, kids get to touch, smell and taste produce they might never have seen before, such as

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

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Corporate Social Responsibility

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We’re trying to redefine the ways we give. It’s not just monetary donations; it’s also using our knowledge to benefit the organizations we partner with.” FIllInG the need Gap hy-Vee has been recognized for its local support of the national Great american Milk drive campaign.

nopales cactus, endive or avocado. Tese Plentiful Plate initiatives allow Raley’s to support the community in diferent ways, according to Minor: “We increase access to food, but it also allows us to educate people. We teach people about the nutritional value of fruits and vegetables, as well as how to select and prepare them.”

Foundations of Giving Fighting hunger is a natural cause for supermarket banners. Chicago-based Feeding America, a large network of food banks that provides billions of meals annually, estimates that grocery retail donates approximately 1.4 billion pounds annually to food banks. In addition to contributing food products and other goods, supermarkets support food bank eforts through cash donations, and by providing in-kind services such as transportation and publicity. Food retailers also encourage their customers’ support of food banks by hosting food drives, offering purchases of prepackaged goods for donations and providing scannable coupons for cash donations. Tanks to a partnership among Feeding America, MilkPEP (the Milk Processor Education Program) and the National Dairy Council (NDC), the Great American Milk Drive is national in scope, but feels

—Chelsea Minor, Raley’s

very local as a scalable, turnkey campaign. Like meat and fresh produce, milk is another need gap for most food banks. Trough the Great American Milk Drive, milk donations can be made via text, online or as a voucher purchased at checkout. Tose in need obtain vouchers from food banks and pick up milk in-store. Tus far, more than 400,000 gallons of milk have been donated; 50 percent of donations were received at retail. West Des Moines, Iowabased Hy-Vee won the 2015 Retail Leader/Category Management Association Best Practices Award for Collaborative Business Planning for its work in developing the program. Just 13 of the chain’s 230 stores collected more than 20,000 gallons. Te banner donated 4,000 gallons and customers contributed 16,000 gallons. Individual stores created displays that promoted the local nature of the support. Schnucks, meanwhile, identifed another need: diapers. Tis fall, the grocer teamed with the St. Louis Area Diaper Bank to provide diapers to local families in need. Te 12-day diaper drive included donations of diapers purchased in-store, previously purchased extra diapers that children may have outgrown and cash donations added to grocery purchases at checkout.

Feature

Corporate Social Responsibility

The Might of Hometown Support One of the largest veteran support programs is Wounded Warrior Project’s (WWP) Believe in Heroes campaign, a collaborative efort among brands, retailers and consumers, which to date has raised more than $16 million dollars for veterans. Believe in Heroes was created in 2010 in collaboration with Acosta Sales & Marketing — based, like WWP, in Jacksonville, Fla. — to help the new generation of injured service members. Te campaign runs from early September through Veterans Day. By 2017, 100,000 warriors will be served, with $96 million in beneft entitlements secured for them and their families. Retailers promote the program through POP materials and contribution tear pads at checkout. Customers shop and receive discounts in support of the nation’s injured veterans, learn about their personal stories, and invite others to join the cause. Earlier this year, Southeastern Grocers LLC’s Bi-Lo, Harveys and Winn-Dixie grocery stores donated 100 percent of profts generated last July 4 to WWP’s Independence Program, which creates

HeRo SuPPoRT Ceo Ian McCloud (center) and Southeastern Grocers’ team members promoted WWP’s Independence Program in support of injured veterans.

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individualized, goal-oriented plans ffor severely injured veterans who need to rely on family and friends for support. Te initiative generated more than $3 million. “Winn-Dixie, Bi-Lo and Harveys operate in states with some of the highest active-duty military populations in the United States,” said Ian McLeod, CEO and president of Jacksonvillebased Southeastern Grocers, which operates about 790 grocery stores throughout Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee, at the time of the program’s launch. Te banners’ shoppers supported the cause by shopping at participating stores on July 4 or making a donation at checkout through July 5; wearing the “I Donated” sticker handed out by cashiers on July 4 to encourage friends and family to follow suit; liking, following and sharing the banners’ Facebook posts and Twitter feeds with the hashtag #AllForHonor; and posting a dedication to a veteran or service member on a special Facebook page.

New Ways to Connect Many charitable programs do as much for the industry as they do for those being supported. For instance, iFoster has partnered with Raley’s to develop a new hiring program for foster youth. Since May — Foster Care Month — Raley’s has hired 17 foster youths in the Sacramento, Calif., region, with the goal of expanding the program to other stores. Te Foster Youth Hiring Program seeks to fnd employment opportunities for foster youths who are close to aging out of the system. iFoster identifes, screens and trains both the youth candidates and Raley’s team members to make a successful match. In sum, decide what’s best for your banner. For greater impact, seek partners with complementary resources. Align programs with shoppers’ interests and use all available tools to engage them. After all, it’s not just the good cause that stands to beneft. PG For more about corporate social responsibility, visit Progressivegrocer.com/CSRTips.

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Store Brands

Private

Eye

Major retailers take a fresh look at their own brands. By Lynn Petrak

Along with a move toward healthier eating and better-foryou foods, many private label food products are focusing on clean labels, with easy-toread ingredients and product claims.” —Amanda Topper, Mintel

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hree shoppers walk into a grocery store. All of them are looking for value, one of them wants to go organic, and one just wants to mix things up. What do you get when you combine shaky consumer confdence, tight competition, and product and packaging innovations? It’s not a punch line, although it’s a trend packing some punch: the continued growth of private label and store brands, and the increasing number of retailers investing in such programs for a variety of products. Te numbers largely look good for private label/ store brands. Boston-based Trace One, a provider of product lifecycle management solutions and transparency software for retailers and suppliers, reports that a whopping 95 percent of consumers buy private brands. Although store brands and private label SKUs have long been purchased for price reasons — and touted as such — a broader defnition of value has emerged in recent years. Te Private Label Sourcing Survey 2015-16 from New York-based Deloitte found that retailers’ main objective for private label brands is to create a lower-priced, quality-consistent alternative, followed closely by their desire to establish exclusivity.

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

Recent market research supports the notion that there’s work to be done on some private label and store-brand identities to reach that second objective of establishing exclusivity. Trace One reported that while 75 percent of shoppers say they buy private label for the lower price point, only 22 percent say they purchase such products because they trust the quality. Many retailers are working to improve that number and bolster the quality perception by introducing new private label products, revamping existing private label oferings, and even creating diferent private label and store-brand product lines. For example, more than half (56.9 percent) of retailers surveyed in the 2015 State of the Industry Research Study in Store Brands (PG’s sister magazine) said that their companies ofer a multitiered private label program.

Natural Selection To set their private label products and lines apart, retailers are paying attention to changing consumer tastes, especially when it comes to premium, natural/organic, gluten-free and other specialty items. Te surge in interest in natural/organic/ better-for-you products — especially among the

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Our goal with HemisFares is to bring only the best food finds to our customers.” —Gil Phipps, The Kroger Co.

Store Brands

much-talked-about Millennial demographic — is a major opportunity for private label and store-brand products, notes Amanda Topper, food analyst for Mintel. “Along with a move toward healthier eating and better-for-you foods, many private label food products are focusing on clean labels, with easy-toread ingredients and product claims,” she observes. Recently, more retailers have addressed that demand for natural products and clean labels. Grand Rapids, Mich.-based Meijer Inc., Progressive Grocer’s 2015 Retailer of the Year, has rolled out a line called True Goodness, which is essentially a fusion of its previous Naturals and Organics private-brand lines. “Tis brand makes real food more approachable, and is part of our ongoing focus to provide health-and-wellness options for our customers,” remarks Peter Whitsett, Meijer’s EVP of merchandising and marketing. As part of the True Goodness reboot, 100 new products will be added this year, spanning a variety of USDAcertifed organic and/or free-from products. Last year, Aldi, whose U.S. headquarters is in Batavia, Ill., began to remove certifed synthetic colors,

Private Label/Store-brand Trends at a Glance Chicago-based Mintel’s research on private label reveals some trends and opportunities in that sector of the grocery business: Over the five-year period of 2009-14, fruits and vegetables, dairy, and snacks grew more than all other private label food categories, according to Mintel’s GNPD (Global New Products Database). Private label categories with the largest declines in new product introductions in 2009-14 included meals and meal centers, and desserts and ice cream. Although sales of private label prepared meals declined, 55 percent of consumers who purchase frozen or refrigerated meals and/or side dishes agreed store brands are as good as name brands in terms of factors such as quality and taste. Organic options can help grow the stable private label cookie segment. Private label sales represent about 15 percent of the cookie market, but have struggled to grow in recent years. Private label bread represents the second-largest market share (24 percent), and continues to perform well. For pretzels, private label sales represent a 17 percent market share. This category grew 14 percent in 2013-14 as a result of increased innovation and higher quality. The percentage of brand-name nut-based spreads and sweet spreads declined in 2010-15, at the same time that the percentage of private label brands grew. Forty-two percent of products were private label during the period January 201415, a 23 percent jump in private label products from 2010-15.

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partially hydrogenated oils (PHOs) and added MSG from its store-brand line of products, which comprise roughly 90 percent of store sales. Te limited-assortment retailer has also recently introduced its liveGfree and SimplyNature lines.

Quality Control Beyond food, other grocery categories can be viable areas for natural private label and store-brand oferings. Wegmans Food Markets, based in Rochester, N.Y., recently rolled out a line of USDA-certifed store-brand organic skin care products under the Wegmans Organic Hand & Body Collection banner. Mintel’s Topper says that conveying quality is key for natural, organic and free-from private label and store-brand items. “[E]mphasizing product quality and afordability will be important, especially if comparing to national brands with these product claims,” she points out. Adding more premium and diverse products is another way to enhance a store brand and its reputation for quality. Notes Topper: “Tese products appeal to consumers looking for quality without having to sacrifce value.” Here, too, there are several examples of retailers investing in private label and store-brand revamps. Te Kroger Co., for instance, is introducing the HemisFares line of products imported from “the most food-rich regions of the world.” Explains Gil Phipps, VP of corporate brand for Cincinnatibased Kroger, “Our goal with HemisFares is to bring only the best food fnds to our customers.” When it comes to merchandising store brands, attractive, informational packaging and easy price comparisons can garner greater consumer attention and sales, advises Topper. “Shoppers are attracted to packaging featuring more product for the same price, as well as functional packaging, such as easy to open, resealable and easy to store. Tese attributes are especially important to high purchasers of store brands,” she says, adding, “[L]isting unit price comparisons between storebrand and national brands on store shelves may infuence shoppers who do not typically buy store brands to consider making a purchase.” PG

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

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Grocery

Meal Solutions

Easy Eats

Shelf-stable solutions offer quick preparation, satisfying fare. By Bridget Goldschmidt

ike the fast-paced world they inhabit, busy consumers’ demand for convenient meals shows no signs of slowing down. Accordingly, retailers have responded with solutions designed to enable shoppers to eat well, even when they have only limited time to cook. Recently, Skokie, Ill.-based e-grocer Peapod, an Ahold USA company, teamed with Barilla on fve more meal kits featuring all-new recipes by the Bannockburn, Ill.-based pasta brand, with all ingredients pre-packaged and pre-measured to make a meal for four or more; a total of eight kits are now available for delivery or pickup in the Chicago, Indianapolis and Milwaukee markets. Likewise, a Square One Markets

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convenience store in Bethlehem, Pa., has launched a pilot allowing customers to purchase Te Six O’Clock Scramble Fresh & Fast Family Dinner Kits, which cost around $20 and are ready after less than 30 minutes’ preparation. For consumers outside of those markets, however, their local supermarkets ofer plenty of quick meal options, and they need look no further than center store, where they can fnd a range of products beyond the taco assembly kits and Hamburger Helper-style meals that have long been staples of the section. Te new solutions are either complete in themselves or simply augmented by the addition of a protein and/or vegetables. To begin with, shelf-stable options have a distinct edge

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

Grocery

The ability to take a shelfstable meal to work or to school without worrying about refrigeration is appealing to many of our consumers. Additionally, storage space in the fridge or freezer is limited in many homes. Consumers often have more space to store shelfstable meals.” —Jill Roberts, ConAgra Foods

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Meal Solutions

over their frozen and refrigerated counterparts in certain key respects. “Te ability to take a shelf-stable meal to work or to school without worrying about refrigeration is appealing to many of our consumers,” notes Jill Roberts, brand manager, convenient meals at Omaha, Neb.-based ConAgra Foods. “Additionally, storage space in the fridge or freezer is limited in many homes. Consumers often have more space to store shelf-stable meals.” “Te clearest advantage[s] of shelf-stable meal solutions [are] storage and portability, given that they don’t require refrigeration to maintain integrity,” agrees Jan Pajerski, co-founder of Ithaca, N.Y.based Grainful, maker of an innovative line of side dishes incorporating steel-cut oats. Perhaps in response to shoppers’ embrace of their greater convenience, and a subsequent infux of new products from manufacturers, shelf-stable meal starters, after years of steep declines, showed a 4.6 percent uptick in sales dollars for the 52 weeks ending Aug. 29, according to Schaumburg, Ill.-based Nielsen. Among related categories during the same time frame, prepared food dry mixes’ sales dollars were down 1.1 percent, after several years of essentially fat growth, while ready-to-serve prepared foods posted a 5.2 percent sales dollar increase, possibly indicating consumers’ preferred meal solution forms.

The Value of Inspiration To address consumer needs, ConAgra has refreshed its Chef Boyardee Big Bowl Microwave pasta offerings with adult consumers in mind. Te items now feature two new grown-up favors — Italian Sausage Marinara and Creamy Tomato Chicken — among the seven varieties, while the product line’s updated new look emphasizes hearty serving size, value and adult appeal. Te company has even looked to its frozen oferings for shelf-stable ideas, launching Banquet Big & Hearty microwave bowls at the end of August. “Tey bring proven Banquet frozen-inspired recipes to microwave meals and ofer a better value per ounce than the current competition,” Roberts points out. In fact, value is as important as convenience for ConAgra. “Te price of our meal solutions should communicate value,” asserts Roberts. “We want consumers to know they’re getting a hearty,

satisfying meal at an afordable price.” In the area of merchandising, she notes, “High-visibility end caps have been successful for us in terms of getting in front of consumers and reminding them to put Chef Boyardee and Banquet Big & Hearty microwave bowls in their carts.” ConAgra isn’t alone in reimagining old favorites. Kraft Heinz has introduced bold Chipotle and Jalapeño varieties to its Velveeta Shells & Cheese line, as well as rolling out Kraft Macaroni & Cheese in “Minions” and “Star Wars” movie tie-in shapes. Additionally, by January 2016, Kraft Macaroni & Cheese will be made without artifcial preservatives or synthetic colors. Other companies are zeroing in on shoppers’ desire for classic comfort food without the fuss. In time for the onset of colder weather, General Mills’ Progresso brand has expanded its oferings to include two new stews and a vegetable chili item, enabling consumers to dig into hearty home-style meals after just fve and a half minutes of preparation. Meat-free Progresso Roasted Vegetable Chili with 3 Beans contains roasted corn, red and green bell peppers, poblano peppers, onions, and pinto, black and dark-red kidney beans, while White Chicken Stew with Savory Herbs ofers a blend of white chicken meat chunks, potatoes, mushrooms, carrots, cream, peas, celery and onions, combined with savory herbs and seasonings, and Hearty Vegetable Stew with Beef includes large cuts of beef, tomatoes, potatoes, corn, okra, onions, celery and sea salt. In a similar vein, packaged mashed potato maker Idahoan Foods promises real Idaho potatoes in every spoonful of its recently launched frst-ever soup line in four substantial varieties: Cheddar Broccoli, Tree Cheese Chipotle, Loaded Potato and Creamy Potato. Te dry soups can be prepared in fve minutes — nearly one-fourth of the time of other soups, according to the Idaho Falls, Idaho-based company.

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

Deli Category Captain

5 Years Running

Grocery

Polenta is delicious, but traditionally time-consuming to make. We’ve given families a head-start on a flavorful meal that’s prepared and easy to customize.” —Kevin Tisdale, Pacific Foods

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Meal Solutions

On the organic front, Pacifc Foods is thinking globally with the introduction of pre-cooked Organic Polenta in four ready-to-heat favors: Original, Chipotle Cheddar, Jalapeño Cheddar, and Roasted Garlic & Herb. “American eaters are more adventurous and looking to grocery store shelves for products that can help them recreate authentic favors and dishes at home,” asserts Kevin Tisdale, VP of marketing for Tualatin, Ore.-based Pacifc Foods. “Polenta is delicious, but traditionally time-consuming to make. We’ve given families a head-start on a favorful meal that’s prepared and easy to customize.”

Time for ‘Brinner’ Ten there’s Grainful, which has broken new ground with Steel Cut Sides, any one of which can be paired with a protein or eaten on its own. Te line comes in four varieties, each featuring steel-cut oats, vegetables, a seasoning packet and preparation suggestions: Cheesy Oats, Tomato Risotto, Madras Curry and Jambalaya. Te com-

pany playfully refers to the product line as part of the growing trend toward “brinner,” that is, eating breakfast foods for dinner. To promote the inventive item, which hasn’t yet hit retail shelves, Grainful is readying a full slate of activities. Brand Manager Katie Long says that the company “plan[s] on demoing the product and participating in advertisements as well.” For instance, she notes, “We have plans to run ads in multiple in-store publications, which will allow us to spread awareness about the new products and ofer the consumer a coupon to use.” Te demo portion of the campaign is particularly important, according to Long. “Since savory oats is an unfamiliar idea to many, demos are a great way to teach people about the concept and get them to try the product,” she explains. “We always bring coupons with us to demos as well to drive trial, which is very important to do with new products.” As for merchandising, Grainful has been working on POS materials. “Since this is a brand-new product, and since we are the frst company to market

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

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Grocery

Since savory oats is an unfamiliar idea to many, demos are a great way to teach people about the concept and get them to try the product.” —Katie Long, Grainful

Meal Solutions

savory oat shelf-stable side dishes, we want to draw consumers’ attention to the products and inform them about oats for dinner,” says Long. “We created a wobbler and aisle violator that we will ofer to retailers.” Also in the ofng is a POP display or shipper. “Tis will be a great option for retailers, because our product can be in a branded standalone display that can be moved about the store,” observes Long. “It is pretty much an ad and functional display all in one, which we believe will be good for many retailers. It will also catch the consumer’s attention, more so than being on a shelf, and inform them a bit about the products and our brand.”

Small Steps As consumers’ convenience needs keep evolving, manufacturers will keep tweaking their center store meal solutions accordingly. “Shelf-stable meals will continue to expand their oferings in terms of new, exciting favors,” predicts ConAgra’s Roberts. “Consumers also want simpler, cleaner ingredient labels. Our classic Chef Boyardee pasta oferings, such as our Beef Ravioli and Lasagna, have no preservatives, no artifcial colors

and no artifcial favors. Tis is a change that many of our competitors are now looking to make. Convenience and value will continue to be mainstays of this category.” For her part, Grainful co-founder Jeannine Sacco believes that her brand is spearheading future shelf-stable meal solution development. “I expect to see more of the smaller food manufacturing companies like ours pushing the envelope with pouches of ready-to-eat meals that are shelf-stable, taste great and are made from ‘real food,’ she says. “We are defnitely moving towards a ‘real food’ movement. I am a chef, not a scientist. I make real food that tastes great. And it happens to be convenient.” PG For more about the future of shelf-stable meal solutions, visit Progressivegrocer.com/mealsolutions.

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The Case for Meat Grocers are wise to offer pricing and positioning that stress value and easy use.

Retailers must make sure to stock their case with a variety of choices, to give consumers the option of moving up to the next tier of quality, which will also be an opportunity for the retailer to gain higher total dollar sales.” —Kent Harrison, Tyson Fresh Meats

126

By Jim Dudlicek

ariety, value and education — those in the know say that these factors are going to be among the most infuential for grocers looking to boost their meat case’s role as a proft center. As the price of meat continues to stabilize following the elevated levels of the past several years due to drought, high feed prices and culled herds, consumers not otherwise experimenting with alternative proteins will fnd values from grocers savvy enough to deliver mealtime solutions. Strategic partnerships with meat suppliers will help retailers bring customers the greatest value. “As an industry, one of the techniques employed is a ‘good, better, best’ pricing model at the meat case,” says Kent Harrison, VP of marketing and premium programs at Dakota Dunes, S.D.-based Tyson Fresh Meats. For example, Harrison explains, a retailer might ofer thinner-cut pork chops at the meat

case at an attractive price, as well as thicker-cut chops right next to them, encouraging consumers to trade up to a higher-quality product. “Retailers must make sure to stock their case with a variety of choices, to give consumers the option of moving up to the next tier of quality, which will also be an opportunity for the retailer to gain higher total dollar sales,” he says. “Some retailers may use a dualprice strategy, with a product ofering that might be better than a competing product, and then a best or premium brand in the same protein category at a more limited SKU set. Price-per-pound gaps between the two tiers should remain consistent at all times, regardless of turn or feature business. Tis can sometimes be easily applied by having the best product in the full-service meat case.” Patrick Fleming, director of market intelligence and innovation for the Des Moines, Iowa-based National Pork Board, concurs. “Our research shows that consumers need to feel like there is enough of a variety in the case, and

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

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consumers relate variety in the meat case with the number of packages available, not the number of SKUs,” Fleming says. “Retailers should be stocking at least four packages of each item on display, especially during holidays and seasonal times, when meat department trafc is highest. “Our research also shows that the key to increase pork sales is to get on consumers’ shopping list,” he adds. “Increased frequency of promotion is just as important as the depth of the promotion. Most of the time, we can get pork into consumers’ shopping carts just by reminding them.” Sean Brady, senior marketing manager for Charlotte, N.C.-based Sealed Air Corp., asserts that

Millennials at Mealtime A look at how one Millennial shops for and prepares meat products. By Caroline Ahn In an effort to better understand how different Millennials purchase and use meat, I interviewed my friend Cathy Lee about her grocery shopping habits. Cathy is a former urbanite turned Millennial mom, now living in the suburbs of Chicago. She works part-time as an occupational therapist and spends the rest of her time trying to get dinner on the table while chasing her toddler. Midan Marketing (MM): Tell me how you typically shop for groceries in a given week. Cathy Lee (CL): I usually go to the grocery store three to four times a week, and the place I go depends on what is closest or what I need. MM:Where do you shop for meat products? And why? CL: For meat products, I mostly go to Costco or Jewel. I really prefer to go to Mariano’s for grocery shopping overall, but it’s kind of far away. Jewel has really great sales on meat, so I can buy in bulk, and then freeze it for later use. Same with Costco — I love that their meat comes in packages I can put in the freezer as soon as I get home. Meat from the regular grocery store you have to use right away. Heinen’s has higherquality meats, but is very expensive and has a limited selection. MM: What cuts of meat do you typically purchase? CL: My husband is better at preparing red meat, so he’ll make a lot of ribs (he has a great Chinese rib recipe!), steaks in the cast-iron skillet and pork chops. I’m not good at preparing red meat, so I buy a lot of thinner steaks for stir-fry and chicken breasts. I do, however, love eating red meat in restaurants.

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value can be expressed or perceived by customers in many diferent ways. “We know that actual price can have an efect, but more consumers are also looking at other factors: appearance and benefts like shelf life, easy-open, no mess, no leaking packages, etc.,” Brady says. To that end, he notes, vertical displays are gaining ground, enabled by appropriate packaging such as Sealed Air’s new Cryovac Darfresh On Tray easy-open package, which allows meat items to be vertically displayed, provides extended shelf life and is freezer-ready. Darfresh also employs vacuum packaging technology, about which Brady observes, “[T]hrough education, consumers are beginning to

I also always have some kind of ground beef in the house. I really like it with pasta sauce. There’s one particuYou know what lar brand of ground beef I buy that is would be really perfect. It’s organic, has the perfect helpful? If amount in a package, tastes great and grocery stores is a good price. I buy them in bulk and told me which put them in the freezer. I used to buy cut of meat is ground beef from the regular grocery good for which store, but now I stick to this kind. type of dish.” By the way, you know what would be really helpful? If grocery stores —Cathy Lee, told me which cut of meat is good for Millennial mom which type of dish. Chicken breast is super-easy, but with red meat, what is the difference between a chuck and stew meat? Is one better than the other? Does one have more fat than the other? I have no idea what the difference is or what to do with them, so I just don’t buy it. My husband would know the difference, but he doesn’t do the shopping. MM:Can you tell me how your meat shopping has changed over the years? CL:I can tell you that before our daughter was born, we (OK, mostly he) used to make a lot of fun meals, like a rack of lamb or boeuf bourguignon. Now that we have a toddler, it’s mostly stir-fry because it’s easy. I can make a whole meal in one pot (less to clean, too), and you can stretch it out to have multiple meals. It’s pretty easy to mix the meat with vegetables and starch for a quick meal. MM: Where do you get your meal ideas from? CL: Mostly Pinterest. Or that Better Home and Gardens redand-white-checkered cookbook everyone gets when they get married. But it’s mostly from the internet. Caroline Ahn is public relations manager for Chicago-based Midan Marketing, an integrated marketing agency focused solely on the meat industry.

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

understand the value it brings and what they fnd to be important: freshness and convenience.”

Adding Value What products are driving growth in the meat case? “One of the faster-growing categories is valueadded and pre-seasoned/pre-marinated meat products,” Tyson’s Harrison says. “Value-added meat products make it easy and convenient for consumers to get dinner on the table, for which they are often willing to pay a premium.” For example: Tyson’s Crafted Creations brand of seasoned and marinated beef and pork products, recently honored as a PG Editors’ Pick. Fleming, too, recognizes the value in value-added. “Retailers are also adding value by ofering more options in convenience packaging, which is a growing trend in the meat department,” he says. “We’re seeing Ziploc packaging, single-serve portion sizes and diferent forms of family packs to meet the various needs of consumers. We know that both Millennials and Baby Boomers want meat packages that serve a single meal. Consumers in these age groups generally don’t want leftovers, and prefer smaller package sizes that are just enough for one meal.” Research presented by the Wooster, Ohio-based Certifed Angus Beef (CAB) brand indicates that demand for premium products remains consistent even in recessionary periods. Tanya Mark, a researcher at Canada’s University of Guelph, speaking at CAB’s recent brand conference in San Antonio, outlined the idea of “hedonistic consumption,” in which consumers spend on afordable indulgences, like fne foods for home consumption, while cutting back on dining out and other luxuries. Tracey Erickson, CAB’s VP of marketing, cited research showing more than 80 percent of shoppers would pay up to $1 more per pound for CAB-branded ground beef, suggesting better returns for grocers that upgrade their grind programs from commodity to branded. Meanwhile, with traditional eating occasions being redefned, meat purchases are extending beyond regular mealtimes. According to the Washington,

D.C.-based National Chicken Council (NCC), 85 percent of consumers ate a chicken meal or snack purchased from a supermarket, and 67 percent ate a chicken meal or snack from a foodservice establishment, in the two weeks leading up to the organization’s June 2015 online survey. “Chicken remains America’s favorite protein, and consumers’ afnity for it shows no signs of waning,”

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Simple Solutions As grocers move toward selling meals rather than just ingredients, the meat case can become the anchor for lucrative cross-merchandising. “Whether it is merchandising with refrigerated mashed potatoes or pastas or vegetables, promoting meat with products that help consumers with their daily dinner dilemma can be benefcial to multiple departments across the store,” Harrison afrms. “We’re also hearing a lot about the fact that many consumers are using meat as an ingredient [rather] than as a centerof-the-plate item. Retailers can beneft from embracing this trend and giving consumers new ideas of where Straight and narrow. A new aisle-warming solution they can use meat as an ingredient for nagging cold aisle complaints. — this can be anything from a pasta dish to a protein-packed salad to a hearty soup.” Te National Pork Board’s Fleming points to a successful summer crossNew promotional campaign with Kraft’s fo A.1 steak sauce: “By grouping like 201 r 5 items together that give consumers a whole-meal solution, we were able to drive sales for the center store as well as the meat department.” Recipes present opportunities for consumer education. “One of the most important things retailers can do is educate consumers on how to prepare fresh meat,” Harrison asserts. “We need to educate them on the various cuts of meat available to them, and the best preparation methods. Making sure they have positive eating experiences ensures repeat purchases and long-term loyalty.” Specifically designed for narrow Another signifcant educational opaisle applications in grocery portunity, Fleming says, is to merchanstores, Airius’ Narrow Aisle fan dise cuts at retail using the new common provides an elongated airflow names developed in 2013. “We are pattern to maximize spread working with retailers across the country to implement these common names for down the length of an aisle fresh pork cuts and diferentiating pork while minimizing interference chops by price,” he notes. “By ofering with open cases. Features grilling cuts that consumers already energy-efficient electronically know how to cook, including ribeye, commutated (EC) motor. New York and porterhouse, pork chops will be seen by consumers as an attractive alternative to other higher-priced items in the meat case.” PG says NCC SVP of Communications Tom Super on the group’s website. “Tis latest data confrms that, but it also presents some opportunities and challenges in the year ahead.” In the next 12 months, 23 percent of consumers anticipate eating more chicken from the supermarket, and 14 percent anticipate eating more from a foodservice establishment, the survey found.

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Fresh Food

In-store Bakery

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Distinctive breads and rolls make the department a true destination. By Bridget Goldschmidt

read may be an everyday staple for many, but in-store bakeries have the opportunity to turn this basic food item — and its smaller counterparts, rolls — into something really special. One key way to do this is through a “focus on high-quality baked products — such as artisan bread — not just current industry fads,” notes Eric Richard, education coordinator at the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA). “We know that shoppers are walking the perimeter seeking freshness and higher-quality products than [in] center store,” asserts Jennifer Becker, director, in-store bakery at Omaha, Neb.-based ConAgra Foods. “In order to capitalize on the purchase, we need to ensure that our bread oferings deliver against those attributes.”

Artisan Artistry In line with this thinking, ConAgra introduced last June a sprouted grain platform consisting of handcrafted batard, ciabatta, baguette and demi baguette varieties. Ofering a milder, sweet favor, the naturally moist breads — appropriate for breakfast or lunch sandwiches, or as sides with soups and stews — provide cross-selling opportunities with premium meats and cheeses. A limited-edition holiday platform, rolled out this past April, ofers batards in four seasonally favored SKUs: Cranberry Walnut, Cranberry Orange, Pumpernickel and Pumpkin Harvest. Additionally, in January 2015, the company relaunched its Bake at Home line in revamped packaging. Enabling consumers to bake fresh bread at home, the line is made from all-natural ingredients, has an extended fve-day

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

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shelf life that reduces shrink, and generates profts without extra labor, according to the company. Next year promises more of the same — and then some. In 2016, La Brea Bakery plans to launch an artisan product line that it describes as “unlike anything else currently on the market.” Te new line will feature items made from Fortuna wheat, “a varietal … not often used because it is difcult to grow, but produces wonderful-tasting bread.” Los Angelesbased La Brea, which has been producing artisan bread on a mass scale for 25 years, ambitiously adds that it “hopes to reinvent the way people think about bread with the launch of this new line.” Further, IDDBA is aware of a particularly heady item emerging in this segment. “John Crocco, bakery director at Daymon Worldwide, told us that a new trend hitting the bread scene is wine artisan bread, which is made from grape skin and seed four,” says Richard, noting that “each variety can have its own unique favor and structure, such as Merlot.” In terms of trending ingredients in premium baked goods, the association has seen “increased and continued interest in ancient grains and sprouted grains,” he adds.

A new trend hitting the bread scene is wine artisan bread. … Each variety can have its own unique flavor and structure, such as Merlot.” —Eric Richard, IDDBA

Citing Progressive Grocer’s own 2015 Retail Bakery Review, Eric Richard, education coordinator at the Madison, Wis.-based International Deli-Dairy-Bakery Association notes that “bread garnered the top-selling spot in instore bakery sales.” Richard adds: “Stats from Nielsen Perishables Group Fresh Facts showed that bread sales in the 52 weeks ending March 28, 2015, were up 1.8 percent versus a year ago, while rolls were up 3.5 percent.”

Clean Sweep In tandem with high-quality products, supermarket bakery departments “should focus on current consumer eating trends in regard to breads and rolls,” advises Richard. “For example, many consumers seek out ‘fresh’ and ‘free-from’ products, two characteristics that can be defned through breads and rolls. Freefrom products that don’t contain ingredients such as nuts and gluten are especially appealing to consumers with food allergies and dietary restrictions. Clean and clear product labeling on these products is another way to entice consumers to make a purchase.” He continues: “IDDBA research shows that while bakery consumers are less likely to be seeking

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Millennials and Gen Xers are interested in purchasing ethnic baked goods. Demand will dictate an increase in nontraditional breads in the in-store bakery.” —Jennifer Becker, ConAgra Foods

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In-store Balery

a variety of wellness attributes compared to other departments, they are still interested in avoiding artifcial ingredients and preservatives, and look for lower-sugar items. High on their lists are products that contain whole grain and high fber.” An added bonus of the wine artisan bread mentioned above, according to Richard, is that its central ingredient, grape skin and seed four, “can appeal to health-conscious bakery shoppers, as it contains statins and is also gluten-free.” He believes that as health-and-wellness issues grow in importance, other alternative fours, including varieties made from sunfower seeds, pumpkin seeds and coconuts, are likely to become more common. Becker notes that “there needs to be an increase in the variety of breads to meet the needs of today’s evolving shopper,” pointing out that natural and organic oferings and ethnic varieties are growing in popularity among consumers. “We know from Mintel research … that Millennials and Gen Xers are interested in purchasing ethnic baked goods,” she says. “Demand will dictate an increase in nontraditional breads in the in-store bakery — fatbreads, lavash, naan, etc.” Regarding ethnic products and new varieties, Richard afrms: “We’re seeing greater interest in fatbreads, ciabatta, naan and torta, as well as greater worldwide interest in sourdough, which has been a mainstay domestically for many years. New favors in rolls include bufalo chicken and tomato basil.” Keying into rising consumer demands for ethnic products and greater variety, Bufalo, N.Y.-based Rich Products Corp.’s Our Specialty brand introduced earlier this year a line of 10 retail-packaged premium fatbread products, consisting of the following SKUs: Original Naan, Original Pita, Wheat Pita, White Sandwich Flats, Multigrain Sandwich Flats, Garlic Cheese Naan, Original Rustic Flats, Italian Herb Flats, Chipotle Flats, and Garlic & Herb Pizza Crust. “Te new Our Specialty varieties go well beyond the traditional pita and naan, combining on-trend bread alternatives with unique favor combinations,” observed Courtney Erickson, associate marketing manager, customer shopper marketing at Bufalo, N.Y.-based Rich’s, at the time of the line’s launch last January. “Trough this range of products, we’re giving shoppers the customizable fatbreads they crave, plus delicious tastes that can increase their mealtime enjoyment.”

Capturing Consumers Once the right products are in place, consumers need to fnd their way to the in-store bakery. Doing so could be as easy as following their noses. As an example of this, Richard suggests that supermarkets “turn an in-store bakery into a store destination through sights, sounds and smells, such as the aroma of fresh-baked bread.” He further advises “customization and personalization, such as take-and-bake bread; more organic options; and having a presence on social media, which is especially important for connecting with Millennials and younger consumers.” On the subject of digital marketing, he also urges engaging with shoppers “through a store’s website … [A]dditionally, in-store beacons can be a great way to connect with consumers on their mobile device[s] as they enter the bakery by alerting them to products [and] specials, or letting them know of ‘events,’ such as when the next batch of fresh bread will be available.” To attract health-conscious shoppers, Richard recommends a “[f]ocus on fresh, free-from and local, as well as trending new ethnic favors and ingredients and healthful attributes like whole grain and high fber. Tese messages can be communicated in signage and labeling and packaging.” “Point-of-sale material with clear messaging on the health benefts of the bread and/or usage ideas is key to capturing the attention of the shopper and driving trial,” agrees Becker. “A perfect example is our sprouted grain bread launch. It is not a commonly well-known fact that our sprouted breads ofer more than 16 grams of whole grain per serving, so we made it a communication priority on the point-of-sale material.” Another opportunity identifed by ConAgra relates to “recipe displays, wherein a rack or display will include all of the ingredients for the meal,” she adds. “Providing a ‘one-stop shop’ display gives the shopper creative ideas and convenient solutions while increasing the basket ring for our retailers. Examples might include a bakery baguette on a rack with olive oil, balsamic [vinegar] and parmesan cheese, or a sourdough bread boule with queso dip. Recipes cards are a must.” PG

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

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Produce Logistics

Fresh Food

Supply Chain

Savvy

Key trends in transportation and logistics transform produce shipments. By Jennifer Strailey

hen it comes to trends in the transportation and logistics of fresh produce, real-time cold-chain monitoring, reusable plastic containers (RPCs) and recyclable packaging are changing the way everything from spinach to cabbage makes the journey from farms to produce departments across the country. Food safety and traceability requirements, an industry-wide movement to reduce shrink and food waste, a demand for higher-quality products, and an emphasis on environmentally friendly practices are helping to drive these trends. “Te FSMA [Food Safety Modernization Act] rules will be out next year, and [they’re] going to

require cold-chain monitoring,” says Kenny Lund, VP of support operations for Allen Lund Co. (ALC), in La Canada, Calif. ALC is a national third-party transportation broker that works with shippers and carriers across the nation, and specializes in the transport of produce. “We’ve seen a huge increase in live-temperature monitoring,” observes Lund, who says that ALC has integrated such monitoring in its trucks. “We worked with a company that was transporting 500 loads of fresh produce a month and would have three or four claims [related to breaks in the cold chain] in a month,” he recalls. “Now that they’ve integrated live cold-chain monitoring, those claims are down to one or two a quarter. It absolutely pays for itself.”

The FSMA rules will be out next year, and they’re going to require cold-chain monitoring.” —Kenny Lund, Allen Lund Co.

November 2015 | progressivegrocer.com |

139

Fresh Food

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Produce managers find that product protected by real-time monitoring is consistently fresher and has a longer shelf life.” —David Benjamin, Locus Traxx Worldwide

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Produce Logistics

Lund further notes that the price of live cold-chain monitors has gone down signifcantly. “If you’ve got a $20,000 fresh produce load, it makes sense to protect it with a $35 to $50 monitor,” he points out. “Other than the [pending FSMA] requirements, there are a lot of good business reasons to use it. I see that as a big shift in the next year, and it’s already started.” A member of the United Fresh Supply Chain Logistics Council, the company also recommends that retailers make use of the new Broker/Shipper Transportation Agreement template available on the United Fresh website. Crafted by council members in partnership with the Alexandria, Va.-based Transportation Intermediaries Association (TIA), the template is designed for members entering a relationship between shipping companies and third-party transportation providers. “Tis is signifcant for retailers, because lawyers typically draft shipping contracts that are written as if for the shipment of dry freight,” observes Lund. “Retailers need to make sure that they are using a contract that is specifcally for produce.”

Real-time Cold-chain Monitoring A growing number of companies now ofer tools for monitoring the temperature and location of fresh produce throughout the supply chain. Locus Traxx Worldwide, in Jupiter, Fla., is one such company. It recently released the SmartTraxx Go Lux, a live monitoring and reporting device that comes in a package about the size of a credit card, and works anywhere in the world. “Te SmartTraxx Go Lux has already won United Fresh’s and IoT (Internet of Tings) Evolution’s Product of the Year,” notes CEO David Benjamin. Going beyond the original SmartTraxx Go, the SmartTraxx Go Lux combines real-time temperature- and location-reporting technology with a highly sensitive light sensor to secure shipments for cross-border coverage, notifying users when the product is being inspected and delivered, or if product tampering has occurred. “Produce managers fnd that product protected by real-time monitoring is consistently fresher and has a longer shelf life,” says Benjamin. “Tere’s no magic here — with real-time monitoring, the product never has a chance of being abused in the cold chain. If things start to go wrong in transport, we see it and stop it.” Benjamin adds that real-time monitoring eliminates the need to fnd a temperature recorder and download the data. It also doesn’t require any additional infrastructure to be installed. Disposable

by design, Go Lux sends temperature and location data in real time to the cloud, making all trip data available online. “We have seen a dramatic decrease in rejected loads, as well as a minimizing of claims,” asserts Benjamin. “Poor quality or no product means disappointed customers, and they will move their spend to the competition.” Looking ahead, Benjamin expects to see the fresh produce industry continue to implement the latest technology. “Advances in sensor technology, coupled with the latest IoT platforms, will deliver amazing capabilities to the market,” he says. “Imagine being able to accurately measure ethylene and CO2 levels in real time.”

The Emergence of RPCs Reducing shrink and waste is also a driver of growth in RPCs. “While reusable containers have been actively used in produce since the early 2000s at several national grocery stores in the United States, the industry is still evolving,” admits Dave Rodgers, VP of sales and business development for Tosca, an Atlanta-based company whose mission is “to revolutionize the fow of perishables through the supply chain, eliminating waste at every turn.” “Some retailers are actively converting the majority of their produce departments, due to the benefts of reusable containers, such as greater product protection; cooling efciencies; transportation gains with improved pack efciency per RPC, per pallet and per truckload; and reduced store labor,” he adds. Other retailers have focused on wet-room commodity conversions, because of RPCs’ ability to handle moist and cold environments. “Te container maintains its structural integrity and doesn’t break down in a wet environment,” explains Rodgers. Tosca recently developed an RPC to address current supply chain challenges on the perimeter of the grocery store. Te container has a one-touch drop wall on the front that simplifes the restocking process. Growers or suppliers fll the container, and the store associate simply releases the front wall and places it on display. “By decreasing [how much] the product is handled, it reduces product damage,” says Rodgers. “Also, because the container itself is much more durable, it provides greater product protection at every step in the supply chain. We have seen as much as 50 percent reduction in shrink with this new container.” Tosca’s RPCs have also been shown to reduce labor by 20 percent and more, depending on the supply chain serviced, he notes. RPCs can be used strictly for transportation

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

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Produce Logistics

purposes, or they can be used for a combination of transport and display. “By using RPCs on display, there is less labor required to maintain the produce display, because RPCs can be pulled out and replaced rather than replacing hand-stacked displays,” observes Rodgers. Tosca ofers a supply chain optimization model that computes the fnancial impacts of a packaging change

across all facets of the supply chain, to help retailers understand the true cost of a packaging change. “As we look into the future, there are many challenges that must be addressed by grocery retailers, such as labor availability and costs, rising cost of food, [and] the Food Safety Modernization Act, as well as the growing desire for companies to be more sustainable,” asserts Rodgers. “If a retailer can move product more efciently and efectively, this translates into higher-quality products for their customers, as well as better pricing.”

Recyclable Packaging In conjunction with a national grocer — which has asked to remain anonymous — operating more than 1,300 locations, and along with members of its national Coalition for Resource Recovery (CoRR), Global Green USA, the Los Angeles-based American afliate of nonproft Green Cross International, recently coordinated a pilot that led to Northampton Growers’ conversion of all of its cabbage packaging to a 100 percent recyclable material. As a result, the 125,000 boxes that Cheriton, Va.-based Northampton will use during this upcoming cabbage season will be recyclable, saving thousands of dollars and reducing greenhouse gas emissions equivalent to the planting of more than 15,000 trees, notes Lily Kelly, Global Green’s senior program associate. Te initial pilot project with the national grocer tracked recyclable Greencoat packaging made by Interstate Container on a journey of more than 750 miles. Te boxes and their contents arrived intact, leading Northampton to decide to ship all of its cabbages in the recyclable, water-resistant containers. Te Greencoat boxes, which are recyclable in accordance with the Elk Grove Village, Ill.-based Fibre Box Association’s recyclability and repulpability protocol for wax-alternative coatings, can be baled and sold with regular corrugated cardboard. “Grocers can create revenue from recycling, rather than paying to send boxes to landfll,” notes Kelly, who goes on to add: “Recyclable cardboard is a growing market. We’ve been doing this since 2010, but the issue up until a couple of years ago was cost. Now that’s not the case.” PG

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

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Fresh Food

Produce Category Spotlight

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Year-round availability and high quality spur demand for juicy fruits. By Jennifer Strailey

F SqueezInG ProFItS A Fruits from Chile demo creates excitement.

rom easy-to-peel mandarins to lemons and navels, citrus is bursting with favor and sales potential. It was once a category that dominated in the winter, but imports have created opportunity for year-round enjoyment of these juicy fruits. “Demand, particularly for easy peelers, continues from winter through the summer, and is energizing the citrus category in a big way,” afrms James Milne, director of citrus for Te Oppenheimer Group, nicknamed “Oppy,” in Vancouver, British Columbia. Seedless mandarins, a favorite fruit across a broad spectrum of shoppers, has skyrocketed to success in recent years. Te mass appeal of this easy-to-peel fruit has made citrus top of mind for consumers and helped to spotlight the entire category.

think they’ve made a break through,” asserts Milne. Navels from Chile, Australia and South Africa also had a good run, he notes, as did clementines and navels from Uruguay, which Oppy introduced last year. “We’ve seen a good boost in citrus consumption throughout the year, with huge mountains of fruit sold on a weekly basis from fall through the winter,

International Sensation Oppy, which sources citrus from around the globe, saw strong performance from Peruvian Minneola tangelos this year. “Tey’re kind of the forgotten child of citrus, but I

144

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

Fresh Food

Produce Category Spotlight

and we expect to see a lift in sales again this year,” observes Milne. For summer citrus, Australia is Oppy’s No. 1 navel producer. “But what’s really increased from Australia is the late-season W. Murcott,” he says. “It is in such high demand.” 2015 marked the frst full year that Oppy has sourced fruit from South Africa, and it was an

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“excellent experience,” notes Milne. “South Africa was … far and away our strongest performer. It is going to have a burgeoning supply of W. Murcotts and Minneolas in the future.”

Chilean Citrus Soars Chile is rapidly making a name for itself with lemons, clementines and W. Murcotts, says Milne, adding, “Te Chilean Fresh Fruit Association is doing some good work in gaining understanding for what Chile has to ofer in citrus.” “It has been a great season for Chilean citrus in North America,” notes Karen Brux, of the San Carlos, Calif.-based association. According to Brux, through week 40 of 2015, exports of Chilean citrus were around 12.5 million boxes, up 30 percent over last year. Te lion’s share — 80 percent — of Chilean citrus went to the North American market. Chile is becoming an increasingly important source of citrus for North America. Exports to the continent through week 40 of this year were up 11 percent for clementines and 19 percent for navels versus the same time period last year. It was Chilean mandarins and lemons that experienced phenomenal volume increases, however. Mandarin volume surged from 26,529 tons to 39,789 tons, an increase of 50 percent. “Even at this volume, the market was short and retailers didn’t have enough to promote,” says Brux. “Tis clearly demonstrates the strong year-round market that exists for easy peelers.” Meanwhile, Chilean lemon volume to North America increased from 16,720 tons to 33,645 tons, an increase of 101 percent for the 40-week time period. To drive sales of Chilean citrus, the main season of which is June to October, the Chilean Fresh Fruit Association runs retail display contests. “It can be very challenging to obtain strong shelf space when the volume and range of domestic fruits [are] so high, and display contests have been an efective tactic for us,” explains Brux. Te association also works with retailers on social media and contests. Its “spooktacular” carved navels generated a slew of Facebook activity, as well as a television appearance. “We’re fnding that retailers want holiday and season-

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

Fresh Food

Produce Category Spotlight

specifc images and usage ideas, so we’ll continue to focus on this next season,” says Brux.

Easy Peelers/Seedless U.S.-grown citrus is also experiencing unprecedented growth, with California the home of easy-to-peel seedless varieties like the wildly popular mandarin. “Te mandarin category continues to see double-digit increases,” notes Bob DiPiazza, president of Pasadena, Calif.-based Sun Pacifc, the company behind Cuties California Clementines. “Last year, mandarins were up 23 percent over prior year and surpassed navel orange sales by 27 percent.” “Te trend of seedless citrus has been on the rise over the last year. For example, the California mandarin business is a perfect example of a seedless variety that is growing year over year,” observes David Krause, president of Delano, Calif.-based Wonderful Citrus, which grows, packages and markets Wonderful Halos, a seedless easy-to-peel mandarin. “Due to the fact that consumers are gravitating to more seedless fruit choices, you’ll most likely see the trend grow within other citrus fruit,” predicts Krause, who attributes the strong demand for Wonderful Halos to the rise in health-conscious consumers, as well as the record $100 million fve-year marketing We’ve seen a campaign behind the brand.

COOkinG WiTh CiTruS Duda Farm Fresh finds that more consumers are using citrus as an ingredient in flavorful dishes.

good boost in citrus consumption throughout the year, with huge mountains of fruit sold on a weekly basis from fall through the winter, and we expect to see a lift in sales again this year.” —James Milne, The Oppenheimer Group

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The Boost in Branded Like virtually every category in fresh produce, the trend toward branded products in citrus is dramatically changing the way consumers shop for these fruits. “We believe in turning commodities into brands,” asserts Krause. “We invest heavily in television advertising, print out-of-home, national FSIs, in-store displays, PR and digital.” With sales in the grapefruit category declining in recent decades, the Los Angeles-based Wonderful Co. seeing a brand-building opportunity, launched Wonderful Sweet Scarletts Texas Red Grapefruit last year as the market’s sole branded grapefruit. “With the right marketing support, we can revitalize the category to both existing grapefruit consumers and the younger demographic of new consumers,” says Krause. Following the tremendous success of Cuties, Sun Pacifc aims to create similar excitement with navel oranges. Last year, the produce company tested its Vintage Sweets Heirloom Navel program with select retailers. “We saw an overwhelming response from consumers who were looking for a premium product, and were willing to pay for the premium,” says DiPiazza. Tis January, Sun Pacifc will debut a highgraphic 3-pound bag that tells the Vintage Sweets Heirloom story. Te bags will be packed in a colorful self-merchandising carton.

Culinary Charisma America’s increasingly health-aware and foodadventurous consumer is discovering that there’s more to citrus than lemons, grapefruits and oranges. Packed with favor, juiciness and acidity, citrus is more than a nutritious snack — it’s also a versatile ingredient in a number of cuisines. “Driving the interest in citrus and grapefruit is consumers’ inclination toward bold, distinctive favors, as well as ingredients with a healthy perception,” says Paul Huckabay, western citrus sales manager for Duda Farm Fresh Foods Inc., in Oviedo, Fla. “Citrus creates a balanced dish when combined with other ingredients, allowing for full-favor meals that are not laden with fat and unnecessary calories.” Duda continues to see sales growth in favorful specialties such as Meyer lemons, Cara Cara oranges and Minneolas. Sunkist Growers, in Valencia, Calif., sees these same varieties resonating with consumers. “In today’s foodie culture, consumers are excited to learn about food and try new things, and in citrus, this means specialty varieties,” asserts Joan Wickham, manager for advertising and public relations, adding that demand for such varieties grows “as consumers learn more about them and appreciate their distinctive qualities.” To capitalize on this interest, Wickham recommends that retailers educate consumers about these varieties at the point of purchase with displays, signage or packaging. Sunkist ofers a variety of retail tools to promote the various attributes of citrus varieties, along with usage ideas and recipes. Notes Wickham, “Due to new printing capabilities, we can customize bins and other point-of-sale materials with a one-week lead time, allowing retailers to quickly execute promotional programs in a way that fts their stores’ unique formats and needs.” PG

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

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Technology

Inventory Replenishment

The Future of

Demand Forecasting Usage by grocers is lagging. By John Karolefski

rocery stores need to maintain the right balance of supply and demand to meet the needs of their customers on a daily basis, as well as during surges such as this monthâ&#x20AC;&#x2122;s pre-Tanksgiving period. Te goal is to prevent out-of-stocks due to brisk sales and targeted promotions. Te latest demand forecasting technologies can take place at both the store and at the distribution center. But are grocers taking advantage of these tools? Some experts say retailers still rely too much on manual ordering and intuition to execute the replenishment process. Itâ&#x20AC;&#x2122;s not common to employ more sophisticated methods to predict consumer demand and to use this knowledge to automate the required inventory estimates to satisfy demand.

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

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Technology

While almost all retailers in grocery use or have a forecast, it is not typically regarded as accurate or used with confidence, particularly in the prediction of promotion demand.” —Tim JW Simmons, Teradata

Inventory Replenishment

Underused Capability “We see demand forecasting as a capability that most grocers need, but few extend this capability to the level where harnessing consumer demand is a competitive advantage in managing the business,” notes Tim JW Simmons, general sales manager, North America, demand chain solutions and services at Dayton, Ohio-based Teradata. “Not many grocery retailers have fully exploited demand forecasting capabilities to include store item-level forecasts that include baseline needs and support promotion events, or the planned launch and support of new products.” According to Simmons, smaller operators have been slow to adopt these tools and gain experience to support decision-making. Most continue to rely on last year’s shipment-withdrawal data or rolled up t-log data in tools like Excel to help plan their activities for distribution or buying. “While almost all retailers in grocery use or have a forecast, it is not typically regarded as accurate or used with confdence, particularly in the prediction of promotion demand,” he says. And that’s when out-of-stocks typically occur. Getting Granular “Hitting this problem with a single-forecast mentality doesn’t work,” asserts Alan Lipson,

Demand Forecasting in Action How are grocers using demand forecasting today? “There are many areas within the grocery vertical — from financial planning to store ordering — where demand forecasts are used today,” says Tim JW Simmons, general sales manager, North America, demand chain solutions and services at Dayton, Ohio-based Teradata. “However, the levels of granularity and sophistication vary greatly across the specific businesses.” Simmons describes several examples of demand forecasting activities driving significantly improved results:

Promotion event-planning forecasting: Leading

retailers are focused on a more granular demand forecast of promotion events at store-item week and day level. This allows for a smarter overall buy to support distribution by linking future store need to the distribution center, and at the same time a better estimate of customer need at store level, improving automation and reducing stock-outs and costly overstocks.

Buying function: How much to purchase, when and

in what quantity? This capability is enhanced by synchronizing the demand and inventory forecast from the lowest level of item-store days and weeks over multiple future time horizons, and highlighting their impacts on DC inven-

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global retail/CPG industry marketing manager for Cary, N.C.-based SAS. He says the key is to address the problem on two fronts: at the distribution center to support desired service levels with better demand forecasting, and at the store level with better overall forecasts. “Te best forecasting technologies generate forecasts for promoted and regular-price products. Te models generating the forecasts should account for time series, life cycle and regression components. Te technology used also should include functionality to support new-item forecasts that extend beyond the simple assignment of a ‘like item.’ You’ve got be granular to get there,” he observes. According to Makarand Deshmuck, VP at Hofman Estates, Ill.-based Sears Retail, the objectives of demand forecasting are twofold for a grocer: footfall and proft maximization. “A lot of grocers are after one of these objectives,” he says. “For mass retailers such Target and Walmart, grocery is a subset of the total business. Tey use the grocery section as a footfall driver more than a proft center. Other specialized retailers pursue the proft maximization route. For pure-play grocery chains such as Jewel-Osco, it is always both, and it is a holistic model.” Shalabh, the one-named director of U.S Midwest

tory plans and vendor commitments. Using this method improves the supply chain and allows all supply chain nodes to benefit from being demand-driven.

Computer-assisted automated ordering:

Granular forecasts are developed at item-location-day to automate the order calculation based on expected consumer demand, presentation, safety stock and inventory levels, to automate the replenishment order. The reduction in the manual effort it takes to execute the orders is significant, and at the same time the order quality improves. This frees up valuable resources to focus on the customer experience.

Multi-echelon planning: The ability to deliver ac-

curate demand forecasts and inventory projections at the lowest level of item location over multiple future time horizons (days-weeks) allows this information to drive the future estimates-buys for the distribution point or partner. This ability improves supply chain capacity-planning processes, internal collaboration and inventory productivity.

CPFR: Retailers can now change their collaborative plan-

ning, forecasting and replenishment (CPFR) processes with the ability to share the granular forecast and inventory needs by week and day with their vendors, down to individual stores and across the network. —John Karolefski

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

Operations for Princeton, N.J.-based LatentView Analytics Corp., lists two key factors that complicate and drive a need for robust demand forecasting: the emergence of online operations and digital ecosystems that have demand shapes that are the exact opposite of their traditional counterparts, and customer- and member-based models that generate more stable demands in large proportions. “In grocery specifcally, we have observed longtail patterns in shelf life and seasonality causing variation and issues in achieving goals,” he notes. “Te sophisticated systems that attack the problem statistically, stochastically and in hybrid are becoming the industry trend. Te big chains also use stochastic demand forecasts and promotions for demand tailoring and shaping to objectives. Experimental analytics such as test campaigns in these areas are becoming a permanent arm to these demand-shaping initiatives.” One grocery executive who has mastered these complexities is Abby Fox, procurement strategy manager at Commerce, Calif.-based Unifed Grocers. Progressive Grocer named her one of 2014’s Top Women in Grocery for her outstanding achievements in inventory replenishment buying. She was recognized for leading a signifcant inventory reduction initiative, as well as for establishing a KPI-driven replenishment program designed to maximize service and proftability. Fox led Unifed Grocers to an aggressive inven-

tory reduction of $11 million while increasing customer service levels. United teamed with Marietta, Ga.-based Blue Ridge, a cloud supply-chain In grocery planning provider ofering demand forecasting, specifically, we planning and replenishment solutions. have observed

Flexible Tech Te business context for demand forecasting should go beyond inventory replenishment to include planning and collaborative elements. Category managers, buyers, store managers and vendors all should be able to reconcile their forecasts using the same system, according to SAS’ Lipson. “Te technology should be fexible enough to provide insight to the forecast and the ability to manage the impact of changes made by any stakeholder in the system,” he explains. “Ideally, the forecasting technology would be linked to inventory optimization technology so the retailer and the manufacturer can work together to make sure consumers get their favorite holiday menus on the table without any hiccups.” Teradata’s Simmons stresses that retailers don’t need to “boil the ocean” to get started. Instead, a small team and good detailed data acquisition practices, combined with some industry-leading tools, should be all that are necessary. “Tey can deliver impressive benefts,” he sums up, “in terms of reduced stock-outs, improved sell-through, inventory turns and customer service levels.” PG

long-tail patterns in shelf life and seasonality causing variation and issues in achieving goals.” —Shalabh, LatentView Analytics Corp.

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Equipment & Design

Seasonal Displays

Holidays

On Wheels

Mobile merchandisers and display equipment go where the season’s action is.

“B Mobile merchandisers open up windows of opportunity for shoppers to explore and learn how to pair products.” —Marjorie Proctor, Hillphoenix

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By Bob Ingram

uild it and they will come” — the iconic line from “Field of Dreams” might well be changed to “Move it to where they’ll buy” in terms of mobile holiday merchandisers and display equipment in supermarkets. “Many grocers are stuck with large stores that shoppers fnd inconvenient,” asserts Harry Newton, director of sales and marketing at SPC Retail, a division of Structural Plastics Corp., in Holly, Mich. “Pop-up retail shops and a store-within-a-store with specialty holiday displays in high-trafc power aisles and temporary areas are great ways to inspire shoppers and generate excitement, featuring unique seasonal items to increase sales.” Newton points out that SPC’s specialty displays feature the patented modular “Kit of Parts” system, which is made of 100 percent post-consumer recycled plastic and easy to assemble in minutes without tools. “Retailers love the lightweight versatility, mobility and extreme durability of our displays, and that they can be used indoors or outdoors as a single display, or grouped together to create a temporary seasonal or holiday pop-up retail shop in minutes,” he adds. SPC’s new Tilt-Top Display Table is perfect for creating a cross-merchandised impulse display for baked goods, candies, fowers, wine and gifts at checkout areas, vestibules and seasonal areas, while the 4-Tier Round Display creates a focal-point display for poinsettias, according to Newton. “We provide free store layout and design services, and many of our retail clients contact us to help them repurpose their existing displays and create new store layouts and shifts in available selling space

to accommodate almost any type of product or temporary pop-up concept,” he says. Newton adds that the future of mobile holidayshopping display equipment will mean having the ability to turn an existing retail space into a new and exciting holiday destination area within a store, or the ability “to capitalize on the onslaught of shortterm lease opportunities to open up seasonal pop-up stores,” which can “make shopping fun, exciting and inspiring to an increasingly diverse audience.”

Adding Interest and Flexibility At Hillphoenix, in Conyers, Ga., Marketing and Design Specialist Marjorie Proctor notes: “Doing the same visual merchandising year after year gets stale and uninteresting. What makes the successful retailers stand out are embracing the opportunity to observe and evaluate the retail landscape, always considering new ways to improve, and striving to fnd ways to do it better and more effectively next year or the next holiday.” She says that the most popular holiday merchandisers from Hillphoenix include the HSC and OSIOA single-deck self-service cases, and the CF and O3UMA multideck self-service cases. “A mobile case with a small footprint provides merchandising fexibility, especially around holidays, that allows a retailer to switch up their typical foor plan to an engaging foor plan with many opportunities to crossmerchandise, [feature] sampling stations and kiosks to promote holiday sales, and educate shoppers about new products that they typically might not try,” observes Proctor. “Mobile merchandisers open up windows of opportunity for shoppers to explore and learn how to pair products.” Her tip for the holidays: Place a 2- or 3-foot mobile merchandiser near the frozen turkey display case and highlight produce, fresh herbs and seasonings to complement the bird; adding recipe cards and signage can get shoppers to try something new.

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

“If done right, the refrigerated mobile merchandiser ... helps tell the holiday merchandising story and makes the shopper feel immensely captivated in the present by having the opportunity to shop a venue of products,” contends Proctor. “A successful holiday set commands the shopper’s attention. ... When a shopper is impressed and completely enveloped in the present, those are the segments in time when a shopper is most likely to buy. Tat’s why it is so important to take the time to think merchandising through and create a show-stopping display.”

Interactive Future According to Kendra Sewell, VP of sales at Bowling Green, Ky.-based Pan-Oston, retailers have been incorporating more samples and recipe addons, as well as taking center store merchandise to the perimeter to increase margins, and prepared food oferings are expanded during the holidays, from the deli to the bakery. “Retailers can use our mobile cooking demo unit, mobile condiment station, custom kiosks, mobile checkout, portable information kiosk, cash security cart, and Pack ‘N Ship Smart Cart for the holidays,” she says. Sewell notes that Pan-Oston’s custom kiosks can be used to make recommendations, dispense samples, print out recipes, among other functions. “Pan-Oston’s engineering team can design any type of mobile kiosk to ft the specifc needs of the store,” she adds. “Te future of mobile merchandisers lies within interactive displays,” predicts Sewell. “With more and more holiday shopping happening online, the in-store experience must be memorable and personal.” On the Move Twinsburg, Ohio-based FFR Merchandising ofers a variety of mobile display fxtures, including produce racks, bakery tables and merchandisers, foral display carts and cubes, and metal wire merchandisers, notes VP of Marketing Paul Bloom. “Certain products lend themselves to innovation simply by their versatile nature,” he points out. “Our Mobile Two-Tier Wire Dump Bin is perfect for use throughout the store, [especially] at checkout for last-minute purchases such as stocking stufers, ribbon and tape.” Bloom says that the Bunker Case Cross Merchandiser was added to hold complementary products for cross-selling, such as cranberry with turkey and marinades with ham. It fts across meat cooler cases and can be easily and quickly repositioned or removed as needed or as promotions change. Bloom believes that there’s a growing need to integrate shoppers’ total buying experience from online to in-store, and that kiosks and interactive displays are becoming more prevalent as a result. “However,

selling physical product in a store remains a core concern,” he admits. “From operational efciencies to loss prevention, in-store merchandising is and always has been a very fuid and changing arena.”

Merchandisers for all Seasons “We sell a variety of mobile displayers that create interest and sales by helping turn passive shoppers into active buyers, including tables, trolleys, carts, baskets, merchandisers, dump bins, stands, merchandising bunks, and even orchard bins with fencing and casters,” says Cathy McCosham, merchandise manager for Hubert Co. LLC, in Harrison, Ohio. McCosham adds that the Expressly Hubert Sureft Mobile Wood Bins with fencing and casters were developed out of a need to supply more KD (knock-down) fxtures that would save on shipping and freight costs and be eco-friendly as well. “We were also looking for display pieces that could be easily assembled, and the Sureft snaps together without tools,” she notes. “It is available in three diferent wood fnishes, with the weathered wood being very popular and on trend. It presents a minimal amount of product with a massive look.” Available in chrome and black, the Hubert Round Mobile Dump Bins were developed as an economical product showcase because of their larger size. In the future, McCosham sees versatile products with interchangeable parts and accessories that can morph into diferent functionalities, as well as products with urban designs and earthy materials that refect current fxturing trends and resonate with the growing Millennial market. PG

Pop-up retail shops and a store-withina-store with specialty holiday displays in high-traffic power aisles and temporary areas are great ways to inspire shoppers and generate excitement.” —Harry Newton, SPC Retail

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Operations

Supply Chain

A Page From

Other Playbooks Gartner’s Supply Chain Top 25 provides outside inspiration for grocers. By Jenny McTaggart

reat sports teams aren’t afraid to steal a few plays from their competitors — as long as they aren’t literally stealing their opponent’s play sheet, as the New England Patriots have been accused of doing. In the same vein, grocers can learn a lot about supply chain management by not only studying their main competitors — think Walmart — but also surveying how other industries make their supply chains strong. Each year, Gartner Inc., a Stamford, Conn.-based technol“Especially now, in ogy research and advisory frm, the multichannel names its Supply Chain Top 25 to environment, you identify global supply chain leaders really need to look and highlight their best practices. at your supply Tis year, Progressive Grocer caught chain network more up with one of the frm’s analysts than once a year.” — a former grocery supply chain exec — to discuss what today’s food —Mike Griswold, Gartner Inc. retailers can learn from the recently released 2015 Top 25. Mike Griswold, a research VP in Gartner’s consumer value chain team, is frmly convinced that a strong supply chain can not only help a company n ssucceed, but also serve as a ccompetitive weapon.

Bentonville Behemoth O of the most obvious One eexamples of supply chain ssuccess in the retail world is Bentonville, Ark.-based WalB Mart Stores Inc., which is No. M 113 in this year’s Top 25 list (see the opposite page for the full list). “Walmart [has] clearly identifed the role of the supply chain within their organization,” notes Griswold. “As we look at our research, we tend to see companies classify their supply chain in one of three

156

ways. At the lowest maturity level, they see their supply chain basically as a cost. It’s something they have to have. Te second classifcation is that it’s one source of diferentiation for them in the market, but it’s not their primary source of diferentiation. And then, where we would say the most mature companies are, is that they see their supply chains as a competitive weapon. It’s their primary source of diferentiation. “Te challenge I see for a lot of food retailers is that they still see their supply chain as a cost center, and they don’t invest in it from a people, process and technology perspective,” adds Griswold. “Walmart [sees] their supply chain as a competitive weapon, and they invest in it accordingly.” Leading companies like Walmart continually refect on their current supply chain confguration and ask themselves whether it’s as efcient as possible, according to Griswold. Tey conduct a lot of network design reviews, asking themselves, do I have the right DCs in the right locations? Do I have the right alignment between stores and DCs? Do I have the right delivery frequency to support that balance between supply chain costs and inventory, and the shopper experience through on-shelf availability? “Too many retailers evaluate their supply chain maybe once a year,” notes Griswold. “Te folks who ... want to keep their edge around the efciency of their supply chain look at it four, fve or six times a year to make sure that all those relationships and interrelationships are as efective as they can be. Especially now, in the multichannel environment, you really need to look at your network more than once a year.” Indeed, the multichannel conundrum — how to provide customers with products when and where they want them — has forced most retailers to step up their supply chain game in a big way. Food retailers, however, have been relatively slow to roll out tests and even slower to adopt any clear strategies on online ordering and pickup or delivery. “Almost every major food retailer is at least piloting some type of order-online, pickup-in-store functionality,” he notes. “Te reason that folks like Walmart and Kroger are starting to do these things

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

The Gartner Supply Chain Top 25 for 2015 is because we’ve got Amazon, and Amazon is forcing everyone to up their game relative to same-day and next-day delivery. Tat’s why we’re seeing so many retailers across all segments of retail revisit how they can use the store. Because if you just fulfll e-commerce orders out of a distribution center, it becomes incredibly expensive.”

Packaged Goods, Packaged Well One area from which grocers can learn from major CPG players, which are well represented on Gartner’s list, is customer analytics, in which they’ve invested heavily, notes Griswold. “A lot of CPG companies have technology that we call DSR [demand signal repository], which basically takes sales data you have from Kroger, Walmart, Publix, Target, etc., and allows you to look at that data in aggregate, but it also lets you start to look at data by each of your individual customers,” he explains. “On the retail side, I’d say supermarkets are probably the one channel that knows the most about their shoppers but does the least about it in general,” observes Griswold. “We can certainly point to examples like Kroger, or Sainsbury and Tesco in the U.K., which have incredibly strong customer analytics skill sets. But in general, there’s a wealth of data that most supermarkets probably haven’t mined to its fullest, especially in the areas of trying to understand things from a customer segmentation perspective.” If retailers want to delve deeper into customer analytics, he says, they should be asking questions such as: “How many diferent types of customers do I have? What do those customers value out of the shopping experience? How do I align my supply chain to meet the needs of those key customer segments?” “Tere’s a defnite connection between how well you know your customers and then how you want your supply chain to work in order to meet the needs of those key shoppers,” he advises. Another area where grocers can learn from large CPG companies is that of shelf-level visibility. A few consumer goods companies are using hourly SKU shelf-level visibility to manage supply during critical promotional and seasonal events, notes the Gartner report. “Tey’re using it to monitor sales patterns and trends, and then from that fgure out from an onshelf availability perspective if they need to fnd ways to be more proactive in how they stock the shelves,” explains Griswold. “From the retail side, we still have a long way to go in terms of automating the replenishment process. We still have way too many grocers in the U.S. that have a very manual ordering process, where someone walks through the aisles and looks to see what we need to order.” Griswold estimates that about half of the top 20 North American supermarket operators have automated ordering and replenishment. By comparison,

Rank Company

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Composite Score*

Amazon McDonald’s Unilever Intel Inditex Cisco Systems H&M Samsung Electronics Colgate-Palmolive Nike The Coca Cola Co. Starbucks Walmart 3M PepsiCo Seagate Technology Nestlé Lenovo Group Qualcomm Kimberly-Clark Johnson & Johnson L’Oréal Cummins Toyota Home Depot

5.32 5.23 5.15 4.09 4.04 4.01 4.01 3.91 3.91 3.78 3.49 3.48 3.39 3.09 3.04 2.99 2.93 2.89 2.85 2.76 2.73 2.41 2.16 2.16 2.11

*(Peer Opinion + Gartner Research Opinion + ROA + Inventory Turns + Revenue Growth) Source: Gartner, May 2015

he fgures that about 90 percent of the top 20 U.K. and European food retailers use this technology. Tat may be changing, however. “I’ve seen a lot more interest among U.S. food retailers in embarking on better forecasting and better automated replenishment,” he contends. “So I’d like to think that in the next 12 to 18 months, we could get a little closer to maybe 60 percent or 70 percent of folks utilizing that technology.” Last but not least, grocers should look to CPG frms to learn how to develop a “very overt talent strategy,” recommends Griswold. “Te retail supply chain is one of the most complex, exciting and demanding supply chains across any industry,” he says. “So I think retailers should look at the CPG companies and adapt some of [their] practices around getting in front of college students to explain what the supply chain in retail is, how it works and why it’s a good career choice. “Attracting talent in retail in general is hard,” he adds. “Getting good retail supply chain talent is even harder.” PG For more on how grocers can improve their supply chains, visit Progressivegrocer.com/supplychain.

November 2015 | progressivegrocer.com |

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Nonfoods

Health, Beauty & Wellness

Pleasure

Principle

As family planning morphs into sexual wellness, grocers need to keep up.

M The industry today is almost completely focused on the premium shopper. Unfortunately, the value shopper has been left behind.” —Ari Isaacs, NV Healthcare

By Barbara Sax

any retailers have been recasting their family planning sections to create sexual wellness sets that include OTC contraceptives, condoms, personal lubricants, testing kits, sexual supplements and even sexual enhancement devices. “We’re seeing more expanded sections that include products like sexual supplements and sexual devices,” afrms Laura Mahecha, industry manager of health care for Kline and Co., a Parsippany, N.J.based market research frm that recently published a report on the sexual wellness category. Trenton, N.J.-based Church & Dwight helped transform the category when it extended the Trojan brand beyond condoms to personal lubricants and sexual enhancement devices. Targeted to mass-market shoppers and backed with prime-time television and social media advertising, the products are receiving prominent positioning on store shelves and have helped move the category well beyond contraceptives. Like many other categories, the condom category is showing growth at both the high and value ends of the spectrum, while sales of midprice products remain stagnant. A furry of high-end premium products has led to a 2 percent increase in dollar sales across multioutlet channels for the 52 weeks ending Sept. 6, according Chicago-based IRI.

Bareskin products, which are advertised to be 20 percent thinner than standard condoms, to its lineup. Meanwhile, Ansell’s SKYN nonlatex polyisoprene premium-price condoms, launched in 2008, have been a big success; the Australian company added a SKYN Elite extension this summer. Te Durex brand, from Parsippany-based Reckitt Benckiser, also has an entry, ReelFeel, in the nonlatex premium segment. Te condom category continues to be dominated by Trojan, which holds a nearly 75 percent dollar share of the category, but sales of the brand’s condoms were down slightly across all channels ending Sept. 6, according to IRI. At the same time, Durex had a 26 percent uptick in dollar sales. Now Durex and Ansell’s Lifestyle brand both hold about a 12 percent share of category dollar sales. Smaller brands, such as NV Healthcare’s Nuvo and Global Protection’s One, have entered the category with some success, although their share of the market remains tiny. Harris Teeter’s assortment includes niche players at both ends of the market. Te Matthews, N.C.-based chain, a wholly owned subsidiary of Kroger, includes Okamoto’s 10-count condoms, priced at $16.99, and Hollander Sustainable Brand’s Sustain condoms, priced at $9.99, in its mix.

Thin is In Since thinness is a key driver in the category, manufacturers are focusing on the high-performance, high-price segment. Last year, Church & Dwight introduced

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Value Proposition While larger manufacturers are chasing the premium consumer, some smaller companies are seeing an opportunity for value products as prices in the category increase. “Te industry today is almost completely focused on the premium shopper. Unfortunately, the value shopper has been left behind,” says Ari Isaacs, president of Oceanside,

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divacup.com *Source: IRI, Sanitary Pads and Tampons, Total US - FDMx, Latest 52 weeks ending March 22, 2015. Spins Data, Disposable Pads and Reusable Pads and Tampons, Total US - Natural Channel, 52 weeks ending 04/20/2014.

Nonfoods

The popularity of the ‘Fifty Shades of Grey’ books and movie has helped move these products into the mainstream. Having the products in their supermarkets helps breaks a taboo for consumers who might not have shopped for those items before.” —Laura Mahecha, Kline and Co.

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N.Y.-based NV Healthcare. According to Isaacs, NV Healthcare’s NuVo ofers consumers a premium condom at extreme-value pricing through everyday upsized bonus packs. Consumers, he notes, are becoming more comfortable buying a value brand in this category. “We’ve seen tremendous growth in various channels this year with NuVo, and expect that trajectory to continue,” adds Isaacs. “We also see incredible opportunity in the supermarket channel and are making a concerted efort to increase distribution there.” Growth in the category going forward will be driven by innovation, and condom manufacturers are exploring ways they can bring novelty to their products. SKUs featuring texture or lubrication continue to be popular with consumers, according to Kline’s research. NuVo, for example, recently launched a Tease ribbed condom and a new UltraSensitive condom. Church & Dwight has secured North American licensing rights to Futura Medical’s Blue Diamond condom, which features a topical gel used for the treatment of men with erectile dysfunction. Te product, not yet approved for distribution in the United States, will be something to watch.

Emergency Contraceptives Drive Sales Female OTC contraceptives are driven by sales of emergency contraceptives. In a novel strategy last year, Israeli company Teva launched a private label levonorgestrel product, Take Action, to directly compete with its levonorgestrel Plan B brand, in an attempt to gain back share that had been eroded by generic competition. Te move worked: Take Action now holds a 32 percent dollar share and is showing triple-digit growth, while Plan B still maintains a 55 percent dollar share despite its much slower 8 percent gains over the previous year’s dollar sales, according to IRI. By comparison, My Way levonorgestrel, from Somerset, N.J.-based Gavis, is showing strong gains in dollar share (38 percent), but still holds a minimal share (5 percent) of the dollar market. Couponing by manufacturers is common for products that can retail for up to $45. Teft is also an issue in this segment, so products are often displayed in antitheft packaging and/or kept behind the pharmacy counter. Tat can be a barrier to sales when a pharmacist isn’t present. To surmount this problem, some of Supervalu’s Shoppers Food & Pharmacy locations keep Plan B and Next Choice emergency contraceptives in locked cases, along with condoms and personal lubricants, adjacent to the pharmacy so they can be unlocked when the pharmacies aren’t manned. Meanwhile, sales in the pregnancy test kit

category were up 1.7 percent over the previous year, according to Kline’s research.

New Players Emerge Despite an aging population and increased openness regarding sexuality, dollar sales of personal lubricants slumped nearly 5 percent, according to IRI. Te category’s leading brand, K-Y, took a beating after New Brunswick, N.J.-based Johnson & Johnson’s McNeil division pulled product from shelves following an FDA inquiry in 2013. Although product has been returning to stores, dollar sales for the brand were still down more than 10 percent for the 52 weeks ending Sept 6. Reckitt Benckiser, which purchased K-Y from McNeil last year, plans to revive the sagging brand. Te longtime category leader is facing increased competition from Bioflm’s Astroglide brand, which saw a 6 percent spike in dollar sales and now commands a 19 percent dollar share of the category, as well as from newer players that provide consumers with more choices. For instance, in June, Ansell extended its SKYN brand to the personal lubricant category with the introduction of SKYN Natural Feel, containing aloe vera and vitamin E, and silicone-based SKYN Maximum Performance. Both lubricants are compatible with latex and polyisoprene condoms. Te new products helped Ansell achieve double-digit dollar sales increases for the 52-week period ending Sept. 6. Kline’s research suggests that natural and silicone-based personal lubricants will be the strongest performers going forward. Devices and Desires Sales of sexual enhancement devices are ahead 7 percent, according to IRI. Category pioneer Church & Dwight’s Trojan is the category leader, with 56 percent of dollar share across multioutlet channels, while Reckitt Benckiser’s Durex and Ansell’s Lifestyles sexual devices both saw dollar sales spikes of nearly 9 percent last year. “Te popularity of the ‘Fifty Shades of Grey’ books and movie has helped move these products into the mainstream,” explains Kline’s Mahecha. “Having the products in their local drug store or supermarkets helps breaks a taboo for consumers who might not have shopped for those items before.” She adds that consumers’ acceptance of electronic gadgets across a number of health care categories may have also helped this segment catch fre at mass outlets, pointing out, “Consumers who are using Fitbits and other electronic monitoring devices may not fnd it such a stretch to use an electronic device for sexual wellness.” PG

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

Holidays for Pets

Help dog and cat owners celebrate with the right gifts and promotions. By Kathleen Furore

et owners are willing to spend big money on their furry family members. Tat’s especially true during the holidays, according to the American Pet Products Association (APPA). “More pet owners will be buying Christmas gifts for their pets than ever before, and spending more money on them,” Greenwich, Conn.based APPA predicts. At least half of all dog and cat owners traditionally purchase pet gifts, and the organization expects that purchases this holiday season will be “to the tune of 20 million people spending at least $210 million!” Retailers that ramp up holiday oferings of pet items stand to beneft if those predictions hold true. “Just like the rest of the retail landscape, holiday is prime shopping for the [pet] toy segment,” notes Leslie Yellin, EVP of Moonachie, N.J.-based pet product designer and importer Multipet International. “Shopping for just the right gift during the holidays always includes four-legged family members.”

Holiday Appeal In the 20 years it has ofered holiday items, Multipet has found that “toys with a holiday theme” make popular gifts. Te company’s holiday lineup has expanded over the years to include the classic Loofa Dog in Santa, reindeer and snowman designs; the Nordic Monkey in several colors; and this year’s new line of Weavie Christmas toys “made of tough woven fabric for moderate to tough chewers,” says Yellin. Holiday themes are fne, but whatever you ofer, make sure customers know they’re safe for their pets. Tat means toys that don’t have small pieces that could come of and be swallowed, according to

holiday safety tips from Peteducation.com. Te American Society for the Prevention of Cruelty to Animals (ASPCA) also advises taking precautions when buying pet toys as holiday gifts. “Dogs have been known to tear their toys apart and swallow the pieces, which can then become lodged in the esophagus, stomach or intestines,” ASPCA cautions. The New Yorkbased organization recommends chew toys “that are basically indestructible,” plastic toys that can be stuffed with healthy foods, or chew treats that are safely digestible. Cat toys present diferent dangers. “Long, stringy things are a feline’s dream, but the most risky toys for cats involve ribbon, yarn and loose little parts that can get stuck in the intestines, often necessitating surgery,” according to ASPCA, which suggests such safer options as a ball that’s too big for Kitty to swallow and stufed catnip toys.

Merchandising retail end caps is essential for great sell-through for seasonal products.” —Leslie Yellin, Multipet International

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Promotions Drive Holiday Traffic Creating eye-catching displays and special pet-themed promotions can help grocery retailers go head to head with pet specialty shops to boost pet product sales during the key holiday time frame. “Merchandising retail end caps is essential for great sellthrough for seasonal products,” stresses Yellin. “Tis year, we worked with a large chain to design and merchandise a Build Your Own Stocking end cap. Te end cap will feature plush stockings along with a selection of toys that can be purchased to fll up the stocking. By ofering the toys right along with the stockings, the retailer is driving multiple unit purchases.”

Pet Product Showcase

In addition, stores can reach out to pet-loving customers by hosting special events throughout the holiday season. Many pet specialty stores, for example, ofer pet photos with Santa. Te folks who fock to those stores to create photo memories probably buy pet food and holiday gifts there, too. Why not work with a local photographer to organize a Pet Pictures for Christmas weekend, and then stock the area with holiday pet toys, food and other accessories? Working with a local vet, kennel or shelter to create a “Keep Your Pets Safe Tis Season” fyer — full of information on how to select safe pet toys and how to protect pets from holiday hazards — is another nonproduct-focused promotion that could help drive sales. PG

a touch of parsley. Cesar dog food also comes in Classics, Filets in Sauce, Savory Delights and Sunrise varieties. www.cesar.com

volume per pound compared with its clay-based lightweight competition. www.tidycats.com

Piddle Place Dog Potty Grass Patch

Tidy Cats LightWeight Litters

Tidy Cats offers three LightWeight clumping litter SKUs, including Tidy Cats LightWeight with Glade Tough Odor Solutions, which launched last June. Results of a recent Tidy Cats test show that LightWeight clumping litters give consumers at least 40 percent more

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Cesar Brand Home Delights Dog Food

Home Delights borrows recipes families love most and makes them just for dogs. Flavors include Pot Roast with Spring Vegetables Dinner in Sauce, made with meaty chunks that are slowly stewed for maximum flavor, and

This easy-to-use indoor dog potty is a convenient and cost-effective alternative to disposable pet pads and expensive dog walkers. Ideal for timepressed pet owners who can’t always take their dogs out or for periods of inclement weather, Piddle Place’s compact, lightweight design fits within limited apartment spaces. Profits and product are donated to shelters. www.piddleplace.com/ piddleplace

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Greenies Pill Pockets Treats

These all-natural treats feature built-in pouches to help conceal medication or supplements, and mask the smell that often alerts pets to their presence. Greenies Pill Pockets for dogs come in Chicken, Hickory Smoke, Duck & Pea, and Real Peanut Butter varieties, while Feline Greenies Pill Pockets are available in Chicken and Salmon flavors. The product features sizes to fit most pet medications. www.mars.com

The Puppy Connection These barking bundles of joy have specific needs that retailers can address. By Kathleen Furore

elcoming a new puppy is an exciting event for pet parents. And with the holidays approaching, many grocery customers will likely be adding a furry new member to the family. Whether they’re preparing for a holiday homecoming or for a new pet’s arrival any time of year, these customers will need puppy-appropriate products once a brandnew dog scampers onto the scene.

Families bringing a puppy home will need more than food.

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The Importance of Puppy-appropriate Inventory Veterinarians and pet product companies alike stress the importance of understanding a puppy’s highly specifc needs before selecting food, treats and toys. “Puppies are growing rapidly, building bone and muscle, and developing organs,” WebMD Pet explains. “Your puppy needs extra nutrients to fuel his growth.” Tat means retailers should make sure the food products they carry contain labels that clearly state

the life stage for which the food is suited. “Puppies should be eating food labeled for growth or for all life stages,” WebMD Pet suggests. Examples of puppy food include Iams Naturistics Puppy Food and Purina Beneful Healthy Puppy Dog Food, both of which contain calcium for healthy bone growth, DHA to nurture brain and eye development, and protein for strong, lean muscles. Choosing treats and toys that are the right size for a puppy is another important consideration, since their jaws are growing, their teeth are still coming in, and they’re in the process of being trained, industry experts say. “Puppies have 28 baby teeth that erupt through the gums, sometimes causing pain,” notes Marya Myszczynski, spokeswoman for Te Kong Co., a Golden, Colo.-based manufacturer of pet treats and toys that also ofers a “Puppy Handbook” with tips on caring for a new pet. Products such as Iams Proactive Health Puppy Biscuits and Kong’s Stuf’N Puppy Easy Treat and Stuf’N Puppy Snacks are examples of products that can help with teething and training. “Chewing soft rubber helps to alleviate teething pain” says Myszczynski. “Tese toys help promote the entry of growing teeth while establishing healthy chewing habits.”

More than Food and Toys Families bringing a puppy home will need more than food — they’ll have to get food and water bowls, grooming supplies, bedding, a collar and leash, an identifcation tag, a crate, a gate, and an odor neutralizer, WebMD Pet notes. Secaucus, N.J.-based Hartz would add cleanup spray and wipes, nail clippers, dog pads, and fea and tick prevention products to that list.

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Merchandising within that section could include:

Puppy-focused personal care and grooming items include Hartz UltraGuard Plus Flea & Tick Collar for Puppies, which kills and repels feas and ticks, and Wahl’s Puppy Shampoo, formulated with cornfower and aloe to gently cleanse and protect a puppy’s delicate skin.

A New Puppy Basket. Tis could be a pre-

packaged basket flled with puppy food, treats, a chew toy, a leash and grooming supplies, or a “build-your-own” version that would ofer shoppers a selection of puppy products from which to choose. A New Puppy Checklist featuring essential items

‘The Puppy Place’ Most grocery retailers carry pet products, and ofer a limited selection of puppy food SKUs. Tat approach won’t create much buzz with shoppers who want to stock up for a new puppy, however. Why not get creative by carving out at least a small section or a few shelves in the pet aisle as “Te Puppy Place,” where customers can fnd an array of food, treats, toys and other must-have supplies for their new family member?

for families with new puppies. Te list could be posted in-store, displayed as a card that shoppers could take home and/or featured on a retailer’s website. A Puppy Care Tip Sheet — possibly created in

conjunction with a local vet — that includes information on how to care for a young pet. Te more puppy products on ofer, and the more creative the approach to merchandising and marketing them, the more likely it is that a grocery retailer will become the go-to stop not only for puppy items, but also for products that customers will need as their pets mature. PG

Statement of ownerShip

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Food, Beverage & Nonfood Products

Holy Mackerel!

According to Wild Planet Foods’ founder, Bill Carvalho, the brand’s Wild Mackerel Fillets are designed to offer consumers a “more sustainable option that goes beyond traditional seafood staples like tuna, salmon and shrimp.” Canned using only mackerel, organic extra-virgin olive oil, water and sea salt, the skinless and boneless offerings are packed with 13 grams of protein and contain just 100 calories per serving. Wild Planet’s Wild Mackerel Fillets carry an SRP of $3.29 for a 4.375-ounce box. www.wildplanetfoods.com

Au Naturel

Made with farm-fresh, rBST-free milk, Darigold’s line of naturally white cheddar is, in the company’s words, “exceptionally creamy and delicious, with just the right amount of sharpness.” With each batch carefully aged and handselected by Darigold’s cheesemaster, the offerings are available in medium, sharp and Mexican blend varieties in loaf, sliced, shredded or wedge form. The products can be found at grocery stores in the Pacific Northwest in 12-ounce wedges ($4.99), 24-ounce loaves ($7.99) and 8-ounce slices, as well as shredded ($3.99 per package). www.darigold.com

Viva Evolution

The Evolution Fresh brand has unveiled two more varieties of its classic green juices, made this time with matcha, a fine green tea powder that adds more flavor and texture, as well as a bit of caffeine. Organic Coconut Matcha, a smooth green tea blended with tropical fruit, and Organic Citrus Matcha, a blend of oranges and mangoes with slightly sweet matcha green tea and ginger, are available at Whole Foods Market and other natural grocery stores on the West Coast and in select East Coast cities. www.evolutionfresh.com

Healthy Bites

Delivering on consumers’ continued desire for nutrition and convenience, ThinkThin has expanded its portfolio of protein bars with Protein Bites and Protein Nut Bites — unwrapped protein and fiber bars in bite-sized pieces. Available in Salted Caramel, Peanut Butter and Chocolate Almond Brownie flavors, Protein Bites offer 10 grams of protein and 5 grams of fiber, while Protein Nut Bites, containing 9 grams of protein and 3 grams of fiber, come in White Chocolate and Dark Chocolate varieties. The gluten-free, non-GMO offerings are sold in resealable stand-up bags retailing for a suggested $5.49. www.thinkproducts.com

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Single-serve Soups

Leveraging the substantial growth of Keurig machines and K-cup coffee in the United States, Kettle Kups K-Cup Soups provide consumers with a single-serve, Keurig 2.0-compatible soup offering that’s rich in value, flavor and nutrition. Free of allergens, gluten and MSG, and lower in sodium and calories than the average soup product, Kettle Kups are available in 12-serving boxes in Homestyle Chicken, Homestyle Beef and Garden Vegetable flavors. www.kettlekups.com

Festive Fare

Brownie Brittle is gearing up for the winter season with a series of holiday varieties, each packaged in a festive self-standing bag. Consisting of Chocolate Chip with White Snowflake Drizzle, Salted Caramel with Dark Drizzle, and Mint Chocolate Chip with Dark Drizzle, Brownie Brittle’s holiday flavors retail for a suggested $3.99 each. “We’ve been working hard on these flavor combinations, as our fans have been requesting special holiday flavors,” says company founder and CEO Sheila G. Mains. “They’re sure to be wowed this year. Brownie Brittle topped with a velvety chocolate drizzle is a great way to celebrate the season.” www.browniebrittle.com

Protect Little Ones’ Skin

Spread it On

Made from a blend of “good fats” like virgin coconut, high-oleic sunflower and flaxseed oils, Melt Organic’s Probiotic Melt Buttery Spread supports digestive health and a healthy immune system when consumed as part of a balanced diet and healthy lifestyle. Best served on toast, muffins, bagels or waffles, the Non-GMO Project Verified, Certified USDA Organic, Kosher Pareve spread is available in 10-ounce square packages in stores nationwide for an SRP of $4.99. www.meltorganic.com

Valeant Pharmaceuticals North America LLC has expanded its CeraVe Baby line with the introduction of Baby Moisturizing Cream ($9.99/5 ounces) and Baby Sunscreen Lotion SPF 45 ($16.99/3.5 ounces), both of which were developed with the expertise of pediatric dermatologists. The cream is formulated with three essential ceramides and dimethicone to help provide intense moisturization for up to 24 hours with one application, while the sunscreen lotion provides a broad spectrum of sun protection from both UVA and UVB rays, and is water-resistant for up to 80 minutes. All CeraVe Baby products are hypoallergenic-, fragrance-, paraben-, gluten- and phthalate-free. www.cerave.com

Shelf Score™ — september 2015 Purchase INteNt score

New Product

1 2 3 3 5 6 6 8 9 9

Chobani Indulgent: Cherry and Dark Chocolate Special K: Apple Cinnamon Crunch Dole Fruitocracy Apple Squeezable Fruit Pouch Archer Farms Pumpkin Pie Spice Scone Mix Duncan Hines Perfect Size Cake: Lemon Bliss Aunt Jemima Griddle Melts Coffee-Mate Pumpkin Spice Kellogg’s Mini-Wheats: Pumpkin Spice Gerber Graduates Lil’ Pastas with Hidden Veggies Pumpkin Spice Latte M&M’s

66% 65 59 59 57 56 56 55 52 52

source: Instantly Shelf Score

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Beaver Street Fisheries Earns COOL Certification Jacksonville, Fla.-based Beaver Street Fisheries Inc. (BSF) has been awarded the COOL (Country-of-origin Label) Supplier Certification for being COOL compliant by the U.S. Department of Agriculture (USDA). COOL is a labeling law that requires retailers to provide their customers with information regarding the source of certain foods. Food products covered by the law include muscle-cut and ground meats; wild and farm-raised fish and shellfish; fresh and frozen fruits and vegetables; peanuts, pecans and macadamia nuts; and ginseng. BSF is among the first suppliers to earn the COOL Supplier Certification. “This continues to help build on strong consumer confidence in our brand,” says BSF’s Rick Swain. As standard practice, the country of origin and method of production are noted on each COOL-covered BSF item’s master shipping container and primary pre-labeled consumer package. BSF retains all of the records pertaining to these items indefinitely, which helped it earn its certification.

Enjoy Life Foods Expands Sales & Marketing Team Schiller Park, Ill.-based free-from product brand Enjoy Life Foods has expanded its sales and marketing team with the addition of seasoned sales veterans Amy Feldman and Jim Feldman Davock Siegel Davock as VPs of sales, and Jamie Siegel as marketing manager. Te new hires are expected to further strengthen the company’s trajectory of rapid expansion across the United States and Canada. Feldman joins Enjoy Life as VP of sales for e-commerce, foodservice and specialty in the United States and VP of independent grocery sales at KeHE Distributors. As VP of sales for food, mass and club, Davock will lead a sales team focusing on conventional retail, natural grocer, mass-market and club store channels. A previous VP and GM of sales for Boulder Brands, Davock brings a wealth of category and retailer knowledge and expertise to his new position. Prior to joining Enjoy Life’s team, Siegel held the role of communications specialist at Leo Burnett, amassing extensive creative experience in the consumer packaged goods category. www.enjoylifefoods.com

http://beaverstreetfisheries.com

Hillphoenix Earns 5th EPA GreenChill Award Conyers, Ga.-based refrigeration system supplier Hillphoenix has received a 2014-15 Achievement Award - Store Certifcation Excellence from the U.S. Environmental Protection Agency’s (EPA) GreenChill Partnership program. It’s the company’s ffth GreenChill award since the program launched in 2007. For the third straight year, Hillphoenix was the only nongrocery recipiScott Martin, of Hillphoenix, receives a Store Certification ent of a Store Certifcation Excellence award. Excellence award from “We are committed not only to the research Tom Land, of the EPA and development of sustainable technologies, GreenChill Program. but also to making our customers aware of the competitive and environmental advantages of investing in sustainable systems,” says Scott Martin, director of sustainable technologies for Hillphoenix. EPA’s GreenChill Partnership works with supermarkets to reduce refrigerant emissions and decrease their impact on the environment, and helps supermarkets transition to environmentally friendlier refrigerants. www.hillphoenix.com; www2.epa.gov/greenchill

Hail Merry Hires VP of Sales Dallas-based vegan snack and dessert maker Hail Merry has hired James Moss as its SVP of sales. “With the expanding distribution of Hail Merry’s products into more retailers and sales channels, James Moss is a strategic hire for our company,” says CEO Sarah Palisi Chapin. “James’ expertise in sales, brokerage, distribution management and channel

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strategies will be instrumental in helping Hail Merry optimize its near-term growth opportunities as well as strategies for our future.” Moss will oversee strategic sales management, manage Hail Merry’s sales force, and have responsibility for managing sales across all existing and new channels. In his new role, he’ll draw on the experience he’s gained at NextFoods, Buxton Co., Crossmark, Dr Pepper Snapple Group and GlaxoSmithKline. www.hailmerry.com

advertiser index Airius Anheuser-Busch Inc. Avocados From Mexico Beaver Street Fisheries Beiersdorf, Inc. Blount Fine Foods Boston Beer Bumble Bee Foods Campbell Soup Company Chiquita Brands Clorox Professional Products Conagra Foods CSM Bakery Products DelMonte Fresh Produce Diva International Inc. Dole Domino Foods Dr Pepper Snapple Group E&J GALLO ECR Software Ferrero USA Inc. Flagstone Foods Flowers Foods General Mills Inc. Goya Foods Inc. Green Giant Fresh Hormel Foods Corporation Icex Foods From Spain Trade Commission Idahoan Foods Iovate Health Sciences Italian Trade Commission Jack Links Beef Jerky Jelly yBelly JTM Foods Kelloggs Company Kimberly-Clark Co. Limoneira Litehouse Loving Pets Products Mann Packing Co. Inc. Mariani Packing Company Mars Chocolate NA Mason Ways Indestructible Massimo Zanetti Beverage USA Messe Berlin GMBH Milk Pep MillerCoors LLC Mizkan Four Monks Cleaning Vinegar Mizkan Natures Intent Vinegars Monterey Mushrooms, Inc. National Raisin Company National Restaurant Association Nestlé Nutrition Pfizer Consumer Health Pharamvite LLC Pinnacle Foods Post Consumer Brands Premier Nutrition Private Label Manufacturers Association Rana Meal Solutions Robbie Flexibles Save-A-Lot Scotch Corporation Sealed Air Seventh Generation Simplot Custom Foods Stonefire Authentic Flatbreads Sun Pacific Sunlight International Tabletops Unlimited The J.M. Smucker Company The Wonderful Co. Tosca Ltd. Toufayan Bakeries Tyson Foods Unilever Foods USA Pears Wholly Guacamole Wisconsin Milk Marketing Board WM Wrigley Jr. Company Wonderful Pistachios

130 3 39 127 113 Inside Back Cover 122 97 119 61 66 21, 51 43 141 159 48, 49 137 77 47 5 55, 71 102 87 18, 19 7 89 82 27 69 33 8, 9 103 99 134 45, Insert 83 91 142 59 163 79 146 135 112 95 26 13 81 73 11 75 147 151 65, 85 109 53 93 105 23 115 125 129 123 111 131 63 117 138 149 145 Back Cover Cover Tip, 37 35, 41 133 110 Inside Front Cover, 17, 121 107 143 124 56, 57 31 15

www.airiusfans.com www.anheuser-busch.com www.trade.avocadosfrommexico.com www.beaverfish.com www.beiersdorfusa.com www.blountfinefoods.com www.samueladams.com www.bumblebee.com www.campbellsoup.com www.chiquita.com www.clorox.com www.conagrafoods.com www.csmbakerysolutions.com www.freshdelmonte.com www.divacup.com www.dole.com www.dominosugar.com www.dpsg.com www.ejgallo.com www.ecrsoft.com www.ferrerousa.com www.flagstonefoods.com www.flowersfoods.com www.generalmills.com www.goya.com www.greengiantfresh.com www.hormelcorporatebrands.com www.foodswinesfromspain.com www.idahoan.com www.sixstarpro.com www.italianmade.com www.jacklinks.com www.jellybelly.com www.jtmfoods.net www.kelloggs.com www.kimberly-clark.com www.lemonsforlife.com www.litehousefoods.com www.lovingpetsproducts.com www.mannpacking.com www.mariani.com www.effem.com www.masonways.com www.mzb-usa.com www.fruitlogistica.com www.milkpep.org www.millercoors.com www.FourMonksClean.com www.naturesintentvinegars.com www.montereymushrooms.com www.nationalraisin.com www.Restaurant.org/Show www.nestle.com www.pfizer.com www.pharmavite.com www.pinnaclefoods.com www.postconsumerbrands.com www.premiernutrition.com www.plma.com www.giovannirana.com www.RobbieFlexibles.com www.save-a-lot.com www.scotchcorp.com www.sealedair.com www.seventhgeneration.com www.simplot.com www.stonefire.com www.sunpacific.com www.dulcich.com www.ttucorp.com www.jmsmucker.com www.pomwonderful.com www.toscaltd.com www.toufayan.com www.tyson.com www.unilever.com www.USApears.org/conditioning www.eatwholly.com www.wmmb.com www.wrigley.com www.getcrackin.com

Progressive Grocer (ISSN 0033-0787, USPS 920-600) is published monthly by Stagnito Business Information, 570 Lake Cook Rd. Deerfield IL 60015. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Deerfield, IL 60015 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to Progressive Grocer, P.O. Box 1842 Lowell, MA 01853. Copyright ©2015 Stagnito Business Information All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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Harry Stagnito President and CEO 224-632-8217 hstagnito@stagnitomail.com Kollin Stagnito Chief Operating Officer 224-632-8226 kollinstagnito@stagnitomail.com Ned Bardic Senior Vice President/Partner 224-632-8224 nbardic@stagnitomail.com Korry Stagnito Chief Brand Officer 224-632-8171 korrystagnito@stagnitomail.com Jeff Friedman Vice President/Brand Director 201-855-7621 jfriedman@stagnitomail.com John Huff Midwest Regional Sales Manager 224-632-8174 jhuff@stagnitomail.com Elizabeth Cherry Western Regional Sales Manager 310-546-3815 • Cell 310-990-9597 echerry@stagnitomail.com Maggie Kaeppel Eastern Marketing Manager 630-364-2150 • Cell 708-565-5350 mkaeppel@stagnitomail.com Mike Shaw Northeast, Marketing Manager 201-855-7631 • Cell 201-281-9100 mshaw@stagnitomail.com Janet Blaney Marketing Manager (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 jblaney@stagnitomail.com Jackie Batson Advertising Manager 224-632-8183 jbatson@stagnitomail.com

November 2015 | progressivegrocer.com |

169

the last word

In Search of Reliable Sources

mid the hundreds of e-mails that cross our collective desks each week, as many as 20 are research studies from any number of sources promising to ofer original insights on the latest consumer preferences, interests, inclinations and irritations. And though many often regurgitate that which is already widely known, or blatantly contradict a similarly themed study received just a few hours earlier, there’s been a profound uptick in the volume of so-called new consumer research that’s actually designed to prop up a larger self-promotional agenda. Much like how today’s shoppers increasingly rely on retailers as trusted authorities — as opposed to being merely product aggregators — the onus is on us to carefully curate, select and report on the most valuable, meaningful insights that we believe will best resonate with our valued audience. Such is the case with recent consumer intelligence from the Chicago Council on Global Afairs, whose 2015 Science and Food Survey fnds that Americans’ most trusted sources of food information are health professionals, who garnered a 25 percent “very trustworthy” rating, followed next by friends and family (23 percent), farmers (23 percent), scientists (20 percent), and the FDA (19 percent). While the above “most trusted” food info sources hardly seem surprising (save the oft-maligned FDA), the low scores given to grocery stores, food packaging and food companies — 5 percent and 4 percent (tie), respectively — in the national consumer survey tell quite a diferent tale. Ditto for the perceived trustworthiness of legitimate food information from the media, including blogs and social networks, which earned a meager 2 percent ranking. Yet with consumers’ interest in food information, ingredients and sourcing practices poised to proliferate ever further, food retailers have colossal opportunities to proactively accelerate, and ultimately own, the conversations they have with consumers. To this end, a watch-worthy template of superiority in this domain can be readily found in Wegmans Food Markets’ longtime SVP of consumer afairs and founding family confdant, Mary Ellen Burris, who was hired as the liaison between customers and the company by the late Robert B. Wegman in 1971. Her role as employee number 918 organically blossomed into helming a 100-person department responsible for consumer response and customer services, food safety and quality assurance, community and

public relations, and sustainability. Best known for her weekly column in Wegmans’ ads, Burris’s “Fresh Stories” regularly and reliably address a host of behindthe-scenes happenings at the 87-store chain, which earlier this year placed as the topranked most reputable organization among the 100 companies in the 16th annual Harris Poll Reputation Quotient (RQ ) study. Renowned for its cultlike customer loyalty and destination stores, Wegmans’ measured, deliberate growth in its relatively compact six-state footprint belies the dynamic impact it’s had on the industry over the past three decades. And I’m convinced that Burris’ trustworthy, approachable guidance — both externally and internally — has been a linchpin in helping the Rochester, N.Y.-based retailer build its unparalleled brand and benchmark standing by which all other U.S. supermarkets are often measured. Trough the years, I’ve been highly impressed by a variety of intriguing topics Burris has tackled on her blog, which, as you might expect, has become a highly popular component of both Wegmans’ website and its overall customer engagement platform. In one of her October entries, for instance, she discussed the signifcance of the company’s recent accolades from the EPA for its own-brand Safer Choice cleaning products. What struck me as most interesting about the post was that it was less about the retailer adding yet another feather in its already decorated cap and more about its years-in-the-making plant-based household cleaning line. Another one of Burris’ intriguing and admirable online commentaries lasr month explored a semi-complex — albeit extremely timely and critical — supply chain topic: backhauling and perishable freight via coast-to-coast refrigerated railcars. Indeed, over the course of my career, it’s been rare to see a supermarket representative expound in such a clear, comprehensible and approachable manner on what’s traditionally been treated as a remote “industry-specifc” issue more apt to appear on the pages of an industry publication like this one. Beyond solidifying the trust and respect of Wegmans shoppers through the years, Burris’ pioneering, peek-behind-thecurtain counsel, in her longtime role as the voice of consumers, serves as a rich and inspiring narrative for other forwardthinking retailers to emulate as they seek new ways to build and nurture closer bonds with increasingly skittish consumers. PG Meg Major mmajor@stagnitomail.com Twitter @Meg_Major/@pgrocer

With consumers’ interest in food information, ingredients and sourcing practices poised to proliferate ever further, food retailers have colossal opportunities to proactively accelerate, and ultimately own, the conversations they have with consumers.

170

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

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VOICE OF THE SHOPPER WHITEPAPER SERIES

Creating Ties that Bind: Building Loyalty

with Your Shoppers E

conomic, generational and cultural shifts, changes in consumer tastes, and advances in digital technology add up to an ever-changing shopper landscapeâ&#x20AC;&#x201D;and retailers must adapt quickly. To create and leverage maximum loyalty from todayâ&#x20AC;&#x2122;s shoppers, grocery retailers need to truly understand what matters most to their shoppers, and focus on keeping them engaged by offering the right category solutions at the right time, at a value proposition that feels individual and personal.

VO I C E O F T H E S H O P P E R W H I T E PA P E R S E R I E S

It starts with the shopper: Understanding today’s fragmented landscape Today, it’s vitally important for retailers to understand which shoppers are their target market, and the needs and desires of these shoppers. Being all things to all shoppers is no longer a realistic or proftable go-to-market strategy. Macro shifs in demographics, lifestyles and values have impacted all grocery shoppers, albeit to diferent degrees. Understanding how relevant and impactful these shifs are to your shopper base is fundamental to delivering a relevant retail experience: Changing culture. America is more multicultural than ever before, and multicultural shoppers bring a unique set of product preferences and shopping behaviors to the store. Meeting the specifc needs and preferences of your shopper base is critical. (Kellogg’s “Marketing to the 21st Century Multicultural Family” whitepaper ofers insight into connecting with these shoppers.)

Millennials. Millennials have come into their own as full-fedged adults, parents and key retail customers. Tey value authenticity, convenience and experiences but are still looking for a good deal.1 Socioeconomic factors. Stagnating wages and soaring consumer debt have resulted in a wider gulf between the haves and the have-nots, and a shrinking American middle class. Tat makes understanding your shopper’s mindset as he or she is walking into the store even more important. Is your shopper confdent, or fnancially insecure? According to a Kellogg’s study on the SNAP (Supplemental Nutrition Assistance Program) shopper, for example, just over 4 in 10 of these shoppers feel self-conscious about their fnances.2 Shared shopping responsibility. Household duties—including grocery shopping—are no longer solely the job of Mom. Men now account for more than 40 percent of those who claim substantial responsibility for the household’s grocery shopping.3 (See Kellogg’s “It’s a Guy Ting” whitepaper for more insight into the new man in the aisle.) Technology. One of the strongest relationships

VO I C E O F T H E S H O P P E R W H I T E PA P E R S E R I E S

shoppers seem to have these days is with their phones. According to Kellogg’s “Mobile Across the Path to Purchase” food shopping study, shoppers have an emotional bond with their phones, and about half of shoppers use their mobile device at some point in their food shopping, particularly in the planning phase.4 Health and wellness. Now more than ever, shoppers factor health and wellness into their retail destination and purchase decisions. While some shoppers may demand only natural and organic products, many shoppers are looking to retailers to help them take smaller, more gradual steps to better health.5 Time and stress. Americans are working longer hours now than in recent decades to stay afoat, which makes saving time and money an important factor in their shopping decisions. In fact, having a stress-free experience is ranked as an important factor when shopping by nearly 6 in 10 shoppers.6 Tese dramatic social shifs are changing every aspect of society—and grocery retail is no exception.

How the shopper landscape impacts grocery retailers With the shifs in shopper needs and desires comes dynamic change in shopper behavior. Tis, in turn, puts unprecedented pressure on retailers, who are feeling the afershocks: Fewer trips to win. In recent years, grocery shoppers have gradually reduced trips.7 In fact, weekly grocery trips have declined to 1.6 in 2014 (from 2.2 in 2005).8 Omni-channel shopping. Today, 9 percent of shoppers say they have no primary store. While this may not seem high, it represents a threefold increase over 2012 numbers.9 What’s more, the majority of shoppers use 2.5 channels for grocery purchases “fairly ofen.”10 In fact, 1 in 3 shoppers now buy most of their food categories in channels other than grocery on at least half of food shopping occasions.11 More purchasing for now rather than later. Younger shoppers tend to shop for a meal or a specifc eating occasion and make more fll-in trips, rather than

VO I C E O F T H E S H O P P E R W H I T E PA P E R S E R I E S

create stronger ties with shoppers. Given fewer grocery shopping trips in general (and with online sales continuing to take a bite out of brick-and-mortar trips), growth increasingly needs to come from building each basket and gaining extra trips with existing shoppers vs. acquiring new shoppers. Let’s take a look at the most important tactics for building stronger relationships and cementing loyalty with the shoppers who are already in your store.

Never compromise the basics Shoppers who primarily shop at supermarkets put quality (especially for produce and other fresh foods) at the top of their list, followed by product selection and knowledgeable employees.17 Tat makes it imperative to have: Easy-to-navigate aisles stocked with a wide range of quality brands stocking up at one time to load the pantry for future meals.12 Millennials in particular have adopted “buy now, eat now” behavior: More than 25 percent of all meals consumed by 20- to 30-somethings include items purchased the same day.13 Among all shoppers, foods eaten within an hour of purchase now account for 15 percent of all eating occasions.14 As grocery has struggled to attract these shoppers, many of them are opting for drug and dollar channels instead. Perimeter vs. center store. Where shoppers head once they’re in the store is changing too. Te percentage of grocery shoppers who exclusively or primarily shop the perimeter has gone up in the past few years, while the percentage who exclusively or primarily shop the center store has remained fat.15 Shoppers also spend more time in the perimeter: On an average shopping occasion, 39 percent of the time is spent shopping the store perimeter and only 18 percent shopping the center store. (Te remaining 44 percent goes to navigating the store and waiting in checkout lines.)16 Retailers can’t aford to lose any more ground with center store. Tere is enormous need—and enormous potential—to reinvigorate these aisles and reignite engagement with shoppers.

Creating stronger shopper loyalty One of the ironies of today’s shopping landscape is that while shoppers have never been less loyal to a single retailer, it’s never been more important for retailers to

Fresh, attractive-looking perishables displays curated in a way that inspires Friendly, well-trained staf who can point shoppers in the right direction—or better yet, point them to products they didn’t even realize they needed Shoppers expect stores to consistently ofer the right products at the right prices at the right times with the right information, and the center store provides a key area of opportunity to meet these expectations. But grocery retailers are defnitely feeling the impact of a shrinking center store: Since 2008, center store unit sales at grocery have fallen 3.4 percent.18 Contributing 70 to 80 percent of bottom-line proft,19 the center aisles serve as the literal and fgurative heart of any grocery store. Tere are two important ways to optimize this area to drive shopper loyalty: Curate center aisle selection to meet changing shopper demands. Consider optimizing center store categories by focusing on what matters most to your shoppers. For example, produce doesn’t have to have a monopoly on wellness. Today’s health-minded shoppers are also looking for products that deliver good-for-me attributes like reduced sodium, gluten-free or minimal processing— all of which can be delivered by packaged, non-perishable items such as breakfast cereal. But keep in mind that it’s important to understand which health attributes your shoppers are looking for and tailor product oferings to meet those needs. Similarly, retailers can respond to the growing interest in

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ethnic cuisine by ofering authentic international sauces, spices, canned goods and other fare that sits squarely within the center store. Connect with shoppers on a more personal level. Digital technology enables retailers to push content customized to a shopper’s lifestyle, which could include everything from pre-populated grocery lists highlighting center store items (“Don’t forget the chicken stock!”) to weekly menu or recipe ideas based on a shopper’s dietary tastes and preferences (“10 quick meals for vegetarians”). Ultimately, a great center store simplifes the shopping experience while delivering the products your customers need (or didn’t even realize they needed). More importantly, a great center store diferentiates the grocery store as a whole, helping retailers stand out, drive conversion and build loyalty. But winning with the basics and improving center store is just one piece of the puzzle. To generate the kind of in-store experience that drives shopper loyalty in this new shopper landscape, grocery retailers need to efect change on a deeper, more personal level.

Provide value beyond price Retailers cannot win on price alone in the current environment. Price will always be important, but with more retailers employing EDLP (everyday low price) and

price-matching strategies,20 grocers must deliver experiences and services that add value beyond price. In fact, 63 percent of shoppers say they are now more likely to consider factors other than price when deciding where to shop, up from 59 percent in 2013.21 Te value a retailer needs to provide beyond price isn’t always an in-store wine bar or cooking classes, however. Sometimes it’s the right digital ofers or just a feeling that your retailer truly understands you as a shopper. Te frst step to providing this value is understanding the type of relationship you have with your shoppers. Behavioral economics, an emerging science utilized by Gallup, Inc., theorizes that feelings are much more important to consumers in their buying decisions than reason, governing more than two-thirds of people’s decisions and behaviors.22 Terefore, it is essential to understand your shoppers’ emotional connection for a true gauge of loyalty. Another framework for understanding loyalty, developed by Kantar Retail, identifes the retailer’s functional connection with shoppers (i.e., retailer meeting their needs better than any other for the types of products it sells) as well as the retailer’s emotional connection with shoppers (i.e., shoppers look forward to/enjoy shopping at retailer). Out of this framework come four diferent relationships with shoppers, each with unique challenges and opportunities:

% meets my needs better than any other retailer

Shoppers’ evaluation of functionality and emotional connection to retailers

WHOLE PACKAGE

HEAD

Challenge At risk of other retailers stealing share; changing shopper needs

Opportunity Focus on function; forge emotional connection

Challenge First retailers eliminated from shoppers’ network

Opportunity Do no harm

Challenge Sustaining the shopper base; maintaining the dialogue

Opportunity Get in on the conversation

Challenge Becoming part of the routine

Opportunity Key in on the experience; focus on the needs of key segments

HABIT

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By understanding retailers’ relationships with their shoppers, we can identify challenges and opportunities to further strengthen those relationships. For example, “Head” retailers should focus on functional aspects of the shopper experience, while beginning to forge an emotional connection with shoppers. “Heart” retailers, on the other hand, have shoppers who already love them, so they can key in on the in-store experience while catering to the unique needs of key segments.

Obviously, there’s no one-size-fts-all solution to providing value to your shoppers that goes beyond lower prices. Te kind of loyalty that lasts is a two-way street: Te most successful retailers are those that are also loyal to their shoppers. Tat’s why it’s vital to open a dialogue with your shoppers to understand their unique needs and desires. Delighting your shopper isn’t just a nice thing to do—it’s a must-do for succeeding in today’s highly fragmented, high-stakes shopping landscape.

11 ways to build shopper loyalty to your store Smart retailers get to know who their shoppers are and what they’re looking for in a shopping experience—then they deliver all that plus a dose of unexpected delight. Here are 11 actionable and impactful approaches to building shopper loyalty.

FUNCTIONAL CONNECTIONS

Think holistically. Rather than pitting the center against the perimeter, focus on building a more seamless whole-store experience. Tis could include cross-promoting center store with fresh in creative new ways—granola and Greek yogurt, anyone? Or, try boutique-style merchandising, non-aisle aisles, and other design elements that integrate disparate categories or areas of the store—solution zones and farmers market style vs. traditional up-and-down aisles. Curate to inspire, delight and grow the cart.

Deliver meal solutions that meet immediate needs. Te trend toward purchasing for immediate consumption means more shoppers enter the store looking for their next meal. Ofer up a wide selection of ready-to-go meals that deliver need state-specifc solutions (i.e., fll-me-up-now or healthy dinner for the family).

Put on a good face. In-store shoppers are looking for a pleasant, stress-free experience, and the percentage of shoppers who say that interacting with helpful, friendly employees is one of their four most important factors when shopping has increased to nearly 20 percent since 2013.23 Make sure you’re training and motivating employees to represent your store as a welcoming, no-hassle oasis for shoppers.

Consider expanded, differentiated services. Some retailers, including Whole Foods and Wegmans, have begun establishing small restaurants within their stores, so-called grocerants that entice shoppers to sit down, relax and enjoy themselves. Walmart, meanwhile, is testing click and collect service for sameday Internet delivery orders. Don’t be afraid to think outside the box, because time stands still for no grocery store.

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EMOTIONAL CONNECTIONS

Target emerging shopper segments. If you’re using the same marketing strategies you’ve always used, it’s time to rethink your go-to market game plan. As men, millennials and multicultural shoppers become ever-more-important shopper segments, retailers must quickly adapt to their unique needs and expectations. (See Kellogg’s whitepapers on “It’s a Guy Ting” and “Marketing to the 21st Century Multicultural Family” for more on how to connect with these groups.)

Amp up loyalty programs. Most shoppers belong to grocery retailer loyalty programs, and these can be powerful tools to connect with shoppers.24 Use loyalty programs to actively engage your shoppers, not just to add more cards to their keychains. Te best-inclass programs personalize and contextualize member rewards; know what resonates with your shoppers, such as fuel rewards or wellness points that provide meaningful benefts. (Walgreens, CVS and Walmart all ofer good examples of these types of programs.)

Leverage digital personalization. Digital technology is a crucial bridge for building personal connections. Develop online tools, apps and other digital touchpoints that deliver value and relevance as well as fun. For example, provide recipe and meal ideas that inspire and reimagine use of food (think mashups like breakfast + Mexican). Because shoppers use their phones in-store to text or call someone else about product selections, fnd creative ways to encourage shoppers to phone home if they’re unsure about what’s already in their pantry.

Be a health partner. Many shoppers are striving to lead healthy lifestyles, and they want to feel that grocery retailers are on their side. Most shoppers are simply overwhelmed by the plethora of health and nutrition information out there and just want accessible help in making easier, better choices.25 Te key is understanding where your shoppers fall on the health and wellness spectrum, and their corresponding needs.

Build in transparency. Provide as much information as possible about product ingredients, sourcing and manufacturing practices. Tis type of transparency is particularly important to environmentally conscious, health-minded millennials, who consider product features and benefts—not just low price—when defning value, and it can help build trust with shoppers of all ages. Leverage signage as well as staf to communicate these details.

Delight with discovery. Shoppers’ palates are growing much more sophisticated, and grocers have an opportunity to bring excitement and experimentation to the shopping experience with novel products and ingredients. Authentic ethnic fare will be especially appealing to adventurous eaters. Try going beyond “Taco Tuesday” meal planning to more adventurous oferings such as Tai Tursday or Mediterranean Monday.

Think outside the store. Some of the most powerful inspiration can be found outside of grocery entirely. Look to Apple, Lululemon, Chipotle and other beloved brands for cues on store design, customer experience and digital engagement.

As the grocery shopper mindset and landscape continue to evolve dramatically, it’s time for retailers to think beyond their traditional operating strategies in order to seamlessly weave functional and emotional connections that reach the hearts of today’s—and tomorrow’s—shoppers. Kellogg’s three-part Voice of the Shopper whitepaper series has analyzed this shopper landscape both as a whole and in areas where retail grocers are likely to experience the biggest impacts: the rise of the male shopper, the dramatically changing American family, and the growth of a new kind of shopper loyalty. We’ve also created specifc actionable insights to help retailers build on this knowledge and execute research-based in-store strategies designed to drive higher sales.

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For further exploration of these and other shopper insights, Kellogg’s ofers a wide array of custom research, including (but not limited to):

Kellogg’s Path to Purchase Study Kellogg’s Shopping List 101 Voice of the Shopper: It’s a Guy Thing Voice of the Shopper: Marketing to the 21st Century Multicultural Family

Kellogg’s Understanding the SNAP Shopper Kellogg’s Mobile Across the Path to Purchase Kellogg’s Health and Wellness Triggers Kellogg’s Trip Missions Research

Let Kellogg’s industry-leading Shopper Insights team help you provide the best retail experience possible for your shoppers.

Hartman Group, “Outlook on the Millennial Consumer,” 2014

“Kellogg’s Understanding the SNAP Shopper,” 2014

Food Marketing Institute, U.S. Grocery Shopping Trends 2014

Food Marketing Institute, U.S. Grocery Shopping Trends 2014 Kantar Retail ShopperScape, February 2012/2014

AMG Strategic Advisors, “The Tipping Point for Center Store,” March 2013

“Kellogg’s Mobile Across the Path to Purchase,” 2014

“Kellogg’s Health and Wellness Triggers,” 2013

Food Marketing Institute, U.S. Grocery Shopping Trends 2014

Kantar Retail ShopperScape, January 2015

Nielsen Homescan; UPC only

AMG Strategic Advisors, “The Tipping Point for Center Store,” March 2013

Food Marketing Institute, U.S. Grocery Shopping Trends 2014

Nielsen data

Kantar Retail research

Food Marketing Institute, U.S. Grocery Shopping Trends 2014

Kantar Retail ShopperScape, October 2013/ October 2014

Food Marketing Institute, U.S. Grocery Shopping Trends 2014 11

Hartman Group, “Shopping Topography,” 2012

Gallup, Inc., “Why Customer Engagement Matters So Much Now,” July 2014 23

Food Marketing Institute, U.S. Grocery Shopping Trends 2014 13

Food Marketing Institute, U.S. Grocery Shopping Trends 2014

Kantar Retail ShopperScape, January 2013/January 2015 24

Kantar Retail ShopperScape, November 2014

“Kellogg’s Health and Wellness Triggers,” 2013

About Kellogg Company At Kellogg Company, we are driven to enrich and delight the world through foods and brands that matter. With 2014 sales of approximately $14.6 billion, Kellogg is the world’s leading cereal company; second-largest producer of cookies and crackers; a leading producer of savory snacks; and a leading North American frozen foods company. Every day, our well-loved brands nourish families so they can fourish and thrive.

Contact: Kellogg’s media hotline: 269-961-3799 media.hotline@kellogg.com

SET THE STAGE FOR IN-STORE DINING

ON CUISINE: 19 ACCENT SOUTHEAST ASIAN SENSATIONS

NOVEMBER 2015

VOLUME ONE

ISSUE ONE

Why

grocerants are here to stay PAGE 4

How Southeastern Grocers leverages local flavors PAGE 15

72% of shoppers have no plan for dinner at least once a week

and yet the deli garners only 20% of prepared food sales. Tyson Deli/Bakery will help you capture a bigger share of those meals. Get to the Right Place. At the Right Pace.

Source: Tyson On The Go Dinner Research 2015

ÂŠ2015 Tyson Foods, Inc. Tyson is a registered trademark of Tyson Foods, Inc.

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 • 224 632-8200 http://www.progressivegrocer.com/departments/grocerant VP, Brand Director 201-855-7621

Jeff Friedman jfriedman@stagnitomail.com

EDITORIAL Editorial Director Joan Driggs 224-632-8211 jdriggs@stagnitomail.com Managing Editor Elizabeth Brewster Art Director Theodore Hahn thahn@stagnitomail.com Contributing Editors Kathleen Furore, Kathy Hayden, Jill Rivkin ADVERTISING SALES & BUSINESS Midwest Marketing Manager John Huff 224-632-8174 jhuf@stagnitomail.com Western Regional Sales Manager Elizabeth Cherry 310-546-3815 echerry@stagnitomail.com Eastern Marketing Manager Maggie Kaeppel 630-364-2150 • Mobile: 708-565-5350 mkaeppel@stagnitomail.com Northeast Marketing Manager Mike Shaw 201-855-7631 • Mobile: 201-281-9100 mshaw@stagnitomail.com Marketing Manager Janet Blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) jblaney@stagnitomail.com 630-364-1601 Account Executive/ Classified Advertising Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@stagnitomail.com Advertising/Production Manager Kathy Colwell 224-632-8244 • Fax: 888-334-4699 kcolwell@stagnitomail.com Classified Production Manager Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com

TABLE OF CONTENTS NOVEMBER 2015

Why grocerants are here to stay

Prepared foods sales will continue to grow as supermarkets ride the wave of consumer demand.

Setting the stage for foodservice

Put the spotlight on in-store dining to compete with restaurant options that lure away grocery shoppers, say experts.

Staff notes

For a top-notch grocerant program, recruit and train employees to deliver restaurant-quality service.

EVENTS • MEDIA • RESEARCH • INFORMATION CANADIAN MARKETS • Convenience • Pharmacy • Foodservice

President & CEO Chief Information Officer SVP, Partner Chief Brand Officer VP & CFO VP/Custom Media Division 224-632-8229 Production Manager Human Resources Manager Corporate Marketing Director 224-632-8214 Promotion Director 201-855-7616 Director of Events 224-632-8181 Director of Digital Strategy 224-632-8180 Audience Development Director

Harry Stagnito Kollin Stagnito Ned Bardic Korry Stagnito Kyle Stagnito Pierce Hollingsworth phollingsworth@stagnitomail.com Anngail Norris Sandy Berndt Bruce Hendrickson bhendrickson@stagnitomail.com Robert Kuwada rkuwada@stagnitomail.com Ken Romeo kromeo@stagnitomail.com Matt McGuire mmcguire@stagnitomail.com Cindy Cardinal

Cover photo courtesy of Alberta, Canada-based Calgary Co-op

Back of the house: Southeastern Grocers

Southern cooking keeps these banner grocerant programs in tune with community values.

17 19 21 22 25

Healthy sales

The snack market offers ripe opportunities for prepared foods with wellness appeal.

Accent on Cuisine: Southeast Asian sensations Chef Q&A: Steve Petusevsky Focus: Soups Focus: Sides

A new word for a new era of retail food

MARKETING & PROMOTION Director of Market Research Debra Chanil 201-855-7605 dchanil@stagnitomail.com Audience Development Manager Shelly Patton 215-301-0593 spatton@stagnitomail.com List Rental The Information Refinery 800-529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media 877-652-5295 sales@wrightsmedia.com Subscriber Services/Single-copy Purchases 978-671-0449 or email at Stagnito@e-circ.net

UNITED STATES MARKETS Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green

Admittedly, it’s not the most graceful addition to the English language. But even though “grocerant” is a rather clumsy word, this evolving concept is gracefully making its way into the supermarket industry, combining the best aspects of fresh prepared foods, home meal replacement, retail meal solutions and in-store dining programs. America’s shif to quick eating solutions and away from cooking is being driven by demographics: busy families, the preponderance of one- and two-person households, Millennials with sophisticated tastes and Boomers with money to spend. Grocerants represent a huge opportunity for retailers to demonstrate that they can exceed these shoppers’ expectations, compete directly with traditional foodservice—and bolster their banner’s point of diferentiation at the same time. A few retailers have already emerged as leaders in the grocerant movement, including Wegmans and Whole Foods, but there are issues to be addressed even among the successful grocerant players, including curation, communication and talent. Progressive Grocer’s goal with our new Grocerant Solutions magazine is not only to help retailers define their own innovative grocerants, but to ofer up ideas for developing, executing and maintaining successful programs. We hope Grocerant Solutions inspires you to think—and act—in new ways, but always with your shoppers and their needs as a guidepost. We welcome your feedback and your challenges, so please let us hear from you. Joan Driggs Editorial Director NOVEMBER 2015

SOLUTIONS

Photo by Tim Benko

Why

grocerants are here to stay

SALES OF PREPARED FOODS CONTINUE TO GROW AS SUPERMARKETS RIDE THE WAVE OF CONSUMER DEMAND. BY K ATHY HAYDEN

A perfect storm of economics, lifestyles, demographics and foodie culture is fueling the boom in grocery retailers upgrading and adding prepared foods and foodservice oferings to become so-called “grocerants.”

Photo by Mike Sherrick

A prime example? Austin, Texas-based Snap Kitchen, which began expanding beyond its Texas roots in spring 2015 to ofer its grab-and-go healthy prepared foods in Chicago. Each Snap Kitchen location stocks a wide selection of prepared meals, snacks and cold-pressed juices that are made fresh daily, portion controlled, and nutritionally balanced.

“We wanted to fll the need for [prepared] food that was not only fast, but also gourmet quality and healthy,” says Andrea Hinsdale, Snap Kitchen’s chief dietitian. “We like to say we’re fast food for foodies—you can get in and out of a Snap Kitchen store in two minutes.” It’s this kind of innovation that will continue to drive grocerant growth, say industry observers, both in existing retail

Photo by Sue Barr

“We’re fast food for foodies— you can get in and out of a Snap Kitchen store in two minutes.” — Andrea Hinsdale, Snap Kitchen settings as well as for entirely new concepts. Joe Spinelli, a Washington, D.C., area food industry consultant who helped develop the Boston Market concept more than 20 years ago, notes that prepared food is all about what today’s consumers value most: speed, convenience and quality. “People get this food because it’s there. It’s the new impulse item,” says Spinelli.

Right time, right place A 2015 report from Chicago-based research frm Technomic and Acosta Sales & Marketing, titled “Te Why? Behind the Dine,” details how grocerants have helped turn the tide for supermarkets. Te past 30 years have seen retail stores lose food dollars to restaurants, but the trend is slowly reversing and leveling of at around 50-50, according to U.S. census data. In 2014, 66 percent of consumers reported bringing home prepared food from a grocery store in the past 30 days, and supermarket prepared food sales jumped 30 percent from 2008 to 2014, compared with just 10 percent growth in foodservice during the same period. Demographics are fueling much of that consumer demand for prepared foods. U.S. census data show that more than half of households are now composed of just one or two people, rather than the large families gathered around the dinner tables of the past century. Tis new reality ofers supermarkets more opportunities to serve as sous chefs, according to 2014 Food Marketing Institute research, as smaller households fnish of meals of prepared foods with fresh extras such as pre-cut salads.

Catering to consumers Overall, consumers are also choosing prepared foods because they’re fnding that supermarkets’ improved oferings are better meeting their needs. FMI research suggests that:

46 percent of those surveyed opt for supermarket prepared foods because they just don’t want to cook.

44 percent like the convenience of prepared foods. 34 percent say prepared foods are cheaper than restaurants.

34 percent fnd retail grab-and-go even easier than going to a restaurant. 31 percent prefer the taste of prepared foods over restaurant options. Spinelli says that as prepared food quality has improved during the past fve to six years, the grocerant potential has exploded on its own terms. “Opting for retail certain-

“Dishes that reflect where consumers are headed [for example, offering a vegetarian or meat-alternative option] . . . demonstrate that the retailer is ‘listening’ to their needs.” —Laurie Demeritt, Hartman Group

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ly doesn’t replace the restaurant experience [for consumers]—[but] it’s akin to ordering delivery pizza instead of making your own,” he says. “It’s not food you go out of your way for, but you grab it because it’s already there.” He notes that stores like Wegmans have proven high-quality prepared foods can bring in shoppers, while variety keeps them coming back. Variety also creates operational challenges, however, both back-of-house and in front, adds the trained architect who has designed restaurants and supermarkets. “You can’t just go with one big cafeteria style,” Spinelli advises. “You have to deploy what is called the ‘scatter system,’ where people aren’t clustered in the same place but are moving around to see the variety in diferent stations and forming shorter lines in more places.”

Trend tracking Prepared foods that take advantage of the latest culinary trends are also keeping consumers interested in coming back to grocerants. Laurie Demeritt, chief executive ofcer of the Hartman Group, a food industry research frm based in Bellevue, Wash., says the entire prepared foods ofering doesn’t have to change with the newest trends, “but dishes that refect where consumers are headed [for example, ofering a vegetarian or meat-alternative option] give shoppers pause to try new things and demonstrate that the retailer is ‘listening’ to their needs,” she says. Technomic’s foodservice trends for 2015, in fact, include two concepts that are tailor-made for grocerants: Te research frm identifed build-your-own as a major motivator for nearly half of those ages 18 to 44 years old, who would like more restaurants to ofer self-serve BYO sandwich bars; another 51 percent of consumers say customization is highly important in creating good value.

“[I see] a disconnect between the ‘grocer-’ and the ‘-rant.’ The company that wins the competition for take-home food dollars will figure out how to visually and psychologically reconnect the word.” —Michael Whiteman, Baum + Whiteman And like restaurants, grocerants can leverage seasonality as a way to capture repeat visits. “We roll out a seasonal menu featuring new, chef-driven dishes four times a year,” says Snap Kitchen’s Hinsdale. “Our concept chef, Matt Reinhart . . . has his fnger on the pulse of the latest food trends and spends his days tinkering in the Austin kitchen developing new and exciting dishes that meet all of our nutritional standards, but that also travel and reheat well.”

Dining destinations What’s next in the grocerant game? Turning desperation dinners, grabbed on the way in to pick up milk, into destination cuisine that consumers seek out, just as they do their favorite food trucks or steakhouses. “When I think of restaurant food, I visualize one plate at a time. When I think of supermarket food displays, I immediately visualize heaps of food in large trays,” says Michael Whiteman, a restaurant consultant and principal at New York City-based Baum + Whiteman. With decades of industry experience under his belt, Whiteman says he sees “a disconnect between the ‘grocer-’ and the ‘-rant.’ Te company that wins the competition for takehome food dollars will fgure out how to visually and psychologically reconnect the word.” Spinelli says he envisions more grocerant concepts that literally merge restaurants with grocery stores by co-branding established names in foodservice within supermarkets, “like installing small-scale taco stands or sandwich shops within large-scale grocery stores. Tis is a win-win idea I see taking of over the next fve to eight years,” he says. “Tat way, you create a destination for shopping and dining, like a Whole Foods with a ShopHouse nestled within it.” G

Photo by Mike Sherrick

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Deli at the Dinner Table 69% of prepared foods shoppers make their decision that day. When it comes to the evening meal, most consumers say they prefer to cook, but 70% of them admit they face unplanned meals once a week or more often. When that happens, where do they turn for a quick dinner solution?

According to Eric LeBlanc, director of marketing for deli and bakery at Tyson Foods Inc., — “Consumers are making channel choices before even crossing the threshold to the supermarket. Grocery retailers can influence this decision-making, but they lag behind restaurants and pizza delivery as top-of-mind choices for customers looking for quick dinner solutions. We have an opportunity to reach out to these folks, but largely, we’re silent.”

Sources: On the Go Study, Tyson Deli/Bakery, 2014

Attitude and Usage Study, Tyson Deli/Bakery, 2014

What drives a consumer’s channel selection? Tyson research found that grocery consistently ranked about as high as fast casual on satisfaction qualifiers such as food quality and freshness amongst consumers surveyed. Respondents also gave high marks to both for store cleanliness, price/value, menu choices and previous experience. If the grocer’s prepared foods rank high in customer satisfaction, it would seem reasonable that consumers might also consider the deli counter their “go to” choice for the evening meal, as compared to other channels like quick serve restaurants (QSR), carryout and fast casual.

The QSR Playbook Consumers in Tyson’s On the Go Dinner study showed a stronger preference for QSR, as well as a partiality for carryout food, as compared to their grocer’s deli, in their last 10 purchases of prepared foods for an evening meal. The grocery store foods did have an edge over fast casual restaurants and convenience stores. This disconnect between customer satisfaction of their grocer’s prepared foods and its rank as a channel choice might be attributable in part to how grocery retail promotes prepared foods. Unlike fast casual and QSR, retailers typically feature prepared food products, like rotisserie chickens, as standalones, using strategies that focus on pricing, instead of on a total meal solution. Retailers can take a page from the QSR playbook, promoting the strengths of their prepared foods as part of a total meal deal, focusing on freshness, quality and value with menu-worthy descriptors.

Channel Choices – The last 10 times you purchased prepared foods, how many were from: Quick-service restaurant such as McDonald’s, Subway, Wendy’s, Taco Bell, etc.

27%

Pizza delivery or carryout from a restaurant such as Domino’s, Pizza Hut, Papa John’s, etc.

20%

Deli or prepared food section of a grocery store such as Safeway, Kroger, WalMart, Super Target, etc.

19%

Fast-casual restaurant such as Panera, Five Guys, Chipotle, Panda Express, Boston Market, etc.

15%

Convenience store such as 7-Eleven, Circle K, QuikTrip, RaceTrac, Wawa, etc.

Competitors are also well ahead of supermarkets in using digital tools to communicate with shoppers for meal solutions. Fewer than 10 percent of consumers recognize mobile apps, text alerts and social media as influencers of their decisions to visit a specific grocery store, mostly because the majority of retailers aren’t using them to promote prepared foods. It’s time for grocery retailers to get their seat at the table by making those same real-time connections; addressing their customers’ emotional triggers and providing the solutions they seek when there’s no plan for dinner.

Setting the stage for

foodservice BY JILL RIVKIN

Put the spotlight on in-store dining to compete with restaurant options that lure away grocery shoppers, say experts.

BY JILL RIVKIN

Moving your grocerant to the next level means expanding from grab-and-go to sit-and-dine. It may sound intimidating—especially if you’re still wrapping your head around stocking refrigerated shelves with restaurant-quality prepared foods. But grocerant leaders like Whole Foods and Wegmans are proving every day that a supermarket can also ofer a variety of customer-pleasing dining experiences.

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Taking notes from the hospitality and restaurant industries is key to launching a successful in-store foodservice operation, experts agree. Tere’s no need to reinvent the wheel when many of the best practices for grocerants are already in place at other foodservice outlets—it’s just a matter of adapting them to ft the retail setting.

Take a page from foodservice Successful prepared food retail segments consistently deliver quality in product taste and appearance, along

Retailers already have an edge on traditional foodservice providers in some aspects of the dining experience. with a variety of products to ft the retailer’s demographics, says Jack Sjogren, design center specialist at Conyers, Ga.-based Hillphoenix, a leading manufacturer of display cases and refrigeration and power systems. But to further diferentiate a grocerant, he adds, requires a separation of the dining experience from the grocery experience. Traditional foodservice operators ofer “culinary knowl-

But retailers already have an edge on traditional foodservice providers in some aspects of the dining experience, says Sjogren. Te concept of a grocerant “‘culinary consultant’ creates a sense of sharing with the customer vs. tightly kept secret recipes [at a restaurant],” he says. In addition, “there are more fuid menu options [at a grocerant]—retailers could provide a wider array of choices and adaptations based on their demographics,” says Sjogren. “[Retailers] can access and have partnerships with local growers and producers that may be able to extend or expand food oferings,” says Giammarco, “as well as seasonality and co-branded opportunities that can be seen as competitive or difcult to attain in the traditional foodservice arena.”

Best practices at work Some notable retailers have already achieved restaurant-level foodservice, exemplifying best practices specific to grocery retail that can be blended with knowledge gleaned from the hospitality and restaurant industries. Sjogren says these successful grocerant foodservice providers zero in on the quality of their people and their food, their dining atmosphere, and the concept of their grocerant as a destination vs. an added area.

edge and ambiance of dining,” he says, and they use foodservice ingredients vs. “of-the-shelf products. Foodservice ingredients have diferent standards regarding consistent sizing and ingredients,” he adds.

Giammarco emphasizes committing to providing restaurant-quality food by taking a culinary approach to recipes and oferings, as well as diversifying options among ethnic foods and local, healthy and seasonably appropriate dishes.

“[A grocerant] should... have its own distinct area inside the store vs. being part of a deli department.” — Jack Sjogren, Hillphoenix

Te whole foodie movement also ofers great insights for grocerants, says Nicholas Giammarco, creative principal, retail strategies at Birmingham, Mich.-based Studio H2G. He points to the popular food truck trend, as well as emerging quick-service restaurants focused on foodies. “Retailers really need to tap this passion for food,” he says.

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being part of a deli department.”

“Retailers really need to tap this passion for food.” — Nicholas Giammarco, Studio H2G

Giammarco agrees: “Tere needs to be a mind shif from necessity to lifestyle, from a department to a viable independent business model,” he says.

Recognizing and addressing customer demands also plays a huge role for successful grocerants, says Giammarco. “Successful retailers know their customer demands and lifestyles, with all-day options [that] align with their needs—breakfast, lunch, dinner, as well as health and wellness options,” he says. “Tey also consider family needs—how does the shopper get a meal that works for the adults and the kids that is nutritious, good, fresh, and meets a budget?”

Meeting shopper/diner expectations For consumers, accepting in-store retail foodservice is still a relatively new concept, certainly in the United States. Tat makes it much more important for retailers to address what their customers are expecting now and what they will expect as they get used to “eating in” at the grocery store. “A grocerant should be a destination center area within the store,” says Sjogren. “It should ofer a dining experience with food that tastes like it is restaurant quality. It should also have its own distinct area inside the store vs.

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Shoppers have high expectations of the foods they fnd in this kind of destination center, and retailers can’t take the risk of not making a strong and lasting frst impression to ensure repeat visits and purchases. Sjogren points to a few key shopper demands, including made-to-order taste profles and attractive products made with nutrient-rich foods in vibrant colors. Ultimately, says Giammarco, retailers who want to be successful in the grocerant space must shif to a customer-focused initiative. Traditional foodservice operators have an edge on grocerants thanks to brand recognition, specialization and focused marketing, he points out, but grocerants aren’t far behind. G

Staff notes Recruit and train grocerant employees to deliver restaurant-quality service. BY JILL RIVKIN

Retailers aiming for grocerantlevel environments in their stores will need more than top-notch prepared foods and a welcoming décor: Employees who can take customer service to new levels are an essential part of the mix too.

successful—looking at it holistically from every aspect of the organization. Tey need to be willing to do the hard work in terms of changing the culture for what’s going to support a new experience for the customer.”

Ingredients for success

And that demands a new perspective on how to recruit, hire and train staf who will bring attributes from the hospitality world into retail. Janet Hofmann, president of HR Aligned Design, a New York-based human resources and management training consultancy, says the key is looking at the process holistically.

Grocerant-level customer service comprises attributes of service that may be newer to retail but are prevalent in the hospitality/hotel industry. It starts with customer engagement, which can range from quick service at a counter to a sit-down experience. Store employees may have to communicate briefy with a shopper about ingredients and food preparation guidelines, or they may have to engage with the shopper from product choice through to consumption.

“Retailers are trying to create a diferent experience for this customer in this part of the store, but everyone has a part in it,” she says. “Te leadership has to have diferent expectations and measures of what makes a store

“Te ability to communicate—and enjoy engaging with people—is a unique skill,” Hofmann says. “It’s not something everybody has or something everyone enjoys. And it’s one of the hardest elements to teach.”

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“You hire for the person’s attitude and train for the skill.” —Janet Hoffmann, HR Aligned Design

Hofmann adds that fnding good communicators is critical and must be a high priority—it’s a “need-to-have vs. a nice-to-have.” In addition to communication skills, says Hofmann, other key grocerant employee attributes are strong organization, deep knowledge and learning agility. “Every organization is going to be diferent, and I always suggest retailers spend some time identifying top skills that are going to make that individual and the organization successful,” she says. Hofmann points to an adage she says is a great guideline for recruiting, hiring and training grocerant-level staf: “You hire for the person’s attitude and train for the skill,” she says. “As grocery organizations move toward a grocerant model, to a large degree they’re changing how they do business and their business model,” she adds. “Even if they’re just changing a portion of the store, the implications are for the entire organization.” With the change in service expectations, retailers need to establish hospitality and service standards, ranging from how employees greet customers to how they follow up or handle a crisis. “What employees needed yesterday are not the skills they need moving forward,” she says. “And they’re not just for those working in the new section. Tere are going to be implications for hiring overall because existing employees will have to change their skill sets to have a consistent model. Team members must be working together, regardless of where they work in the store.”

Millennial mindset From a recruiting standpoint, Hofmann encourages retailers to think about how their grocerant employees may—or may not—mirror their customers. “A lot of

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what is driving this change at retail is the new makeup of people who are becoming adults—Millennials. Tey are working and don’t have time to cook, but they want a great meal and to eat healthy,” she says. If Millennials are a growing customer base, says Hofmann, retailers need to attract them as employees too. Job trends have shown that Millennials seek: Growth Advancement Ongoing feedback Autonomy

Training tactics Retailers realigning to become grocerants need to set high expectations for employees and teach them how to achieve their goals. Hofmann says it’s important to train employees so that they not only learn the intricacies of what they’re selling—ingredients, preparation, allergy issues—but they also experience diferent situations and role play. “For those employees that are literally selling and engaging with customers, they need a knowledge base,” she emphasizes, pointing to the hotel and restaurant industry as a great model for retailers. To establish a new grocerant culture, it’s also essential for retailers to communicate expectations clearly. “Retailers need to retrain on the new expectations—they need to have set them and defned them and provided the tools to learn,” says Hofmann. “And they need to give people time to change their performance and hold them accountable. Some people may not make it, but those are the tough parts of change like this. Te best approach is to give employees the tools and opportunities to make the shif to this new model.” G

Back of the house:

Southeastern Grocers

Southern cooking keeps banner grocerants in tune with community values. BY K ATHY HAYDEN

Traditional Winn-Dixie stores focus on core items that appeal to families.

Local favors are the secret to success for grocerant initiatives at Southeastern Grocers LLC, parent company of BI-LO, Harveys and Winn-Dixie, says corporate chef Deanna Stephens. “We try to focus on items and programs that speak to local in all of our diferent footprints,” Stephens explains. “For example, Southeastern Grocers is known for BBQ ribs and our outdoor grilling events as a whole. But we have diferent recipes depending on region and demographic. Unlike our competition, we don’t necessarily have only one favor profle or recipe throughout our 750 stores.”

Boosting banners Stephens notes that the Harveys banner, for instance, focuses on its rural footprint and supports that position

with good comfort food at an afordable price. Harveys features hardwood smokers in the deli for rotisserie chicken and ribs, and Stephens sees this equipment as a game changer in the stores’ ability to maintain a “homecooked” feel. As the ffh-largest conventional supermarket chain in the United States—and the second-largest conventional supermarket in the Southeast—Southeastern Grocers also has strategies to create diferent types of stores within banners. Te BI-LO banner includes a hometown-styled BI-LO serving full, freshly cooked breakfast starting at 6 a.m., which is important to local farming communities and to early workers. Tese stores also provide take-home scratchcooked items such as red rice, baked mac-and-cheese, and shrimp and grits that are native to the Carolinas. A group of BI-LO select stores, on the other hand, is known not only for the traditional chicken and ribs oferings but also for more upscale prepared foods like a freshcut cheese program; chef-prepared, slow-braised brisket; roasted, sustainable salmon; and slow-roasted prime rib.

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“In these stores, we feature and provide meal solutions for the family on vacation or the local family that is looking for great restaurant-quality food that they would be proud to serve to their family or dinner guests,” says Stephens. Similarly, Winn-Dixie employs three very diferent strategies within the banner. Traditional Winn-Dixie stores focus on fried Lip Lickin’ Chicken, wings and rotisserie chicken—core items that appeal to traditional families. Winn-Dixie also has a large group of select stores that ofer in-store chefs, cheese and wine stewards, and prepared foods aligned with the BI-LO select stores’ prepared food programs. And Winn-Dixie South Florida stores focus on the Hispanic population, serving up grab-and-go, scratchcooked local favorites like mojo pork shoulder and tostones (fried plantain slices) made from traditional recipes. “We have many Cuban cafes in our South Florida market that provide great Cuban cofee, sandwiches and traditional Cuban pastries,” adds Stephens.

Making it happen To cater to the local tastes of diferent areas, Stephens created fve regionally based training-chef positions, developing that new role from the ground up about four years ago. As the company has acquired diferent banners, she has added training-chefs and now manages six for more than 750 stores. Te training-chefs assist with educating deli managers on recipes and selecting which items throughout

“You need to listen to your customers and do a few dishes extremely well.” — Deanna Stephens, Southeastern Grocers corporate chef

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Winn-Dixie uses several different grocerant strategies within the banner.

the store can be paired with deli prepared items. “Tere are times that we showcase, sample and sell prepared items and products from other departments,” Stephens says, noting that she recently ran a deli promotion featuring fully prepared value-added items that are sold in the meat department. Highlighting sustainable salmon with the prepared foods in the deli, meanwhile, calls out the company’s social responsibility to the environment, which is great bang for the marketing buck, she says. Tis cross-pollination also gives customers the opportunity to see and taste fully cooked meat and seafood items before purchasing them. “I fnd that what’s important on the prepared side is to realize that no store can be all things to all people,” Stephens says. “It makes no sense to try to be a bit of everything. Some trends you just need to sit out.” Chicken and wafes, for example, is a hot restaurant trend that didn’t translate well to her prepared food program. “We couldn’t do them efciently and decided not to put the resources into a trend that might not have longevity,” she says. “Te risk was that, by the time we got a version we liked, the market would be over-saturated. “You don’t want to lose momentum,” adds Stephens. “You need to listen to your customers and do a few dishes extremely well. Ten stand behind what you do well.” G

Healthy sales BY K ATHY HAYDEN

The snack market offers ripe opportunities for prepared foods with wellness appeal.

Will paleo diets go the way of the dinosaurs? Does organic mean more nutritious? Is gluten-free the way to be?

Freshii’s new frozen kefir packs more probiotics and vitamins than traditional frozen yogurt.

While the umbrella covering healthy eating is bigger than ever, consumers are seeking a simpler, faster approach to eating well that aligns better with the grocerant than the drive-thru. Ofen located near the fresh produce department and sourced from the same aisles where shoppers look for their home cooking needs, the grocerant has a leg up in ofering wholesome, natural foods, say experts. “Shoppers are increasingly seeking out prepared foods that signal higher quality, which they link intrinsically with their health and wellness,” says Laurie Demeritt, chief executive ofcer of Bellevue, Wash.-based market research frm the Hartman Group.

Attacking the snack market Snacks are a particularly hot category for health and wellness, and many prepared foods can be made to order for this market. “We can see that serving prepared foods aimed at solving snack and meal occasions is still a signifcant opportunity,” says Demeritt. “Snacks make up half of all meal occasions today, so portion sizing, variety and portability now matters if retailers are to remain relevant with shoppers.”

“Snacks have become a restaurant occasion.” — Steven Goldstein, The Culinary Edge

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Meaningful menus

Top information consumers want to see on foodservice menus when they’re seeking healthier, higher-quality foods: Calories

29% 29% 29% 28% 27% 26% 24% 24% 24% 22% 19%

“Heart-healthy item” labels Fat content Description of preparation (taste, ingredients) “Locally grown item” labels “Seasonal item” labels Labels/symbols indicating level of spiciness or heat Sugar content Salt content “Cooked to order” labels “New item” labels “Certifed organic” or “non-GMO” labels

35%

Source: “Diners’ Changing Behaviors: Sustainability, Wellness & Where to Eat” 2014 report, Hartman Group

“Snacks have become a restaurant occasion, but this can tip the scales to indulgence,” adds Steven Goldstein, partner at Te Culinary Edge consulting group in San Francisco. “When you’re snacking a few times a day, you can’t choose butter and sugar all the time.” Goldstein says ofering prepared foods that add a healthy trend to old-fashioned ingredients, such as using chia seeds to make a chia seed pudding, results in a more nutritious snack that is still a treat, but a more balanced treat.

For example, Freshii, a health-focused international fast casual brand, serves frozen kefr, a yogurt-like treat that packs more probiotics and vitamins than the traditional version. LYFE Kitchen, a growing chain that’s been called the “Whole Foods of fast food,” ofers a chocolate budino that combines dark chocolate, chia seeds and nuts for a super-foodpacked treat. And Starbucks is positioning protein-packed snack boxes at its registers.

Fast casual concepts Popular health food chain restaurants that feature on-trend, healthy ingredients can be a good source of inspiration for grocerant prepared food snacks.

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Starbucks’ Protein Bistro Box caters to consumers looking for healthy mini-meals.

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“When you look at recent history, you can see a generation that missed out on real food and associates food with drive-thru windows or with packages in the kitchen cabinet,” says Goldstein. “We are still working away from this mentality and these strong messages, but people are starting to eat diferently and to know about the quality of their calories.” G

Accent on cuisine:

Southeast Asian sensations

For many consumers, pad thai is a default lunch or family takeout. For Chef Robert Danhi, who has been sharing his passion for Southeast Asian cuisine for decades, it’s a sign of things to come. Chef Robert Danhi researches Southeast Asian cuisine on location in Thailand.

able with Asia, thanks to the popularity of Chinese and Japanese restaurants and a more recent awareness of Korean dishes like kimchee and sweet-salty barbecue sauce.”

Starting small Danhi considers Tai cuisine the forerunner in terms of consumer adoption of Southeast Asian favors, followed by Vietnamese. But he sees evidence that U.S. markets are ready for greater acceptance of other regions and lesser-known dishes in the newest packaged retail meal kits and fast casual chains like ShopHouse Asian restaurants, created by Chipotle founder Steve Ells. ShopHouse deploys a build-your-own service line concept that allows customers to layer aromatic rice or rice noodles with marinated proteins, loads of vegetables, sauces and crunchy extras. Te deceptively simple menu brings less familiar tastes, such as green papaya slaw, tamarind and daikon radishes, to a wider audience. “People are already branching out from the Tai coconut-based curries, mangoes and sticky rice to explore a much more rustic style of Northern Tai food, as well as Vietnam’s pho [soup], sweet condensed-milk cofee, and banh mi sandwiches,” says Danhi, whose clients include Marks & Spencer and Trader Joe’s.

In fact, Danhi predicts the entire Southeast Asian region will explode with culinary infuences on the American food scene just as Italian pasta and pizza did decades ago. “Overall, consumer reception for Southeast Asian foods is huge,” says Danhi, who in 2005 founded Chef Danhi & Co. Inc., a consulting frm based in Los Angeles, to focus on the cuisines of Southeast Asia. “People are comfort-

Vietnamese banh mi, in particular, got a recent boost from Yum! Brands’ debut of Banh Shop, a fast casual restaurant concept showcasing Saigon street food. Interest in these sandwiches proves that any store with access to French bread, cured and grilled meats, fresh greens and pickled vegetables should consider ofering some variation of banh mi, he adds.

Many of Southeast Asia’s distinctive dishes evolved from classic street food, which means they can be produced using only small, barebones cooking facilities. NOVEMBER 2015

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Consumers already are exploring different styles of Thai food (left), as well as Vietnamese dishes like pho (right), says Chef Robert Danhi.

“Tis concept demonstrates how industry leaders believed it was time to focus on Vietnam and to bring this national dish in mainstream U.S. dining,” says Danhi. “Tey launched with just banh sandwiches, but afer some time, they discovered they needed to broaden the menu with noodle dishes, breakfast scramble bowls and even some dishes that are admittedly more about Tai infuences, such as the green curry.”

From street food to retail

Newcomers in the wings

Most Southeast Asian cuisine features more raw herbs, greens and vegetables than cooked elements, which makes proximity to the fresh produce aisle a plus. And as successful restaurant concepts like ShopHouse have shown, simple Asian menus of limited choices are a hit: Bowls built on a base of rice or rice noodles piled with protein, plenty of vegetables and favorful sauces and extras are the cornerstone of Southeast Asian meals. Bowl-based meals are also easy to prep and assemble, travel well and retain heat.

Danhi notes how, historically, Asian food ofen enters a community at local mom-and-pop restaurants and quickly gains popular acceptance. “Right now Filipino and Indonesian food is at the mom-and pop level and is poised for more penetration in the market,” he says. Meanwhile, Malaysia has made some inroads but is still in the discovery stages for many diners. “Malaysia is certainly on the rise, especially with international chains like PappaRich—a casual chain with open-concept kitchens—coming to the States,” Danhi notes. PappaRich ofers accessible Malaysian comfort food such as satay, curries, Indian rice dishes, and chicken rice—a rustic version of chicken soup with bean sprouts plus dipping sauces of chili, ginger and dark soya sauce.

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Operationally, Southeast Asian cuisine is an easy ft for retail settings, according to Danhi. Many of the region’s distinctive dishes evolved from classic street food, which means they can be produced using only small, barebones cooking facilities. Sometimes a grill is enough, but rarely would equipment needs go beyond a high-powered wok.

“Adding the foods of Southeast Asia to your grocery store prepared foods program is no diferent than adding any other cuisine,” adds Danhi. “It begins with a commitment to the research process, then developing customer-appropriate adaptations of these cuisines.” — Kathy Hayden

Chef Q&A:

Grocerants grow up

As the grocerant market ramps up, one person in particular is enjoying the ride. Chef Steve Petusevsky was among the frst in the industry to see the grocerant concept potential when he helped Whole Foods Market develop the chain’s original prepared food program and wrote “The Whole Foods Market Cookbook–a Guide to Natural Foods with 350 Recipes” (Clarkson Potter, 2002). Today, Petusevsky’s Washington, D.C.-based consulting service’s retail clients include Mariano’s, Roundy’s and Lucky supermarket chains. Grocerant Solutions talked with Chef Steve for a full-circle perspective of the grocerant business, and what he sees trending right now.

Why are prepared food programs so important for retailers now? SP: My basic tenets are the same as when I started. I stress that all grocery store companies—whether traditional, natural food or specialty—need to provide prepared foods. Tey need to have restaurant-quality food because your prepared food is the one element that makes your brand stand apart. It’s your identity in this business. How do you see more mainstream retailers buying into the grocerant concept? SP: Prepared food in retail is fnally being treated as its own feld, and not just an aferthought, and I want to see that momentum continue. It’s good to see executive level grocery store management really giving their attention to their prepared food programs.

What is diferent about the prepared food business today compared with years ago? Chef Steve Petusevsky: For 20 of my 30 years in this [retail food] business, I had no one to talk to about this work. I had to source quinoa direct from Peru and steal kale from the seafood display cases. Now we’re getting leading chefs from more traditional settings and top culinary schools. [Working in retail] fresh prepared food is attracting chefs from the food truck culture, the CPG and R&D worlds, and people previously involved in large-scale production. Chefs are seeing retail as a place to innovate and to work in a less intense setting with better hours.

What more needs to be done to make grocerants more successful? SP: I always stress the need for prepared food to be thoughtfully integrated into the whole market and the whole shopping experience. Oferings need to be carefully engineered to support busy shoppers. It’s not the same as going to a restaurant. It needs to be its own experience. I’m encouraged to see new store design including open kitchens, better fow and better seating options that create unique dining experiences in retail settings.

— Kathy Hayden

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Focus:

Soup’s on

Ethnic, innovative offerings

heat up the category. BY KATHLEEN FURORE

Billed as the fastest-growing and most exciting event of the winter, the annual Bufalo (N.Y.) Soup-Fest has introduced thousands of Western New Yorkers to a cornucopia of local soups, including the Sweet Potato Chowder and the Roasted Corn Soup with pickled shallot and bacon on the 2015 menu. Te surge of interest in this soup-er gathering during the past fve years is just one of many testaments to the popularity of soup as a menu staple across the foodservice spectrum, from restaurants to retail prepared foods. “Without exception ... every soup we have tried has found traction regardless of season,” says Kevin M. Smith, director of food service and production bakery at Raley’s Family of Fine Stores based in West Sacramento, Calif.

Positive purchase patterns One look at the number of consumers sold on soup shows how positive this product can be to the bottom line. Fify-four percent of consumers contacted for Technomic Inc.’s “Soup & Salad Consumer Trend Report” say they source soup from home at least once a week. More than two-ffhs of consumers interviewed strongly agree that they visit certain restaurants specifcally because they enjoy the soup. And 51 percent say it is important to have

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the option of ordering soup paired with other items—another sales-building beneft. “Ofering soup as part of a bundle with sandwiches or salads and providing varieties that guests enjoy, but can’t duplicate at home, can help entice soup orders,” reports Anne Mills, Technomic’s manager, consumer insights. “Fify-eight percent of consumers who order soup away from home say they are more likely to order soup as part of a combo meal than as a single item.” Many of the trends driving the popularity of other food products (think global favors, healthy nutritional profles, and a yearning for more innovative favors) pertain to the soup category too. In fact, ethnic and innovative soups are poised for growth, according to Technomic, particularly among younger consumers—the same consumers who are more likely to purchase and are willing to pay more for a soup that is premium, natural, locally sourced and preservative-free.

Foodservice soup strategies Keeping up with trends and ofering a wide variety of traditional and more innovative soups are key to attracting soup-loving patrons. At retailer Raley’s, that means ofering ethnic-inspired

Organic soups for your most discerning customers Y from Blount. We take great pride in small batch cooking that featur ced ingredients whenever possible. Turn to Blount for the ﬁnest in organic, gluten free, low fat and vegetarian offerings. It’s a differ customers can taste. To learn more about our artisan-crafted organic soups, call 800.274.2526 or visit blountﬁnefoods.com/buildsales.

Ofering a wide variety of traditional and more innovative soups is key to attracting soup-loving customers. vegetarian, spicy, and gluten-free options. Te Chicken Potpie, Lobster Bisque, and Vegetarian Split Pea are the most popular—and customers are encouraged to sample before they settle on an order. Tat approach appears to be working: System-wide sales for 2014 were $38.2 million, up from $30.8 million in 2013—a 24 percent increase, according to the company.

An opening for organics

soups like Chicken Tortilla, traditional standbys like Farmers Market Vegetable, healthy options such as Organic Ancient Grain, and creamy bisques in varieties including King Crab and Tomato. Souplantation—a soup and salad concept restaurant from San Diego-based Garden Fresh Restaurant Corp.—provides a rotating menu of broths, cream-style soups and chili, all made from scratch daily. (Te restaurant goes by the name Sweet Tomatoes outside of California.) “We always serve eight diferent soups, including vegetarian and vegan options to meet any dietary preferences,” says Don Cowan, spokesperson for Garden Fresh Restaurant Corp. Although the Chicken Noodle Soup, which Cowan says has real chicken plus noodles “made from just fve ingredients: four, egg, water, milk and a pinch of salt,” is a perennial favorite, other options tap into current culinary trends. Albondigas Locas, Asian Ginger Broth, and Border Black Bean & Chorizo Soup are among the ethnic-inspired items. Broccoli & Potato Chowder and Broccoli Cheese cater to vegetarian preferences, and the 4 Bean Minestrone with Whole Grain Pasta capitalizes on consumers’ embrace of whole-grain products. Souplantation’s menu also gives guests a chance to customize traditional items to their liking. “We have guests who get creative [with] combinations like chili and macaroni and cheese, or chili on our cornbread—it’s like our secret menu,” Cowan says. A similar story is playing out at Zoup!, a fast casual restaurant chain based in Southfeld, Mich. Zoup! dishes up 12 diferent soups daily, including low-fat, dairy-free,

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Organic products are also heating up the soup scene, and for good reason. According to the Organic Trade Association (OTA), sales of organic products in the United States jumped to $35.1 billion in 2013, up 11.5 percent from the previous year’s $31.5 billion and the fastest growth rate in fve years. Eighty-one percent of U.S. families now choose organic food at least sometimes, the OTA reports. Raley’s soup menu, for example, includes Organic Chicken Noodle and Organic Ancient Grain soups, according to Michelle Silvestri, Raley’s food service specialist. At San Francisco Soup Co., a family-owned quick service concept with 16 locations in the Bay Area, at least three certifed organic signature soups are featured on the menu every day. Among the oferings are Organic Southwestern Corn Chowder, Organic Smoky Split Pea Soup, and Organic Tomato Bisque. Te soups are part of the company’s overall mission to provide a healthy and favorful repertoire of recipes that position soup as the centerpiece of the meal. “We have always known that our guests care about what they are eating, and we have been forthright in sharing nutritional information from the very beginning,” explain owners Jennifer and Steve Sarver in an online history of the company. “And we are committed to developing more organic varieties in the future.” G

Focus:

Side show stars

Vegetables take the lead in foodservice side dishes. BY KATHLEEN FURORE

As savvy chefs have discovered, of-overlooked side dishes are steady performers that many diners regularly enjoy—which can make them important components of grocerant culinary oferings too. “Sales of side orders have remained consistent over the past two years,” according to “2015 Lef Side of the Menu: Starters, Small Plates & Sides Consumer Trend Report” from Chicago-based research frm Technomic Inc. “Today, 53 percent of consumers order sides every time or nearly every time they order food from foodservice.” Kevin M. Smith, director of food service and production bakery for Raley’s Family of Fine Stores, based in West Sacramento, Calif., believes that data is just the tip of the iceberg. “I feel as though we have barely begun to explore the depth of this sub-category,” Smith says. “We fnd that many customers are willing to risk [experimenting with] new and bold favors and recipes if they are timely, cost-efective and authentic. “As much as I believe wholesome food is back, I think the true [side dish] trend resides in customization and world cuisine,” he adds. “Te American classics are still strong contenders. However, food trucks have done a great service in liberating the American palate with very little exposure to ‘risk.’ Korean BBQ tacos with kimchee and sriracha [sauce] at $2—who wouldn’t try something at that price? We are seeing developing sales in Korean, Vietnamese,

Turkish and Italian [side dishes]. All regions of Chinese cuisine are popping up, and Middle Eastern is staking a presence, also.”

Root vegetables rule As consumers become more willing to branch out in their side dish selections, grocerants can cater to their tastes by creating unique, innovative options that help drive sales. In 2015, going “ugly” has been one way to do just that, according to Baum + Whiteman’s 2015 food and beverage forecast, which dubbed “ugly root vegetables” as one of the main ingredient categories that chefs and manufacturers alike are working with this year. Tese vegetables also mesh well with today’s sustainable, locally grown and root-to-stalk culinary craze. “Celery root, parsnips and kohlrabi are grabbing attention in restaurant kitchens— fried, mashed, pureed, gratineed; favored with cured pork or smoked honey,” according to the Baum + Whiteman forecast. “Tey replace humble potatoes with lots more inherent favor. Better yet, consumers have no notion of how to cook them ... so they’re becoming ‘chefy’ ingredients.” Other popular sides that rely on these “ugly” vegetables include the parsnip potato mash at New York Dog House

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Kitchen & Bar in Astoria, N.Y., along with the caramelized root vegetables with balsamic glaze and the baby beets with goat’s milk yogurt and basil at Pizza Barra restaurant in Oak Brook, Ill.

Tradition with a twist While root vegetables are making inroads on side dish menus, more traditional, tried-and-true sides have not disappeared. Instead, some old favorites are getting a culinary makeover of sorts. “We’re seeing more creative spins on classic sides and expect this to continue growing to help meet demand for uniqueness while not veering too far from consumers’ comfort zones,” reports Anne Mills, manager, consumer insights for Technomic. “I think sides have become more seasonal and much lighter than in the past,” says Chris Macchia, chef at Pizza Barra and at Chicago’s Labriola Ristorante & Cafe. “Most older restaurants would sell asparagus all year round, or heavy creamed spinach, but our guests are looking to eat much lighter and have better knowledge of what’s in season.” Examples from Labriola’s menu include grilled asparagus with shaved Parmesan, sautéed rapini and garlic, and green beans with basil pesto and pine nuts. Lightening up recipes isn’t the only way chefs are spruc-

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ing up conventional side dishes. Tey’re also pairing ingredients in innovative ways, such as these restaurant oferings: trufe mashed potatoes at Maya Del Sol in Oak Park, Ill. olive oil mashed potatoes and Parmesan polenta fries at Labriola potato-caulifower mash at Hophouse in Portland, Ore. grilled GMO-free yellow corn with chili oil, Cotija cheese, cilantro and crème fraîche at Nirvana Grille in Laguna Beach, Calif. Retailer Raley’s, meanwhile, has beefed up its traditional side dish roster with mashed caulifower with Cheddar cheese, sage orzo and butternut squash, and creamed corn with bacon. Tis new focus on side dishes can help pump up profts along with favor profles. According to Technomic, bundling side dishes with main dishes can boost sales. And side dishes can even be used as a separate menu category, Macchia notes. “At Pizza Barra, we have a whole section of our menu dedicated to vegetables,” Macchia says. “Tey can be ordered as side dishes accompanying proteins, but we tend to sell more of them to be eaten and shared as antipasti.” G

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