C.A. Fortune Newsletter- August 2016 by C.A. Fortune

ORTUNE

Natural Specialty Bakery

Newsletter August 2016 Volume 4 - Issue 4

Distributor News Vol. 4 - Issue 4 Inside This Issue Distributor News 2-3 Industry News 3-5 Consumer Trends 5-9 Retailer News 9-17 Shows & Events 18

New KeHE DC In Aurora, CO Opening KeHE Distributors will opened its new LEED Goldcertified distribution center in Aurora, Colorado, on Wednesday, Aug. 31. Aurora Mayor Steve Hogan joined local government officials, Colorado food companies and KeHE team members at the 270,000-s.f. facility at 2200 N. Himalaya Road for a ribbon-cutting ceremony, plant tours and a “pick & pack” activity to help local families in need. The state-of-the-art site employs energy-efficient practices, including its HVAC system, lighting and 80,000-s.f. freezer and cooler space. Source

KeHE Distribution Center Changes For Dalla Independent Customers Effective August 21, 2016 - all of the Grocery Independent and Natural Independent Food Store Customers will transition from KeHE’s Dallas #22 distribution center to the Flower Mound #42 distribution center. Large Grocery Independent chains included in this transition include: Brookshire Brothers, Consentino’s, Fiesta Mart, Reasor’s, and Rouse’s.

Offices Central Region (HQ)

1831-A Howard St. Elk Grove Village, IL 60007 630.539.3100

East Region

2 Van Riper Rd. Montvale, NJ 07645 201.307.9100

South Region

801 Stadium Dr. Ste. 107 Arlington, TX 76011 817.522.3200

The Dallas distribution center will continue to service the following Grocery chains: Albertson’s/Safeway/United, HEB, Central Market, and Walmart. Dallas will also continue to service KeHE’s ecommerce customers.

UNFI Buys Organic Distributor Gourmet Guru United Natural Foods Inc. (UNFI) of Providence, Rhode Island, has purchased Gourmet Guru, a Bronx, New Yorkbased distributor and merchandiser of fresh and organic food. Gourmet Guru had $50 million in net sales for the fiscal year, which ended June 30. According to UNFI, the purchase will enhance the company’s strength in cultivating emerging fresh and organic brands and further expand UNFI’s presence in key urban markets. “We are excited to strengthen our expertise in identifying new and fast-growing health and wellness brands with the strategic acquisition of Gourmet Guru,” said Steven Spinner, UNFI’s president and CEO. continues next page...

Distributor News UNFI Buys Organic Distributor Gourmet Guru cont... Jeff Lichtenstein, CEO of Gourmet Guru, will remain at the company in a leadership role. “Gourmet Guru brings diverse skills in merchandising and service, targeting cities and high-traffic locations, which will enhance UNFI’s unique ability to deliver on the most innovative and local brands,” added Kirsten Hogan, UNFI’s national VP of retail service. Source

Industry News Federal GMO labeling: 3 Things to Expect Last month, President Obama signed the federal GMO labeling bill into law, which immediately nullified state-based GMO labeling mandates like that of Vermont’s. Under the program, disclosure will take the form of messaging on a product, a symbol, or QR code that consumers may use to find out more information. Small food manufacturers can comply by using a phone number or URL. Here are three other things to expect from the federal GMO labeling program. 1. Compliance is up to three years away: “Technically the act provides for two years, but part of the issue is there isn’t even a definition yet about what constitutes bioengineered food, so there is likely going to be a lot of back and forth during a public comment period. So the likelihood that this is going to go into effect within two years isn’t great,” Creighton Magid, a partner at the law firm Dorsey & Whitney, Washington, told SN. Small food manufacturers, which have yet to be defined, will have at least one year extra to comply with what the USDA promulgates, added Magid. 2. Products derived from animals fed GM feed will be exempt: “The bill specifically excludes from the definition of ‘bioengineered food’ animal products, so meat for example, that’s been fed genetically engineered feed,” explained Magid. “This makes it clear that beef is not bioengineered and subject to the regulations if the only connection it has to bioengineering is what it’s eating.”

3. The USDA will develop the standards: “The law provides that the standards will be developed by the Ag Department, which is one of the interesting things about the law that few people talk about. I think the FDA is a little miffed that it doesn’t have the responsibility for drafting these regulations, but I feel that the advocates for the bill felt that the USDA would provide a more business-friendly approach than would the FDA,” said Magid. Source

Industry News FDA Delays Salt Guidelines The Food and Drug Administration (FDA) is delaying new salt guidelines. In an effort to reduce sodium consumption in America, the FDA issued draft guidelines in June that would encourage food manufacturers and restaurants to use less salt. But the agency is now extending the comment period on the guidelines to give industry more time to respond. The public will now have until Oct. 17 to comment on the short-term sodium reduction plan that aims to reduce the average American’s salt consumption to 3,000 milligrams each day. While the public has until Dec. 2 to comment on the 10-year plan to further reduce salt intake to 2,300 milligrams per day. The delay comes at the request of various food industry groups. The FDA will consider these comments before issuing a final guidance. Public health officials blame high levels of sodium consumption for health problems such as cardiovascular disease and heart failure. But the salt industry disputes these claims and points out that salt is an important resource not only for flavoring food but also preserving it. Source

NY State Grown & Certified Food Program Launched Gov. Andrew M. Cuomo has rolled out the New York State Grown & Certified program and revealed plans for a new $20 million food hub in the New York City borough of the Bronx to boost access to farm-fresh produce. The program identifies and promotes New York producers who comply with the state’s food safety and environmental sustainability programs, and assures consumers that the food they’re buying is local and produced at a higher standard. Including a wholesale farmers’ market, a cold-storage facility for farmers, a food-processing center and other infrastructure to support local food businesses, the 120,000-square-foot Greenmarket Regional Food Hub will significantly expand distribution capacity, provide new markets for farmers, and create 95 permanent jobs and 150 construction jobs in the Hunts Point section of the Bronx. According to published reports, the state government intends to put $15 million toward the cost of construction of the hub. A spokeswoman for Cuomo’s office told PG that the facility was expected to be operational in 18 months. “New York state agriculture is an essential pillar of our economy, bolstered by the modern market demands for safer and more sustainable food,” said Cuomo. “The New York Grown & Certified Program strengthens the link between producers and consumers and provides new opportunities for agricultural development. By connecting upstate farmers to new markets with a state-of-the-art food hub and promoting the consumption of healthy and environmentally conscious food, these initiatives will have continues next page...

Industry News NY State Grown & Certified Food Program Launched cont... extraordinary environmental, nutritional and economic benefits for all New Yorkers.” More than 100 qualifying vegetable and fruit farms across New York state already have already expressed interest in taking part in such an effort, according to officials. The Department of Agriculture and Markets will work with producers to help them qualifying for the voluntary certification program. To ensure maximum environmental sustainability and food safety, participation in such existing certification programs as the state’s Agricultural Environmental Management program and the U.S. Department of Agriculture’s Good Agricultural Practices program is required for producers to take part in New York State Grown & Certified. Further, a new marketing campaign, including on-product labels and promotional materials, will generate awareness of the program and spotlight New York producers who meet New York State Grown & Certified standards. Consumer advertising and retail promotion are slated to start this fall. After New York’s inaugural Farm to Table Upstate-Downstate Agriculture Summit in late 2014, Cuomo pledged to work with local partners to develop a wholesale farmers’ market downstate. Further, the New York State-New York City Regional Food Hubs Task Force, convened at the governor’s request, placed a high priority on a regional food hub as part of its final action plan. Source

Consumer Trends What’s on the Menu for Back to School Lunches? As August races on, kids are heading back to school and all the shopping and schedule adjustments that come with it. As parents readjust to hectic mornings filled with sleepy kids, scrambling to find missing homework and racing out the door, most stories focus on shopping trends for back to school clothes and supplies. However, food decisions should also be at the top of parents’ priorities when it comes to sending kids back to school. A recent Nielsen survey revealed that 64 percent of consumers are making a concerted effort to buy healthier foods. According to Google research, Americans are becoming more conscious about their food choices, seeking more information on ingredients and diet optimization. In short, they want to look and feel their very best, and are starting to realize that “functional food” is the key. This mindset is impacting not only the way the consumer eats, but also how these consumers are feeding their children. As the focus on health continues to rise, brands are targeting those backto-school grocery buyers in significant ways. In an article on Instant. ly’s blog last year, they pointed out that there’s a big focus by brands on reinventing classic foods to be more suited for school lunchboxes. This includes fewer chemicals, less fat and overall healthier ingredients. While schools may simultaneously be trying to overhaul the school lunch menu to create healthful options, many parents are looking to have more control over what their children eat by sending a lunch from home that fits their lifestyle goals.

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Consumer Trends What’s on the Menu for Back to School Lunches? cont... Breakfast Crunch But before lunch is packed neatly into the insulated superhero lunch box, those school-aged kids need to fuel with breakfast. A meal that 74 percent of Americans still feel is the most important meal of the day according to Nielsen. But finding quick and easy items that are also healthful is a challenge for many parents. Getting the kids up and going, washed, brushed and dressed (while often getting ready for work themselves), finds parents in a time crunch when it comes to breakfast. So how to start the day out right? Nielsen Homescan data found that households with elementary school aged children spend 45 percent more on kid’s cereal than total U.S. households and are the primary drivers of total cereal sales in the country. But this purchase may be driven not by the actual buyer – the parent – but by a key influencer – the child. Seven in 10 parents say their kids ask for items from the cereal aisle while they are shopping for groceries. While purchases of cereal stay steady year-round, back to school time sees a rise in the purchase of eggs, yogurt, breakfast meats and toaster pastries, and the like, in order to get the most important meal of the day into their kid’s bodies before they hit the classroom. So as families transition back into the school year, there’s a lot more happening from a consumption standpoint than just a big rise in Crayola purchases and new shoes. Purchase habits at the grocery shelf are shifting to accommodate busy mornings, portable lunches and healthful choices that are quick and easy for both parents and their children. Time for pencils, books, teachers and…new grocery decisions…school’s in session! Source

Non-GMO Demand Soars Despite Lack of Consumer Understanding Recent years have seen steadily rising demand for products without genetically modified organisms (GMOs). Sales of food labeled “non-GMO” grew more than $8 billion between 2012 and mid-2016, reaching $21.1 billion, according to supermarket scan data from Schaumburg, Ill.-based research firm Nielsen. But what’s driving such dramatic growth? Carl Jorgensen, director, global thought leadership with Stamford, Conn.-based Daymon Worldwide, says the cause is simple: GMOs are a “stand-in” for Big Government, Big Agriculture and Big Food. And consumer distrust of these three institutions is skyrocketing. “Consumers may not understand exactly what GMOs are,” he notes, “but they have an instinctive aversion to the idea of genetically engineered food.” In fact, consumers are losing trust even in the face of expert opinions on the matter. According to a 2015 Pew Research Center study, 57 percent of U.S. consumers consider eating genetically modified foods “generally unsafe,” even though only 11 percent of scientists with the American Association for the Advancement of Science feel the same. Additionally, a February 2016 report continues next page...

Consumer Trends Non-GMO Demand Soars Despite Lack of Consumer Understanding cont... from Rockville, Md.-based market researcher Packaged Facts found that 26 percent of U.S. adults believe that non-GMO labeling is an especially important factor when choosing what foods to eat. “Consumers want their foods to be more natural,” Jorgensen adds, “and GMOs are seen as not natural.” Further, while no one really knows the effects of altering the DNA of organisms in food products, cancer incidence is on the rise, along with many food sensitivities and allergies, all of which are arousing suspicion. “Only 20 percent of diagnosed cancers have known origins, and food allergies are growing at lighting speed, which leads one to think that maybe what we are altering in our food may be altering our health,” says Mary Vandewiele, co-owner of The Better Health Markets, in Novi, Mich. Of all generations, Millennials are leading the demand for labels calling out GMOs. So whether GMOs are actually harmful, Millennials’ growing purchasing power means money does — and will continue to do — the talking here. “The Millennials were the first generation to grow up with [the] awareness and knowledge [of GMOs], and will be leading the charge on cleaner products,” Vandewiele explains. “This will invariably put more pressure on companies to add more information to their labels or lose traction in the market.” Retailers, Manufacturers Respond Lou Biscotti, partner with Chicago-based research firm WeiserMazars and leader of its food and beverage national practice, has seen demand for such information grow. In the same way that retailers such as Austin, Texas-based Whole Foods Market and Monrovia, Calif.-based Trader Joe’s have focused marketing efforts on their extensive organic offerings, many retailers today are pushing suppliers for non-GMO products, understanding their profitability. Whole Foods, for instance, found in 2015 that the 130 brands that actively supported California’s and Washington state’s GMO labeling initiatives collectively saw sales rise almost 13 percent, Jorgensen notes. Meanwhile, brands that opposed the labeling were down almost 10 percent in sales. Overall, sales of Non-GMO Project Verified products were up 21 percent for more than 7,000 items, and sales of products that were both organic and Non-GMO Project Verified were up 17 percent. True, Whole Foods customers are more likely than those at more traditional retailers to consciously avoid GMOs. However, this data reflects mainstream retailers’ sales data and not Whole Foods’, as the grocer didn’t share scan data with Nielsen over that time period. “Just as the organic label became increasingly important to retailers and consumers in recent years, we’re now beginning to see a similar demand for the non-GMO label, one that is only likely to increase over the next year,” Biscotti explains. continues next page...

Consumer Trends Non-GMO Demand Soars Despite Lack of Consumer Understanding cont... The Better Health Market has, for the past few years, been making such a push. The retailer actively educates its customers and sends a message to its business partners that its philosophy is to embrace foods that are natural, organic and minimally processed to promote better health and prevent disease. Natural and organic labels are cleaner than conventional ones, and with the passage of the Safe and Accurate Food Labeling Act of 2015 — called by some GMO labeling advocates “the DARK (Denying Americans the Right to Know) Act” — no one can be certain that the foods they put in their carts don’t contain GMOs. Therefore, labeling is critical for the retailer and its customers. “We give higher consideration to potential new products that have the non-GMO label present on the package,” Vandewiele asserts. “In response, we see more and more products now have this certification. Suppliers understand that this gives them easier entry as a new product.” Other grocers aren’t having to nudge their business partners as much. Heather Isely, EVP of Lakewood, Colo.-based Natural Grocers, says her company hasn’t had to pressure vendors because they’re responding directly to consumer demand for transparency and higher quality in their foods. For instance, all of the retailer’s produce is 100 percent USDA Certified Organic, which requires it to be non-GMO. “Because we offer a large assortment of organic food options in our stores, we are able to significantly reduce the percentage of GMO-containing foods when compared to traditional grocery retailers,” she says. However, traditional grocers have been cautious when it comes to educating about GMOs and non-GMO products via in-store merchandising, Jorgensen notes. Instead, they’ve been happy to let individual brands make their own non-GMO claims on packaging, and some retailers — as the Cincinnati-based Kroger Co. is doing with its Simple Truth brand — are experimenting with non-GMO labels on their store-brand products. Labeling for GMOs As for labeling that communicates that a product does contain GMOs, the RobertsStabenow Biotech Labeling Act, which President Obama recently signed into law, will require most food products to carry a text label, symbol or QR code indicating whether they contain GMOs. Originally proposed by Sens. Debbie Stabenow (D-Mich.) and Pat Roberts (R-Kan.), members of the Senate Committee on Agriculture, Nutrition and Forestry, the new law nullifies Vermont’s own recently passed GMO-labeling law by closing what the federal legislators called “glaring loopholes” in the Vermont law. Manufacturers will have two years before they have to adopt the labeling, as the rules behind the law still must be written. Many industry associations praised the speedy signing of the bill into a law, including Food Marketing Institute, the Grocery Manufacturers Association and the National Grocers Association. Additionally, for the most part, many manufacturers and retailers have already been moving toward the labeling now being formalized by the legislation. One major reason for the praise is the fact that the bill will keep food manufacturers from having to navigate a plethora of varying state laws, which would force a choice between tailoring labels by state — a pricey proposition — or pulling products altogether from retailers in that state. However, the legislation situation has been in such a state of flux that it’s difficult to assess how retailers’ continues next page...

Consumer Trends Non-GMO Demand Soars Despite Lack of Consumer Understanding cont... relationships with suppliers are being affected, Jorgensen notes. In general, retailers haven’t seen any problems with sales of products labeled as containing GMOs, such as those from Campbell’s and Mars. In fact, a study released by the University of Vermont in late 2015 found that, contrary to the arguments of labeling opponents, GMO labeling wouldn’t act as warnings that scare consumers away from buying products with GMOs. “I would say that from a retailer perspective, there is nothing to fear from GMO labels, and every reason to encourage non-GMO labels for the sales lift they provide,” Jorgensen says. It would be ironic if the pending law stimulated the non-GMO market even further, he adds. Because it allows for “considerable lack of transparency” in the labeling, the level of consumer trust could be exacerbated, further burnishing the natural halo of non-GMO products. But the more demand grows for non-GMO products, the more potential for trouble exists down the line. A major issue that retailers and manufacturers must worry about is maintaining steady supply, as agriculture hasn’t kept up with demand for non-GMO products, meaning that manufacturers must take extra precautions to source and secure reliable quantities of non-GMO ingredients. Strategies include long-term contracts and dealing with specialty identity-preserved grain dealers. Ultimately, the trend of non-GMO products is here to stay. Whether we’ll continue to see non-GMO claims on more products, however, won’t depend solely on consumer demand — it also will depend on how confident manufacturers are that they’ll have access to a steady supply of non-GMO ingredients. Source

Retailer News Meijer Targets 40k Gen Zers with Back-to-College Events Meijer is in the midst of “Meijer Mania,” as it welcomes about 40,000 incoming college freshman to its annual shopping party events. The retailer will have hosted 22 events at 20 colleges across the Midwest by early September. The back-to-college events feature a DJ, photo booth and interactive contests and are designed to introduce new students to the Meijer brand, since many may not be familiar with the Midwest supercenter. Each event hosts about 1,700 freshman who are bused from campus to their local Meijer store. Meijer provides samples and coupons and sometimes hosts big-ticket giveaways. “Our Meijer Mania events provide new students the opportunity to shop for their first living spaces away from home and share a fun-filled bonding experience with classmates,” said Cathy Cooper, senior director of promotions and sponsorships at Meijer, in a statement. “We are pleased to partner with so many colleges and universities to help ease the transition of moving into a new living environment for these students.” continues next page...

Retailer News Meijer Targets 40k Gen Zers with Back-to-College Events cont... Meijer expects to sell the following classroom and dorm room essentials this back-to-school season: l 3.8 million pounds of paper l 1.6 pounds of apples l 1 million pairs of socks l 1 million individual washcloths l 300,000 sticky notes l 175,000 sets of sheets l 75,000 pillows Source

Why Wegmans’ CEO is ‘sad’ Over Store Expansion The CEO of Wegmans Food Markets said he didn’t know the grocer’s newest store near Richmond, Va., would put it toe-to-toe with another top grocer. Danny Wegman told the Richmond Times-Dispatch, prior to opening Wegmans’ 90th store in Short Pump, Va., that the Rochester, N.Y.-based grocer didn’t consider further expansion until another grocer, Ukrop Super Markets, sold its stores in the area. Meanwhile, 10 of those stores are being bought by Publix Super Markets Inc., a Florida-based grocer ranked second — only behind Wegmans — in a survey of top grocers released earlier this year by Market Force. Publix announced the move into Virginia last month. “They are absolutely wonderful people,” Wegman told the Times-Dispatch. “George Jenkins, who founded Publix, and (my) dad (Robert Wegman, who died in 2006) were like best friends. In many ways, it’s kind of sad that we will compete. We didn’t know that they were going to Richmond. “Anyway, here we go.” It will be the first time the two chains will have stores in the same market, although competition among the two will probably grow over the next several years, said Burt Flickinger, an industry analyst with Strategic Resource Group. He expects Wegmans to push further south over the next several years. Also, Wegmans said it is looking at multiple new sites in North Carolina. “Publix has not competed against an all-world retailer like Wegmans,” Flickinger said. “While Publix is very good institutionally, Publix is about at least a half step behind Wegmans.” Wegmans stores on average are double the size of Publix stores. Wegmans had annual sales last year of $7.9 billion. Publix’s roughly 1,120 stores did $32.4 billion. “Wegmans can successfully move south very efficiently and effectively before Publix achieves greater size and scale by moving north,” Flickinger said. Source

Retailer News Retailers Launch Louisiana Flood Relief Local grocers Rouses and Southeastern Grocers have announced support for customers and associates impacted by devastating flooding in Louisiana, while Walmart and Target have pledged donations to local relief efforts. All Rouses locations are accepting cash donations and donations of non-perishable food and cleaning supplies for Second Harvest and the Greater Baton Rouge Food Bank, the retailer announced. Customers can also donate online. Immediately after the storm, Rouses urged associates at the Denham Springs store, located in an area that was particularly hard hit, to contact store directors at a neighboring location to make sure all employees were accounted for. Rouses also posted a video to YouTube showing managing partner Donny Rouse assessing the damage at the Denham Springs store, with a promise to rebuild. Southeastern Grocers launched a weeklong donation-matching program through the Southeastern Grocers Foundation on Aug. 17. The retailer plans to match every dollar donated at any Winn-Dixie, Bi-Lo and Harveys store. “Winn-Dixie has been a part of the Louisiana community for 60 years. During that time, the strength and resilience of the community has been tried time and time again, and we are proud to have the people of Louisiana as our customers, our associates, and our neighbors, as their bravery and perseverance has been an inspiration as we begin our recovery efforts,” Southeastern president and CEO Ian McLeod said in a press release. “We are encouraging all our customers across the Southeast to rise up and support the great states and communities of Louisiana and Mississippi. We will continue to work tirelessly on the ground and with the American Red Cross to direct all available resources to help the people affected by the flooding.” Meanwhile, Walmart and the Walmart Foundation announced they would donate $500,000 in cash and inkind donations, including truck loads of water sent to impacted areas. “We are deeply saddened by the devastating floods in Louisiana and the catastrophic effect it’s having on our associates and members of the community,” Mark Cooper, senior director of emergency management, Walmart, said in press release. “We are fully committed to the relief efforts and will continue to work closely with local officials to do everything we can.” Similarly, Target will donate $100,000 each to the Salvation Army and American Red Cross, as well as $30,000 to local schools. The retailer donated more than $100,000 of food to local food banks. It has partnered with local non-profits to distribute $20,000 in Target GiftCards for the purchase of supplies during recovery efforts. Target also plans to match donations to the American Red Cross from associates, up to $50,000. The retailer said its store teams in the affected area have been volunteering their time to contribute to relief efforts. continues next page...

Retailer News Retailers Launch Louisiana Flood Relief cont... “Communities where we have a presence don’t just represent a store to Target; these communities are home to many of our team members and countless valued guests,” said Laysha Ward, chief corporate social responsibility officer, Target. “We’re extremely proud of our team members’ efforts, not only as volunteers, but also in making sure our stores closest to the disaster areas are ready with needed supplies. We’re honored to work with incredible partners like The American Red Cross and Salvation Army to provide relief and comfort during the response and recovery.” Source

Hy-Vee Delays Minnesota Plans After Opposition Hy-Vee says it’s delaying plans for a grocery store in suburban Minneapolis after a push to save a historic theater on the site. Hy-Vee had planned a 91,500-square-foot grocery in Robbinsdale, a northwest suburb, which would have been its seventh location in the Twin Cities. The Des Moines-based company quickly became a target for people seeking to save the historic Terrace Theatre from being demolished to make way for development on the 10-acre site. They gathered more than 1,000 signatures calling for a boycott of the grocer. “Over the past several weeks, it’s been difficult to witness the friction our proposed project has caused among Robbinsdale residents,” Hy-Vee spokeswoman Tara Deering-Hansen said in a prepared statement. “When we enter a community, we want to be respectful of our neighbors’ history, culture and all the things that matter to them. We will continue to assess the situation and keep communication lines open with city officials.” City leaders were due to discuss a demolition permit for the theater Tuesday. “We’re going to continue fighting this,” said David Leonhardt, who has led preservation efforts. “We acknowledge the area needs to be redeveloped; we just feel (saving) the Terrace should be included in it.” Source

Tops Opening Six Stores Acquired In Ahold Delhaize Merger Six stores that Tops acquired through the Ahold Delhaize merger will open over the next week as Tops Markets in the New York municipalities of Rhinebeck, New Paltz, Wappingers Falls, LaGrangeville and Carmel and in Gardner, Massachusetts. Four of the supermarkets were from the Stop & Shop banner and two were from Hannaford. The stores expand Tops’ footprint into northern and eastern New York and mark the company’s entry into Massachusetts. Tops now operates 171 stores, and an additional five stores are operated by franchisees. Source

Retailer News Sprouts Confirms Florida Expansion Sprouts Farmers Market has finally confirmed its plans to expand in the Sunshine State. The Phoenix-based grocer (Nasdaq: SFM) in a regulatory filing Tuesday [August 9] listed Florida as a “mid-term expansion market,” along with Carolinas, Louisiana, Mississippi and Arkansas. Sprouts has been rumored for several years to be entering Florida. At least three locations in Tampa Bay are in the works, in Valrico, Palm Harbor and South Tampa. The expansion represents a new target for retail real estate developers. Grocers, especially specialty concepts like Sprouts, are in high demand to anchor new developments. It also means even more competition for Publix Super Markets Inc., both in its home state of Florida and in North Carolina, where Publix is heavily focused on growing its footprint. Sprouts clearly has grocers like Publix in its crosshairs. The company said in the filing that its main competitor is the “mainstream grocery store.” Half of its shoppers are “coming from traditional grocers.” The company also said it appeals to a wide demographic base — middle and upper income households and baby boomers, Generation X and rising Millennials. Sprouts last week reported stellar financial results for its second quarter, with profits up 16 percent compared to the same quarter in 2015. Same-store sales, which eliminate sales growth from new stores, were up 4 percent year-over-year. It has plans to invest in technology and enhance its in-store experience “through greater digital connection.” Sprouts is also planning to beef up its private label products. With its combination of competitive pricing and focus on healthy foods, Sprouts is a formidable competitor to mainstream grocers. “They’re a price operator in arguably the most important category,” an analyst previously told the TBBJ. “That’s why they’re converting traditional shoppers to their format.” Source

Natural Grocers Aspires to Become ‘Organic Headquarters’ In conjunction with September’s designation as Organic Harvest Month, Natural Grocers aims to elevate its brand to become the official “Organic Month Headquarters.” The Lakewood, Colo.-based retailer, which sells only 100 percent USDA-certified organic produce, will host an educational push for the entire month of September. “Since we added produce racks to our stores in 1989, we have sold only organically grown produce,” continues next page...

Retailer News Natural Grocers Aspires to Become ‘Organic Headquarters’cont... said Kemper Isely, Natural Grocers’ co-president. “ When the USDA finally established an officially recognized and regulated organic standard in 2000, all the produce we sold already met that standard.” He continued, “Other major grocery chains have recently begun to include organic options, but none of them sell exclusively 100 percent organic produce like we do.” Natural Grocers’ decision to sell only organic produce from the start, Isely added, “is based upon our core founding principles of providing consumers with the highest-quality product choices that are ‘good4u,’ good for the environment and good for the economy. Claiming the title ‘Organic Month Headquarters’ is our way of showcasing our commitment to organic produce and our customers.” Elements of Natural Grocers’ Organic Month Headquarters promotion include: l Free organic apples for the first 400 customers at each Natural Grocers location on Sept. 1. l Free reusable shopping bag for the first 400 customers at each Natural Grocers location on Sept. 1. l F ree classes where customers can learn about the benefits of choosing organic foods, along with easy ways to incorporate organic vegetables into their everyday meals, including healthy tailgating options. l “ Fall in Love with Organics” classes offering one winner at each class the chance to take home $50 for organic shopping in the store, and a bag full of 100 percent organic produce valued at $50. l A second class, “Elevate Your Tailgate,” will offer healthy tailgating options for football fans. l F ree meal planners and recipes that educate customers on how they can incorporate more organic vegetables into their diets in an affordable way. l Sampling Saturdays each weekend, with opportunities to sample a variety of organic produce. l A n original song and video by Grammy Award-nominated eco-hip hop artist DJ Cavem to inspire everyone to choose organic products. The song will be accompanied by a series of downloadable tips from DJ Cavem and Alkemia Earth on how to get your family to fall in love with eating more vegetables. To showcase the new “good4u tailgating” concept, the company will also host a free tailgating event in Denver on Thursday, Sept. 8 from 3 p.m. to 7 p.m. The event will include free “good4u snack kabobs,” and live music by Jakarta. Source

Whole Foods Market To Open 1st Shreveport Store Nov. 16 Whole Foods Market will hire about 100 team members for its first store in Shreveport, Louisiana. The grocer will begin accepting applications in early September. The Shreveport store will open Nov. 16 at Fern Marketplace, 1380 E. 70th Street. The 39,000-s.f. store will be the Austin, Texas-based company’s seventh in the state of Louisiana. continues next page...

Retailer News Whole Foods Market To Open 1st Shreveport Store Nov. 16 cont... “We’ve had a tremendous response from the community since first announcing our plans to open a store in the Shreveport-Bossier City area,” said Mark Dixon, president of Whole Foods Market’s Southwest Region. “We can’t wait to open our doors and give the Shreveport community a new option for shopping, dining and gathering with friends and family.” Beginning in early September, the store’s team leader, Ralph White, will accept applications for cashiers, prepared foods cooks, fishmongers, butchers and other positions. Anyone interested in applying can find more information at wholefoodsmarket.com/careers. “I’m thrilled for Whole Foods Market to open in Shreveport this November,” White said. “We’re excited to offer new and local products, develop strong partnerships with our neighbors, and deliver a shopping experience unlike anywhere else.” Whole Foods Market is already planning store partnerships and activities leading up to the November opening and beyond. Source

Food Lion Wraps Up Remodeling On Half Its Charlotte-Area Stores Food Lion says it has finished work on about half of its Charlotte-area grocery stores, as part of a major renovation effort at the chain. Approximately 70 stores of the area’s 142 are done, spokeswoman Christy PhillipsBrown said. The remodeling efforts are going “extremely well” in Charlotte, PhillipsBrown said, and the company is working to complete construction on the remaining stores by October. Some are still awaiting the new exterior signage. The Dilworth store on Park Road, for example, is scheduled to have its new sign installed Thursday. The renovations are a multiyear initiative, and Food Lion hasn’t yet said which market is next in line. The project includes redesigning stores into easier-to-navigate formats, adding new decor, slashing prices on staples like chicken and produce, adding new registers and updating product assortments. Food Lion announced earlier this year that it would spend $215 million to update stores in the Charlotte metro area, its fourth market to be remodeled. The grocer revamped 76 stores in the Wilmington and Greenville, N.C., markets in 2014, and completed another 162 stores in the Raleigh market in 2015. Food Lion, based in Salisbury, debuted a prototype of the new store format in Concord in December 2013. Food Lion’s parent, Brussels-based Delhaize, was bought last month by Dutch retailer Ahold for $10.4 billion. As part of the merger, the two companies said they were selling 61 Food Lion stores, none of which are in North Carolina. Source

Retailer News H-E-B Acquires Six Sun Fresh Markets H-E-B has acquired six Sun Fresh Market stores from RLS Supermarkets of Dallas, possibly marking the entrance of the San Antonio-based grocer’s namesake banner into the North Texas market, the Dallas Business Journal reported. Although H-E-B said its upscale Central Market banner “continues to be the primary format” for the DallasFort Worth area, it added that it’s examining each store purchased to determine the best use for each. The retailer currently operates five Central Markets in north Texas and offers grocery delivery to the region and beyond. Sun Fresh is in the process of closing the acquired stores, with the transaction expected to close in the coming weeks. H-E-B didn’t disclose terms of the deal, nor did it say when the stores would reopen under its ownership. The acquisition is the second Sun Fresh Market has seen over two months, the first being Fiesta Mart’s purchase of two Sun Fresh Markets and nine Minyard Food Stores, which retired the Minyard chain. Source

KB Holding Acquires Kings, Balducci’s Kings Super Markets and Balducci’s Food Lover’s Markets on Wednesday announced the companies have been acquired by KB Holding, a Delaware-based investment firm affiliated with GSSG Capital from Angelo Gordon & Co. and MTN Capital Partners. The terms of the transaction were not disclosed. The new investment will allow the companies to further their growth and expansion plans in the specialty food retail sector, officials said. “We believe this will be a great partnership for Kings and Balducci’s that will create significant opportunities for our business going forward,” said Judith Spires, chairman and CEO. “This investment will lay the foundation for expansion now and into the future,” president Rich Durante added. Kings and Balducci’s will continue to be managed locally, and its current operating structure will remain intact, company officials said.

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Retailer News The Fresh Market and SuperValu Sign Longterm Supply Agreement The Fresh Market has entered into a long-term agreement that names SuperValu as a grocery wholesaler and distributor for the chain. According to both companies, the intention is for SuperValu to become primary distributor once The Fresh Market completes the transition with current distribution relationships. “The Fresh Market is a terrific organization with a tremendous store base and a great consumer offering,” SuperValu President and CEO Mark Gross commented. “The stores offer a great shopping experience. They are extremely well merchandised, meet customer demand with a keen focus on fresh, and provide a wonderful mix of traditional and specialty products. This is an excellent example of how our experience, strong distribution network and overall wholesale capabilities can serve larger grocery chains while also being flexible to the needs of specialty-focused retailers.”

According to a press release, SuperValu will supply The Fresh Market with signature grocery products ranging a variety of categories, including: l Meat l Deli l Bakery l Grocery l Frozen foods l Dairy It’s been a year of transitions for The Fresh Market, which was acquired by Apollo Global Management, LLC, last spring. “We are excited about this relationship with SuperValu,” said The Fresh Market President and CEO Rick Anicetti. “SuperValu’s experience in wholesale grocery and logistics capabilities aligns well with our strategic vision and will make them a valuable strategic partner for our future. This new relationship will be highly beneficial in enhancing our customer experience, with a focus on providing superior quality and freshness at a greater value.” SuperValu stated that it expects to begin serving some of The Fresh Market’s stores as early as this fall, taking on additional stores throughout the transition.

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