ORTUNE
Natural Specialty Bakery
Newsletter August 2015 Volume 3 - Issue 8
Consumer Trends ORTUNE Natural
Specialty
Bakery
August 2015 Vol. 3 - Issue 8 Inside This Issue Consumer Trends 2-4 Retailer News 5-10 5 Hy-Vee 6-7 Coborn 7 Kroger 8-9 A&P 10 Natural Grocers 10 H-E-B Shows & Events
11
Offices Headquarter Central Region 141 Covington Drive Bloomingdale, IL 60108 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
Digital Coupons Increase 17% In First Half Of 2015 The number of digitally-distributed coupons for consumer packaged goods (CPG) brands on key websites increased by 16.7 percent in the first half of this year, according to Kantar Media. The increase was attributed primarily to food brands, said Darcy Douglas, director marx account solutions, at Kantar Media. Much of the growth took place within the dry grocery area of food, which historically is the leading department for digital offers. Douglas added that the face values of digitally-distributed coupons were in flux during the first half of the year, with most departments increasing incentives. “This fluctuation may signal a shift in the way manufacturers are leveraging digitallydistributed coupons to target shoppers online,” she said. “Manufacturers often apply different strategies and tactics to their digital promotions compared to print promotions and will adjust digital promotions on the fly, depending on how quickly shoppers respond to digital incentives across various websites.” Kantar also examined trends in the incentives that various retail channels offered on digitally-distributed coupons. From January through June of this year, these incentives reached $1.72 across all areas and retail channels – a 4.2 percent increase year-over-year. However, incentive levels varied significantly among different retail channels. “Incentives are a critical part of a digitally-distributed promotion, and misaligning your incentives could mean the difference between a brand offer being clipped or printed or just ignored,” said Douglas. The dollar channel websites had the lowest level of incentives in the first six months of 2015, at $1.41. That figure was 27 percent below the incentives offered on mass channel websites and significantly below drug channel websites, which offered the greatest incentive, at $1.94.
Follow Us
2
Source
Consumer Trends Millennial Moms Choose Nutrition Over Price, Convenience For Kids’ Lunch Boxes With back-to-school season in full force, parents are scrambling to get their kids ready for the new year. Millennial mothers are no different—they are getting in on the action as many more of them are now sending their children off on school buses for the first time. Influenster, a product discovery and reviews destination, conducted an online survey with its Millennial Mom group to better understand how they plan to prepare lunches for their little ones this fall. In addition, primary data from its reviews platform was aggregated to reveal the top reviewed healthy food products. The infographic shines light on what Millennial mothers prioritize in a lunchbox, how they pack lunches differently from their parents of the Baby Boomer generation, what food products they consider as healthy additions to lunch boxes, and how they go about making these purchase decisions. Nutrition trumps convenience and price; gluten-free food surprisingly doesn’t matter as much to Millennial moms. Nine out of 10 Millennial moms prepare healthy lunch boxes for their children. Of this group of mothers, they prioritize nutrition (88 percent) as their main concern, when shopping for food to include in lunch boxes, above the more obvious price and convenience. Interestingly, given the gluten-free phenomenon that has swept our nation in recent years, these mothers ranked gluten-free considerations for their kids’ lunch boxes as the lowest priority (8 percent). Other important factors include: well-balanced (74 percent), freshness (72 percent), tastiness (69 percent), price (65 percent), convenience (52 percent), low sugar (43 percent), organic (29 percent), low fat (19 percent) and allergy-friendly (12 percent). Six out of 10 Millennial moms pack their children’s lunch boxes differently from how their mothers packed theirs. Nutrition triumphs again amongst this new generation of moms. Seventy-five percent of these mothers say that their lunch boxes are more nutritious than their mothers’, followed by 71 percent who choose different food products and 48 percent who go with different food brands. Thirty-seven percent of these moms say that their lunch boxes are more organic than their mothers’—this reveals that even though organic food products aren’t on the top of their minds when planning their children’s meals, these Millennial moms still think of their packed lunch boxes as more organic than their mothers’. Millennial moms still prefer shopping in stores more than online. The most digitally connected generation of mothers to date, Millennial mothers still choose to shop for their food the old-school way—pushing carts down shopping aisles. Here are their retail categories of choice: supermarket (88 percent), big-box retailer (81 percent), farmer’s market (42 percent), local deli (23 percent) and convenience store (13 percent). In contrast, only 7 percent opt to do their grocery shopping online (while this is a small percentage, it has continues on next page...
3
Consumer Trends Millennial Moms Choose Nutrition Over Price, Convenience For Kids’ Lunch Boxes continued... grown significantly compared to previous years). Further poll questions reveal that most of these women are online researchers and then offline shoppers—57 percent of them do all their researching on the internet before they hit stores to buy the products. Word of mouth has the most sway in affecting purchase decisions. Given the proliferation of content in this information age, word of mouth (79 percent) is still the top influencer to help millennial moms make their shopping decisions. That is followed by online reviews (59 percent), social media (57 percent), brand websites (43 percent), television (37 percent), news websites (16 percent) and newspapers (15 percent). Dairy ranks amongst the top healthy food products to include in lunch boxes. When polled, Millennial moms ranked the following packaged foods as healthy lunch box inclusions: 1. Yogurt (87 percent) 2. Cheese (82 percent) 3. Cereal/Granola (72 percent) 4. Juice boxes (70 percent) 5. Peanut butter (67 percent) 6. Dried fruits (54 percent) 7. Milk (51 percent) 8. Nuts (49 percent). Source
Single Households, Solo Diners Driving Snacks-As-Meals Trend The growth in snack foods being consumed at meal time are largely driven by single-person households and people who are eating those meals by themselves, confirms The NPD Group. In 2014, annual per-capita instances of eating snack foods at meal times among solo diners was 191, versus 167 in 2011, according to NPD’s new Snacking in America report. Across the U.S. population, that translates to represents a difference of billions of eating occasions. The U.S. now has 38 million single-person households, so it’s not surprising that this group has an impact on snacking, notes the report. Like larger households, single-person households cite health and weight management as key motivators for eating snack foods at meals, and particularly better-for-you snack foods. The most common over-indexing motivator cited across the better-for-you snack categories was the accessibility of a single-serve package. Like most other households, single-person households plan the snack foods that they will be eating at meals ahead of time — typically, more than a day before. A significantly smaller number of eating occasions include a snack food that was planned less than an hour before. Supermarkets tend to be the shopping outlets of choice for snack foods consumed as meals. Given their significant and growing influence on snacking trends, solo diners’ needs should be important in shaping snack products, packaging and marketing, summed up NPD food and beverage analyst Darren Seifer.
4
Source
Retailer News Hy-Vee’s Twin Cities Expansion Gets Boost With U.S. Bank Stadium Partnership Hy-Vee Inc.’s push into the Twin Cities market will get an assist from a partnership with the Minnesota Vikings that includes signage and food offerings at U.S. Bank Stadium. The Vikings and the West Des Moines, Iowa-based supermarket chain announced the deal on Monday. Hy-Vee joins MillerCoors as one of seven or eight founding partners of U.S. Bank Stadium that will be named in the coming months. The deal is a major bet by Hy-Vee, which plans to go toe-to-toe with Twin Cities market leader, Stillwater-based Cub Foods. The company’s first Twin Cities supermarkets will open next month in New Hope and Oakdale and project are also in the works for Brooklyn Park and Lakeville. Hy-Vee has 235 supermarkets in the Midwest. ”This is very unique and bold, but it’s been quite thought-out for some time,” said John Penhollow, director, new stadium partnerships for the Vikings. “We are confident this will be a great partnership.” The two sides are still working out all of the specifics of the 10-year partnership, but so far the agreement will make Hy-Vee a food supplier to stadium concessionaire Aramark, give Hy-Vee branded food stands in the stadium, and give the company exposure on Vikings media channels, Penhollow said. The Vikings will also be on hand to help promote the openings of the New Hope and Oakdale stores. “All of us at Hy-Vee are ecstatic to be joining the Minneapolis-St. Paul community, and what better way to show our Minnesota pride than to partner with the Vikings as they enter a new chapter with U.S. Bank Stadium,” said Hy-Vee Chairman, CEO and President Randy Edeker. The deal will include benefits for the Vikings, too. It will give the team a presence in Twin Cities stores, as well as the chain’s existing stores in southern Minnesota. Penhollow said there will be exclusive tailgate foods that fans can only buy at the stadium or in Hy-Vee stores. Financial terms of the deal were not disclosed.
Source
5
Retailer News Coborn’s Builds Gluten-Free Bakery, Products Begin Hitting Stores Coborn’s Inc. has built a gluten-free bakery “from scratch” to meet the demand for fresh, gluten-free bakery treats at its 50 midwestern supermarkets and its online delivery company, CobornsDelivers. The bakery is housed on the Coborn’s corporate campus across from the company’s central bakery and has begun production of 20 specialty bakery treats. Go here to see a two-minute video by Plant Manager Bob Leuth is available online. “More and more of our store guests have been asking for fresh gluten-free bakery items, as more people today have gluten allergies than ever before or are simply changing their diets. It is challenging to find products that are not frozen,” says Dennis Host, VP of marketing at Coborn’s. “We set out to work on a plan to build a gluten-free scratch bakery that is completely separate from our central bake shoppe, and we’re excited to introduce this new product lineup to meet the needs of our guests.” The products are appearing in Coborn’s, Cash Wise and Marketplace Foods stores this week. They will have their own display and will be marked with the “G Free Bakery” label.
Broad selection The company’s bakers tested hundreds of recipes to find products that are both gluten free and delicious tasting, according to the St. Cloud, Minnesota-based grocery chain. They partnered with Michigan-based Dawn Foods, which is NSF certified, to test production and recipes. The initial 20 products include muffins, hot dog and hamburger buns, sliced white bread, cupcakes, cakes, bars, cookies and brownies. Muffin flavors include Double Chocolate Chip, Chocolate Chip, Banana, Blueberry and Cranberry Orange. Frosted cupcakes come in both White and Devil’s Food; the bars are fudge brownies and chocolate chip bars. Available cookies are Sugar, Raspberry, Chocolate Chip and Double Chocolate Chip—in two sizes. The frosted cakes are available in White and Devil’s Food. As seasons change, additional items will be added into the mix. In September, sugared cake donuts will be available. The flavors have been developed to appeal to all guests, whether they have a need for gluten free or not, Coborn’s says.
Food safety Coborn’s says the “G Free” bakers recognize that even the slightest amount of gluten can be detrimental for some consumers. “The integrity of our products for our guests is of utmost priority; that’s why we invested in a brand new space and all new equipment,” says Kim Kockler, food safety and nutrition manager for Coborn’s. “Whether our guests choose gluten-free treats by choice or necessity, we appreciate the peace of mind in knowing that those who select our products can trust the integrity of what we’re offering.”
6
continues on next page...
Retailer News Coborn’s Builds Gluten-Free Bakery, Products Begin Hitting Stores continued... Coborn’s says it has invested in additional safeguards to ensure its gluten-free claim holds true. All ingredients entering the bakery and finished products exiting the bakery are tested to confirm the absence of gluten. The new bakery facility is in a separate building from the company’s conventional bakery to ensure there is no cross-contact with gluten-containing ingredients. Everything in the G Free Bakery has been built solely for the new bakery, from the new ovens and pans to the utensils and employee uniforms.
Certification G Free Bakery has begun the gluten-free certification process through the Gluten Free Certification Organization. Gluten-free certification is not required; however, Coborn’s says it is actively pursuing it. Certification involves many steps, and the process will take at least four months from the application date. As part of the certification process, the bakery tests all of its finished products to ensure they meet the 20-parts-per-million guideline set by the FDA. G Free Bakery is managed by Leuth, and production is managed by Production Manager Jim Majchrzak; it is in production seven days a week. Source
Kroger To Split Southwest Division The Kroger Co. is pulling Dallas and Houston out of its Southwest division and creating new divisions for each of the Texas cities. Two current executives are in line to lead the new divisions, according to an Aug. 18 news release from the Cincinnati-based retailer. Dana Zurcher, currently vice president of operations for the Southwest division, will be president of the Dallas division, effective Oct. 1. She has been with Kroger since 1985. Bill Breetz, president of the Southwest division since 2002, will continue to oversee operations in Texas and Louisiana for the rest of 2015 and then pick up the reigns in Houston as president of that new division. “We see opportunities for growth in both Dallas and Houston thanks in large part to Bill’s leadership the past 13 years,” Kroger chairman and CEO Rodney McMullen said in the release. “This move will bring resources closer to our store teams, customers, and communities.” Kroger officials previously outlined capital investment plans with about $700 million in the works for the Dallas-Fort Worth area and $500 million in Houston. The work is expected to take three years. The new Dallas division includes 105 stores and stretches from Fort Worth to Shreveport, La., according to the release. The new Houston division includes 109 stores in the metropolitan area and others in Lake Charles, La. Source
7
Retailer News A&P Sets Sale For Remainder Of Chain A&P said Monday it is seeking buyers for 153 stores no one has yet bid on — potentially opening the way for ShopRite, C&S Wholesale Corp. or others to make a move. Companies must submit bids by Sept. 11, or else wait for an auction scheduled for Oct. 7, according to court documents. Also Monday, the judge overseeing A&P’s bankruptcy case reportedly sent the retailer and its unions back to the negotiating table to resolve a dispute between the sides over bumping and severance obligations. At a hearing Monday, Judge Robert Drain told the parties to resume negotiations with instructions to have a resolution in place by the time the sides meet again Wednesday, according to a report in the Bergen Record. The Record report quoted one union attorney as saying that was “a positive sign” for workers, who face the potential loss of thousands of jobs as a result of store sales and closures. A&P, which filed for Chapter 11 bankruptcy protection in mid-July, has already secured bids for 118 of its 296 locations and announced plans to close 25 additional stores that are losing money. The 118 stores are scheduled for auction on Sept. 24 and 25. The announcement that 153 more stores are on the block could attract new market entrants, including Sprouts Farmers Market or The Fresh Market, industry observers said. More likely, they told SN, are bids from members of Keasbey, N.J.-based Wakefern Food Corp., who operate under the ShopRite banner. “ShopRite has made it clear it will not overpay for any stores,” Craig Rosenblum, a partner in Willard Bishop, Barrington, Ill., said, “but if no one else claims them, ShopRite could be interested in maybe 30 or 40 locations.” If ShopRite members do buy some of the stores, it could be a big jolt to competition, a Northeast consultant told SN, “because whenever a ShopRite opens, competition gets tough, and other operators need to sharpen their pricing to keep up.” Most other possible scenarios involve C&S, the Keene, N.H.-based wholesaler that supplies A&P and would like to retain as much volume as it can, observers said. C&S will hold onto the volume at the 76 stores on which Ahold-owned Stop & Shop has bid, since Ahold is already one of its customers, they pointed out, “but losing most of the rest of the A&P volume would be a huge loss,” the consultant said, “which makes it kind of surprising C&S hasn’t taken a more aggressive position at this point. “C&S probably would have made its interest known early on. But it could still submit a bid for X number of stores — including stores that other companies have bid on — or try to sweep up the entire chain.”
8
continues on next page...
Retailer News A&P Sets Sale For Remainder Of Chain continued... According to Rosenblum, it’s possible C&S could arrange for a private equity group to buy some of the stores and run the retail operations — as it did with Grocers Supply Co. in Houston — “which would enable C&S to keep the wholesale business.” It’s also possible C&S could opt to run some of the stores itself, the Northeast consultant told SN. There is precedent for that course of action, he said, citing the wholesaler’s purchase of the Grand Union stores when that company liquidated in 2001, with C&S finding buyers for some and operating the rest under the GU banner, “though it was not happy with the results,” he added.
Another possibility, he said, “though one that’s less likely, would be for C&S to take a “stalking horse” approach and let a third party make bids for the stores, then pay them a break-up fee and take ownership, which would allow it to re-package the stores and sell them to some of its customers. According to Neil Stern, senior partner at McMillanDoolittle, Chicago, C&S will get involved directly only as a last resort. “It would probably prefer those stores go to independents it could supply,” he said. All observers agreed a number of the 153 stores remaining will likely never reopen as supermarkets, aside from the 25 stores A&P plans to close because they are losing money — possibly between 30 to 60 additional units that could go dark because they are just too small to be viable, in bad locations or have leases close to expiration, they said. Of the 118 A&P stores for which bids have been submitted — subject to approval by the U.S. Bankruptcy Court — Albertsons-owned Acme Markets said it would buy 76 (encompassing 36 stores in New Jersey, 21 in New York, 10 in Pennsylvania, four in Connecticut, four in Delaware and one in Maryland); Ahold-owned Stop & Shop said it would take 25 (including 22 in New York and three New Jersey), and members of the Key Food Cooperative said they would buy 17. Source
9
Retailer News Natural Grocers To Open First Minnesota Store Natural Grocers will open its first Minnesota store on Tuesday, Sept. 15. The store is located at 1507 Greenview Drive SW in Rochester and will officially open at 8 a.m. As part the grand opening, Natural Grocers will have a ribbon-cutting ceremony at 7:55 a.m. and will then distribute mystery gift cards to the first 60 customers in line. Gift cards will be in the amount of $5, $10, $25, $50 and $100. Customers won’t know the amount of their gift card until they check out. The store will offer a tasting of healthy food from its Paleo Wraps class. There also will be other food tastings, as well as cooking demonstrations and nutrition classes with nutrition experts as part of the store’s opening festivities. All activities will take place from noon-4 p.m. on the following dates: l S aturday, Sept. 19: Taste the Difference Food Standards Make: A Nature-Inspired Tasting Fair and Health Expo l Saturday, Sept. 26: Gluten-Free Tasting Expo and Health Fair l Saturday, Oct. 3: Active Lifestyle Health Fair l Saturday, Oct. 10: Paleo Fair: Primal Eating for Optimal Health Colorado-based Natural Grocers says it will provide the Rochester community with fresh produce that is exclusively USDA Certified Organic, as well as other healthy, affordable, organic and natural products. The store will feature a mix of national brands and locally-grown, raised and manufactured products from Minnesota in a small, neighborhood market environment. The Rochester store also will feature a nutritional health coach and offer free nutrition education classes to the public. Natural Grocers Rochester will be open seven days a week. Natural Grocers continues to expand. The Rochester location is one of 17 Natural Grocers stores expected to open in fiscal year 2015. The company currently operates about 100 stores in 17 states. Source
New Braunfels Makes Incentive Offer For H-E-B grocery store New Braunfels is offering H-E-B up to $1.5 million in incentives to build a grocery and other retail space in the city. The New Braunfels City Council on Monday evening passed two sets of incentives, an $800,000 grant and a five-year sales tax rebate of up to $700,000, depending on the store’s sales volume. The grant incentive proposal requires H-E-B to spend the money on drainage and road infrastructure and to have 108 full-time employees at the store by the end of 2021, with a minimum payroll of about $3.9 million, to receive the full amount, according to New Braunfels city documents. H-E-B is proposing to build the 113,000-square-foot store and a gas station at the intersection of FM 306 and Interstate 35, which would put it close to a Target and about a half-mile from a Walmart distribution center. The property also would include 28,800 square feet of retail space, according to the city documents. H-E-B already has two stores in New Braunfels, according to its website.
10
Source
Shows & Events
Show
Location
Date
Great Lakes KeHE Tabletop
Bolingbrook, IL
September 16, 2015
Expo East
Baltimore, MD
September 16-18, 2015
Midwest KeHE Tabletop
Milwaukee, WI
September 23, 2015
Haddon House Fall Show
Uncasville, CT
September 30 October 1, 2015
Associated Grocers Fall Show
Baton Rouge, LA
September, 23 2015
Southeast KeHE Tabletop
Orlando, FL
October 2, 2015
North East KeHE Tabletop
New York, NY
October 7, 2015
Great Lakes KeHE Tabletop
Fort Wayne, IN
October 14, 2015
Kosher Fest
Secaucus, NJ
November 10-11, 2015
Shoprite Fall Shipper Show
Edison, NJ
October 1, 2015
Fancy Food Show
San Francisco, CA
January 17-19, 2016
Expo West
Anaheim, CA
March 10-12, 2016
11