EDITOR’S LETTER
Spring into Networking
Spring not only brings nicer weather, it also kicks tradeshow season into full swing. We’ve been covering so many different ones both in the magazine and on our social media channels. (Are you following us?) Toy Fair New York, South Beach Wine and Food Festival, eTail West, Consumer Electronics Show and MAGIC have all come and gone with more industry news and new products than we can practically keep up with. Right on the heels of those shows is a slate of even more! In this issue, we cover the National Hardware Show, which is a major event for those in the home improvement industry, taking place May 4-6 in Las Vegas. ScottsMiracle-Gro, our cover story for this issue, will showcase its licensed products for lawn and garden care, and the company plans to meet with retailers of all sizes - from big-box stores like Home Depot to the small, momand-pop independent home improvement store - to gain even better insights into what customers want. Also in the coming months are B2B Online 2016, the Sweets & Snacks Expo and Licensing Expo, all of which are covered in this issue so you can get a sneak peek about what you can expect at these shows. They’re all unique in their industry focuses, but all equally important for professionals in the retail and licensing market. I’m looking forward to attending a few of them to walk the floors and meet with some of the great companies I get to write about. Attending tradeshows and conferences creates invaluable opportunities for retailers and industry professionals of any market. They are a fantastic opportunity to put faces to the people in the industry that you’ve only communicated with via e-mail or on conference calls, and especially important for meeting new people. If you’re exhibiting, you can meet with potential customers to generate leads or buyers that want your product in their stores. Attending educational sessions or striking up a conversation at someone’s booth is a great way to gain deeper insights and
Attending tradeshows creates invaluable opportunities for retailers and industry professionals.
knowledge into both the industry at large and any niche market you want to target. You can even see what your competition is doing, how they might be succeeding and learn from them. By attending, you’re exposing yourself to the industry and especially to the press, like RM, to promote your business, brand or product. You should be collecting as many business cards as your wallet can carry for potential customers, buyers or marketing opportunities to help your retail or licensing business grow. Most importantly, however, tradeshows are a great way to let off steam and have fun. Most shows host networking parties, along with a ton of opportunities to wine and dine with fellow attendees. Whether you’re exhibiting or walking the floor, tradeshows are a great way to connect with your industry for a few days at a time and potentially get more business done there than you might in an entire year behind your computer. And lucky for you retailers, licensors, licensees, buyers, merchandisers and distributors – there are so many different shows, expos and conferences to go to just in the next few months! I hope you’re getting excited for all tradeshow previews in this issue, along with all the great licensing, retail and supplier profiles. Read on!
Stephanie Crets Editor-in-Chief
EDITORIAL -------------------------------------------------------------------EDITORIAL DIRECTOR John Krukowski john.krukowski@retail-merchandiser.com (312) 676-1125 EDITOR-IN-CHIEF stephanie.crets@retail-merchandiser.com
Stephanie Crets (312) 676-1264
EDITORS Staci Davidson, Alan Dorich, Russ Gager, Jim Harris, Janice Hoppe, Tim O’Connor, Chris Petersen, Eric Slack DESIGN ----------------------------------------------------------------------ART DIRECTOR Erin Hein erin.hein@retail-merchandiser.com (312) 676-1136 DESIGNERS Joshua Beaudry, Jonathan Lyzun, Vida Soriano PRODUCTION ---------------------------------------------------------------PRODUCTION COORDINATOR Michelle DeCeault michelle.deceault@retail-merchandiser.com (312) 676-1178 SALES ------------------------------------------------------------------------VP OF SALES Stephen Pastorello stephen.pastorello@retail-merchandiser.com (978) 299-9811 PROJECT COORDINATOR john.conroy@retail-merchandiser.com
John Conroy (978) 299-9814
PROJECT COORDINATOR tony.pelonzi@retail-merchandiser.com
Tony Pelonzi (978) 299-9815
PROJECT COORDINATOR rocky.pisa@retail-merchandiser.com
Rocky Pisa (978) 299-9810
PROJECT COORDINATOR jay.purcell@pmcmg.com
Jay Purcell (978) 299-9873
EDITORIAL RESEARCH -----------------------------------------------------PRESIDENT Joy Francesconi joy.francesconi@retail-merchandiser.com (978) 299-9870 VP EDITORIAL RESEARCH amy.ingoldsby@retail-merchandiser.com EDITORIAL RESEARCHER michelle.fontaine@retail-merchandiser.com
Amy Ingoldsby (978) 299-9862 Michelle Fontaine (978) 299-9875
EDITORIAL RESEARCHER anne.gray@retail-merchandiser.com
Anne Gray (978) 299-9872
EDITORIAL RESEARCHER judy.kushner@retail-merchandiser.com
Judy Kushner (978) 299-9866
EDITORIAL RESEARCHER deborah.young@retail-merchandiser.com
Deborah Young (978) 299-9865
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March/April 2016
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March/April 2016
| CONTENTS
COVER STORY
6 LICENSING EXPO PREVIEW Stay connected to the evergrowing licensing industry.
8 NATIONAL HARDWARE
SHOW PREVIEW Meet the biggest brands in the home improvement market.
10 ORCHARD SUPPLY
HARDWARE Orchard Supply becomes part of the communities it serves.
14 SWEETS & SNACKS
EXPO PREVIEW Discover the latest innovations in snack and confectionery.
16 ESTHER PRICE CANDIES
Esther Price Candies has a 90year history of quality.
20 MONDELEZ
30 ScottsMiracle-Gro builds on its nearly 150-year brand legacy through licensing partnerships that allow the company to enter new product categories to serve consumer needs.
UPFRONT
26
INTERNATIONAL Mondelez International unifies its procurement process.
New & Notable
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Exciting licensed products from ScottsMiracle-Gro and the National Hardware Show.
26 WISE SNACKS
Wise Foods’ dedication to innovation has the company excited for a future beyond its 95th anniversary this year. March/April 2016
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REPORTS
Retail 36 Carry On by Brookstone Launched this year, the new Carry On by Brookstone airport concept store stands to revolutionize the retail experience for the traveling public.
40 Harvest Market Harvest Market implements a number of sustainable measures to shrink its footprint while continuing to support its communities.
44 Shoe Mill Shoe Mill stands as a leading independent retailer in the Pacific Northwest.
48 Melrose Family Fashions
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A signature blend of on-trend apparel at affordable prices has helped Melrose Family Fashions reach its target market.
Supplier
SOLUTION PROVIDER DIRECTORY 72 B2B Online Preview
52 Gildan
58 Timeless Frames
Through vertical integration and owning every step of the manufacturing process, Gildan ensures the consistency retailers and customers want in a high-quality T-shirt and maintains its position as a leading apparel manufacturer.
The Timeless family of companies delivers products that exceed clients’ expectations thanks to its flexibility and dedicaton to customer needs.
B2B Online 2016 offers insights into the e-commerce revolution that is happening in the B2B market that will see businesses disrupted and an entire landscape changed, as customers now expect their B2B experiences to mirror the B2C world.
61 Perrone and Sons
74 ASL Transportation
54 Inserts East
Perrone and Sons is establishing lasting relationships with vendors and customers to make itself indispensible to the New Orleans culinary scene.
Inserts East produces advertising inserts for newspapers and direct mail, created with stateof-the-art production technology and advanced printing capabilities, so its retailer customers can get their messages to customers.
56 MCS Industries Leading wall and poster frame provider MCS Industries prides itself on a low turnover rate that is the result of it creating a flexible and empowering culture for its employees. 4
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64 Peirone Produce Peirone Produce’s distribution center helps make it one of the best distributors of fresh produce in the Inland Northwest.
66 Sunwarrior Sunwarrior says it is “crazy about quality” when it comes to its health products.
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Group
Offering a wide menu of services and supported by a first-class professional team, ASL Transportation Group provides dedicated transportation, truck rental and leasing, logistical design modeling, driver leasing and fleet maintenance services to a variety of industries.
78 Solution Provider Directory
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Brand Matters
Licensing Expo serves the industry as the world’s largest tradeshow dedicated to licensing and brand extension. BY JESSICA BLUE, SENIOR VICE PRESIDENT OF LICENSING, UBM AMERICAS
Licensing Expo allows retailers to stay connected to the ever-growing licensing industry and keep up with the latest trends.
Recognizable brand names, such as Disney and Pierre Cardin, remain popular among consumers and often generate a higher price point than generic goods. Because of this, the licensing industry continues to grow and licensed products are driving retail sales as consumers demand more of their favorite brands. 6
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In fact, the licensing industry now accounts for an estimated $259.9 billion in retail sales globally, according to License! Global. As retailers, it is important to stay connected to the ever-growing licensing industry and upcoming trends to ensure your store is filled with the latest products and brands consumers are looking for.
LICENSING EXPO Licensing Expo serves the global licensing industry as the world’s largest and most influential trade show dedicated to licensing and brand extension. For three days, 16,150 retailers, licensees, manufacturers and advertising agents from more than 90 countries will come together on June 21 to 23 at the Mandalay Bay Convention Center in Las Vegas to: • Hear future brand strategies directly from brand and property owners; • See what brands are being launched and will be ready for stores in the next 18 to 24 months; • Find exclusive licensed products for their stores; • Compare the hottest fashion, movie, TV, sports and consumer brands that consumers will be demanding for 2017 and 2018; and • Ink direct-to-retail (DTR) deals with brand owners. More than 5,000 brands from all product categories are showcased at Licensing Expo – from candy to cars, food to fashion, music to movies, TV to toys and everything in between. No matter what category attendees may be responsible for, a visit to Licensing Expo will help with business decisions and strategy, now and in the future. Retail attendance continues to grow at Licensing Expo. In 2015, retail attendance increased by 15 percent. Retailers that attended included: amazon.com, Best Buy, Forever 21, H&M, Kohl’s, Pottery Barn, Target, Tesco, Walmart, Wet Seal and Williams-Sonoma. In addition to connecting with top brand owners and agents like AwesomenessTV, Nintendo of America, Inc., NFL Players Inc., Crocs, Mattel Inc., Coca-Cola and Grumpy Cat, expo attendees can enhance their show experience through networking, education and Matchmaking Services. Attendees can hear from industry experts at more than 25 educational sessions at Licensing University, sponsored
A visit to Licensing Expo will help with business decisions and strategy. by the Licensing Industry Merchandisers’ Association (LIMA). In addition to seminars, Licensing University includes: Roundtable Discussions, an intimate 30-minute setting to review the industry’s hottest topics, and Digital Media Licensing Summit, seminars from the world’s most popular digital media companies and stars. The keynote and the Digital Media Licensing Summit are free to attend, while you can purchase an all-access pass to attend any of the seminars and roundtable discussions. Adding to the opening day buzz is the most talked about party in licensing, which takes place on June 21 in a stunning new venue: The Havana Room™ and Sky Beach Club at the recently renovated Tropicana Las Vegas. Sponsored by LIMA, the Opening Night Party is the must-attend after-hours networking event for the industry, featuring premier
evening networking with the world’s most influential brand owners, retailers and licensees. Festivities for the 2016 party include entertainment by Winter Dance Party, courtesy of C3 Entertainment, Inc., a tribute to Buddy Holly, The Big Bopper and Ritchie Valens. Throughout Licensing Expo, retailers will have access to the Retailer Lounge, located in the Brands & Agents zone on the show floor. Escape the bustling show floor to meet with colleagues and enjoy complimentary refreshments. Licensing Expo only happens once a year: this June in Las Vegas. Don’t miss out on the business and the buzz. For more information and free attendee registration, visit www.licensingexpo.com. O
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THE NATIONAL HARDWARE SHOW
Latest AND Greatest
IN HOME IMPROVEMENT
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The National Hardware Show brings together attendees to see new products, network and meet the biggest brands in home improvement. BY STEPHANIE CRETS The 71st annual National Hardware Show is coming to the Las Vegas Convention Center May 4 to May 6 for attendees to experience the latest brands and products in the home improvement marketplace. Attendees will see new products, network with other attendees and exhibitors, attend educational seminars and meet with big brands – from 3M to Ace Hardware Corp. to Louisville Ladder and more. As one of the largest gatherings of its kind in the industry, retailers, manufacturers and distributors in the home improvement industry won’t want to miss the show. The National Hardware Show has evolved through the industry’s involvement, commitment and passion to improving people’s quality of life through their homes. The show is the place for global manufacturers, associations, organizations and the media to unveil new products, ideas and insights to a wide range of industry professionals. “We’re looking forward to providing all our attendees and exhibitors with a productive, memorable few days at the Show,” says Rich Russo, vice president of the National Hardware Show. “We have made a few changes, based on customer feedback to make the show the best it can be. We can’t wait to see everyone in Las Vegas in May.” Some of those changes include changing the days of the show. In past years, the show took place Tuesday through Thursday, but this year, the days are Wednesday through Friday. The show will also move back to the north and
Attendees will get a first-hand look at new, innovative and up-and-coming products from topname brands at specialty areas.
central halls of the Las Vegas Convention Center, as attendees – via customer feedback – said this location offered a more convenient and complete show experience. Additionally, the Tailgate, Backyard & BBQ section (formerly the Outdoors, Tailgate & Recreation section) will be moving back to the Silver Parking Lot in front of the convention centers so attendees can have a more enhanced outdoor experience as they see products from lawn, garden and outdoor living. The National Hardware Show offers a plethora of new products to view from the top brands in the industry, which is what many attendees most want to see. Inventors Spotlight features products that aren’t yet on the market; New Product World offers a look at the newest products, innovations and trends in the industry; and New Product Launch gives attendees an inside look into upand-coming products. This year, the National Hardware Show wants to offer attendees a more personalized show experience with
exhibitor and product recommendations offered once registration is complete. This will allow attendees to navigate the exhibit hall more easily and locate the exact type of product they want to know more about. In addition, the show is offering new specialty areas. The Made in USA and Energy Efficient areas focus on those two trends, which are currently very popular among consumers, and the Emergency Preparedness & Disaster Recovery area will highlight products from a quickly growing category. And lastly, the show offers award programs, such as the Homewares Awards, which recognizes specific products and manufacturers. Registration is now open for the National Hardware Show. By registering early, attendees will receive important show news, including personalized exhibitor and product recommendations, a first look at show specials and new products and more. For more information and to register, visit www.nationalhardwareshow.com. O
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ORCHARD SUPPLY HARDWARE
True Neighbors For more than eight decades, becoming a part of the communities that it serves has been a vital part of the Orchard Supply Hardware formula for success. BY ERIC SLACK Headquartered in San Jose, Orchard Supply Hardware currently operates 81 stores throughout California and Oregon.
California-based hardware retailer, Orchard Supply Hardware (OSH) has been serving West Coast neighborhoods for more than 80 years.
Bob Tellier www.osh.com San Jose 10
Founded in 1931 as a purchasing cooperative, today Orchard Supply Hardware operates neighborhood hardware and garden stores focused on paint, repairs and the backyard. Orchard Supply Hardware was acquired by home improvement retailer
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Lowe’s In September 2013 but remained a separate business unit. The hardware retailer currently operates 81 stores in California and Oregon with each store averaging approximately 40,000 square feet of retail space.
“We are most known for our neighbors-helping-neighbors philosophy at every store, which is a commitment to fitting our format into the neighborhoods we call home,” President Bob Tellier says. “Our stores have been opened in former car dealerships, bowling alleys, multi-unit facilities and other shuttered facilities,” he adds.
Different Approach The value proposition for Orchard Supply Hardware is very distinct to that of the large-scale hardware retailers and local independents. The company’s core competencies are paint, repairs and backyard products. This focus allows Orchard Supply Hardware to occupy a niche focused on a broad product assortment of greater than 35,000 items in the categories it carries. Additionally, OSH strives to
“
ORCHARD SUPPLY HARDWARE
Our neighbors-helping-neighbors philosophy…is a commitment to fitting our format into the neighborhoods we call home.
maintain a tradition of what it sees as legendary customer service. “Our focus is on a convenience opportunity in paint, repair and the backyard,” says Tellier. “We deeply respect all of the traditions and history of the small independent operation, as we believe that they offer their own unique value to the consumers,” he continues. The company’s goal is to truly operate as a neighborhood hardware retailer. It is guided by the philosophy, “Take good
”
care of customers and they will take good care of you.” When considering new regions, Orchard Supply Hardware looks for areas where its stores can make an impact where other hardware stores cannot. The company is committed to becoming ingrained in the communities it serves, and it is excited at the prospect of establishing roots in new neighborhoods as it continues to grow. “We offer more than what we have on the shelves,” Tellier says.
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ORCHARD SUPPLY HARDWARE
“
Our merchant teams and senior management engage regularly with our suppliers in a cooperative effort.
”
“Customer loyalty programs and in-store services are part of what bring our neighbors back time and again,” he continues. “We provide real-life resources for your home such as key making, rescreening damaged window or door screens at our Workbench and even free knife-sharpening services at our new and remodeled stores. We also offer a lifetime plant guarantee and even pot them for customers at our potting station while they shop for the rest of their lists.” Through frequent storewide community events, Orchard Supply Hardware establishes each store as a valuable community resource. These include drought clinics, drip irrigation workshops and emergency preparedness tutorials where shoppers receive hands-on product instruction and valuable takeaways from in-store experts. Equally important to the company’s success is building strong vendor and supplier relationships. Throughout its transformation over the last five years, Orchard Supply Hardware’s supplier community has been deeply involved and completely supportive. The company says its culture is set up in such a fashion that it can view every supplier as a true partner. This helps all 12
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ORCHARD SUPPLY HARDWARE
parties to have a role in OSH’s growth and success in delivering upon the Orchard Supply Hardware mission to be America’s neighborhood hardware store and destination for paint, repairs and the backyard. “Our merchant teams and senior management engage regularly with all of our suppliers in a cooperative effort to ensure communication channels are always open,” Tellier says. “Our suppliers support every grand opening and keep the merchants abreast of product and industry developments. The Orchard team provides feedback on product performance and Orchard growth plans. We are extremely proud of the support we have received from our partners and we realize that communication is a twoway street. We take our responsibility in this partnership very seriously.”
Forging Ahead As the company looks to continue to build off of more than 80 years in busi-
ness, it is focused on making key investments in its future. At the same time, it is also making sure that it is staying on top of the main trends that are currently shaping its industry. For example, Orchard Supply Hardware is focusing on bringing its innovative shopping experience to more urban markets. Simultaneously, it is focused on maintaining the same level of customer service that its shoppers have relied on for so many decades. “Our company is working on ways to provide added value to more urban areas by offering goods and services that specifically cater to small-space living,” Tellier says. “Just last fall, we opened a compact store concept in San Francisco’s North Beach area,” he adds. “We’re also continuing to expand outside of the West Coast, which means expanding into new markets with the Orchard Supply Hardware brand.” As the company continues to grow,
Orchard Supply Hardware places a high value on engaging with and developing an open dialog with its new neighbors. Insight from the local community is critical to the success of the company’s long-term strategy, which is especially true in areas that are not familiar with the brand. By remaining steadfastly committed to the neighborhoods it serves, OSH believes it can look forward to introducing new customers to its product selection. On top of that, the company believes it can continue to provide customers with what it calls “Legendary Customer Service” and a top-notch customer experience. “We work hard to engage with our customers in areas that will truly make their lives better,” says Tellier. “As good neighbors, Orchard Supply Hardware makes it one of our top priorities to always respect the culture and the integrity of all of the communities in which we serve.” O
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The Sweets & Snacks Expo gives ateendees a look at innovations in snacking, merchandising and business-building solutions.
Hungry for Learning Discover the latest trends and innovations in the snack and confectionery industry at the Sweets & Snacks Expo. BY STEPHANIE CRETS The Sweets & Snacks Expo, put on by the National Confectioners Association, takes place May 24 through 26 at McCormick Place in Chicago. The expo gives more than 16,000 attendees from 90 countries a look at the latest trends in snacking – from products and consumer behavior to merchandising. This year, the show will offer a new exhibitor hall thanks to its 20 percent exhibitor growth and will feature more than 700 exhibiting companies across four acres of candy and snacks. With three jam-packed days of events 14
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and things to see, attendees will experience widespread snack innovations, new and niche snack products, business-building solutions and innovations in merchandising. They will be able to gain actionable insights on snack inno-
March/April 2016
vations, trends and behaviors, uncover trends from the latest in multicultural snacking and learn how to drive sales by using technology to understand purchase behavior and merchandizing insights. “One of the most exciting things about this year’s show is the influx of new exhibitors that will be on hand because we’ve expanded into a second hall, so we’re able to offer more innovation than ever before,” says Jenn Ellek, senior director of trade marketing and communications for the National Confectioners Association. “The reason we made this decision for the second hall is to provide the best business value in the industry.
SWEETS & SNACKS EXPO
By coming to our show, you get a whole year’s worth of work done in three days.” New for 2016, the Discovery Theater will host sessions focused on innovation and snacking, while the Sweet Insights Theater will focus on the latest in confectionery and specialty. The Sweets & Snacks Expo recommends the following snack sessions: • The State of the Snack Industry 2016, with an overview presented by IRI • Everything is a Snack: Modern Day Snacking in America • Demonstration and Tasting, presented by Canadean • Multi-Cultural Snacking: Are You Ready for the Impact of Changing Demographics? Insights presented by Geometry Global In addition to educational sessions, experts from the Consumer Electronics Show (CES), Canadean and the Center for Advancing Retail & Technology will each discuss the latest retail advance-
ments. CTA’s Director of Business Intelligence Jack Cutts will speak about the latest advances in electronics, sensors and other technologies aiming to reshape the retail strategy for all types of goods, including candy and snacks, along with the latest findings from CES. He will provide a look into the future, including insights into how retailers use data to help micro-target shoppers, a peek at next-gen video technology that will revolutionize displays, as well as augmented reality’s role in retail. Canadean’s Innovation Insights Director Tom Vierhile will explore product innovation trends taking the confectionery and snack markets to new levels, along with highlighting new consumer flavor preferences that are driving innovation in snacking and how manufacturers are balancing the sensory and emotional demands of global consumers. CART will discuss technology available today that can drive retail sales, and attendees can learn why retailers need to
consider how personalized marketing is important and why shopping analytics are beneficial. “We know product and technology innovations are top of mind to our attendees,” commented Barry Rosenbaum, expo chairman and president of Nassau Candy Distributors Inc. “By attending our 20-minute learning labs during the expo, retailers can take away actionable insights on how to keep relevant with their shoppers given the latest advancements in the marketplace.” O
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ESTHER PRICE CANDIES
Pure, natural ingredients help Esther Price Candies to be rated tops among customers throughout the country.
90 Years of Candy The name of Esther Price Candies has meant quality in Cincinnati and Dayton, Ohio, for 90 years, and through the Internet, now nationwide. BY RUSS GAGER
James Day, president www.estherprice.com Dayton, Ohio 16
Home cooking is always best, and that includes home candy-making. So the tried-and-true methods of candy-making employed at Esther Price Candies – which date back to the founder’s home business 90 years ago in Dayton, Ohio – keep customers coming back for more.
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“People from here move down to Florida, and all their relatives and friends up here send them our candy, and this happens continuously because Esther Price is one of the things we are noted for in this area and potato chips,” President James Day explains. “They still call and order for their friends at Christmastime, and that’s
store on Wayne Avenue in Dayton. That store is still at the company’s headquarters, which has been expanded substantially since then to handle increased production. “We have a lot of competition as far as people from different parts saying their candy is the best,” Day relates. “So they trade it, and we always hear that Esther Price comes out on top.” One of the reasons for that is the ingredients. “We use all pure, natural ingredients,” Day emphasizes. “We use pure 40 percent butterfat cream and Swiss chocolate and no preservatives. We make it the same way Esther made it for over 90 years, and we have a reputation for it here.” That reputation has been bolstered by its being voted for several years as Ohio’s best-made candy by the readers of Ohio magazine. Another reason for Esther Price Candies’ success is not only the recipes that are used but the candies’ value. “Our pricing is less expensive than most competitors,” Weaver maintains. “Nobody has a candy made like ours that is anywhere close to our retail price, because we’re competitive with even some of the cheaper candy that’s made.”
Hand-Made Chocolates why our company’s mail order business is so strong.” “We have an Air Force base in Dayton, so there are people who are transferred here for several years and learn about the hometown staple of Esther Price,” Accountant Peggy Weaver says. Every region of the United States seems to have at least one candy company that its residents think is the best. Esther Price began making chocolates at home for her co-workers at a downtown department store in Dayton. When she started her family with her husband in 1926, her co-workers urged her to make candy for them at home. She continued with this home business until 1952, when she opened her first
Many of the candy-making techniques that Esther Price developed are still being used at the company. “We do a lot of handwork to keep our product the same as since Esther had it,” Day says. That hand work produces candy in different sizes, which necessitates hand packing, because automated packing requires consistent sizes. An innovative product the company has introduced takes advantage of the craft beer trend by combining ale from Warped Wing Brewing Co. in Dayton with Esther Price peanut brittle to create Beer Brittle. This year, Esther Price Candies partnered with Warped Wing to provide its dark chocolate for a limited-edition chocolate stout called Esther’s Little Secret. March/April 2016
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“
We make it the same way Esther made it for over 90 years, and we have a reputation for it here.
”
In 2014, Esther Price Candies provided its caramel for a limited edition caramel beer. The Esther’s Little Secret line of dessert brews are sold on tap locally and in cans until they are sold out. “We only make a certain amount of it, so we do run out,” Day notes. “Last year, we made a caramel beer, and they sold out in almost five days. We made quite a bit more this year of the chocolate beer, but we sold out in two weeks.” “When it’s gone, it’s gone,” Weaver stresses. Esther Price and Warped Wing intend to offer a series of such beers each holiday season. Next year’s ingredient is a closely guarded secret until its release. Esther Price Candies utilizes television, radio and social media for advertising, but finds its word-of-mouth recommendations from customers most valuable. “If they taste it, they’ll buy it,” Day says. The company also does sampling in theaters, at home shows and in regions it is new to, such as Louisville and Nashville. Esther Price Candies are sold in Kroger grocery stores throughout Ohio, portions of Illinois and Indiana, and in sections of Kentucky and Tennessee within a 50-mile radius of Dayton and Cincinnati. The company also ships its products throughout North America and increases its online business – which it began in 1999 – approximately 10 percent annually compared with in-store sales. A big marketing event this year is the 90-second shopping spree for one lucky person whose name gets drawn. 18
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Anyone who comes into an Esther Price store or submits an entry online is eligible for the drawing. “We’re going to do one local person and one non-local person,” Weaver explains. “Whatever the local person grabs in 90 seconds, the non-local person will receive the same thing. We have so many customers that live out of our local area that we thought it was fair to give them a shot, as well.”
Tie a Red Ribbon A distinctive feature of Esther Price Candies are the ones that are sold in gold boxes with red ribbons handtied around them. For the company’s 16-ounce boxes – its most popular – the company is automating the ribbon-tying process with a robot, which is scheduled for activation by this year’s holiday season. Esther Price Candies also is working on an upgrade of its inventory and point-of-sale software so it can provide real-time inventory ordering and marketing for all seven of the company’s store locations in Dayton and Cincinnati. The mail order management software handles online ordering on the company’s website and integrates customer order management into the company-wide enterprise resource planning system. The company also has recently activated a smart phone app for customers to place orders. These production improvements are being made so the company can private-label more of its products. This would include making custom products to order for other companies
ESTHER PRICE CANDIES
from Esther Price’s or the customers’ own recipes. To do that will require additional production space, for which Esther Price Candies is in the process of obtaining approval. “We’ve already got plans to build a big building with all the latest equipment,” Day says. It would improve the operational layout by organizing manufacturing, packing, refrigerated storage and shipping into a single progression from one area to the next. The latest addition to the manufacturing operation in Dayton was of a kitchen furnished with the latest equipment that centralized ad-
dition of ingredients instead of obtaining them from several different locations.
Direct Line Day was one of four investors who bought Esther Price Candies in 1976. “We bought it on her 50th anniversary, and I’ve done it for 40 years this past year,” Day recalls. “My partner, Ralph Schmidt, and myself bought the other two partners out. Ralph passed away in 2006. We were friends from kids on up.” Although Day is now the majority owner and has big plans for the future of Esther Price Candies, he is not rely-
ing on himself alone to execute them. He has been joined in the business by three daughters who are on the board of directors: Marketing Director Sandy Brielmaier; Sharon McManus, who handles retail and heads donations; and Senior Store Manager Barb Dressman. Their husbands – Bruce Brielmaier, Wholesale Assistant Denny McManus and Vice-President Doug Dressman – are all on the board of directors. “I more or less steer the ship – I did everything when we started,” Day remembers. “I’m 88 years old, so I’m trying to turn it over a little bit.” O
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Mondelēz has embraced procurement functions as vital parts of the company’s operational strategy.
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MONDELEZ INTERNATIONAL
Sweetening Supply Snack maker Mondelez International is unifying its procurement process to improve its margins and increase investment in growth. BY TIM O’CONNOR There was a time in Mark Dady’s career when he wanted to switch to sales so he could see the impact he was making on weekly and quarterly revenue statements. But sticking with procurement turned out to be the right choice for the chief procurement officer of snack food giant Mondelēz International. In Mark Dady, senior less than two years, vice president and Dady has overseen chief procurement officer the transformation of www.mondelez procurement into a international.com Deerfield, Ill. unified operation that visibly impacts the company’s growth and bottom line. Mondelēz formed in October 2012 after Kraft Foods split off its snack brands into a new company to encourage growth. For the past three years, Dady says Mondelēz has been flexing its independence to discover what it is and is not capable of. “We are committed to being the global snacking powerhouse,” he adds. “Our dream is to create delicious moments of joy.” Although it is a relatively new company, the separation from Kraft left Mondelēz with a collection of beloved, leading global brands such as Oreo, Cadbury, Ritz and Trident. The company is the No. 1 chocolates and biscuits company and the No. 2 gum maker in the world, according to Dady. Mondelēz offers a variety of products in five major categories: biscuits, chocolate, gum and candy, beverages and cheese and grocery.
Redefining Procurement As Mondelēz refined its organizational structure, the company looked to adjust its procurement strategy to become one of the foundations of its transformation. Mondelēz International’s leadership believed the company had good growth potential, but realized its margins were not competitive with rivals such as Hershey, Nestlè and Mars. Improving its margins would enable the company to develop a virtuous cycle of investing in growth and expanding margins further. “We were very deliberate in focusing first on getting our margins to a particular point,” Dady says. To achieve that goal, Mondelēz decided its procurement operation would own and source 100 percent of its $20
billion spend on everything from cocoa and packaging to insurance, consultants and sponsorships. “There was an appetite to leverage scale,” Dady explains. Mondelēz regards procurement as a discipline in its own right, not just as a function of the finance department. “We want to be the best procurement function out there,” he adds. “In many ways, there’s no excuse not to deliver on that ambition.” Many of Dady’s peers at other companies can spend their entire careers trying to get a seat at the table with business owners and budget managers, but Mondelēz has embraced procurement as a vital part of its strategy. “With our model and with the foundational building block of procurement owning and managing 100 percent [of spend], the challenge wasn’t getting a seat at the table, but to jump on the table and dance a jig,” Dady says. Since taking over as chief procurement officer in July 2014, Dady has reorganized the division. About 90 percent of the company’s 1,000 procurement employees
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have had their roles adjusted and report to new supervisors to streamline the process. Dady likens the overhaul to open heart surgery. “We wanted to very rapidly move from generalists toward a team that was more specialists,” he says. Prior to the restructuring, the procurement team was more locally centric. Redefining those roles allowed the organization to widen its scope, Dady says. In doing so, Mondelēz won’t neglect its local needs, but will be in better position to source them more efficiently (e.g., packaging). “We don’t think of ourselves as ‘global’ necessarily – in fact, I’ve tried to banish that word – but we are for the first time globally wired,” Dady explains. 22
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Because the company has a presence in nearly every grocery market on earth, changing the way it thought about procurement required an efficient plan. Employees were divided into five parts of one larger team. Category leaders must understand the needs of every product in every regional business working hand in hand with the business presidents and also then with procurement’s sourcing team to obtain whatever resources are necessary for a brand. The company’s five sourcing teams drive value with suppliers for items such as packaging, raw materials, manufacturing and marketing. An operations team handles all the transactional and repeat-
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Accenture Accenture and Mondelez International’s leadership took a measured approach to zero-based-budgeting, reducing costs in all areas of the business. The team focused on taking cost out of low-value areas like travel and other overheads so Mondelez International could reinvest the money in areas that create a competitive advantage, such as product development and marketing. Accenture and Mondelez International created new budgeting processes and embarked on a far-reaching change management program to establish accountability for cost management. Accenture helped design a new global operating model and supporting global business services unit that delivers cost-effective and efficient finance, HR and procurement services.
MONDELEZ INTERNATIONAL able work, some of which is outsourced to Accenture. Mondelēz International’s risk managers work closely with the finance department to conduct hedging actions on commodities. Finally, the strategy and capability division develops the process and technology road map for the other four parts of the procurement group. The five-part procurement model was developed early on in Mondelēz International’s plan to restructure the department. The company began the process by studying external benchmarks to investigate how other companies solved similar procurement dilemmas. That data enabled Mondelēz to develop its own procurement strategy to facilitate the transfer of best practices and leverage scale. The resulting strategy is a move away from the idea of “global,” but replaces it with a philosophy of unification. Dady calls the concept “Pangaea” from the primal supercontinent that all modern continents broke off from. “We do not want to lose sight of our customers and the P&L that we serve,” Dady says. “But the bigger point is that we act as one fully integrated team, with no seas or oceans getting in the way of scale leverage or best-practice sharing.”
Keying in on Growth In building the best procurement department in the snacking world, Dady is quick to point out that “‘best’ doesn’t mean best at any cost.” Having a procurement function is an investment by Mondelēz, he explains, and the group owes the business a return on that investment. “When you have an ROI mentality, that’s when this whole Pangaea concept becomes more interesting.” Although Mondelēz is still implementing its procurement strategy, Dady says the company is already seeing results. For the first time in 2015, the procurement group was able to deliver more than 5 percent total gross savings, equivalent to more than a billion dollars. Much of that progress can be credited to the new collaboration models it works 24
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MONDELEZ INTERNATIONAL
within to partner with all other parts of the business, and progress against its goal to halve its 100,000 supplier count. Dady says he wants to go even further by narrowing its contracts down to a few star suppliers in each particular space. Already, Mondelēz International has found some manufacturers willing to invest in their own capabilities to take on production of certain Tier II regional brands allowing Mondelēz International to free up capacity at its own facilities so that it can continue to grow its Tier I global power brands. “What we’re looking for are a few sustainable, transformational, advantaged relationships,” Dady says, recalling the STAR acronym. Those transformational relationships
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When you have an ROI mentality, that’s when this Pangea concept becomes more interesting.
will become even more important as Mondelēz International builds its vision of the future supply chain. As forward-thinking companies such as Uber have disrupted the transportation industrial, Dady believes digital technologies will shape procurement. Choosing contracts will be like perusing a virtual mall. Sourcing managers will browse a database of competing approved ven-
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dors, picking an office supplier or a janitorial service from variety of storefronts. Dady’s vision is only possible because of how his team has embraced its restructuring and the company’s mission to manage 100 percent of its spend. “We’re learning to play a whole new sport and we’re moving at the speed of light to become a global snacking powerhouse,” he says. O
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Upfront
Jolie Weber, CEO www.wisesnacks.com Berwick, Pa.
WISE FOODS INC.
Snack Success
Wise Foods’ dedication to innovation has the company excited for a future beyond its 95th anniversary this year. BY CHRIS PETERSEN
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After 95 years of making some of the country’s favorite salty snacks, Wise Foods continues to come up with new ideas in the realm of potato chips, popcorn and other types of snacks. Making the highest-quality snack foods with the best ingredients has always been Wise Foods’ top priority, but recently the company has made a firm commitment to being the thought leader in the salty snacks category through a strengthened commitment to innovation. CEO Jolie Weber says the implementation of a new innovation center at its headquarters already has brought exciting new products to the market, and it should prove to be the backbone of the company’s continued success beyond its 95th anniversary and well into the future. Based in Berwick, Pa., Wise Foods has been in the business of satisfying consumers’ craving for snacks for nearly a century. The company was founded in 1921 by Earl Wise Sr., who at the time was a grocer who found himself with a surplus of potatoes. Rather
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We’re just thrilled to have that technology and that facility here in-house to drive new ideas for the company.
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than let the spuds go to waste, Wise hand-made the first batch of Wise potato chips and sold them in brown paper bags at his store. Needless to say, the chips were a big hit, and soon Wise built his first production plant in 1925 to keep up with the demand. A brand-new plant
was built in 1944 to replace the original and expand the company’s capacity. Throughout the 1950s and 1960s, Wise Foods experienced significant growth as consumers’ demand for the company’s snacks increased throughout the Northeast. With the addition of new snacks including corn chips, Cheez Doodles and popcorn, Wise Foods – and its mascot Peppy the Owl – became household names. Today, Wise Foods continues to be a leader in the salty snack food segment in the Northeast, and Earl Wise Sr. was inducted into the Snack Food Association’s Circle of Honor in 2011. The company’s high-quality products have developed a loyal following, and Weber says the company’s most recent initiatives are aimed at keeping them happy while gaining new fans along the way. The company’s acquisition by beverage giant Arca Continental in 2012 has given it added strength to realize those initiatives.
Central Innovation The most significant development for Wise Foods in the last year has been the launch of the company’s new innovation center, which occupies a 6,000-square-foot facility at the company’s headquarters. According to Weber, the center officially opened last October and was envisioned March/April 2016
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Upfront
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WISE FOODS INC.
Innovation and new products are going to be a solid pillar and platform for us as we move into the future.
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as a place for Wise Foods to ideate “all facets of salty snacks” and develop new products for the marketplace. Although much of the work being done at Wise Foods’ new innovation center is being kept under wraps for obvious reasons, the first new product developed within the initiative already is on store shelves. Wise Foods’ new Cinnabon popcorn, flavored to taste like the world-famous Cinnabon cinnamon roll, was launched this past December. Weber says the company is excited to add the product to its lineup and believes future products developed in the new innovation center will be just as
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successful. “That was a real fun project for our team,” she says. A soon-to-be-introduced concept that will come out of the innovation center is what the company is calling Food Truck Favorites. Working together with local food trucks in the Northeast, Wise Foods is developing ways to translate signature menu items to a salty snack platform. Weber says she expects the new innovation center to be the focal point for a slew of new products that will contribute to Wise Foods’ continued leadership in the salty snack arena. “We’re just thrilled to have that technology and that
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facility here in-house to drive new ideas for the company,” she says.
On Top of Trends The addition of Wise Foods’ new innovation center comes at a crucial time for the company, as Weber says keeping up with the changing tastes and preferences of the typical consumer has been difficult at times. “One of the biggest challenges that we as a company have is keeping up with the fast pace of change that we’ve seen with consumers these days,” she says. “As a company we are having to really force ourselves to sift through a lot of data, and there are really talented people to help us identify what are the true forward trends.” For example, some of the biggest trends sweeping through the snack food market today revolve around more natural foods. Weber says this has had an impact on Wise Foods’ operations in everything from the ingredients it sources to the information it includes on its packaging. “For us, things like the GMO trends, those are things that are popping up that in past years were more niches, but we’re seeing that get more play,” Weber
WISE FOODS INC.
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Excitement Ahead
says, adding that retailers also are pushing for fewer artificial ingredients and simpler labeling. “Those are trends that are very much on the forefront and very important as we look toward the future.”
As excited as Wise Foods is about celebrating its 95th anniversary in 2016, Weber says the company is just as excited about what lies ahead in the years to come. She says the company has lofty aspirations about what the next few years hold for it, including a geographic expansion. For the first time in the company’s history, Wise Foods will be broadening its reach beyond the Northeast with the addition of a second production facility in Fort Worth, Texas. With the company’s expansion in the works and new products being developed, Weber says Wise Foods is in a good position to reach the century mark and beyond. “Innovation and new products are going to be a solid pillar and platform for us as we move into the future,” she says. O
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COVER STORY
Growing THE Brand
ScottsMiracle-Gro builds on its nearly 150-year brand legacy through licensing partnerships that allow the company to enter new product categories to serve consumer needs. BY STEPHANIE CRETS
Glenn Neilson, director of marketing for licensing programs for ScottsMiracle-Gro www.scottsmiraclegro.com Marysville, Ohio
Ricky Yoselevitz, vice president of brand strategy and business development for Seltzer Licensing Group www.seltzerlicensing.com New York, NY
ScottsMiracle-Gro is committed to enabling gardeners to be successful through the use of its convenient and innovative products.
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SCOTTSMIRACLE-GRO
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aintaining a beautiful lawn and garden that you can truly be proud of and enjoy does not have to be a complicated and daunting task. ScottsMiracle-Gro offers consumers a wide range of products that help simplify that process, making gardening and lawn care more enjoyable and, overall, more successful. For nearly 150 years, the company has built trust and brand loyalty among consumers by continuously delivering on its promise of offering products that provide superior performance and exceed expectations. Now, ScottsMiracle-Gro is building on that trust in new categories through its licensing program. “Consumers have relied upon ScottsMiracle-Gro for generations, and ScottsMiracle-Gro is committed to enabling gardeners to be successful through convenient and innovative products,” says Glenn Neilson, director of marketing for licensing programs at ScottsMiracle-Gro. When developing new, innovative products and exploring key licensing partnerships, ScottsMiracle-Gro keeps its core consumer in mind. The Scotts® brand focuses on lawn and backyard care and skews slightly more male while the Miracle-Gro® brand focuses on garden care, skewing more female. In addition to the Scotts® and Miracle-Gro® brands, ScottsMiracle-Gro boasts several other leading brands within the company’s portfolio, including RoundUp®, TOMCAT® and Ortho®. “Determining how those brands best fit within the broader licensed assortment is a priority for our team this year,” Neilson continues. Initially, ScottsMiracle-Gro had a handful of legacy licensees in place, but the company really ramped up its licensing efforts in 2012. At that time, ScottsMiracle-Gro enlisted the assistance of The Seltzer Licensing Group, a global brand extension and licensing consultancy based in New York City, to help focus on expanding the portfolio
Key Licensees
ScottsMiracle-Gro awarded its Licensing Awards at its latest licensing summit at the company’s headquarters in Marysville, Ohio. The awards were given to: • Swan Hose, LLC: 2015 Top Performing Licensee • Techtronic Industries (TTI): 2015 Best Packaging Design • Westchester Protective Gear: 2015 Best Hardware Show Display • Bond Manufacturing Company: 2015 Best In-Store Display
through strategic licensing partnerships. ScottsMiracle-Gro recognized a need to reach consumers outside of its traditional product categories, and, perhaps more importantly, a desire among consumers to engage with the brand across more lawn and garden products. “Seltzer was brought in to analyze what the potential could be for a licensing program,” says Ricky Yoselevitz, vice president of brand strategy and business development for the Seltzer Licensing Group. “We believed, like the ScottsMiracle-Gro team, that consumers had an interest in the brand in other categories, so Seltzer began conducting due diligence and analysis with the goal of answering two key questions: What categories do consumers allow the brands to extend into? And what is the potential success – royalty revenue or otherwise – ScottsMiracle-Gro might expect to achieve by extending its brands? Seltzer’s extensive research yielded a list of 12 to 15 key categories that made sense to pursue. We then set out to secure the best companies in those categories.” “Because consumers trust our brands, we saw an opportunity to assist them by making the entire lawn and garden experience much more intuitive,” Neilson explains. “We know we have a huge following of brand loyalists, and our goal in licensing is to enable them to follow our brands into new categories. ScottsMiracle-Gro views its licensing program as a way of providing the complete experience to its consumers.” Neilson adds that the company is “being selective when evaluating licensing partners. We want to ensure we are working with companies who care about the end result as much as we do. Any licensees with whom ScottsMiracle-Gro partners have to be best in class and more importantly, their products have to be truly innovative and bring something March/April 2016
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new and beneficial not just to the category, but to consumers,” he says. One of the first companies ScottsMiracle-Gro partnered with was Techtronic Industries (TTI), a global leader in indoor and outdoor power tool technology with existing consumer brands like Ryobi, Milwaukee and Homelite. Working closely together and trading on one another’s expertise in lawn care and power tools respectively, TTI launched the Scotts® Sync™ System. The line brings innovation to a category that had become somewhat stagnant, offering features like on-board battery fuel gauges and an on-wall charging system that lets consumers charge their tools while neatly stored. “We at Seltzer Licensing find that the most successful licensing partnerships are typically found where there is a lack of brands that have established trust and confidence in a particular category,” Yoselevitz adds. “If a company enters the market place as a brand that is trusted and relevant in that particular category, they can quickly help drive category growth. This strategy has been a win for the consumer, for ScottsMiracle-Gro and for the retailers.” Neilson points out that the hose category is another standout example of this narrative. When a consumer comes to a home improvement store, seeing a full aisle of garden hoses with so many different brands and claims can be overwhelming. ScottsMiracle-Gro has partnered with Swan Hose, a leader in hose and watering accessories, to create a line of truly innovative yet simplified hose products. ScottsMiracle-Gro hoses are now some of the strongest selling products in the category. And it’s not just limited to the hose category. “When you marry a brand so trusted in the lawn and garden space, such as Scotts® and Miracle-Gro®, with a superior product that delivers meaningful innovation with straight-forward features and benefits, it allows a consumer to make a more
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ScottsMiracle-Gro says the products it considers for licensing must be unique, innovative and able to drive growth for the market category.
educated, selective and most importantly, confident choice,” Neilson says.
Take Notice Developing a new licensing strategy is not without its challenges, however. With brands as strong as those in the ScottsMiracle-Gro portfolio, it can be easy to start overextending the brand and landing in categories where the brands don’t add value to either the consumer or the retailer and, as a result, can even tarnish the brands. This is why, when considering any prospective licensing opportunity, both ScottsMiracle-Gro and Seltzer Licensing ask themselves the following key questions: What can ScottsMiracle-Gro offer consumers that’s not currently being offered at retail? What added value can ScottsMiracle-Gro deliver to retailers?
“Products considered for licensing must be unique, innovative and truly able to drive growth for the category,” Yoselevitz says. “ScottsMiracle-Gro has no intention to brand products that don’t deliver unique value to consumers or that won’t deliver category growth to retailers,” adds Neilson. Yoselevitz points out that it is also a challenge ensuring that the licensed products get in front of both retailers and consumers. “One of the ways ScottsMiracle-Gro is helping drive awareness is through unique in-store displays and signage. These tactics are an added benefit and help educate and direct shoppers when they are at shelf; it also helps reduce shelf walkaway by demystifying some of the more complex categories,” Neilson notes. He says ScottsMiracle-Gro wants to ensure consumers buy the right tool for their specific job. That way, they are pleased with the performance of that particular product and actually enjoy the task they are performing at home. A perfect example of this can be seen through ScottsMiracle-Gro’s partnership with Westchester Protective Gear in the gloves category. Through innovative way-finding signage, Scotts® and Miracle-Gro®-branded gloves are separated into categories for men, women and children, along with signage that illustrates each glove’s specific function so as to eliminate confusion. “Many people don’t realize that different projects may call for differ-
West Chester Protective Gear West Chester is a leading supplier of work and garden gloves. We are a one-stop shop for retailers seeking high-turn, high-profit programs. We are a proud licensee of iconic brands: Scotts, Miracle-Gro, Realtree, Gas Monkey Garage, and John Deere.
For Kids
Miracle-Gro® Kids kits were launched with Horizon Group, an industry leader in crafting and kids’ growing kits. With these kits, kids can take an indoor greenhouse and paint and decorate the unit, along with planting seeds and watching them grow over time. “These kits offer instant gratification through creating and decorating, while allowing long-term fun in watching something grow and develop,” Neilson says. “This allows kids to have quality time with their parents as they learn and play together.”
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We want to ensure we are working with companies who care about the result as much as we do.
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ent, unique gloves,” Yoselevitz says. “If we can bring clarity to the category through education and help consumers find what they truly need, then we’ve accomplished our goal. And for the retailers, this is of great value because now you’ve incentivized consumers to not only trade up but potentially add to their basket by identifying they may need two different sets of gloves for different projects.” “If we can help consumers and drive category growth for retailers, we’ve succeeded,” Neilson adds.
Lifestyle Brand Over the course of the next year, ScottsMiracle-Gro’s key licensing initiatives will expand to include more lifestyle options. The company says March/April 2016
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COVER STORY ScottsMiracle-Gro uses unique in-store displays and signage to drive awareness of its new products and educate customers.
that consumers have a real emotional connection when it comes to their lawns and gardens. The goal is to allow gardeners to bring all of the joy and emotion of their outdoor living area inside to be enjoyed year-round. As part of this initiative, ScottsMiracle-Gro has enlisted Langley Empire to develop Miracle-Gro®-branded candles that can bring the ambiance and scents of the garden indoors, especially in regions that have to endure cold and snowy winter months for extended periods of time. “ScottsMiracle-Gro is coming up on its 150th anniversary, so that’s 150 years’ worth of goodwill and equity built around our products,” Neilson says. “We strongly believe that our consumers have given us permission to help them enjoy the lawn and garden lifestyle exemplified by our brands.”
Out in Front
Plant Accessories
A common product bought in conjunction with Miracle-Gro® plant food products are plant support accessories like bamboo poles, support stems and ties, among others. ScottsMiracle-Gro recognized that their brand could greatly improve the consumer experience in this category and drive category growth. “We recognized that consumers buying our core products were also purchasing plant support accessories, but that this was a category causing a lot of consumer confusion,” Neilson explains. “It was historically poorly merchandised and led to frustration at point of purchase with consumers walking away without the items they really needed for their project to be successful. “If we could help bring some level of education to highlight products, along with better merchandising, we felt this delivered something consumers were in great need of,” he says. “It’s worked. Many top retailers have transitioned their program to the Miracle-Gro® program. It’s a true testament to the ScottsMiracle-Gro brands and its licensing strategy.”
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ScottsMiracle-Gro’s licensing program continues to grow year over year. Neilson says the company will continue to be proactive in its licensing endeavors and does not intend to be opportunistic or reactive. The licensing program will be in full display at this year’s National Hardware Show in Las Vegas, taking place May 4-6 at the Las Vegas Convention Center. All current licensed products and licensees will be featured prominently in a dedicated ScottsMiracle-Gro Licensing Program booth directly adjacent to ScottsMiracle-Gro’s main presentation space. This event is a great opportunity for ScottsMiracle-Gro to get its products in front of an even larger audience. After all, this is one of the few chances they will get to have all of the larger retailers, as well as the key independent hardware and garden center owners to review its offerings. “The independent retailers have been very supportive of our program so far,” Neilson says. “And the National Hardware Show affords us the opportunity to speak with many local retailers and get vital feedback about what’s really working and what isn’t. We’re receptive to constructive criticism to see what retailers are hearing from their consumers. They have tremendous insight and we can leverage that to make the program better.” Aside from the National Hardware Show, ScottsMiracle-Gro regularly meets with its licensees through licensing summits at the company’s headquarters in Marysville, Ohio, to evaluate the synergy between products and how to best merchandise products, possible promotions and best practices at line reviews. “From a company standpoint, my overarching responsibility is to drive and enhance the equity of our brands while remaining that ’trusted friend’ to our consumers,” Neilson says. “ScottsMiracle-Gro wants to ensure we are delivering simplicity and success for our consumers.” O
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Retail
Our priorities include identifying exciting new products that our travel customer is surprised and delighted by. – Tom Via
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Retail
Launching the Carry On brand will help Brookstone build an exclusive assortment of travel items.
CARRY ON BY BROOKSTONE
Happy Travels
Launched this year, the new Carry On by Brookstone airport concept store stands to revolutionize the retail experience for the traveling public. BY ERIC SLACK
T Tom Via www.brookstone.com Merrimack, N.H.
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he Brookstone name has been synonymous with retail excellence since the company opened its first location in 1973 in Peterborough, N.H. Today, the Merrimack, N.H.-based company continues to strive for retail innovation, including with the recent launch of its Carry On by Brookstone airport store concept. “For years, Brookstone has had particular success serving both business and leisure travelers in our airport stores,” CEO Tom Via says. “They’ve come to rely on us for travel electronics, travel pillows and blankets, and the ever-important take-home gift. Brookstone airport stores were so successful for us that we simply wanted more of them. As a new store
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concept, Carry On gives us a great way to offer customers an even more specialized travel assortment that we just couldn’t fit inside our Brookstone stores. Plus, it gives us a way to open more stores in airports where we already do business.”
Ample Selection First and foremost, Carry On will provide travelers with a diverse array of product options, including travel-friendly clothing featuring top brands. The Carry On mission is to give airport travelers access to the best brands in travel gear and clothing. The concept is designed for travelers who need to find smart clothing and gear in a hurry, and also for people who
Carry On by Brookstone
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Building Carry On stores around the best brands in travel gear is a win-win for everyone.
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have time between flights who want to explore and discover items from all the product makers the company features. “The clothing in Carry On stores is travel-friendly, packable and weather smart, and it is also on trend,” Via says. “As an example, one of our featured apparel lines, ExOfficio, can literally be folded into a tiny ball and remain wrinkle free. Informed customers demand that their travel clothes be both stylish and low maintenance. If you only pick up one item of clothing specifically for traveling, try the ExOfficio Storm Logic jacket. It’s amazingly comfortable in all sorts of weather and folds up into a nice pillow for sleeping on the plane.” Helping the company make the concept a reality are its strong ties with brands such as Craghoppers, Victorinox, Scottevest, Brics, Briggs & Riley, Belroy and Ogio. Brookstone is fairly well known in the retail industry for having expertise in the airport store segment, and its internal expertise is very much aware of those brands that make travel products that are both smart and beautiful. “We’re not just business partners with these brands,” Via says. “We are a retail showcase offering access to millions of travelers. Building Carry On stores around the best brands in travel gear is a win-win for everyone.” The first Carry On launched this year in Salt Bric’s Lake City. Brookstone says it was thrilled to Founded in 1952 by Mario Briccola, Bric’s Milano has been hand-crafting travel bags have an available storeand fine leather goods for over 60 years. front become available at Located in the beautiful Lake Como region of the Salt Lake City Airnorthern Italy Bric’s today remains a family port, and it moved quickbusiness currently owned and operated by ly to bring the Carry On Mario’s sons, daughters and grandchildren. The family values, attention to detail, and concept to the airport pride that was Mario’s original vision is when the opportunity carried on by this new generation. As Bric’s presented itself. Thus far, has grown into a global brand it’s the core sales have exceeded early values of quality, artistry, attention to detail, Italian style, function, fashion, asthetics, plans, and customer reand durability, all backed by a family name action has confirmed the that has helped Bric’s grow into one of the company’s faith in the premier luxury travel bag brands in the world. basic concept of giving 38
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savvy travelers an exciting, premium-quality assortment in a dedicated travel-themed store. “The lesson we’ve learned most clearly is that Brookstone can succeed in combining great fashion with innovative features in a premium travel assortment,” Via says.
On the Move Looking out at the horizon for longer-term plans for expansion, Brookstone is simultaneously evaluating airport real estate opportunities and refining and expanding its travel assortment. At present, the company has one additional location confirmed for launch in fall 2016, to be announced at a later date. In the meantime, the company is actively seeking additional sites. Brookstone feels that the key investments needed to support the growth of Carry On will be the right locations and product assortments, as well as robust CRM systems. To fulfill the long-term potential of the Carry On brand, Brookstone says it is investing in premium airport store locations, scouring the world for the most innovative and
Carry On by Brookstone
fashionable travel gear, and customizing its assortments to the weather conditions and regional preferences of people traveling through host airports. “It’s one thing to sell jackets to people coming into Salt Lake City, but it’s also important to know how many people fly out of Salt Lake City on their way to bathing-suit climates,” Via says. Brookstone’s traditional operations will provide support to Carry On, which will benefit from both the Brookstone distribution infrastructure as well as its network of close relationships with key brands and manufacturers. Another advantage Brookstone gives to Carry On is early access to innovative items coming through its Brookstone Launch program. “BrookstoneLaunch.com is our new platform for seeking out, identifying and sourcing exciting new products from maker communities such as Indiegogo and Kickstarter,” Via says. “There’s an item we’re not quite ready to talk about that is going to be big among business travelers, and it will likely be a perfect fit for our Carry On stores.” Just as the Carry On brand will take advantage of Brook-
stone’s expertise and infrastructure, it should play an important role in Brookstone’s overall strategic growth plans. Carry On will add to revenue growth for Brookstone and expand the reach of its brand among business travelers, travel enthusiasts and other high-income airport shoppers. As the concept evolves, Carry On will be entertainment-centered but with a much greater emphasis on fashion trends. The company believes that launching the Carry On brand will help it to discover and build an exclusive assortment of items that are ahead of trends technologically and perfectly on trend in terms of fashion. Challenges lie ahead, but Brookstone is understandably excited about the potential of the Carry On brand. “The short-term challenge lies in managing the product needs of a single-store operation,” Via says. “We need to learn and scale this concept quickly to gain the benefits of a multi-unit chain. Our priorities include identifying exciting new products that our travel customer is surprised and delighted by. We plan to expand Carry On as an exciting new travel concept store in many airports.” O March/April 2016
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Retail
HARVEST MARKET
Taking Root
Harvest Market implements a number of sustainable measures to shrink its footprint while continuing to support its communities. BY JANICE HOPPE
Much of Harvest Market’s improvement efforts are focused on creating a sustainable business for the community.
Jennifer Bosma, co-owner and senior vice president of operations www.harvestmarket.com Fort Bragg, Calif.
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arvest Market takes the better-for-you concept to a new level by focusing not only on what consumers put in their bodies, but also on how it can better the environment and communities in which it operates. As Mendocino County, Calif.’s first Certified B Corporation, the company made a commitment to use its business for good and not just a profit. “Basically that means that we are not just making a profit,” co-owner and Senior Vice President of Operations Jennifer Bosma says. “It shows that we can make decisions that are not just good for profit, but also about environmentally sustainable
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measures, supporting the community and provide employees with a fair living wage. Part of that is also carrying a certain amount of organic and nonGMO products.” B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability and transparency. There are more than 1,400 Certified B Corps in 42 countries and more than 120 industries working together to redefine success in business, B Lab says. Tom Honer, Bosma’s father, founded the Fort Bragg, Calif.-based company in 1985 after working
Harvest Market
for years in the industry and deciding he wanted to start his own store. When he realized there was little differentiating Harvest Market from many of its larger chain competitors, Honer began focusing on natural and organic products in 1995 after recognizing his consumers’ demand for such items. In 2006, Honer purchased Mendosa’s Market, a 100-yearold, small family owned market in Mendocino, Calif., which he renovated and renamed Harvest at Mendosa’s. Harvest at Mendosa’s focuses nearly exclusively on natural and organic products in a 15,000-square-foot space while the 40,000-square-foot Fort Bragg store offers both conventional and specialty products. Both stores offer fresh produce as well as full-service meat and seafood counters, specialty wines and cheeses, and a made-from-scratch deli and specialty bakery. “We are always trying to improve upon who we are,” Bosma says. “We are trying to create a sustainable business not just in profit, but with the community and our staff. One of the things we are really happy about is that we are one of the largest employers in Fort Bragg right now, giving us certain responsibility to keep people’s livelihoods going.” 42
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We believe in taking care of the planet and being responsible in the way we run our business.
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Staying Sustainable
Harvest Market is working to shrink its footprint by becoming more environmentally friendly. One of the biggest improvements the grocery store made is when it developed a new garbage stream. Each department is responsible for putting products in the appropriate bins – recyclables, compostable and landfill, which is the smallest bin. “We have reduced our waste by 60 percent going to the
Harvest Market
landfill in the last six months,” Bosma notes. “We are making everyone more aware of what they are putting in each can. We used to have a 25-yard compacting dumpster for waste, but now we have a four-yard dumpster that’s picked up three times per week. The change was almost immediate because once we expressed what we were doing and how we would do it, employees jumped on board.” The company also collects waxed cardboard and backhauls it to a company in Chico, Calif., which then turns it into fire logs that are shipped back to Harvest Market and sold. Harvest Market retrofitted its produce cases to use less electricity, increase airflow and extend the life of produce. Both of the company’s stores are equipped with solar panels and Harvest uses condensed water captured from refrigerated cases in the Mendocino store to flush toilets. Harvest Market’s focus on sustainability earned it Progressive Grocer magazine’s “Outstanding Independent Greatness in Green” award for multi-store operators and the 2015 North Coast Sustainability Award. “We believe in taking care of the planet and being responsible in the way we run our business,” Bosma explains. “Environmental stewardship is also very important to our customer base, and many of the things we do are ideas we get from consumers.”
are Fort Bragg Food Bank, Mendocino Coast Senior Center, Mendocino Coast Children’s Fund and the fourth bin is for the school’s PTAs. An additional canister is available in the check stands and rotates on a monthly basis” In addition to those four charities, Harvest Market participates in many other events including Wine Song, an annual fundraiser that raises over $500,000 for the local hospital. Harvest Market focuses on education, feeding the hungry, emergency services and organizations supporting children. Harvest Market hosts the Harvest of the Month program that provides kids with an opportunity to try different seasonal fresh fruits that they might not otherwise have. “The local schools now have gardens and we support that with time and money to help teach them how to grow things,” Bosma adds. Moving forward, Harvest Market will continue to support the community and take environmentally sustainable measures. The company has considered expanding and is looking to open more locations. “The idea is to have a grocery store that dedicates itself to being as efficient as possible, supporting the community and providing fair employment,” Bosma says. “Our community involvement really distinguishes us, and we support a number of organizations.” O
Tokens for Charity Harvest Market decided to stop using plastic bags well before a Fort Bragg city ordinance went into effect in late 2012, banning their use in all grocery stores. The ordinance also requires stores to charge 10 cents for each paper bag. Instead of keeping the bag fee for itself, Harvest Market’s two locations donate it to local organizations chosen by customers. “We give out wooden tokens for every bag purchased and brought in, and each token is worth 10 cents,” Bosma explains. “We started this in April 2013 and we have donated $125,000. In the front of the store is a token bank with four bins for customers to deposit their tokens into. The choices March/April 2016
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Retail
SHOE MILL
A Good Fit
Shoe Mill shops the globe for unique brands to offer its customers a greater selection and value.
Shoe Mill stands as a leading independent retailer in the Pacific Northwest. BY ALAN DORICH
W Ed Habre, president and CEO www.shoemill.com Portland, Ore.
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hen people come to Shoe Mill’s stores, they are more than mere customers, President and CEO Ed Habre says. “We consider every customer a neighbor and friend,” he declares. “Our purpose is to take care of them with thoughtful hospitality.” Portland, Ore.-based Shoe Mill operates retail stores that sell shoes and related accessories. Habre’s parents started the company in 1978. “My dad was a longtime footwear retailer,” he recalls, explaining that his father always wanted to be the owner of his own shoe store. While his father worked for a nationally known shoe store chain, that company eventually gave him the opportunity to own and operate his own branded concept store. To make this dream a reality, Habre’s parents sold all of their assets and moved into a new mall location three hours north of Portland. “They used what little funds they had,” the younger Habre remembers. “It drained them of resources to the extent that they had to sleep in the back room of the store for the first three months, until they could scrape enough together to put a deposit down on a nearby apartment to live in.” Ultimately, the store was a success, which led Habre’s father to open another location back in the their hometown of Portland. But when the strain of operating the two stores over 200 miles apart became too much, he kept the store in Portland and sold the other. Ed Habre, who had initially pursued a construction career, went to work alongside his parents during a seasonal slowdown. “‘Just come on down to the store and help me put away some new merchandise that came in today and we can go to lunch together,’ he told me,” Habre recalls. “I soon realized that he could use some help to make his wonderful dream into a meaningful retirement. “I guess that was the hook he used to get me interested in the family business,” he says. “Regardless, I never did go back to my construction job and ended up making a new career in the shoe business. The
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best part was that we got to spend the last years of his working career together and that I enjoyed working with my dad more than I could have imagined.”
Strong Ethics Habre helped grow Shoe Mill into the region’s major independently owned shoe retailer with locations throughout the Portland Metropolitan area and in the state’s capital city of Salem. When asked how the brand name concept store
became Shoe Mill, “We wanted to add additional locations, but were unable to do so using the concept store name, since our market area was saturated with the nationally known brand,” he says. “Dad took on a partner that always wanted to own a store called Shoe Mill. My dad thought it was as good a name as any, and collaborated with him. However, after a few years the partnership dissolved and we decided to move forward with more stores, opening additional Shoe Mill locations in our market area. “As for our tag line, ‘We Put the World at Your Feet,’ this registered trademark was born out of the way we purchased brands from all over the world The Rockport Group and presented an “Ed and his team epitomize what a familyinternational mix owned business is all about. They take pride of footwear to our in their work, they care about their community and they know their customers inside and local customers,” out. This approach has provided Shoe Mill, he says. “We still and its vendors, with a great foundation shop the globe for success. In fact, Shoe Mill played a vital for unique brands, role in launching Cobb Hill and for that we which adds to our are grateful. All of us at The Rockport Group look forward to continuing your family legacy uniqueness in the together. Congratulations!” - Bob Infantino, view of our valued President & CEO, The Rockport Group customers.” March/April 2016
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Shoe Mill Today the company has nine brick and mortar locations and sells via the Internet on shoemill.com. Concerning online retailing Habre explains: “Like most independent shoe retailers, our website started out as simply an information page that detailed where our stores were located along with a brief history of our company. “However, we soon realized that customers were going to our site intending to purchase from us and this presented an opportunity that we should take advantage of,” he continues. “Even though it was a significant investment of time and resources, it is one we are glad we made.” He credits the company’s overall success to its strong work ethic, which his parents exemplified. “They had this mentality that they simply were not going to fail no matter how hard the going got,” he recalls. “If hard work was what it took to succeed, they weren’t going shy away from it,” he continues. “If long hours were required to get the job done, then they sacrificed leisure time to accomplish the tasks at hand. “My dad also was a very dedicated Christian who had a high moral ethic,” Habre continues. “His whole selling style was to be helpful to people. He wasn’t just selling footwear; he was selling service with kindness.
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Ultimately, it comes down to a desire to help people and give them a superior customer experience.
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“He would provide this atmosphere of respectful service to people who he considered to be his friends and neighbors,” he says. “When he would measure their feet, they would be fit properly and feel comfortable in their footwear. It’s still part of our company culture. We’ve continued that attentive selling style to this day.” Shoe Mill has established itself as an iconic brand in Oregon. “People know who we are because we’ve been in business nearly 40 years,” Habre says, noting that the stores also are well positioned in the Pacific Northwest. “Our strategically located stores allow customers in our region to find us easily.”
Satisfying Buying E-commerce has changed the way Shoe Mill’s customers buy products, Habre says. But the company does not see this as a negative challenge; instead, it views it as an opportunity for the company to grow. “We have to make ourselves available to all customers who choose to shop with us,” Habre says. “If it’s not convenient for them to shop our brick-and-mortar stores, we need to be present for them to shop our selection of great brands on the Internet.” But Shoe Mill has no plans to close its physical locations, either. “We need to be available to our customers wherever they want to shop,” he says. “If they’re going to come to the store and have a personalized experience, our challenge is to make sure that experience is incredibly satisfying.” Although Shoe Mill’s physical locations cannot match the breadth of product that is available on the Internet. “We curate our selection each season to what we believe to be the best products appropriate for the clientele that historically come to our stores,” Habre says. “They depend on us season after season to bring them options that make them feel comfortable both in feel and sense of style.” The company continues to refine the retail experience, Habre adds. “We’re trying to make sure that our stores are as inviting as they possibly can be, and that our employees are working at maximum efficiency,” he says. 46
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People Persons Shoe Mill hires employees who like people, Habre says. However, previous shoe retail or service industry experience is not mandatory, it is simply a plus. “They don’t necessarily have to have shoe selling experience,” he says. “If you can put up with the grueling hours and the demands of customers in restaurants, you’ll probably be good at selling shoes. Ultimately, it comes down to a desire to help people and give them a superior customer experience. “To help our fit specialists create a positive feel, we try to make selling fun,” he says. “We run sales contests, set reachable goals and celebrate sales successes company-wide. When both the customer and the salesperson are having fun together, it makes shopping with us a memorable occasion.” Habre shares ownership of Shoe Mill with his sister, but has begun implementation of a succession plan. “I’m in my early 60s and our plan for the next generation running the company on a day-to-day basis is well under way,” he says, but asserts that he is not getting tired of the business. “These are the best working years of my life and I’m having a blast working with my sons who are taking ownership of this business seriously,” he says. “Candidly, I need to continue to get out of their way. They’re very forward thinking, creative and capable. “We also have some younger senior management employees who we have confidence in that have a passion for retail and the success of the company,” he says, noting that he believes Shoe Mill will continue to be successful as it continues to have confidence in creative and motivated team members. “Our business will be viable as the industry changes,” he says. “The attitudes of our highly skilled and energetic younger management team will adapt to the changing times.” O March/April 2016
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Retail
MELROSE FAMILY FASHIONS
Fashion and Value
A signature blend of on-trend apparel at affordable prices has helped Melrose Family Fashions reach its target market. BY ERIC SLACK
Reuben Bar-Yadin www.melrosestore.com San Antonio
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he Melrose Family Fashions story began with a single store in the southern tip of Texas, a 6,000-square-foot location focused on ladies’ apparel. Today, the organization has grown to about 100 stores with a focus that has expanded to the entire family. “Our stores are now about 10,000 to 12,000 square feet,” CEO Reuben Bar-Yadin says. “We are mostly in Texas but have expanded toward the West Coast. We focus on strip centers and our target audience is what we call the blue collar Hispanic consumer.”
Market Focus Melrose Family Fashions features non-branded goods at affordable prices. The company strives to be a fashion- and trend-oriented apparel store, one that feels and operates like a larger chain but is in reality a small, non-branded department store. It has targeted the blue collar Hispanic consumer because its roots were established in McAllen, Texas, which has a large lower income, Hispanic population. 48
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“My parents were born and raised in Cuba, and their primary language is Spanish,” Bar-Yadin says. “We catered to that population and understood how to connect with them. As we grew into the rest of Texas, we targeted the consumer we were familiar with and looked for parts of the cities that had a large Hispanic demographic.” As a result, the company’s marketing efforts remain very much targeted toward that community. Along the Mexican border, the company celebrates the Mexican holidays as well as American holidays. “Marketing is one way we reach that consumer, and we try pay attention to what the consumers like in terms of our apparel selection,” Bar-Yadin says. “We have bilingual signage in most stores, and most of our staff is Hispanic.” Although the company knows there are some fashion styles that appeal to people across differing demographics, Melrose Family Fashions understands that working class Hispanics tend to prefer colorful and tighter-fitting clothing. That doesn’t mean those offering are only for Hispanics, but the company knows those styles appeal to its target audience. “A lot of our trendy fashions come from the Los Angeles area, which is heavily influenced by the Hispanic market,” Bar-Yadin says. “That market also influences Mexico, and we look for styles that are popular with the target consumers in those areas. Some types of clothing appeal to Hispanics more than others, and that is what we look for.” In addition to marketing and merchandising, Melrose Family Fashions has sought to stay ahead of the curve in terms of its store design. The company is constantly trying to modernize to stay fresh and contemporary. “Many years ago the stores were more basic,” Bar-Yadin says. “Now, even though we are a small discount store, we try to give the consumer a shopping experience they can feel good about. Lighting, flooring, signage and displays – they are all important. We are very much into displaying a
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Melrose Family Fashions
Even though we are small, we try to give the consumer a shopping experience they can feel good about.
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certain lifestyle through out store design and ambiance. We want our name to become more recognized in the Hispanic community.” Other investments are focused on the back-end of operations. The company is using technology to mine data about what is selling so buyers have more information to help them understand elements such as sizes, trends, colors and themes. “Now we can drill down into different aspect of the merchandise, using shopping habit data to improve,” Bar-Yadin says. “We are also doing more to locate where the custom-
ers live and shop, looking at demographic trends to determine where it makes sense to open new stores. We’ve focused more on social media, too, so we can better connect with consumers.”
Expansion Efforts Considering the changing demographic makeup of the United States, Melrose Family Fashions sees a lot of opportunity for growth. Hispanic populations are on the rise beyond the border states, which presents opportunities for the company to grow in markets it might not have considered in the past. Additionally, the company is looking to grow beyond Ceridian Hispanic markets and Ceridian is a global human capital manmake inroads with other agement technology company serving over lower-income consumers. 25 million users in more than 50 countries. “With the economy Our offering includes the award winning, cloud-based Dayforce HCM, Global Solutions, as it is now, more peo- Small Business Payroll, and LifeWorks ple are trying to stretch Employee Assistance and Wellness programs. their dollars, and we take Ceridian. Makes Work Life BetterTM. For more pride in delivering bang information about Ceridian solutions call 1.800.729.7655 or visit www.ceridian.com. for the buck,” Bar-Yadin
March/April 2016
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Melrose Family Fashions
Melrose Family Fashions is dedicated to presenting and organizing its stores in an appealing way.
says. “We sell what you see in more expensive stores but at prices that working class families can afford, and we do it in more exciting ways than discount stores. We are a fashion store with a high emphasis on value pricing, offering fashion at a discount.” This sets Melrose Family Fashions apart from stores that are all about fashion as well as stores that are all about discounts and a barebones shopping experience. “Our store presentation is like a department store, organized in an appealing way,” Bar-Yadin says. “But the prices are similar to discount stores. We’ve combined the great fashion presentation with the need for value pricing and think that can grow around the country.” In fact, the company’s biggest focus right now is on growth. Melrose Family Fashions wants to grow its store count within and beyond Texas. Its strategy is to work with the right brokers in select markets to find the right opportunities for new stores. “The economy is still delicate and there is a lot of compe50
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tition,” Bar-Yadin says. “But we are like many others in that we have to deal with those situations and look for solutions. We can stay relevant through marketing, merchandising and value pricing in contemporary stores, standing out in the minds of our loyal customers.” O
GILDAN 52 | INSERTS EAST 54 | MCS INDUSTRIES 56 | TIMELESS FRAMES, DÉCOR & EXPRESSIONS 58 | PERRONE AND SONS 61 | PEIRONE PRODUCE 64 | SUNWARRIOR 66
Supplier
“We are evolving with the market and growing with the market.” – Rob Packard March/April 2016
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Supplier
GILDAN
Controlling Quality
By owning most steps of the manufacturing process, Gildan ensures the consistency retailers and customers want in the production and supply of quality T-shirts. BY TIM O’CONNOR owned company with Glenn Chamandy, who is one of the founders and still CEO of the company.
Growing Market
To ensure a continuous level of quality, the company says almost 100 percent of its value comes from a Gildan-owned facility.
Rob Packard, vice president of marketing, Gildan’s Branded Apparel division www.gildanonline.com Montreal
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O
ffice culture has become much more relaxed over the last decade, at least when it comes to dress codes. T-shirts and jeans are now regularly sighted among cubicles and every day may as well be casual Friday for many companies. Some may lament the loss of formality, but the cultural shift is good business for clothing maker Gildan. The company’s high-quality T-shirts are now a part of many people’s daily lives as consumer amass a collection of Gildan-made clothing from events. “Everybody now understands that Gildan is a T-shirt leader,” Vice President of Marketing for Gildan’s Branded Apparel division Rob Packard says. Gildan’s path to becoming one of the largest clothing apparel companies in the world began in 1984. The Chamandy family operated a children’s clothing business in Montreal when they decided to start producing their own textiles to lower cost. By the early 1990s, the company entered the screenprint market by manufacturing plain T-shirts that could be printed on. Today, Gildan is a publicly
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T-shirts remain Gildan’s primary product. “We still execute and make a better-value T-shirt,” Packard says. “We have higher quality at a great price for a better value equation than the competition.” In addition to its shirts, Gildan is now one of the leading men’s underwear companies. When including all the brands under the Gildan umbrella, the company is also a leading sock manufacturer and it continues to grow its activewear business. Gildan has an merchandising and product development group that watches shifts in the clothing industry and helps steer the direction of new products. The company also relies on its business partners to help it innovate. Gildan manufactures items for several global brands and is keyed into developing trends in the market. “We are evolving with the market and growing with the market,” Packard explains. Much of its sales are in the printwear market, which covers clothing made for races, family reunions, concerts or other events that demand a specialty T-shirt. Packard says Gildan’s quality and diverse lineup have made it the go-to brand for screen-printers. It offers more than 90 colors in its printwear portfolio. “No one comes close to the breadth of offering or the breadth of color that Gildan has,” he explains. In the retail industry, Gildan supplies big-box stores such as Target, Walmart, Kmart, J.C. Penny Co. and Kohl’s and also dollar stores such as Family Dollar and Dollar General. The company is mainly in the North American market with smaller but growing presences in Europe, Asia and Latin America. In recent years, the company has expanded its T-shirt offerings to hobbyists who want to make their own designer apparel. Gildan’s goal is to match the great quality and value it offers retailers and screen-printers with its hobbyist products. In 2011, the company converted its first big craft retailer from a competing brand to Gildan. Now
Gildan clothes are in all the major craft retailers, including Hobby Lobby, Jo-Ann Fabric and Michaels. Gildan has worked with those retailers and craft companies to create displays where a Gildan T-shirt appears alongside a craft kit. “I believe we have done a really good job of showing the craft hobbyist the value and quality of Gildan,” Packard says.
Being Vertically Integrated Gildan’s consistent quality is one of the company’s biggest contributors to its success, Packard says, and the company has been able to accomplish that consistency because it controls the entire manufacturing cycle in-house. “When you control more of your own process that helps to ensure you get better quality,” Packard says. The company owns nearly every step in garment production, from spinning its own yarn to textile manufacturing and garment finishing. The Gildan Quality System measures and monitors every step of production. “A big part of our success is that we are probably the most vertically integrated apparel company in the Western Hemisphere,” Packard explains. Pretty much the only thing Gildan doesn’t own is the cotton farms – although it is one of the largest cotton buyers in the United States. Even the completed clothes are primarily shipped to Gildan’s own warehouses. “Almost 100 percent of the value, excluding raw material, comes from a Gildan-owned facility,” Packard says. Having conquered its manufacturing process, Gildan is transitioning to become an omni-supplier, a process Packard says is becoming more essential as retailers see more sales occur online. Working closely with retailers is allowing Gildan to have an increased presence on retailers’ websites. The company is maximizing its business with those retail customers by offering a mix of products, some that are normally not found in stores. Packard says Gildan’s manufacturing hubs in Honduras, Dominican Republic and Nicaragua mean that it can produce and ship basic clothing more quickly and at less cost than competitors whose facilities are concentrated in Asia. “We’re a good Western Hemisphere supplier,” he boasts. The company has ecommerce capabilities on its own website, but Packard says Gildan’s main focus is to support its retail and screen-printer customers. Although some competing apparel companies have opened their own physical locations in recent years, Gildan brand has no immediate plans to follow suit. “Do you need to have your own brickand-mortar [store]?” Packard says, explaining that the company is carefully considering its strategy in the digital world. “Where do you need to be?” For now, Gildan plans to grow by increasing its product lineup and providing the quality clothing products that customers have come to expect from the brand. “We are going to continue to expand in basic apparel categories,” Packard says. O March/April 2016
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Supplier In 1988, Gino Maiale left the company to found his own print brokerage company. But when he received word in 1996 that Able Printing was about to be sold off and moved to Long Island, N.Y., Gino and Nick Maiale stepped in and purchased the company. Renaming the company Inserts East, the Maiales expanded its capabilities and added new equipment. Today, Inserts East has more than 200 employees working out of a more than 150,000-square-foot facility in Pennsauken, N.J. The company’s primary service is printing advertising inserts for newspapers as well as direct mail advertising inserts. Its customer base includes regional and national retailers, including some of the largest in the country. Although consolidation has reduced the number of commercial printers in the marketplace, Maiale says Inserts East still faces strong competition. Nevertheless, he adds, the company has the strengths and capabilities in place to stand up to that competition and continue to thrive in the Northeast.
Inserts East says its talented, hard-working employees allow it to build and maintain strong relationships with customers.
People Power
INSERTS EAST INC.
Power of Print Inserts East serves its customers with ads made with state-of-the-art production. BY CHRIS PETERSEN
E Nick Maiale, president/CEO www.insertseast.com Pennsauken, N.J.
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ven in today’s digital age, the printed word remains an effective way for advertisers to get their messages to consumers, and New Jersey-based Inserts East Inc. continues to lead the way in that regard. President and CEO Nick Maiale says business is booming for the company despite the rise of digital media, and that’s due in large part to the company’s ability to do more for its customers than the average printer. With its strong base of experience and knowledge as well as its state-of-the-art technology, Inserts East won’t be stopping the presses anytime soon. Maiale’s father, Gino, was president of the company for many years, when it was known as Able Printing.
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Inserts East has dedicated itself to having some of the most advanced capabilities in the industry. For example, the company recently added another 36inch, eight-unit heat-set web press, bringing its total capacity to 36 printing units and nine in-line folders. However, Nick Maiale says the company’s greatest asset doesn’t roll off an assembly line. “Our company’s greatest strengths are the people that we have here,” he says. Inserts East has many people on its staff with many years of experience in the industry, and Maiale says everyone who works for the company puts the quality of the finished product at the top of their list of priorities. “They’re proud of what they do,” he says. “They’re professionals.” With so many hard-working, talented people at its disposal, Inserts East has been able to build and maintain strong long-term relationships with its customers. The strength of its people is why Inserts East has been so successful in serving clients new and old, according to Maiale. “Our client base is very, very loyal,” he says. “We have a very good mix of retailers who have been here and we’ve seen a lot of organic growth in our current client base.”
Finding New Avenues Although Inserts East continues to have great success serving its customers, Maiale says there’s no denying that one of the primary outlets for its advertising in-
serts – newspapers – is suffering a decline. Readership in newspapers is dropping off as people continue to look to the Internet or other media for their news, and Maiale says this has been Inserts East’s biggest challenge over the last several years. Newspapers may be on the decline, but Inserts East’s customers still have the need to get their messages out to consumers, so Maiale says the company is dedicated to helping them find whatever print vehicle makes the most sense for them in the current environment. Inserts East has become more involved in creating other types of solutions for its customers, including creating signage, window banners and printing direct mail products. Maiale says the company also looks for other ways it can serve its customers through print, but the company also has digital capabilities it can offer them. “We offer the full package here, and you have to,” he says.
Building Relationships Maiale says Inserts East is excited about the future. Even though the last several years have brought with them many changes to the industry, the company is poised to take advantage of many of those changes. For example, market conditions have caused many of the company’s weaker competitors to close their doors or be absorbed into larger com-
Inserts East Inc.
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I see us really focusing on what we can do to bring more value-added services to clients.
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panies, but that provides Inserts East with opportunities to take on new customers. “What I’m most excited about is all the new clientele we’re bringing on board,” Maiale says. With the new clients the company is adding, Inserts East continues to grow. The company has been adding new staff and now runs 24/7 for its customers. Maiale says the company’s goal in the immediate future is to focus on new ways that Inserts East can serve as an extension of its customers’ own marketing and promotional efforts. “I see us really focusing on what we can do to bring more value-added service to our clients,” Maiale says. “Anybody can put ink on paper – it’s the customer service and value-added assistance that strengthens client relationships.” O
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Supplier
MCS INDUSTRIES
Suitable for Framing
Leading wall and poster frame provider MCS Industries prides itself on a low turnover rate that is the result of creating a flexible and empowering culture for its employees. BY JIM HARRIS Josh MacNeel, president www.mcsframes.com Easton, Pa.
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here are a number of reasons why MCS Industries has grown to become a market leader. In the eyes of its owner and top executives, the main explanation for the company’s success is simple. “We have a very tenured, solid and hardworking base of employees who’ve been with us a long time, understand this business and are very caring and conscientious about what they do,” President Josh MacNeel says. MCS enjoys extremely low turnover. “We don’t
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have people leaving us for other jobs – that’s almost unheard of here,” he adds. “We do add new talent – principally in engineering and design – each year, but for us its about building and developing the people and experience we have here.” The company builds its positive culture by empowering all level of its staff. “Our people become akin to small business owners of whatever their jobs are,” MacNeel says. “Their sense of fulfillment in what they do is important to us.” MCS also offers its staff perks including flexible
MCS Industries hours and a relaxed dress code. “Our owner, Richard Master, believes the morale of the company is No. 1,” MacNeel says. Employees are also offered a benefits package that includes a 401(k) with company contribution, and college scholarships for their children. “Benefits are important to us,” he adds. The company believes strongly in keeping healthcare costs down for its employees, so it makes a large contribution toward its staff ’s costs. Healthcare in general is an extremely important topic for Master, a national advocate for health cost reform. Master produced the documentary film “Fix It,” which makes a business case for replacing the current multi-payer system with a single-payer system. The film is available at www.fixithealthcare.com. “We want to use our influence to be able to help our company and others attain healthcare more affordably in the United States,” MacNeel says.
Dedicated Service MCS’s staff has enabled the company to become a U.S. market leader for wall and poster frames as well as a major player in those categories globally. The company supplies a full line of wall and tabletop frames, photo albums, scrapbooks, mirrors, wall décor and art-print products to a wide variety of retail customers. The company’s products can be found in brick-and-mortar stores of all sizes as well as through major online merchants. “We have tremendous retail partnerships with the bulk of nearly all major retailers as well as a very solid base of independent to mid-size retailers,” MacNeel says. “Part of our success is our girth, and the knowledge we are able to cultivate from having this broad base of business.” The company organizes its staff into teams dedicated to each of its major customers. These teams include salespeople as well as analysts, designers and planning forecasters. “Our people get intimate at the customer level; we believe in taking care of our retailers,” he adds. “Retailers know who each of the team members are. When they call us, they’re not just calling the salesperson, they’re calling the team.”
is a truly innovative product that is generating a lot of excitement,” he adds. “If you go Google how to keep a mirror from fogging you will find hundreds of articles – this is a serious consumer issue no one has really solved, until now.” MCS follows a vertical integrated manufacturing format and maintains two large manufacturing sites: The Frame Manufacturing Co. (TFM), in Mexico; and TFC, located in China. “We have a manufacturing infrastructure that is different from the rest of the industry, starting with very basic commodities and controlling the manufacturing process through a broad array of technologies,” MacNeel says. “We have a global footprint in regards to supply and also who we sell to. Our products are manufactured with great care and quality, in environments controlled by us for quality, ontime service and integrity.” O
Connecting with Consumers MCS believes in offering products that connect directly with consumers. “We and our retailers have to ebb and flow to meet our customers’ needs, or we are gone,” MacNeel says. The company’s latest product is a fog-resistant mirror that is available in more than 1,200 Home Depot locations under the retailer’s Home Decorators Collection brand. “This March/April 2016
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Supplier
TIMELESS FRAMES, DÉCOR & EXPRESSIONS
Fine Frames
The Timeless family of companies delivers products that exceed clients’ expectations and remains competitive by staying flexible. BY ALAN DORICH
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The company’s proprietary production software provides it with flexibility to meet customers’ specific needs.
Q Lisa Weber, CEO and owner www.timelessframes.com Watertown, N.Y.
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uality is not a goal but a way of life at the Timeless family of companies, Director of Marketing Angela Owen says. “That quality comes from a driven team of individuals with an unwavering commitment to high performance and creating products that exceed expectations,” she says. Based in Watertown, N.Y., Owen notes that the start of the Timeless story began in 1999, when one of its customers approached its current owner and CEO, Lisa Weber, about a struggling ready-made frame business. Weber had always wanted to own her own business, but she had some hesitancy. “Not only was the
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company located in a geographic area where manufacturing companies were closing, the wall frame business was an unfamiliar industry and competitive obstacles such as import products were a serious consideration,” Lisa stated. When the previous owner called Weber and told her he was closing its doors, she traveled to Watertown the next day to evaluate the business. “Looking at the company financials, Lisa saw the potential of what the business could do with some volume, realignment and good old fashioned hard work,” Owen says. Weber told the owner she would try running Timeless Frames for a month. “She offered to pay the employees and expenses for the month,” Owen continues. “If she lost money, she would cover the losses. If she made money, she would keep the profit.”
Great Growth Weber’s bet led to the formation of Timeless Frames and the start of the Timeless family of companies. Weber brought the company’s once-struggling manufacturing facility to new heights through hard work and dedication, Owen says. “Today, the Timeless family of companies employs nearly 200 team members and does business under the names Timeless Frames, Timeless Décor and Timeless Expressions,” Owen says. Weber is the CEO of all three organizations.
Timeless Frames, Décor & Expressions While Timeless Frames provides wall, tabletop and novelty picture frames, “Timeless Décor is the largest single site producer of custom framing fulfillment services in the country, and offers an extensive collection of framed art and mirrors, matted art prints and pre-cut mattes,” she says. Timeless Décor has recently expanded into the hospitality market and provides framing packages for brands such as Holiday Inn Express, Hilton Garden Inn, Comfort Inn and more. “We see great growth opportunities in this segment of the framing industry and view it as a natural progression for Timeless Décor,” Owen adds. “Timeless Expressions is a premier digital image fulfillment house for corporate, store and web digital images sales,” the company says. “We provide a unique online experience,” Owen says. “Blending online digital photo services with the Timeless brand of quality picture frames offers consumers a place to shop, share and compare their products with friends and family. “Along with offering our assortment of ready-made and custom-framing products online, we also offer an expansive collection of art prints and digital keepsake products,” Owen says. “We are pleased to offer our retail partners the option to create a co-branded site, providing their customers
with the opportunity to shop the full assortment and have the orders shipped directly to the customer’s home or to the store for pickup.” Timeless also has expanded its online presence by adding its framed product lines to the sites of national retail chains including Walmart, Macy’s, JCPenney, Kohl’s and The Home Depot. “We continue to see growth in this segment [by] continuously expanding our presence on the sites as well as adding our line to new retail partner sites, such as Houzz,” Owen says. Owen credits the Timeless family’s success to Weber’s leadership. “Lisa does not believe in leaving her destiny or the success of the company to chance,” Owen says. “She has always said, ‘You get up every day and make a choice as to what you would like to do.’
Timeless Frames, Décor and Expressions® Woman owned, Timeless Frames, Décor & Expressions® is a premier manufacturer of Ready Made Picture Frames, Custom Framing Fulfillment Services & Digital Image Fulfillment Services. Whether it is out of our U.S. vertically integrated manufacturing facility, or on an import basis, we are pleased to offer solution based products and services to our customers!
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Timeless Frames, Décor & Expressions We are pleased to offer our retail partners the option to create a co-branded site.
“She has a passion for what she does and leads her team to aspire to the same passion to ensure success,” Owen continues.
Fitting Needs The Timeless group keeps competitive by being flexible, having a wide product and service mix, and operating as a vertically integrated U.S.-based manufacturing firm. “We are able to react to our customer needs and turn our products quickly,” Owen says, “providing our customers the opportunity to introduce new programs to the market quickly as well as maintain a tight control on their inventory levels. Whether it is out of our Watertown, N.Y., manufacturing facility, or on an import basis, we are proud to offer a wide range of solution-based products and services to our customers. “In keeping a key eye on the market, investing in company resources/product development, and remaining flexible to our customers’ needs, we work to ensure the success of any program. We provide the best product mix and services for each particular customer that fits their particular needs,” she says.
Green Friendly
The Timeless family of companies prides itself on operating an environmentally friendly business and strives to reduce its green footprint, Director of Marketing Angela Owen says. Its green initiatives include: • Using recycled goods to make paper components of frames; • Purchasing wood from New York and Pennsylvania’s sustainable forests; • Donating its used shipping wood and cardboard to recycling services; and • Donating to reforestation efforts.
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Creating Links Technology is an integral component to the Timeless family’s success, particularly within its Custom Framing production facility. “At the startup of the company, through trial and error, we quickly learned that there was not any software available on the market that could support the sheer scope and volume of products that our business model produces,” Owen recalls. To solve this issue, the company invested in developing Timeless Manufacturing System (TMS), its own proprietary production software. “TMS allows us to link our retail partners directly with the production facility and provides us with real-time visibility to all relevant job information,” she says. “It is fully maintained by us with no third-party involvement,” Owen continues. “This allows us the freedom and flexibility to quickly evolve the software and customize it to the customer’s needs.”
Building the Family The Timeless companies have nurtured a fun and hardworking culture. “We are family,” Owen says, noting that it uses a broad array of recruiting tools that include job banks, posts on job search sites, social media, and local print and radio media outlets. “We host Timeless-specific job fairs,” Owen adds. “We are also committed to the development and growth of team members already with our company, providing opportunities for cross-training as well as posting all open positions to the team to try and promote from within.” O
Supplier
Perrone and Sons is one of the leading wholesalers to restaurants and grocery stores in New Orleans, and remains committed to its customers.
PERRONE AND SONS LLC.
Preserving a Legacy Perrone and Sons establishes lasting relationships with vendors and customers to make itself indispensible to the New Orleans culinary scene. BY TIM O’CONNOR
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hen Hurricane Katrina hit New Orleans in August 2005, the historic storm wiped out much of the city and left businesses inoperable for weeks, even months. One of them was Perrone and Sons LLC., a specialty food wholesaler that was without power for a month following the storm. John Perrone III, son of owner John Perrone Jr., had to leave college for a few semesters to help the family business recover. Perrone and Sons took the lessons learned during the Katrina disaster and applied them to the construction of its new distribution and production facility in 2013. The 30,000-square-foot building uses the same reinforced roofing as the renovated Mercedes-Benz Superdome and onsite generators keep the building powered during blackouts, such as
when Hurricane Isaac hit in 2012. Vice President of Sales Rusty Perrone says the company now has confidence it can continue operating in the aftermath of any storm. “We’ll be one of the last to be turned off if there is a hurricane,” he says. “We used Katrina as a lesson for us,” he adds. “What are the requirements for us to be up and running in the shortest amount of time?” Perrone and Sons is one of the leading wholesalers to restaurants and grocery stores in New Orleans. If a disaster were to shut down the business, even temporarily, it would not only harm Perrone and Sons’ operation, but the city’s specialty grocery and gourmet restaurants. By investing in a facility that can withstand strong winds and power outages, Perrone says the company made a commitment to its supermarket and restaurant customers. March/April 2016
Rusty Perrone, vice president of sales www.perroneandsons.com Metairie, La.
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Perrone and Sons LLC. Integrating with New Orleans Perrone and Sons’ history began when Bartholomew Perrone, Rusty Perrone’s great-grandfather, opened Progress Grocery in New Orleans’s French Quarter in 1924. The store was a hit with the large Italian community as locals came to view it as the go-to place for imported goods from Europe. As time went on the community changed and Italian families moved out. Meanwhile, New Orleans cemented its status as a culinary destination and restaurants began coming to Progress Grocery to buy specialty products. The grocery store developed a wholesale business and began making deliveries to eateries in the French Quarter. By 2001, the lack of local customers prompted the Perrone family to close the grocery store and concentrate solely on the wholesale operation. As a retailer, Progress Grocer was known for its olive salads, stuffed artichokes and Muffaletta sandwiches. After the switch to wholesale, restaurants and supermarkets continued to rely on Perrone and Sons for those and other specialty food products. The company has also partnered with several of its restaurant customers to sell retail versions of signature food items, such as sauces from Two Tony’s and Commander’s Palace Chef Tory McPhail’s rum vinegar, specialty sauces and marinades. The company today has three primary divisions: food production and private label, foodservice, and retail distribution. “If there is a white table cloth restaurant in New Orleans, nine times out of 10 we’re serving them with a gourmet product,” Rusty Perrone says. Perrone and Sons’ most important market is New Orleans, but the company’s wholesale operation covers a 200-mile radius from its headquarters in Metairie, La. Its market reaches as far east as Mobile, Ala., and as far west as Lafayette, La. To reach those customers – and the ones in New Orleans – Perrone and Sons owns and operates six refrigerated trucks. Rusty Perrone attributes the company’s success to the quality and service standards his great-grandfather first established when he opened Progress Grocery in the 1920s. “Basically, [we are] just sticking to the core values of our family business,” he says. “We have a reputation in the city of being honest and fair people, dedicated to preserving our heritage and the legacy my great-grandfather provided.” That legacy is what Rusty Perrone says sets the family owned company apart from its competitors. “We’re the oldest specialty foodservice distributor in the city,” he adds. Many chefs who work in The Big Easy’s most renowned eateries learn to purchase from Perrone and Sons, then continue to do so once they open their own restaurants. “Our success in foodservice is really our spanning history of serving those types of products,” Perrone says. Part of Perrone and Sons’ legacy is honoring members 62
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of the Perrone family. Rusty Perrone’s twin brother, Randy, died in 2013 from complications with brain cancer. Randy Perrone was the company’s director of retail and the family struggled with the loss on multiple sides. “To have a double whammy on the family front and the business front was quite difficult,” Rusty Perrone recalls. “But fortunately we have a great family of employees that really stepped up.” Perrone and Sons is honoring Randy Perrone’s memory with its new Brie, Saint Randeaux. Rusty Perrone says the company plans to donate of portion of sales proceeds to brain cancer research.
Strengthening Vendors New Orleans is a hot culinary market that is attracting more interest from national wholesalers. To thrive in the face of well-funded competition, Perrone and Sons is relying on its relationships with vendors such as BelGioioso Cheese, a specialty cheese producer based in Green Bay, Wis. Such exclu-
sive products enable Perrone and Sons to stand out and fill a niche in the wholesale market. “It’s really making us unique enough that nobody can really replace us,” Rusty Perrone says. Having a relationship with vendors is about forming a partnership, Perrone adds. Perrone and Sons strives to helps its suppliers grow their businesses, not treat them as if they are expendable. “We need to make ourselves attractive not only to the customer but also the vendor,” Perrone explains. One way Perrone and Sons has done that is through its annual food show, a one-day event where customers and vendors can meet with each other to learn about new products. This year’s food show will take place on Aug. 21 at the Hilton Riverside in downtown New Orleans. The first event in 2014 attracted 27 vendors. The 2015 food show more than doubled in size with 65 vendors. Rusty Perrone describes it as an opportunity for vendors to get out in front of Perrone and Sons’ customers and introduce them to new food products. “If somebody sees something they like it’s going to be easy for them to make that purchase [with integrated iPad ordering systems],” he says. “All our guests come hungry.” Perrone and Sons continues to invest in new technologies, such as a better enterprise resource planning (ERP) system to support its vendors and customers. Rusty Perrone says the company is already near capacity in its three-year-old facility but technology investments allow it to manage the operation without issue. Perrone says keeping up with investments will allow the company to maintain its position as a key wholesaler for New Orleans grocers and restaurants and remain strong for the eventual fifth generation of Perrone family ownership, Rusty and John Perrone’s young children. The company is not planning an expansion at this time, but is open to whatever the future holds. “We’re constantly looking for the next opportunity,” Rusty Perrone says. “We’re not opposed to other markets as long as the opportunity exists.” O March/April 2016
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Supplier
PEIRONE PRODUCE
Inland Northwest’s Best Peirone Produce’s distribution center helps make it one of the best distributors of fresh produce in the Inland Northwest. BY CHRIS PETERSEN
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or 70 years, the name of Peirone has been synonymous with high-quality fresh produce in the Inland Northwest, and Peirone Produce continues to serve its supermarket customers with the Kamphaus, best produce available as well as Mike president/CEO the best industry practices any- Spokane, Wash. where in the industry. President and CEO Mike Kamphaus says one of the primary reasons for the company’s longevity and success has been its concentration on the supermarket industry, rather than splitting its attention between that customer base and other types of customers like foodservice or institutions. That gives Peirone Produce a clearer understanding of how it can best serve its customers and gear its processes to supermarkets’ specific needs. “One of the unique things about Peirone is we’re almost singularly focused on one segment or channel of the business, and that’s supermarkets,” Kamphaus says. “Clearly we have good competition in the marketplace. However, their model is different from ours in that they’re serving many different channels of the industry, from schools to fast food to prisons.” The focus and dedication Peirone Produce shows to the supermarket segment of the marketplace is one of the company’s biggest strengths, but it is far from the only advantage it brings to the table. According to Kamphaus, Peirone Produce’s distribution center, technology and co-op ownership all contribute to making the Spokane, Wash.-based company the best in the Inland Northwest. As long as the company continues to focus on what has made it successful for the last seven decades, Kamphaus adds, the future looks bright for Peirone Produce.
Center of It All
Joe Peirone founded Peirone Produce in 1945, and the operation continues to grow in the Inland Northwest.
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Serving supermarkets means produce needs to be fresh because customers see it out there on the shelves every day, and that also means a distributor March/April 2016
Peirone Produce
that serves that segment of the market has to be able to provide fruits and vegetables that have been stored properly and turned around quickly. To that end, Peirone Produce has invested millions into its distribution center, which Kamphaus says puts the company head and shoulders above any other produce distributor in the region. “We have the finest distribution center in the Inland Northwest,” he says. The 77,000-square-foot facility was built from the ground up specifically to serve the supermarket segment, giving Peirone Produce another distinct advantage over other distributors. Kamphaus says the company’s facility has nine different temperature zones to ensure that virtually any kind of fruit or vegetable has the precise type of environment it needs to stay fresh during distribution. “It truly is the perfect environment,” Kamphaus says. Combined with the company’s size and footprint in the area, Peirone Produce’s distribution center makes it possible for the company to completely turn over its inventory more than 70 times a year.
With those pieces in place alongside the company’s existing advantages, Kamphaus says Peirone Produce looks to be in good shape for another 70 years of success in the Inland Northwest. As the company continues to identify and chase new markets and trends such as locally sourced and organic produce, Peirone Produce is ready to keep growing. O
Still Growing Peirone Produce has undergone some substantial growth over the last few years, and Kamphaus says the company has put a lot of effort into making sure the company isn’t a victim of its own success. “One of our biggest challenges is managing the tremendous growth we’re going through,” he says. “The worst thing we could do is bring on new business and not meet their expectations.” Recently, the company upgraded its warehouse management software to ensure it not only does a better job for its existing customers but also prepare itself for the growth still to come. Kamphaus says the company also has been hard at work ensuring that it keeps up with the latest requirements from the Food Safety Modernization Act. March/April 2016
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Supplier
SUNWARRIOR
Healthy Business
Sunwarrior says it is ‘crazy about quality’ when it comes to its health products and focuses on remaining true to its values. BY ALAN DORICH
Sunwarrior offers eight lines of products, including protein, greens, capsule vitamins and liquid vitamins.
M Emerson Carnavale, chief supply chain officer www.sunwarrior.com Washington, Utah 66
any companies in Sunwarrior’s market focus on growth, but the firm holds another mission in a higher regard. “We really try to stay true to our values, which are to provide the best protein powders and supplements,” Chief Supply Chain Officer Emerson Carnavale says. The Washington, Utah-based firm makes sure to focus on its client service, as well. “If you just do what your customers ask you to do, they’ll take care of you,” he asserts.
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Sunwarrior’s history goes back to 2007, when its owners came up with the idea for a vegan product that also enabled them to build muscle. “Little did they know that there were a lot of people like them,” Carnavale explains, noting that the company started operations one year later. Today, Sunwarrior offers to its customers eight lines of products, Carnavale says. Much of the company’s business comes from its protein lines, he says. “We also have greens, capsule vitamins and liquid vitamins,” he states.
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Sunwarrior
We included everyone in supply chain, marketing and sales in trying to address this issue from all angles. Creating a Win-Win
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Sunwarrior’s recent initiatives have included reworking its packaging. Two years ago, Carnavale says, the company had three types of packages: a Mylar bag, a round tub and a box that contained a bag inside. “Manufacturing, storing and distributing in three different packaging was an operational nightmare,” Carnavale says, describing the challenges faced by Sunwarrior with its variety in packaging. Although these three packaging styles created a lot of problems operationally, Sunwarrior found that opinions varied about the types of packaging among its retailers and end users. Some retailers liked the tub, while online retailers preferred to buy its products in the bag because they were more ship-friendly, and the boxes really looked good on the shelves. “But we knew we couldn’t continue down that road,” Carnavale says. “It made no sense!” He explains that the company needed to drive change. “So we started a year-long market analysis and research on what would be the best packaging. It was a tremendous team effort,” Carnavale recalls. “We included everyone in supply chain, marketing and sales in trying to address this issue from all angles.” He notes that Sunwarrior’s most important consideration belonged to its customers. “We do business in over 40 countries, so we had to take into consideration what our customers from outside the United States expect from us as well.” Sunwarrior set its project’s success target on achieving three goals: make its customers happy, reduce its footprint in the environment and reduce costs. What Sunwarrior eventually developed was a square tub container that is molded from recycled plastic. “It is shorter and skinnier than the older tub,” he says, noting that it combines the best traits of all three packages. In addition, this new package will allow Sunwarrior to achieve its three main goals. “We nailed on all three,” Carnavale says.
Square is The New Cool The new square tub has won great acceptance from Sunwarrior’s customers. “It is easier to close once opened, and it is March/April 2016
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Sunwarrior
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With one packaging, we were able to specialize our manufacturing facilities and processes.
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very easy to hold – contrary to our previous box that was big and awkward,” Carnavale says. Sunwarrior’s customer base largely consists of women between the ages of 18 and 45 who are very health conscious, he says. “We needed to create a packaging that our customers could easily handle and store,” he states. This move was also very positive to Sunwarrior retailers. Sunwarrior’s main channels of distribution are brick and mortar health food stores, and online retailers. “It appeals to the retailer because it is very easy to stack and occupies a lot less space on the store shelves — plus it is unique,” Carnavale says. “Our online retailers like it because of its smaller size and durability during shipping.”
Illuminate Our Planet The new square tub was designed with the planet in mind. “We wanted to make a positive impact in helping reduce wasteful materials,” Carnavale says, noting that the new square tub is comprised of recycled plastic from discarded milk jugs. The new packaging also meant that creating its delicious protein powder became much easier and efficient, and it requires a lot less resources. “With one packaging, we were able to specialize our manufacturing facilities and processes,” Carnavale explains. “Also, in our bulk and pallet utilization, we Axiom Foods were able to increase the Meet Axiom Foods, the world leader in amount we could load on manufacturing organic brown rice protein, a pallet by 45 percent,” plus other plant-based proteins, dairy-subCarnavale says. “We realstitutes, and sweeteners. Since 2005 Axiom has been setting the bar in certifications, ly nailed that on the loclinical trials, quality control, and progistics end.” duction growth, working closely with the This huge improvenutraceutical, food, beverage and cosmetics ment in the pallet cubic industries. We are proud to be partnered utilization also will rewith Sunwarrior since day one, as they have made groundbreaking advances in the plant duce Sunwarrior’s CO2 protein world, both in consumer education emissions by 72 metric and nutrition. tons in 2015. “With bet70
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ter pallet utilization, we don’t need as many trucks,” Carnavale explains.
Cost Savings The cherry on top for Sunwarrior came when it realized that, by meeting its first two goals, the company would enjoy some significant cost savings. “The design and shape of the tub plays a huge role in how it reduces our costs,” Carnavale says. He notes that the new packaging has allowed Sunwarrior to reduce its shipping, manufacturing and storage costs. “Our old packaging created dimensional weight challenges for our small parcel shipments,” Carnavale explains, noting that it also limited sales of Sunwarrior products through its online retailers. “The boxes were bulky and expensive to ship,” Carnavale
Sunwarrior
Sunwarrior strives to manufacture the products customers really want while maintaining high levels of quality.
continues. “Now our new packaging has a 1:1 ratio of dimensional and actual weight which is fantastic for small parcel shipments.” The new packaging has also had a tremendous impact in Sunwarrior’s international business. When commenting on the impact of the new packaging in the international business, Carnavale says, “We are now able to fit 25 percent more product into a shipping container.” Sunwarrior also reduced its manufacturing costs by an estimated 10 percent due to the efficiencies gained in the manufacturing process.
In the Right Place Carnavale joined Sunwarrior in December 2013, after working for multiple firms, including UPS, Honeywell
Aerospace and Henkel Corp. “I’ve always been in supply chain,” he says. He credits Sunwarrior’s success to its ability to manufacture products its customers really want. “We are crazy about quality,” he says. “We go above and beyond to get the best ingredients.” Additionally, “Everything we use is natural and comes from the ground,” Carnavale continues. “It’s as green as it could possibly be.” He sees a strong future for Sunwarrior, particularly after the redevelopment of the company’s packaging. “We have all of our ducks in a row now,” Carnavale says. “We have a brand that really speaks to what the company believes. I think Sunwarrior is in the right place to grow in 2017, 2018 and beyond.” O March/April 2016
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Solution Providers
ASL TRANSPORTATION GROUP 74 72
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B2B ONLINE 2016
Changing Landscape B2B Online 2016 offers insights into the e-commerce revolution that is happening in the B2B market. BY CAROLINE BERGER, EVENT DIRECTOR, B2B ONLINE 2016 The way businesses buy and sell is changing. The e-commerce revolution that took hold of the B2C world some years ago is finally gathering the kind of pace in the B2B market that will see businesses disrupted and an entire landscape completely changed. The reality is that your customers now expect their experience with you to mirror their B2C experiences. Executives no longer want to play golf or go to lunch with you, they want access to your products and product information from their offices or on the go. With every passing year, more millennials join both the work force and the customer community. Companies are trying to adapt as quickly as possible to do two things: internally attract and keep millennial talent and grow their millennial customer base. Both of these require a strong and seamless digital strategy for a generation that is, without a doubt, digital-first. The creators of the eTail conference series have been developing industry-leading events focused on e-commerce since 1999. B2C e-commerce sales have grown by double-digit percentages every year for the past decade, as retailers have spent millions of dollars transforming their businesses and
B2B Online will enable companies to develop an omnichannel and e-commerce strategy for their evolving businesses.
building an online experience that meets and exceeds customer expectations – with the end goal of increasing sales and brand loyalty. Right now, B2B selling companies are looking to figure out an omnichannel strategy, a new technology strategy and an e-commerce strategy. B2B Online
focuses on advanced e-commerce strategies and the organizational challenges that are specific to the digital transformation of the B2B business model. This event is designed to enable manufacturers and distributors to build an omnichannel strategy that meets B2C expectations in a B2B world. O
All of these areas will be discussed in depth at B2B Online 2016. Register at b2bmarketing.wbresearch.com and save 15% off the full conference price to attend with code: B2B16RM15.
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SOLUTION PROVIDER ASL TRANSPORTATION
One-Stop Shop Offering a wide menu of services and supported by a first-class professional team, ASL Transportation Group provides value to a variety of industries. BY STEPHANIE CRETS
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o matter what the industry – from arts and crafts, to ice cream cakes or a manufacturing Jim Donnelly Jr., company – businesses president and CEO need trucks to get www.asltrans.com Williamstown, N.J. their products to the shelves. And that’s where ASL Transportation Group comes in. Most truck leasing companies don’t offer additional services, so ASL Transportation wanted to become a one-stop shop, offering not only truck leasing and fleet maintenance, but also dedicated truck delivery service, regulatory and compliance services, logistical consulting and driver leasing. “Offering non-traditional, value-added services provides us strategic advantages in the marketplace,” President and CEO Jim Donnelly Jr. says. “I don’t run my business based on a profit model. I run my business by striving to offer the best service and product possible, and I back that by putting the best possible team in place, and with that, profits will come. It is a model called ‘good to great.’ To thrive in today’s competitive world, good is not enough; you need to be great.” His father founded the company in 1988 while Donnelly Jr. was working in the banking industry. He helped his father out by working on finances for ASL Transportation until he decided to work for him full-time in 1992. Donnelly Jr.’s father had him spend a bit of time in each department to get a firm grasp on all aspects of the company, first learning the ins and outs of the main74
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ASL Transportation works with a variety of markets and takes pride in its ability to grow along with its customer base.
tenance facility. “It really taught me the respect level you have to give to what’s being done over there,” he says. “It was a very good start to learning the specifications of trucks and how they’re maintained.” Donnelly Jr. spent time in sales, accounting and human resources and oversaw maintenance and sales until he took the reins as CEO and president in 2001. “If you’re the son or daughter of a family
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company, it doesn’t give you or guarantee you anything; it actually means you have to work harder,” he explains. “Down the road, if you really want to stick with it and run it, don’t expect anyone to hand it to you. You have to earn it. For me, owning and operating a company is fun and extremely fulfilling, but I never realized how hard you have to work to keep it moving forward.”
ASL Transportation continues to grow. It has more than 600 vehicles under lease or maintenance control and hopes to add more physical locations within the next two years. ASL Transportation works with a variety of customers and companies, ranging from some that need only one truck for their operation to others that have 150 retail stores that need a full logistical design and delivery execution. Still other customers might have their own fleets and want to lease drivers from the company; while others have hundreds of trucks and allows ASL Transportation to handle the maintenance. “I’ve been very happy to grow my company slowly,” Donnelly Jr. says. “Controlled growth has allowed us to stay razor-focused on service level. As part of our evaluation with growth opportunities, a major factor is our absolute dedication to existing customers and ensuring that it won’t impact our ability to continue offering them top-level service. “Much of our growth has come from our existing customers growing themselves and by default, we grow with them,” he continues. “We’re always looking at other opportunities, but [while] making sure those we take on match up well with what we do for the new customer while never sacrificing what we do for the existing customer.”
ASL Since 1988, ASL has anticipated and met the transportation and logistics needs of our customers. ASL provides comprehensive transportation solutions to help our customers run a more productive business. ASL has excelled by offering innovative solutions, an entrepreneurial spirit, customer satisfaction, and excellent service. And we combine that with a team of professionals offering a commitment to excellence, integrity, and the best ‘positive attitude’ in the industry. March/April 2016
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SOLUTION PROVIDER ASL TRANSPORTATION
Industry Challenges The transportation industry is rife with challenges that ASL Transportation works to overcome. These issues include the shortage of quality truck drivers and diesel technicians, increasing competition in the market and higher costs for new trucks given new regulations on emission standards. ASL Transportation’s operations are conducted knowing that the driver is the most important asset to the company. It treats its drivers with respect and offers constant recognition, awards and bonuses to show how much they are appreciated, along with competitive pay and benefits. It monitors wages across the industry so it doesn’t lose its best drivers. “Truck drivers are some of the hardest-working folks in America and also underappreciated,” Donnelly Jr. says. “I believe the company culture of treating everyone with respect and appreciation is why we have an extremely low turnover rate with drivers. We have one heck of a driving force here.” As an independently owned company, ASL Transportation is uniquely positioned because it competes against a lot 76
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of national companies in the New Jersey region. To combat this, the company is a member of NationaLease, one of the largest truck-leasing organizations in the world. Its motto is “national connections, local ownership,” which rings true for ASL Transportation. The membership gives the company a nationwide network of service providers but with a personal, local touch. “It gives me the presence and resources of a national company, but we’re finding that all of our customers totally enjoy the fact that they can call me on my cell on Sunday afternoon,” Donnelly Jr. notes. “They’ve got the owner and a decision right away. Entrepreneurial companies have an advantage with flexible, quick decision-making. We can cover the nation as well as anyone, while still delivering the personalized service and spirit, which has been a strategic advantage and a major contribution to our success.”
Passionate Team Donnelly Jr. chalks much of ASL Transportation’s success up to the people who have been at his and his father’s side for
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years. The head of transportation, for example, has been at the company for 21 years, while the head of maintenance has been there for 15 years. With nearly zero turnover, the staff knows every last logistical detail of the companies they work with. “I’ve got a hardworking, loyal, passionate team, and the feelings are contagious,” Donnelly Jr. says. “I’m very passionate about my business, and I make sure there’s an enjoyable work environment.” ASL Transportation hosts several meetings a year with the staff and drivers to thank them for being safe, courteous and on time for all their deliveries. With a family and team approach to everything the company does, Donnelly Jr. says that it’s important for everyone to know how much ASL Transportation values and supports the drivers for what they do. “My role is to provide vision, leadership and passion,” he adds. “When you’re sharing that vision with your team and leading by example, it brings a tremendous amount of passion to the workplace. And that passion translates into excellent service for our customers.” O
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