C.A. Fortune Newsletter- May June July 2016

ORTUNE

Natural Specialty Bakery

Newsletter May- June - July 2016 Volume 4 - Issue 3

C.A. Fortune Company Announcements Vol. 4 - Issue 3 Inside This Issue

We’ve Moved!

C.A. Fortune is happy to announce the new location of our corporate office in Elk Grove Village, IL.

Announcements 2-3 Distributor News 4 Industry News 5-6 Consumer Trends 7-8 Retailer News 9-18 Shows & Events 19

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

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Thanks to the collective effort and hard work of many C.A. Fortune Central Region employees, we were able to make a smooth transition from our Bloomingdale office over to a newly renovated office space.

C.A. Fortune Company Announcements As C.A. Fortune continues to grow and provide our clients and client partners with industryleading sales and support services, our new corporate office will allow us to continue our mission to offer an integrated and collaborative approach to assist clients in managing their business.

We look forward to hosting visitors in our new location!

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Distributor News KeHE- Compliance with Vermont Law KeHE recently sent out a communication notifying vendors that in order to comply with Vermont Act 120 the Genetic Engineering Labeling Law, which came into effect on July 1, vendors that supply products for resale into Vermont must complete a Certification of Compliance and have it uploaded onto the KeHEConnectTM portal at http://connect.kehe.com within the Vendor Management section.

The Vermont Certificate of Compliance can also be downloaded from the Vendor Management section as well.

KeHE Names Timothy Wiggins CFO KeHE Distributors appointed Timothy Wiggins as CFO, effective July 11. Wiggins will lead all aspects of the distributor’s finance function and strategic planning as well as business unit and subsidiary performance. He will also be a member of the board of directors of World Finer Foods, a KeHE subsidiary, and a member of the advisory board to Tree of Life Canada.

“Tim brings a depth of financial experience in the public and private sectors that will be valuable as we continue to drive shareholder value,” said Brandon Barnholt, KeHE’s president and CEO. Previously, Wiggins served as VP/CFO at DeVry Education Group.

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UNFI Updates Haddon House Integration - Following the May announcement of Haddon House and UNFI joining together, Haddon House’s Chicago area customers will be served from UNFI’s Racine distribution center beginning in July.

Any questions regarding the intergration can be directed to HHintegration@unfi.com Gilroy, CA Distribution Center - The final phase of customer moves from Rocklin to Gilroy was completed on June 26.

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Industry News Senate Passes Roberts/Stabenow GMO Labeling Bill; Now To The House Next week is a big week in the U.S. House of Representatives for the U.S. food industry, following the July 7 Senate passage of a bipartisan bill that creates a national labeling standard for all foods made with genetically engineered (GE) ingredients and genetically modified organisms (GMOs).

Industry groups commended the Senate for its passage and now are urging the House to move swiftly to pass the bill before it recesses on July 15.

Peter Larkin, president and CEO of the National Grocers Association, said, “On behalf of the independent supermarket industry, NGA commends the U.S. Senate for passing this important legislation that creates a uniform federal standard for the labeling of foods containing genetically engineered ingredients. This legislation will help to ensure that the consumers our members serve on a daily basis have clear and consistent information on the food products that they purchase and consume nationwide. We were pleased to see the strong bipartisan support this bill received and strongly urge that the U.S. House bring this legislation to the floor for a vote next week.”

Leslie Sarasin, president and CEO of the Food Marketing Institute, also praised the bill’s passage: “FMI applauds the Senate’s favorable action on this critical agriculture biotechnology labeling legislation and calls on the House of Representatives to also act on this time-sensitive bill before it recesses next week.”

Sarasin expressed the sentiments of many industry groups around this bill: “The development of a single national GMO labeling standard is absolutely essential to avoid the consumer confusion that will emerge from a patchwork of differing state laws, conflicting definitions and divergent labeling criteria regarding biotechnology.

The Roberts-Stabenow agreement will allow consumers the opportunity to receive accurate and accessible information they desire by offering the food industry an efficient, economical and orderly means of providing such information. We and our partners in the Coalition for Safe Affordable Food praise this important Senate action in support of this legislation and encourage the House’s expeditious passage of the bill next week.”

In its own statement, Coalition for Safe Affordable Food (CFSAF) co-chair Pamela Bailey, president and CEO of the Grocery Manufacturers Association, said, “The Senate has provided all Americans a transparent and consistent system of disclosure that will give consumers access to more product information than ever before, and we urge the House to consider this legislation next week.

“Nearly 1,100 organizations in the food-producing community are united behind this bill to set a uniform, national standard that protects American family farmers and small businesses. Today’s vote means that both chambers of Congress have had strong bipartisan votes to set a national standard and avoid the higher costs and consumer confusion from a patchwork of state labeling laws.”

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Industry News Senate Passes Roberts/Stabenow GMO Labeling Bill cont...

Bailey’s CFSAF co-chair, Charles F. Conner, president and CEO of the National Council of Farmer Cooperatives, added, “We are tremendously thankful for this Senate vote and for the leadership of Senators Roberts and Stabenow. We will now turn our full attention to working with the House and explaining why this is the right solution for farmers, food companies and consumers. This bill is simply too important to let sit until after the summer recess. Vermont’s law is already in effect and the negative consequences are already being felt. We need to get this solution passed by Congress and signed into law this month.”

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FDA Modernizes Nutrition Facts Label For Packaged Foods The U.S. Food and Drug Administration (FDA) has updated nutritional information for most packaged foods sold in the United States. The new Nutrition Facts label will include the following: l An updated design to highlight “calories” and “servings.” l Requirements for serving sizes that more closely reflect the amounts of food that people currently eat. l D eclaration of grams and a percent daily value (%DV) for “added sugars” to help consumers know how much sugar has been added to the product. l “ Dual column” labels to indicate both “per serving” and “per package” calorie and nutrition information for certain multi-serving food products that could be consumed in one sitting or multiple sittings. l F or packages that are between one and two servings, such as a 20-oz. soda, the calories and other nutrients will be required to be labeled as one serving because people typically consume it in one sitting. l U pdated daily values for nutrients like sodium, dietary fiber and vitamin D, consistent with Institute of Medicine recommendations and the 2015-2020 Dietary Guidelines for Americans. Daily values are reference amounts of nutrients to consume or not to exceed and are used to calculate the %DV that manufacturers include on the label. l D eclaration of vitamin D and potassium that will include the actual gram amount, in addition to the %DV. These are nutrients that some people are not getting enough of, which puts them at higher risk for chronic disease. The %DV for calcium and iron will continue to be required, along with the actual gram amount. Vitamins A and C will no longer be required because deficiencies of these vitamins are rare, but these nutrients can be included on a voluntary basis. l “ Calories from Fat” will be removed because research shows the type of fat is more important than the amount. “Total Fat,” “Saturated Fat” and “Trans Fat” will continue to be required.

The FDA is also making minor changes to the Supplement Facts label found on dietary supplements to make it consistent with the Nutrition Facts label.

Most food manufacturers will be required to use the new label by July 26, 2018. Manufacturers with less than $10 million in annual food sales will have an additional year to comply with the new rules.

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Consumer Trends How Boomers and Gen Z are Changing Food Baby boomers and Generation Z have different eating behaviors and attitudes, but together they are driving profound changes in the food industry, said Melissa Abbott, vice-president of culinary insights at the Hartman Group, a Bellevue, Wash.-based consumer insights firm.

Both segments, each representing 23% of the population, have catalyzed a shift in consumer food culture from predictable to diverse, Ms. Abbott said during a presentation at the Summer Fancy Food Show, held June 26-28 in New York.

“In the not too distant past, it was production that was driving economy,” Ms. Abbott said. “Things coming off conveyor belts signified quality and safety. Meals were at a set time every day. That has completely gone out the window.

“Now you see consumption driving economy. It’s much more fun and experiential… What this means is our modern eating culture is marked by fragmentation and a complete upending of tradition. And who is doing the planning, shopping, cooking? It’s very much decentralized. Mom is no longer the gatekeeper.”

Boomers, those aged 51 to 69, view food as a key to living a higher quality of life for longer. Ms. Abbott said.

“Boomers have driven a lot of what has been going on in terms of the fresh, less processed food movement,” Ms. Abbott said. “They not only led it; they shaped it. They also led and shaped how the organic food movement is happening.”

She added, “This is the first time in history we’ve seen an aging generation approach food in this way.”

Generation Z, those 17 and under, are the most ethnically diverse cohort. While boomers generally prefer familiar American fare, Generation Z is more likely to seek innovative and ethnic cuisines, Ms. Abbott said.

“Nearly 50% of Gen Z are non-Caucasian, compared to boomers, at 28%,” Ms. Abbott said. “Gen Z’s diversity will continue to drive food culture trends we already see around the exploration of authentic, global food experiences, and the impacts of this diversity are going to include how they eat.”

Early exposure to digital technology has spurred a demand for ingredient transparency among younger consumers, she added.

“Gen Z is the first generation to completely grow up in the digital age, so to them there is no question that can be unanswered,” she said. “This is really affecting the food that they eat because they want to know where it’s from, how’s it grown, who made it. We see this behavior will be integrated into their everyday lives as they continue to grow up.”

Boomers and Generation Z approach cooking in different ways. While the older cohort prefers recipes and continues next page...

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Consumer Trends How Boomers and Gen Z are Changing Food cont... instructions, the younger set may prepare a dish based on wordless pictures posted on-line, Ms. Abbott said.

“In the long run, Gen Z might just be much more intuitive cooks than the rest of the population because they won’t need to rely on written recipes the way we all have in the U.S.,” she noted.

Consistent across both demographics is the instinct to scrutinize nutrition labels. About two-thirds of Generation Z consumers prefer food and beverages containing only ingredients they recognize, Ms. Abbott said. Additionally, nearly a third of this segment has tried at least one type of diet over the past year.

“But that doesn’t mean they’re dieting,” Ms. Abbott said. “It’s about different ways of eating and how personalized and how prescriptive it can be. In the consumer’s diet lexicon today, dieting as it once was known seems shallow now. You don’t hear people say, ‘I’m on a diet.’ … Today, it’s: ‘I’m avoiding dairy.’”

Both cohorts experiment with specialized approaches to eating, she said.

“There are a lot of different types of eating, but what’s interesting is whether it’s Gen Z, boomers, Gen X or millennials, they may avoid dairy in the morning and by the afternoon trying something vegetarian, and then all of a sudden they’re paleo by dinner time,” Ms. Abbott said. “We don’t see consumers sticking to any one particular way of eating for very long. They’re customizing bits and pieces from each one of these different ways of eating. It might be local, but it also might be gluten-free for a moment.”

Perceptions of organic food differ between Generation Z and boomers. More than half of the younger generation perceives organic as healthier, which compares to only 39% of the older segment.

“Gen Z views organic as a symbol of healthy food, while boomers see it as an absence of negatives,” Ms. Abbott said. “Gen Z sees organic as tasting better, too, but boomers don’t necessarily see the organic symbol as tasting better or even worth it in many instances.”

An important commonality across all demographics is the connection consumers are making between food and health, she said.

“One thing consumers have been explaining to us for the last decade is they are much more aware of putting food into their body and how it makes them feel,” she said.

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Retailer News Nielsen to Provide Analytics for Whole Foods Whole Foods Market said Tuesday it has selected Nielsen as its primary U.S. analytics provider for point-ofsale data, consumer insights and industry metrics.

“Whole Foods has long been a great retail artist,” said Don Clark, global VP of procurement, non-perishables, for the Austin, Texasbased retailer. “This partnership allows us to better blend the art and science of food retail, helping us compete more effectively in a very dynamic environment.”

New York-based Nielsen said it is working with the retailer “to collaboratively create a customized natural and organic product hierarchy that will provide a comprehensive view of [the retailer’s] product categories, including ingredient-level attributes” — a hierarchy that will be opened up to suppliers for the first time “as a foundation for an expanded analytics and consumer-centric engagement,” Rob Hill, EVP, retail services for Nielsen, said.

Nielsen will also provide measurement and marketing analytics for all U.S. stores, the company noted.

Besides allowing Whole Foods and its supplier partners to make faster, more informed decisions to drive growth, Nielsen said the data will yield “a deeper understanding of customer preferences,” which will enable Whole Foods and its suppliers “[to] excel at new product development.”

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Whole Foods to Move Regional Headquarters to Denver Whole Foods Market is moving its Rocky Mountain regional headquarters to the Mile High City, and the train to the plane was a big selling point.

By early next year, the Austin, Texas-based natural foods grocer will settle about 100 employees into a historic, three-story brick building near Coors Field that once housed Centennial School Supply Co. Whole Foods will pull out of Boulder’s Twenty Ninth Street mall, where it leased space that had been headquarters to Wild Oats Markets, the Boulder-bred rival it acquired in 2007.

The company’s new Denver address, 3012 Huron St., is about a 15-minute walk from Denver Union Station, the first station along the commuter-rail line serving Denver International Airport.

“We polled the folks who worked in the office and asked what their top five or six criteria were for a new office space. Public transit was in the top two. They wanted really good access to buses as well as trains,” company spokeswoman Heather Larrabee said Tuesday. continues next page...

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Retailer News Whole Foods to Move Regional Headquarters to Denver cont...

“This is a group of team members with Whole Foods that travels pretty extensively for their job. They‘re on the road 50 percent of time,” she said. “To be able to hop on the train at Union Station and not worry about parking at the airport was really attractive to them.”

The new location should also be more convenient for Whole Foods’ producers and clients flying to Colorado for meetings, she said.

“What really became apparent is there are just some incredible opportunities in Denver to grow our space and the quality of our space and be around all those amenities that a city offers,” Larrabee said. “Denver’s food scene has exploded over the last few years. It’s something we really wanted to be a part of.”

A downtown development official called the announcement a “coup” for Denver.

“Whole Foods is a powerful brand,” Downtown Denver Partnership CEO Tami Door said. “That will not only add tremendous value to our center city, but that brand will be leveraged as we continue to seek other national and regional headquarters. It sends a very strong message.”

From a strategic standpoint, officials have always expected the University of Colorado A-Line to be attractive to both businesses and workers, and “it’s absolutely playing out,” she said.

“This is one more example of how convenient, efficient regional mobility options provide a powerful boost to business recruitment and relocations, not to mention to existing employers and their employees,” Paul Washington, executive director of the Denver Office of Economic Development, said in an e-mail.

The Whole Foods store near 28th and Pearl streets in Boulder will remain the region’s flagship location. But just as natural and organic is maturing into the mainstream, Whole Foods is opting to become more centrally located, Larrabee said. Since it acquired Wild Oats, the natural products industry has continued to blossom, soaring past $100 billion in annual retail sales, according to the Natural Foods Merchandiser.

“We have three stores in Boulder,” she said, “but the majority of our stores are actually in and around the Denver metroplex.”

Whole Foods has started to roll out its smaller-format 365 by Whole Foods Market, which is designed to appeal to younger, more value-conscious and tech-savvy shoppers. The first 365 store opened last month in Los Angeles, and one or a few could very well land in Colorado, Larrabee said.

“We definitely have been looking at sites, and we don’t have anything confirmed yet,” she said.

Whole Foods’ new offices, less than a mile from what will be the natural grocer’s first downtown store, will be slightly smaller in terms of square footage — 38,000 compared with 45,000 — but Larrabee said the plan is to make the space feel a lot more open.

“We’re going to maximize the space in a way that’s different than our current location,” she said. “It just reflects what’s current in today’s work environment and what millennials are looking for. We do so much in collaboration and in teams — the new space will really help activate that.”

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Retailer News Fairway Emerges From Bankruptcy Fairway has emerged from bankruptcy after filing for Chapter 11 in early May, according to a court filing this week. Although one of the New York metro-area grocer’s 15 stores will close, a location in Lake Grove on Long Island. Fairway is still on track to open a store in Brooklyn, N.Y., later this year.

The grocer’s senior lenders voted for a plan to swap their loans for common equity and $84 million of debt of the restructured company. Further, the grocer secured $55 million in financing from some of its creditors to aid its reorganization, as well as to fund the daily operation of its business.

Fairway also now has a new board of directors, among them former Whole Foods Market executive Errol Schweizer, Rite Aid President Ken Martindale, and James Demme, a senior adviser at New York-based Angelo, Gordon Acquisition Corp., whose supermarket experience spans A&P, Bruno’s, Homeland Stores and Shaw’s.

A consortium including Blackstone Group’s GSO Capital Partners is succeeding Sterling Investment Partners as Fairway’s owner. In 2007, Westport, Conn.-based Sterling acquired Fairway for $150 million and tried to expand Fairway across the region, but stiff competition from the likes of Whole Foods and Trader Joe’s stymied the plan. The company went public in 2013, but continued to lose money, and last year offered itself for sale, but there were no takers.

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Meijer Opens Two New Supercenters Meijer said [May 19] it opened supercenters in Evansville, Ind., and Owensboro, Ky., as part of its nine-store growth plan for the year.

The stores are part of a planned investment of more than $400 million in new and remodeled stores, the company said.

Both stores are 192,000 square feet and will operate 24 hours a day.

Meijer, Grand Rapids, Mich., operates 225 stores in Michigan, Ohio, Indiana, Illinois, Kentucky and Wisconsin.

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Retailer News Lucky’s Considering Downtown St. Louis Grocery Lucky’s Market, a specialty grocer based in Boulder, Colo., is considering a store on the first floor of the Ely Walker building in downtown St. Louis, [Missouri], sources say.

Saggar Holdings LLC recently acquired the space at 1520 Washington Avenue from SA Group Properties Inc. Sources say Lucky’s would occupy about 20,000 square feet of space formerly occupied by the London Tea Room and the English Living furniture store.

Lucky’s already has St. Louis-area stores in Rock Hill and Ellisville.

Steve Symsack, the Gershman Commercial Real Estate senior vice president who represented Saggar Holdings in the Ely Walker transaction, said Thursday that Lucky’s has scouted several locations for a downtown store.

A Lucky’s at the Ely Walker building would be similar in size to downtown’s only supermarket — the 26,000-square-foot Culinaria that opened in 2009 at 315 North Ninth Street. Culinaria is a Schnucks Market store.

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Brookshire Brothers Growing Again With Four New Express Stores Lufkin, Texas-based Brookshire Brothers will be growing again in the coming year. The employee-owned regional grocer plans to open stores in four rural markets starting this fall in Grapeland, Texas.

“Each store will be tailored to meet the specific needs of the communities in which they are located,” said COO John Alston. “As a result of an outpouring of requests from the people of Grapeland, their store will be our first Express location to include a pharmacy. ‘Wellness Delivered’ is what our pharmacies are known for and we are excited to be able to provide solutions for health and wellness in northern Houston County.”

Alston anticipates a late October grand opening in Grapeland.

Coming in quick succession will be three more new Texas stores, in Wells, Valley Mills and Hudson.

The Express format features easy-to-shop layouts, fresh meat and produce departments and delis that include full breakfast, hot lunch and dinner offerings, as well as rotisserie and Brookshire Brothers “famous” fried chicken. The stores also will offer a wide selection of grocery, dairy, frozen, general merchandise and health and beauty products. In-store services will include check cashing, Western Union money transfers, ATMs and money orders. continues next page...

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Retailer News Brookshire Brothers Growing Again cont...

The new locations will provide employment to more than 130 people in the region.

“Each of these stores and their employee-owners will become an integral part of these communities by providing the exceptional customer experience Brookshire Brothers has been known for since its founding in 1921,” Alson added. “We believe that our core competency of operating diverse formats, ranging from traditional supermarket, convenience and pharmacy to hybrids such as our Express banner and nextgeneration supermarkets, ideally positions us to fully capitalize on future growth opportunities in a variety of markets.”

Brookshire Brothers operates 110 retail outlets, including grocery and convenience stores and freestanding tobacco, pharmacy and petro locations. Its footprint stretches east to Lake Charles, Louisiana, west to Dublin, Texas, north to Whitesboro, Texas and south to Ganado, Texas.

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Earth Fare Opens Fourth Ohio Store Earth Fare opened its fourth Ohio location yesterday in The Venue at Belden, located at 3939 Everhard Road in North Canton. Every item in the new 24,000-s.f. store is free of artificial fats, trans-fats, colors, preservatives and sweeteners and high fructose corn syrup, as well as bleached or bromated flour. Its meat, seafood and poultry offerings are from animals that have never been administered antibiotics or growth hormones.

The Asheville, North Carolina-based chain said in a news release that hundreds of people lined up hours before the 7 a.m. opening.

After a ribbon cutting ceremony with local dignitaries that included a $1,000 donation to Stark Fresh, a local organization that provides access to locally sourced fresh food, there were contests and giveaways, as well as sampling, special deals, product demonstrations and live music.

“Earth Fare opened its first store in Ohio five years ago to provide healthier options to the community. We source only the best tasting, highest grades of produce, seafood, meats, poultry, dairy and raw ingredients for our in-house prepared meals-to-go, bakery, hot bar and salad bars,” said Earth Fare President and CEO Frank Scorpiniti. “Our response from the community has been overwhelming. We hosted our ‘Love Local’ vendor fair earlier in March and are proud to announce many local artisans and food producers will be available at Earth Fare, including: Berlin Natural Bakery, Cleveland Kraut and Crimson Cup Coffee, to name a few. continues next page...

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Retailer News Earth Fare Opens Fourth Ohio Store cont...

“In addition, we established a Community Advisory Board made up of a number of passionate community members who came together to help Earth Fare build the best healthy offering for the North Canton neighborhood,” Scorpiniti added. “Today marks the first step in providing the best selection of fresh, healthier choices closer to home.”

Earth Fare says its “food philosophy” is that it “reads labels so you don’t have to.”

“We believe that healthy food improves lives, so we make it easy for our customers by providing them with healthier choices for themselves and their families every day,” said Scorpiniti. “Our commitment to the highest ‘Quality Standards’ means customers can shop with ease and confidence in every aisle of our store and be assured that they are not taking home many unnecessary chemical additives to their family. Earth Fare also makes it a priority to work with environmentally and socially responsible organizations dedicated to a holistic vision of healthy living, including: USDA Organic, Non-GMO Certified and Certified B Corp.”

Founded in 1975, Earth Fare operates 37 stores in nine states in the Southeast, Mid-Atlantic and Midwest.

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H-E-B to open two new San Antonio stores in 2017 Grocery store chain H-E-B plans to open two new stores next year in San Antonio’s growing suburban neighborhoods where demand has increased along with the number of new retail shops and residents, the company said Tuesday.

The grocer plans to unveil locations at the intersection of Alamo Ranch Parkway and Alamo Parkway on the

city’s far West Side and another near the intersection of Loop 1604 and Bulverde Road on the Northeast Side, H-E-B spokeswoman Dya Campos said in an email. Campos declined to share additional details about the new grocery stores, including the exact opening dates and the offerings at the new locations.

H-E-B snagged the 16.27-acre plot at Alamo Ranch Parkway in 2012, according to Bexar County Appraisal District records. The lot, almost 2 miles west of the newly opened Santikos Casa Blanca movie theater, was valued at $4.74 million in 2016.

The grocer’s other planned store will be located in the Bulverde Marketplace, a retail center being built by local development firm Fulcrum Development on the southwest corner of Loop 1604 and Bulverde Road, Campos said.

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Retailer News The Fresh Market Exiting 4 States The Fresh Market [closed] 13 stores across the country by May 18, according to published reports. As a result of the move, the grocer is shuttering all of its locations in Texas, Iowa, Missouri and Kansas.

“The decision to close these stores is a difficult but necessary step, with the end goal of producing a stronger, more agile company,” noted The Fresh Market CEO Rick Anicetti. “This shift also allows us to focus our energy and resources on the growth of our remaining stores, as well as new stores we have planned in the future. We continue to pursue our strategy of offering exceptional products, engaging shopping experiences, and great customer service across all our stores.”

According to the company, affected associates can apply for jobs at other store locations and will receive severance pay.

The Greensboro, N.C.-based grocer, which was purchased earlier this year by New York-based privateequity firm Apollo Global Management LLC for $1.36 million in cash, currently operates 175 stores in 23 states across the country.

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Kroger Announces Plans to Build Culinary Institute Retailers continue to up their strategies and tap in on shifting consumer demand. This time, Kroger is heading the trending announcements by announcing that the company will make a sizeable investment into a new culinary training and education center.

“We’ll have a facility that’s incredibly up to date for chefs to do what chefs do and make some great product,” said CEO Rodney McMullen. “But they’ll also be able to give us more insight on food trends, so when you think about our corporate brands, making sure we’re developing the right flavors, the right trends, the right product lines.”

Kroger will invest $2.5 million into a 12,270-square-foot facility in a remodeled building in downtown Cincinnati for the center, according to The Cincinnati Business Courier. At least 20 chefs at a time will inhabit the center for up to two days to exchange ideas and skill sets.

“We believe this will further establish Cincinnati as a hub for the food industry,” continued McMullen. “It’s nice this is in Cincinnati. The food scene here is kind of fun.”

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Retailer News Kroger Announces Plans to Build Culinary Institute cont...

McMullen said that this latest investment by Kroger not only follows a trending need from consumer culture, but is also in line with several other venture capitalist partnerships and restaurant start-ups to invest in the nationwide food scene.

“It’s more about the food experience for us,” stated Mike Donnelley, Executive Vice President of Merchandising. “It’s about how to stay more in tune with food trends.”

Kroger plans to begin construction on the project next month, and gave the detailings for the investment at its annual shareholders’ meeting last week. The company also stated interest in developing a delivery meal service.

Kroger’s culinary institute seems to be matching a rising trend in the buy-side industry as Walmart also debuted its own culinary center earlier this year to develop products and demand based on consumer trends.

DeliMarket News will continue to have the latest as retailers sharpen their strategies to match consumer trends and shifting food culture, and its impact on the industry.

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Changes Underway at Roundy’s Stores As the dust settles on the $866 million December acquisition of Milwaukee-based grocery store operator Roundy’s Inc. by Cincinnati-based supermarket behemoth The Kroger Co., some changes are expected this year at Wisconsin Pick ’n Save and Metro Market stores.

Chief among them are what the stores look like and which products they carry, at what prices.

“Usually Kroger, after they acquire a store, they integrate their own product in the store; they try to sync their frequent shopper card up with those stores,” said grocery industry analyst David Livingston.

Among the changes coming down the pike this year are store remodels, as well as pricing and product shifts, said James Hyland, vice president of corporate communications and public affairs at Roundy’s Supermarkets Inc., which now operates as a subsidiary of Kroger.

“There’s obviously going to be changes in product that people will see and there will be pricing changes and there may be some changes to the store,” Hyland said. “We have committed to increase our capital spending throughout all of our Wisconsin banners. While we don’t publicly disclose our spending plans, over time our customers will notice changes in merchandising, pricing and store aesthetics.”

The larger scale that Kroger brings should benefit customers, Livingston said.

“It’s going to work out pretty good for the customer because it will give them a little more access to some better deals,” he said. continues next page...

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Retailer News Changes Underway at Roundy’s Stores cont...

But for employees, the integration may not be as favorable.

There are just more than 500 employees at the Roundy’s corporate headquarters in Milwaukee. The company has a total of 23,000 employees, 13,000 of whom are in Wisconsin, Hyland said.

He wouldn’t answer questions about any employment changes occurring at the corporate offices in Milwaukee.

“You’re asking strategic questions and we don’t reveal strategy to the media,” Hyland said. “If I’m Hy-Vee or Festival (Foods) or somebody else, I would love to know what Roundy’s is doing. Like any other industry, those are things we keep close to the vest and we have to do that for competitive reasons.”

“The whole point of acquisitions is to eliminate redundancies,” Livingston said. “A lot of those (corporate) functions are already being done in Cincinnati and Roundy’s has a lot of good people, so it wouldn’t surprise me if they made some offers to people to move to Cincinnati.”

But the name on the outside of the store is not likely to change, at least in the Milwaukee area, Livingston said.

Kroger is narrowing its Wisconsin banners to Pick ’n Save and Metro Market, and this summer is renaming the Copps stores in the Fox Valley to Pick ’n Save.

A Roundy’s manager who declined to be named said the pricing department has been told to cut prices in half on some Roundy’s brand and national brand products to make room for Kroger brand products. Pick ’n Save and Metro Market stores currently carry Roundy’s brand products, which are made by about 275 employees at the Roundy’s commissary in Kenosha.

Hyland said there may be some product changes, but the 120,000-square-foot commissary will remain in operation. It supplies fresh and prepared food to 150 stores in Wisconsin and Illinois.

Prices are likely to be lowered across the store network to compete with Meijer and Walmart, Livingston said.

“I could see prices being lowered around 4 percent,” he said.

Roundy’s will likely also improve its pharmacy program, harnessing the service to drive up to 10 percent of sales, Livingston said.

But at the same time, methodical store closures are on the horizon over the next several years, he predicted.

While Roundy’s may lose market share this way, its sales per square foot will improve.

“I think they’re going to close probably up to 20 percent (of the Roundy’s stores),” Livingston said. “They’re just too close to the other stores. It just wouldn’t make sense to keep them open.”

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Retailer News Natural Grocers Taps Fitness Influencer Ben Greenfield Natural Grocers has inked an agreement with bestselling author and fitness influencer Ben Greenfield, who is now “Fueled by Natural Grocers.”

“When I sat down with the nutrition education team here at Natural Grocers to brainstorm who would be a great brand ambassador for us, Ben Greenfield was the unanimous top choice for the team,” said Heather Isely, EVP for the Lakewood, Colo.-based Natural Grocers. “We’re educating America about nutrition and Ben Greenfield is a terrific brand ambassador to help us spread the good4u Revolution.”

The author of New York Times bestseller “Beyond Training,” Greenfield has been recognized as a top personal trainer as well as one of the top 100 most influential people in health and fitness.

“There’s a genuine need right now for honest, science-backed information about how we can feel healthier and have more energy each day,” said Greenfield. “Natural Grocers is leading the charge towards serving this need and I’m excited to help share the message and get more people living the good4u lifestyle.”

The new sponsorship will include: l Live meet and greet events at Natural Grocers stores l Live appearances at events and conferences l Articles in Natural Grocers’ Health Hotline publication l Recipes and fitness tips on the Natural Grocers website l Radio, television and social media promotion Greenfield will make his first appearances at the grand openings of Natural Grocers’ two Gilbert, Ariz., stores on July 12, when he will present a class titled “Shattering Fat Loss & Diet Myths,” at both locations.

Natural Grocers by Vitamin Cottage, Inc. operates more than 115 stores in 19 states.

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