California Grocer, Issue 2, 2023

CGA CELEBRATES 125 YEARS:

Reflecting on the last 25 years of the Association and looking forward

page 38

THE MODERN GROCER

NAVIGATING THE NEW ERA:

How SB 54 shapes the future of plastic packaging in California’s grocery industry

WHY RETAIL MEDIA IS THE NEXT BIG THING

Opportunity abounds as retailers and suppliers explore new frontiers in advertising page 26

DEFINING THE MODERN GROCERY STORE

Consumer shifts leave grocers to strategize how the modern grocery store can satisfy shoppers’ evolving needs page 32

We are bringing together the ingredients for a better world our planet our people our products our communities to make change a Reality.

Great food isn’t possible without a healthy planet. We’re committed to reducing our carbon footprint and nurturing the environment.

We’re committed to creating and sourcing sustainable products and reducing unnecessary packaging and food waste.

AVOID FINES. SAVE LIVES. FOLLOW THE LAW.

IT’S NOW ILLEGAL IN CALIFORNIA TO SELL MOST FLAVORED TOBACCO PRODUCTS, INCLUDING VAPES AND MENTHOL CIGARETTES. FOLLOW THE LAW TO PROTECT KIDS FROM A LIFETIME OF DEADLY ADDICTION.

MAKE SURE YOU’RE FOLLOWING THE LAW AT NOFLAVORS.ORG

EXECUTIVE COMMITTEE Chair

Dennis Darling Foods Etc.

Immediate Past Chair

Renee Amen Super A Foods

CHAIR APPOINTMENTS

Denny Belcastro Kimberly-Clark Corporation

Independent Operators Committee Chair

DIRECTORS

Elliott Stone Mollie Stone’s Markets

Mary Kasper 99 Cents Only Stores

Jonson Chen 99 Ranch (Tawa Supermarket, Inc.)

Greg Sheldon Anheuser-Busch InBev

Brendan McAbee Bimbo Bakeries USA

Karl Wissmann C & K Market, Inc.

Eric Pearlman C&S Wholesale Grocers

Donna Simpson Certified Federal Credit Union

Joe Angulo

Chedraui USA, Inc. (FKA Bodega Latina Corporation)

Brian Pohl Classic Wines of California

Elaina Budge Costco Wholesale (Bay Area)

CALIFORNIA GROCERS ASSOCIATION

President/CEO

Ronald Fong

Senior Vice President & Chief Operating Officer

Doug Scholz

Senior Director Events & Sponsorship

Beth Wright

Senior Director Communications

Nate Rose

Director State Government Relations

Leticia Garcia Director

Local Government Relations

Tim James

First Vice Chair

Lynn Melillo

Bristol Farms

Second Vice Chair

Steve Dietz United Natural Foods, Inc.

Joe Mueller Kellogg Company

Treasurer

Michel LeClerc

North State Grocery

Secretary

Richard Wardwell

Superior Grocers

Karl Schroeder Albertsons Companies

Chris Dehoff Dehoff’s Key Market

Casey Scharetg E. & J. Gallo Winery

Tim Mahoney Gelson’s Markets

Pamela Burke Grocery Outlet, Inc.

Adam Salgado

Heritage Grocers Group dba Cardenas Markets

Chang So Hollister Super, Inc.

Andrew Nodes Instacart

Nancy Krystal

Jelly Belly Candy Co.

Scott Silverman KeHE Distributors, LLC

Kelli McGannon King Soopers

Tyler Kidd Mar-Val Food Stores, Inc.

JB Ryan Molson Coors Beverage Company

Marc Swisher

Mondelēz International Inc.

Subriana Pierce

Navigator Sales and Marketing

Sergio Gonzalez Northgate Gonzalez Markets

Saj Khan Nugget Markets

Jon Giannini Nutricion Fundamental, Inc.

Michael Molinar

PAQ Inc. dba Food 4 Less & Rancho San Miguel Markets

Jeff Severns

PepsiCo Beverages North America

Tim Nowell Procter & Gamble

Josh Southerland

Reyes Coca-Cola Bottling LLC

Brandon Lombardi

Sprouts Farmers Market

Bertha Luna

Stater Bros. Markets

Jake Fermanian

Super King Markets

Rick Stewart

Susanville Supermarket IGA

Brent Cotten

The Hershey Company

Tiffany Menyhart

The Kraft Heinz Company

Bethany Pautsch

Tyson Foods, Inc.

Jeff Schmiege

Unilever

Diane Snyder

Whole Foods Market –Southern Pacific Region

Director

CGA Educational Foundation

Brianne Page

Director Administration & Human Resources

Jennifer Gold

Senior Manager

Marketing & Membership

Sunny Porter

Communications Specialist

Grace Becker

Business Development Manager

Bailey Dayen

Administration & Programs Coordinator

Miriam Ellis

Controller

Ion Bazgan

Executive Assistant

Delaney Faulkner

Senior Accountant & Assistant Office Manager

William Quenga

California Grocer is the official publication of the California Grocers Association.

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Sacramento, CA 95814

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For association members, subscription is included in membership dues.

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© 2023 California Grocers Association

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Editor Nate Rose nrose@cagrocers.com

Assistant Editor

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For advertising information contact: Bailey Dayen bdayen@cagrocers.com

Southern California

Tuesday, July 25, 2023

8:00 am – 4:00 pm

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Thursday, July 27, 2023

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Non-Members: $250/person

Registration includes lunch & full-day program.

Store Leaders

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PRESIDENT’S MESSAGE

Connecting the Dots between CGA’s Past and Future

RON FONG PRESIDENT AND CEO CALIFORNIA GROCERS ASSOCIATION

This summer we celebrate 125 years serving California’s grocery community

In this issue we honor both the past and the future. 2023 is a special year for our association as CGA turns 125 years old. In a dynamic economy where more than half of the Fortune 500 companies from just 25 years ago no longer exist, 125 years marks a fantastic achievement in staying power and longevity for California’s grocery community. We also know it’s no time to rest on laurels, and both CGA and the grocery industry at large are intensely focused on continuing to succeed in the future. I think you’ll get that feeling from this issue’s content, which covers everything from media’s cutting edge to the future of food packaging.

Having been founded at the end of the 19th century, our association is now thriving into the 21st century. The world is a vastly different place, yet shockingly similar in some ways. The past truly does rhyme with the future as the famous saying suggests.

As we prepared for this milestone, the team and I went into the CGA archives to look through past issues and it can be surprising to see how cyclical politics can be and how many public policy issues are reoccurring today only in different iterations. The same is true in the business world. Did you know curbside grocery pick-up was a thing in the 1920s?

To explore the meaning of the Association’s anniversary, we focused on the last 25 years, which have been financially and politically transformative for CGA. The Association has built multiple streams of revenue to help diversify our funding and to make our community more robust to economic disruption. This financial strategy has also allowed for us to build new events, offer improved services, and better represent the industry’s political concerns. In 2019, we even purchased and opened our very own office headquarters just a block or two away from the Capitol building in Sacramento.

After reflecting on 125 years serving California’s grocery community, we switch gears to focus on the future of packaging, media, and grocery retail. There are some fantastic features and columns in this issue. Plenty to sink your teeth into while on summer vacation or enjoying a few extra hours of daylight in the evening—it is summer after all and a great time to find inspiration or new strategic insights heading into the always action-packed fall and winter for grocers.

In closing, I’ve always admired a quote from a commencement speech Steve Jobs delivered at Stanford University.

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something—your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

It’s a busy summer for CGA as we have several events on the docket. I hope to see you out there, connecting the dots and endeavoring to mark new points of achievement that we will all proudly call back to when we reach our next milestone. Cheers to 125 years! ■

Centennial issue of California Grocer magazine.

Celebrating 125 Years of CGA

DENNIS

Since then, much has changed in our business. In fact, the first self-service store didn’t open until 1911, but the principals of CGA remain the same. Our mission is to promote, serve, represent, and educate the grocery industry and advocate on its behalf at the state and local levels.

As evidenced by this exciting milestone 125th anniversary, CGA has a long and proud history of representing the interests of the grocery industry in California.

The Association has played a vital role in shaping the food industry in the state, and it continues to work to ensure that California has a strong and vibrant grocery industry. Over the years, CGA has helped its members adapt to the ever-changing food landscape. Think about the challenges that our industry has faced in the last 125 years. Outside our walls: wars, food rationing, social unrest, and most recently, climate change. Inside our walls there’s been an explosion of products available,

new technologies, labor force changes, governmental regulation, and coming soon, AI-assisted technology. The Association has worked to help members not only adapt and survive these changes, but thrive. When Ruth and I bought our first store in 1983, we had to fill out a short application to the ABC to acknowledge the several state and federal agencies that had oversight of our business. Today the number of governmental agencies with oversight of stores has multiplied, presenting grocers with a maze of regulation. Without the guidance and support of CGA, a single store like ours could never navigate the countless regulations and compliance requirements to operate in California. While our industry has become more complicated, CGA has become more sophisticated, adapting to our industry’s needs to offer cutting-edge programs and events, industry education, and top-notch advocacy. The Association is a vital resource for California’s grocery industry, representing over 300 grocery companies operating more than 6,000 brick and mortar stores, and approximately 150 grocery supply companies. CGA is also a strong advocate for consumers and works to ensure that California has a safe, healthy, and affordable food supply.

All California grocery companies have undergone significant changes over the years as our state and food industry have evolved. The rise of online grocery shopping has posed a challenge to traditional brickand-mortar stores, and the increasing cost of living in California has made it difficult for companies to compete. However, CGA has remained a constant, helping grocery companies prosper with crucial resources and support. CGA has lobbied for favorable legislation, prepared companies with tools and training, and carved out a landscape for members to prosper in California’s challenging business environment. CGA’s efforts have helped California grocery companies remain a vital part of the state’s economy. The Association is committed to the future of the grocery industry in California and is working to meet the challenges of the changing food landscape to ensure that California’s grocery industry remains strong and vibrant. It is an honor to lead this great organization in its 125th year, and I look forward to continuing in my role as CGA Chair to help our industry thrive. ■

The California Grocers Association (CGA) was founded in 1898 and Joseph A. Stulz was its first President.

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Event produced by the California Grocers Association.

Well, I Got That One Wrong

KEVIN COUPE FOUNDER MORNINGNEWSBEAT.COM

Hence, this column.

In recent years, in speeches and my day job writing MorningNewsBeat, I’ve largely bought into an argument made by demographers and sundry experts about the urbanization of America. The argument went like this: Cities are a magnet for innovation—in business, technology, finance, culture, retail, entertainment and food. Young people hunger for such innovations. Young people also are getting married later and having fewer children. Therefore, young people don’t have to move to the suburbs and can stay in the city, where they will occupy smaller abodes than they might have in the past. They also won’t need to own their own cars (the Uber app being on all of their smartphones), and won’t need to go to large, suburbanstyle supermarkets and other retail entities as much. Therefore, traditional retailers— especially, but not limited to supermarkets— need to rethink their long-term strategies and realign them so they can cater to an urban consumer with different needs and desires.

All of which sounded great. Even made sense. Now, I may have bought into this to an even greater extent because while I am by no means young, I shared some of those priorities—having spent almost all of my life living in the New York and Connecticut suburbs (interrupted only by my education at Loyola Marymount University), I was ready to move to a west coast city (Portland or Seattle) and become a late-in-life urbanite.

They discovered that having more space was better than less space. And while the end of the pandemic has meant some adjustment of those work-life priorities, the basic shift that took place seems to have taken hold.

Here’s a number for you: 45 percent of millennials expect to buy homes in the suburbs.

Simultaneously—some of it is correlation and some of it is causation—many cities have found themselves in an increasingly precarious spot.

People who lived in the suburbs no longer commuted to the city; they worked from home and suddenly prioritized work-life balance to a greater degree than ever before.

Crime is the problem we hear the most about, driven by homelessness and the fentanyl epidemic. But there are other forces at work, as well, such as too many stores, not enough workers, too-high rents, the impact of e-commerce. It then becomes a Gordian knot of complications, increasingly difficult to untie, causing people and retailers to leave the city, which creates a flywheel of problems almost impossible to stop. Crime festers because criminals have a sense of when the social order is breaking down— it is called opportunity.

Except that things changed. The pandemic came along and disrupted a lot of plans and caused people to rethink their goals and priorities.

Those of us in the punditry game ought to be willing to admit when we get things wrong, I think. And then, we ought to focus on figuring out why we were wrong and what lessons can be learned from our mistakes.

Suddenly, you have Whole Foods closing down a store in downtown San Francisco that only has been open a year. You have a nearby Nordstrom flagship store being shuttered. And when people look up “dystopian hellscape” online, they almost expect to see a picture of Coit Tower.

will be able to step into the breach and help breathe new life into urban neighborhoods. But that will require thinking differently about city streets and neighborhoods.

A recent CNN story cited urbanist Jane Jacobs’ influential 1958 essay ‘Downtown is for People,’ in which she argued a vibrant

In other words, a retail environment that is more responsive and less restrictive and static.

I don’t think that a changed urban landscape is all that retailers need to think about, though. I continue to believe that even the young people (or older people like me) who have decided not to move to the city are going to want and need urban-style amenities. Where I live in Connecticut, a local developer name David Genovese is in the middle of building something that I think of as an urban oasis in the middle of a resolutely suburban village. The idea is create a vibrant and concentrated sense of community out of retail and hospitality options in a way that will appeal to those with an urban bent. I think it is very smart, and even though it is only about one-third built at this point, you already can feel the energy.

But at the risk of being wrong again, I want to be guardedly optimistic about the moment and point out that there may be an opportunity here for retailers as well.

Let’s stipulate, just for the sake of discussion, that renewal depends on cities being able to figure out how to deal with crime. Me, I’ve always believed in the approach to criminal justice espoused by William Bratton, the former police commissioner for New York City and Chief of Police in Los Angeles. He called it a “broken windows” approach that stressed “quality of life”—if you crack down on small crimes such as panhandling, disorderly behavior, public drinking, and street prostitution, inevitably smalltime criminals would not move on to commit bigger crimes. (He was the NYC police commissioner for just two years, and during that time felonies dropped by almost 40 percent and homicide rates were cut in half. I think that in retail terms this is called ROI.)

If this all can be figured out and the right lessons from Bratton’s tenures applied, then retailers will have a moment in which they

street life was crucial for neighborhood safety and community. She wrote:

“It is this model, focused on the vitality of the streets and the people who inhabit them, that’s needed to create lively and exciting communities and shopping areas.

“Streets could be blocked to cars on weekends and other hours. Cities can also host street fairs, food festivals, live music, art exhibits and other events to draw foot traffic downtown … If the future of shopping is not giant department stores, a wider mix of stores will be needed to make downtowns more appealing.

“Traditionally, retail landlords seek out the longest leases. But that makes it difficult for new stores to open.

“Cities can provide financial incentives to encourage landlords to offer temporary and more flexible leases and loosen regulations to speed up the permitting process for them.

“This will allow for pop-up stores, seasonal retailers and a mix of food and drink vendors.”

As demographic changes evolve—and nothing happens overnight—it will be critical for retailers, including (and especially) grocery stores, to evolve their own offerings, thinking about a different kind of suburban customer who may be seen as something of a hybrid, and needing a store that fuses elements of what they always have done with innovations that reflect some urbanized cross-breeding. It may mean better and more specialty foods. It likely will mean an expedited approach to delivery. It almost certainly will require a more targeted and customized approach to marketing. Maybe, in the long run, it is not cities that are a magnet for innovation. Maybe it is people who are—and who will respond to and reward retailers who don’t think about them as the same old customer base, but in fact see their needs and desires as requiring a retail approach that is less restrictive and more responsive. ■

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INSIDE THE BELTWAY

Grocery Shoppers Redefine Value

JENNIFER HATCHER

CHIEF PUBLIC POLICY OFFICER & SENIOR VICE PRESIDENT,

As universal as the word is across the consumer landscape, recognizing what value means to consumers and how to meaningfully deliver it to them can be challenging. Understanding value in today’s shifting cultural context is imperative for the food industry, particularly as shoppers adjust their purchasing patterns and habits amid continued inflation and uncertainty.

The latest survey of grocery shoppers by FMI — The Food Industry Association in our U.S. Grocery Shopper Trends 2023 series reveals the meaning of “good value” and how it is becoming more complex as consumers navigate grocery aisles. Although definitions vary, value is often understood in terms of

price and quantity. However, shoppers are increasingly expanding their notions of value to include quality, relevance, convenience, and experience.

Quality reflects the importance of personal food standards and goals around eating well, and includes an emphasis on freshness, minimal processing, health and nutrition, product sourcing, and ethical considerations such as sustainability and labor standards.

Relevance refers to shoppers’ needs versus wants and reflects their decision-making around necessary versus indulgent items. Questions about how well a product aligns with personal/household preferences, its usefulness, and its potential for waste have

taken on greater importance as shoppers seek to meet the preferences and needs of individual household members while sticking to their budgets.

Experience captures the importance of pleasure, enjoyment, novelty, variety, and discovery as well as the physical aspects of shopping such as store cleanliness and the friendliness and knowledge of store employees.

Lastly, convenience continues to be a key element of value, including more typical criteria such as speed, ease, and accessibility (which shoppers sometimes trade for lower price) as well as expectations around engagement, flexibility, experience, and relevance.

While shoppers say that getting good value is a priority across all income and demographic levels, younger shoppers are clearly driving the shifting definition of value toward a more holistic measurement that goes beyond the traditional price-to-quantity ratio. For example, 62 percent of millennials increasingly say they prefer to minimize food waste by buying only what they need, a strategy that speaks to relevance.

Value represents the cornerstone of the food industry’s proposition to consumers.

FOOD MARKETING INSTITUTE

Convenience and a pleasing shopping experience are also key drivers of value for younger shoppers: 47 percent of millennials say that they are willing to spend more money to avoid shopping at multiple stores, while 50 percent say they’d spend more to shop at more pleasant stores, compared to just 16 percent of Baby Boomers.

Younger shoppers are also more willing to buy the best quality items regardless of price. Fifty-two percent of millennials and 42 percent of Gen Z-ers express that sentiment, compared to just 22 percent of Baby Boomers.

Across generations, shoppers also note benefits related to convenience and experience as factors for choosing in-store versus online. For example, while some shoppers appreciate amenities such as

in-store cafes, pharmacies, and banking, which help them save time by combining grocery shopping with other household tasks, others appreciate not having to deal with crowds and lines. Store cleanliness, ease of navigation, familiarity, and employee treatment also play roles in decisions not just about which stores shoppers trust and prefer but also whether and when they shop in person or online.

Ultimately, shoppers’ desire for more flexibility and control over their shopping process shapes their decisions about which methods they employ. While the search for “value” remains a priority for most shoppers, how they define it has evolved. Today’s shoppers see value through the lens of a broader range of considerations that reflect the complexity of their lives, habits, values, and priorities.

Loyalty has a distinct connection to value, so understanding value from a consumer perspective is imperative for the food industry. Retailers can differentiate themselves by thinking about value more holistically. Developing a unique identity by embracing multiple dimensions of value that go beyond specific categories or departments can help retailers stand out by standing for more than just good prices and deals— although both remain a top priority! ■

To download the U.S. Grocer Shopper Trends 2023 – Value Matrix report and to sign up to receive updates on future reports in the series, visit www.FMI.org/GroceryTrends.

A Grocery Perspective on the 2023 Farm Bill

Earlier this year, NGA outlined its 2023 Farm Bill priorities to the U.S. Senate Committee on Agriculture, Nutrition and Forestry, and U.S. House Committee on Agriculture, the entities driving this evolving legislation.

As Stephanie Johnson, NGA’s VP of government relations, aptly noted, “Independent community grocers are a linchpin for communities across the country by providing nourishing food to millions of Americans at an affordable price. Legislation must consider the critical role independent grocers play across America so they can continue expanding food access and supporting local economies.”

NGA’s team is working with lawmakers to ensure that the new Farm Bill reflects changes and technology in the grocery marketplace and addresses the needs of the communities that independent community grocers serve, looking to build on the inroads we have made since the previous Farm Bill five years ago.

To be sure, there are many challenges for the legislation as it advances though a divided Congress, with a House of Representatives controlled by a slim Republican majority.

Namely, efforts to boost nutrition programs generally supported by Democrats face erosion by GOP members including some who favor work requirements for SNAP participants.

industry and related wages in the Golden State. While SNAP purchases are not subject to sales taxes, sales helped generate additional tax activity—in California, that means $118 million in state and local tax revenues and $117 million in federal tax receipts.

At its core, SNAP improves access to food and encourages healthy eating behavior by providing incentives rather than restrictive mandates. These themes from previous Farm Bills should carry over to the new legislation. To that end, NGA favors maintaining SNAP Choice, which offers flexibility to both retailer and participants, and ensures families can choose foods appropriate for their unique situation.

SNAP, which helps low-income families to afford nutritious foods and reduces hunger, is responsible for more than 17,000 jobs in California across grocery and supporting industries, including agriculture, manufacturing, transportation, and municipal services. The jobs required to administer SNAP at the grocery store level generate more than $760 million in grocery

After successful piloting, NGA supports making SNAP online a permanent feature of the program and, to ensure it continues to operate as intended, providing technical support for retailers to properly implement and expand the service.

That expansion should come with maintaining the program under its current structure. Changes to SNAP that have been suggested in recent years, such as block granting or bulk food distribution boxes,

Partisan differences notwithstanding, SNAP is a fundamental safety net program for millions of Americans and has largely been a success due to the private-public partnership it shares with supermarket operators.

Work on a Farm Bill reauthorization is under way, and activity is ramping up toward the food and ag package that holds significant impact for independent grocers, especially those in historically underserved parts of the country.

GREG FERRARA PRESIDENT AND CEO NATIONAL GROCERS ASSOCIATION

threaten the viability of grocery stores in communities where food access is most vulnerable.

Further, NGA supports expanding and streamlining the Gus Schumacher Nutrition Incentive Program (GusNIP), the nutrition incentive program that has successfully boosted access to and consumption of fresh fruits and vegetables.

And finally, grocery retailers should not be subject to processing fees on EBT transactions or an EBT tax. With credit card transaction fees already among grocery retailers’ most onerous operating costs, further burdensome expenses would threaten their ability to serve communities most in need.

As negotiation toward a new Farm Bill continues, grocers need lawmakers to understand that its impact stretches far beyond the fruited plain, into the grocery aisles and the communities they serve,

and the other businesses and organizations they support, driving growth and wellbeing of both rural and urban areas throughout the United States. ■

iStock

CAPITOL INSIDER

One Half Down, One Half to Go

On June 2, the House of Origin deadline came, marking the end of the first half of the 2023 legislative session.

It’s not really halfway, since it has taken five months to reach this deadline, leaving three and a half months for the second house to review remaining bills and for the end-ofsession sprint that occurs during the first half of September.

The session started with 2,661 bills— 1,770 Assembly bills and 891 Senate bills. Of those introduced, 1,713 remain alive, having passed the House of Origin (1,055 Assembly and 658 Senate bills). This means 948 bills were introduced and did not make it to their respective house floors for consideration. Of those bills, many were placeholders and may be resurrected in January of next year. Others were held in the appropriations suspense calendar. This leaves a lot of work to be done in the second house, which with the truncated timeline, adds significant pressure to the process.

As for the grocery industry, we continue to face a barrage of legislation introduced by the UFCW seeking to impact future acquisitions, mergers, and transactions. AB 647 (Holden) and SB 725 (SmallwoodCuevas) seek to amend California’s Grocery Worker Retention law in a manner that

would make the acquisition of existing grocery stores extremely unappealing by adding private rights of action, severance pay, and other penalties for acquiring parties. AB 853 (Maienschein) would allow the Attorney General to engage in certain grocery acquisitions, similar to the authority the office now has over hospital transactions. These bills, as currently drafted, would impact nearly all grocery transactions, regardless of scale. While the bills continue to move through the Legislature, CGA is making progress in narrowing potential impacts if signed into law.

Notwithstanding the potential impacts of these bills on the grocery industry, California Senate Constitutional Amendment (SCA) 7 is likely to have the greatest negative impact on all businesses in the state if approved by the voters. Titled the “Right to Organize and Negotiate Act” and publicized as enshrining an individual’s right to join a union, the words of the measure go much further. Though the amendment is brief, it could have far-reaching impacts.

“(b) All Californians shall have the right to join a union and to negotiate with their employers, through their

legally chosen representative, and the right to protect their economic well-being and safety at work.

(c) On or after January 1, 2023, no statute or ordinance shall be passed, enacted, or adopted that interferes with, negates, or diminishes the right of employees to organize and bargain collectively over their wages, hours, and other terms and conditions of employment and workplace safety.” You may be thinking to yourself, ‘what do these words mean?’ Often, it’s not about what they actually mean, but rather how broadly they can be interpreted. If adopted by the Legislature, this measure will be on the ballot in 2024. If it makes it to the ballot, you can expect it to become one of the most expensive fought measures in recent history. CGA will continue to be proactive at the Capitol to push the grocery industry’s priorities at every turn of the legislative process. ■

LOUIE BROWN IN THE SACRAMENTO OFFICE OF KAHN, SOARES AND CONWAY, LLP

GROCERS DAY AT THE CAPITOL

This April, grocers joined CGA in Sacramento to lend us their voices for one of the most important industry advocacy days of the year, Grocers Day at the Capitol.

Our morning began with heavy-hitting speakers from the Capitol community. Chair of the Moderate Democratic Caucus Asm. Blanca Rubio spoke with us about upcoming priorities for the businessfriendly caucus. Topping the caucus’ current priority list is a plan to strengthen its scale and presence at the Capitol by recruiting new members for the 2024 election season, Asm. Rubio shared.

Capitol Correspondent for KCRA 3 and President of the Capitol Correspondent Association Ashley Zavala, who has received praise for her forthright and thorough reporting of elected officials, sat down with us to discuss the media’s role in maintaining checks and balances with lawmakers. Ashley shared her insights on the ways grocers can work with the media strategically to tell our industry’s story and hold the legislature accountable.

The bread and butter of CGA’s advocacy day is our afternoon meetings with lawmakers. During these meetings, grocers shared their firsthand experiences operating stores in California and discussed the real-life impacts of proposed legislation. This year, our focus spanned from amending harmful retail theft legislation, to opposing store closure and worker retention bills that would create barriers for grocers of all sizes hoping to expand in California.

On behalf of the Association, thank you to all of the grocers and food industry leaders who spent the day advocating with us for California’s grocery community. We would also like to thank our sponsors for contributing to the success of our event. ■

CGA EDUCATIONAL

FOUNDATION INDUCTS

MIMI SONG AND BOB GARIBALDI INTO HALL OF ACHIEVEMENT

The California Grocers Association Educational Foundation (CGAEF) inducted Mimi Song, Superior Grocers, and Bob Garibaldi, UNFI, into the prestigious Hall of Achievement in late April in Anaheim, California. The Hall of Achievement recognizes grocery leaders for their tremendous contributions to the grocery industry and within their local communities.

In addition to honoring Song and Garibaldi, attendees raised more than $530,000 during the awards gala which will help fund the Foundation’s signature college scholarship and tuition reimbursement programs to support future grocery industry leaders in their pursuit of higher education.

INDEPENDENT GROCERS CONNECT ON THE GOLF COURSE

The independent grocery community enjoyed a lively day of golf and connection at this year’s Independent Grocers Golf Tournament which took place on June 7 in Rohnert Park, California at Foxtail Golf Club.

The annual tournament allows independent grocers, wholesalers, and suppliers to network with one another outside of the office while practicing their swing for a productive day of golf, sampling product from sponsors, and forming new business relationships. After a day of play, attendees gathered back at the clubhouse for a raffle and silent auction. The grand prize winner took home an eight-day vacation to Mexico.

CGA is appreciative of our sponsors for supporting the event, and thankful to our attendees for spending their day with us! ■

Song and Garibaldi, both dedicated leaders in California’s grocery industry, have long championed industry education and the CGA Educational Foundation. Founder of Superior Grocers, Song established the Superior Foundation which has raised more than $3 million to support local schools and organizations over the last 20 years. Garibaldi has long been a committed advocate for independent grocers, serving as a board member for the California Independent Grocers Association (CIGA) before the organization merged with CGA in 2014.

“I can’t think of two more deserving industry leaders to receive this honor. Both Mimi and Bob embody the Foundation’s mission and have each devoted several decades to bettering the grocery industry and supporting academic opportunity for our industry’s students,” CGAEF President Ron Fong said.

Recipient of CGAEF’s fourth annual $10,000 Legends of the Industry Scholarship, Jennifer Pelayo took the stage during the event to share how the industry’s support will help her complete her educational journey and fulfill her career goals. Pelayo, who serves as director of human resources at Smart & Final, is currently pursuing her master’s degree in human resources management at the University of Southern California.

Thank you to our attendees, honorees, and sponsors for an unforgettable evening! ■

NEW MEMBERS

CGA welcomes the following members:

Allen Lund Company LLC

4529 Angeles Crest Hwy Ste 219

La Cañada Flintridge, CA 91001-3247

Contact: Jeremy McGovern, General Mgr.

E-mail: jeremy.mcgovern@allenlund.com

Phone: (800) 777-5863

Website: allenlund.com

Barsotti Family Juice Company

2239 Hidden Valley Ln

Camino, CA 95709-9722

Contact: Cathy Barsotti, VP, Sales & Marketing

E-mail: cathy@barsottijuice.com

Phone: (415) 867-8852

Website: barsottijuice.com

Divert Inc.

23 Bradford St

Concord, MA 01742-2971

Contact: Lauren Eichelberger, Dir., Business Development

E-mail: leichelberger@divertinc.com

Phone: (585) 738-8289

Website: divertinc.com

E & H Foods, LLC

PO Box 146

Hydesville, CA 95547-0146

Contacts: Clint Victorine, President; Thad Benshoof, Co-Founder

E-mails: cvictorine@eelriverorganicbeef.com; thad@eelriverorganicbeef.com

Phone: (707) 768-2164

Website: eelriverorganicbeef.com

Mercatus Technologies Inc.

200 Wellington St West Ste 310

Toronto, ON M5V 3C7 Canada

Contact: Mark Fairhurst, VP, Marketing

E-mail: mark.fairhurst@mercatus.com

Phone: (416) 576-1146

Website: mercatus.com

Mesa Verde Trading Company

2513 W Shaw Ave Ste 101

Fresno, CA 93711-3322

Contact: Michael Philipps, Organic Recycling Manager

E-mail: mike@mesaverdetrading.com

Phone: (858) 735-0083

Website: mesaverdetrading.com

National Pork Producers Council

122 C St NW Ste 875

Washington, DC 2001-2109

Contact: Michael Formica, Chief Legal Strategist

E-mail: formicam@nppc.org

Phone: (202) 680-3820

Website: nppc.org

New York Style Sausage Company

1228 Reamwood Ave

San Jose, CA 94089

Contact: Mike D’Ambrosio, CEO/Dir., Sales & Marketing

E-mail: mikey@newyorkstylesausage.com

Phone: (408) 745-7676

Website: newyorkstylesausage.com

One World Beef

512 Via de La Valle Ste 310

Solana Beach, CA 92075-2715

Contact: Steve Coley, VP, Marketing

E-mail: scoley@oneworldventures.com

Phone: (855) 551-2333

Website: oneworldbeef.com

S. Martinelli & Company

345 Harvest Dr

Watsonville, CA 95076

Contact: Nicole Juntunen, VP, Sales

E-mail: njuntunen@martinellis.com

Phone: (209) 470-8225

Website: martinellis.com

San Francisco Bay Coffee Co.

1731 Aviation Blvd

Lincoln, CA 95648

Contact: Pete Schmitt, Region Manager

E-mail: pschmitt@sfbcoffee.com

Phone: (800) 829-1300

Website: sfbaycoffee.com

Valley Inventory Service

1180 Horizon Dr Ste B

Fairfield, CA 94533-1693

Contact: Amby Nair, President

E-mail: amby@valleycount.com

Phone: (707) 422-6050

Website: valleycount.com

NAVIGATING THE NEW ERA: How SB 54 Shapes the Future of Plastic Packaging in California’s Grocery Industry

By Tim Townsend

The political environment that produced SB 54

Aparadigm shift is coming for every grocer in California. A new law enacted last year on single-use and plastic food packaging will impact the day-to-day operations of grocery stores and their customers as soon as 2025.

The law, known as Senate Bill (SB) 54, resulted from years of discussions in the State Capitol on reducing plastic waste, culminating in an agreement that won support from businesses and environmental groups.

Environmental advocates have viewed California’s leadership on plastic waste as a high-stakes affair because it could be a model adopted nationwide.

Over the years, the state has banned most single-use plastic carryout bags at stores, restricted single-use plastic straws, and mandated plastic beverage containers to be made of at least 50 percent recycled content by 2030. However, despite these efforts, the state has struggled to meet its decade-old goal of diverting 75 percent of solid waste from landfills by 2020.

In 2017, a significant change in the economics of plastic recycling made meeting the state’s goals even more challenging. That’s when China stopped accepting used waste materials under its “Operation National Sword” policy initiative, closing off the primary market for disposing of plastic waste.

SB 54 SUMMARY

California’s Senate Bill 54 (SB 54) is set to bring significant changes to the operations of grocery stores, eliminating Styrofoam packaging as soon as 2025.

“This caused a major challenge for our cities, who had been relying on this not only to meet their diversion requirements, but also even as a revenue source. And what went from a good source of revenue went to a major financial burden,” said Senator Ben Allen (D-Santa Monica), the author of SB 54, citing China’s actions as a catalyst for the need to address plastic waste.

A coalition of environmental groups pushed the issue to the forefront in 2019 with a proposed ballot measure that would have set strict standards for recyclable plastic use by 2030, immediately banned polystyrene, also known as Styrofoam, and included a one-cent fee on single-use plastic packaging.

However, the ballot measure was delayed until 2022 after the COVID-19 pandemic impacted signature gathering efforts needed to qualify for the 2020 ballot.

As the 2022 election neared, plastic manufacturers and business groups mobilized to oppose the measure, indicating it would be a heavily contested campaign.

That prompted Senator Allen to seek a compromise between environmental and business interests utilizing a process that allows the Legislature to craft laws that avert pending ballot measures. The negotiations brought together the plastics industry, environmental groups, local governments, and business organizations, ultimately producing an agreement.

“This issue is an environmental problem, it’s a financial problem, it’s a local government problem, it’s a logistical problem, and after a

long, long time, we finally got a really strong negotiated deal across the finish line,” said Allen in an interview about the negotiations. “The deal we ultimately struck has not only the sign-off of the business community, but it was strong enough for the ballot measure proponents, who were pretty committed advocates, to feel comfortable pulling their measure back.”

The outcomes of ballot measures are notoriously tricky to predict. And if approved by voters, their provisions are very difficult to change, leaving few legal options to correct issues as they arise. Those factors helped stakeholders coalesce around Senator Allen’s efforts to broker a deal.

Satisfied with SB 54, the environmental groups sponsoring the initiative withdrew their proposal from the ballot. Compared to the ballot measure, SB 54 gives businesses more time to comply with recycling and alternative material mandates. It also creates a producer responsibility organization (PRO) comprised of plastics manufacturers to lead recycling programs and incorporate post-consumer content into packaging, contrasting with the ballot measure’s approach that gave most of the control to CalRecycle.

“The business community was committed to ensuring the Legislature passed responsible legislation that didn’t place the burden on working families but still created a path toward achieving our recycling goals,” said Brooke Armour, executive vice president of the California Business Roundtable, one of the organizations involved in negotiations.

SB 54 aims to address plastic waste by requiring 100 percent recyclable or compostable plastic packaging, a 25 percent reduction in plastic packaging use, and a 65 percent recycling rate for single-use plastic packaging by 2032.

The law was the result of negotiations between environmental groups, businesses, and other stakeholders, offering a compromise that creates one of the most expansive plastic packaging laws in the United States.

Grocery stores and food producers must prepare for the impending changes, including finding alternatives to Styrofoam and adjusting their operations to comply with SB 54’s requirements.

While all stakeholders ultimately had to compromise, many acknowledge the law’s importance nationally.

“[SB 54] is the biggest deal ever passed in the United States to address source reduction, recycling and remediation of plastic pollution,” said Heidi Sanborn, founder and executive director of the National Stewardship Action Council, a few months after the law passed.

WHAT DOES SB 54 Do?

By 2032, SB 54 requires:

100 percent of plastic packaging must be able to be recycled or composted;

■ A 25 percent overall cut in the use of plastic packaging; and

■ 65 percent of all single-use plastic packaging be recycled.

■ Some of these provisions will be phased in as 2032 approaches, giving businesses time to adjust.

Plastic manufacturers will also pay the industry-led PRO $5 billion over ten years as part of the deal. The PRO follows a model used in other sectors and allows the private sector to use its first-hand experience to design programs that accomplish the bill’s goals.

“Circularity ought to be taken into account when these products are designed, developed and marketed,” said Senator Allen on what he hoped to accomplish with the law. “[This is about] helping create a market for more sustainable products in packaging while also helping mitigate against the impacts of more and more plastic waste.”

Under SB 54, the PRO, with oversight from CalRecycle, will develop innovative programs that, among other goals, ensure recycling and make it more convenient, reduce costs to local governments, and reduce overall pollution. One of the most imminent aspects of the law for grocers is a de-facto ban on Styrofoam starting in 2025 unless 25 percent of the material statewide can be recycled.

“I don’t think it’s likely that Styrofoam will meet the goals,” said Senator Allen but added it’s not a foregone conclusion, “[The business community] pushed hard for a fighting chance to meet the goals.”

However, as 2025 looms, finding a replacement for Styrofoam will now need to be top of mind for every retailer, not just in cities with local bans.

From local bans to statewide standards

Similar to how California’s plastic bag fee emerged after a raft of local measures, SB 54 follows local actions on Styrofoam. More than 130 cities already have local ordinances restricting Styrofoam to varying degrees, according to Californians Against Waste, giving businesses some insight on how to utilize alternative materials.

Grocery stores and food producers will likely have less than two years to adjust their operations if Styrofoam producers cannot meet SB 54’s recycling requirements.

A market for alternative materials is emerging but meeting grocery stores’ needs for durability, humidity control, preserving products and other factors will require careful planning.

One benefit of a unified statewide policy is that it eliminates the patchwork of requirements and creates a larger market for alternative products. Additionally, examples are already emerging where local governments are allowing more time for businesses to comply.

The City of San Diego first proposed a comprehensive ban on Styrofoam in 2019. However, the ordinance was challenged in court, and city officials agreed to conduct a comprehensive analysis.

After concluding the study, San Diego’s ban recently took effect on April 1. It also includes a special exception for small businesses with incomes below $500,000 per year who will be given until April 2024 to comply, setting a similar timeline as SB 54, which will kick in several months later on January 1, 2025. The city is also considering a request from CGA for a two-year delay for raw meat packaging.

Grocery stores and food producers will need to prepare accordingly.

“This issue is a balancing act between meeting consumer demand for environmentally conscious packaging, while simultaneously ensuring food safety and reaching a realistic solution for grocers of all sizes,” said CGA President Ron Fong. As the experience in San Diego demonstrates, local governments are already factoring in SB 54 when setting their own rules.

The impact on businesses and consumers

Debates on past efforts to phase out singleuse plastic bags or increase composting requirements have centered around the health risks of eliminating these products, such as quality impacts on certain commodities like raw meat, and other practical or logistical concerns.

However, businesses will now need to resolve those issues with SB 54 on the books.

“Over time, we are all moving toward more sustainable food packaging,” said Senator Allen on what companies should expect for the future.

Grocery stores and food producers will need to prepare accordingly. The cost of packaging has traditionally been negligible for food products, but those costs will likely increase as the search continues for alternative materials that meet consumers’ expectations. Some retailers are already testing plant-based fiber packaging that is fully biodegradable and recyclable while aiming to mimic plastic’s cost and performance. In addition, new packaging companies like Arizonabased Foodprint continue to emerge to fill the need for alternative materials. This trend will only increase as SB 54’s mandates create a larger market for those products.

The Wall Street Journal covered a self-imposed effort to eliminate plastic packaging from Iceland Foods, the operator of 1,000 grocery stores in the United Kingdom. The retailer has grappled with challenges but continues experimenting with different product options.

They are optimistic they will ultimately find optimal solutions and expect costs to decline as they scale up their use.

While rising food costs are already an issue for most families, Californians have generally been open to playing a role in reducing their waste footprint.

“There’s not a single day that I don’t marvel at the trash can in my kitchen and think about the ridiculous amount of waste we create as a family each day,” said Kimberly Miller, author of the Mommy Blogger in California Grocer “When I shop, I actively look for materials that are at the least recyclable, but I would definitely be comforted knowing materials were biodegradable.”

“I’m fairly strict about our food budget, so higher food [and] packaging prices will mean making some cuts to extras, but that doesn’t necessarily mean I’m not in favor of them,” added Miller.

What to expect looking ahead

Some environmental groups are concerned that SB 54 contained too many concessions for plastic manufacturers and businesses. They are also worried it opens the door to certain types of chemical and advanced recycling and has provisions to exempt materials that present “unique challenges.”

These issues are likely to be a focus for business and environmental groups as the details of SB 54 are spelled-out through CalRecycle’s regulatory process, which is now getting underway.

“Existing and emerging technologies will play a critical role in addressing pollution and recycling and we look forward to working with policymakers on ensuring all options are on the table as we develop

solutions moving forward,” added Armour on the business community’s engagement in the regulatory process and future legislation.

Nick Lapis, director of advocacy for Californians Against Waste, predicted state lawmakers could approve additional restrictions around the most toxic and least recyclable forms of plastic but didn’t foresee other immediate new mandates.

One advantage of SB 54 is it can be changed by the Legislature if specific provisions prove to be unfeasible, unlike the proposed ballot measure, which could be crucial to businesses with unique challenges like grocers.

“The Grocers Association was a really important player in the conversation from the very beginning,” added Allen on his appreciation for CGA’s continued involvement and engagement on the issue.

In the meantime, all parts of the food supply chain must prepare for SB 54’s rules to kick in. However, necessity is the mother of invention, and with a market as large as California requiring new forms of packaging, there will be opportunities for innovative products to fulfill the needs.

From the consumer side, Miller says, “There will always be a contingent of people who resist change, and for them, the change will have to be more gradual. But for many of us, these changes are welcome.” ■

“Over time, we are all moving toward more sustainable food packaging,” said Senator Allen on what companies should expect for the future.

RETAIL MEDIA: Advertising to consumers at or near their point of purchase, or point of choice between competing brands or products.

OPPORTUNITY ABOUNDS AS RETAILERS AND SUPPLIERS EXPLORE NEW FRONTIERS IN ADVERTISING

Consumer packaged goods companies have always looked to where the eyeballs are. That was true from the first sign boards at ballparks to newspaper classified ads to Super Bowl commercials, hoping customers would remember a catchy name or slogan when they went to the store.

Today, technology has made it possible to go direct—advertising directly with media networks owned by large retailers and distributors and meeting potential customers right in the channels where they are making purchases. As the media landscape changes and the return on investment from traditional outlets becomes less certain, there is a logic in diverting resources into channels directly controlled by retailers. It has also resulted in a financial boon for many of these retailers, who find themselves sitting on the ingredients of a valuable advertising property.

byMattPressberg

“Any retailer knows how near impossible it is to get the attention of a potential customer, especially in a world dominated by Amazon,” said Gabriel Kahn, director of the Media, Economics and Entrepreneurship program at the University of Southern California’s Annenberg School of Communications and Journalism. “Anything that gets in front of customers at the point of sale is incredibly valuable, particularly in a media landscape that is beyond splintered and fragmented.” That value has resulted in total ad spending on retail media networks projected to surpass $45 billion this year, per data provided for the California Grocers Association by eMarketer, a market research firm that is now part of Insider Intelligence. Amazon accounts for more than three quarters of that spending—nearly $34 billion—but what’s left over still represents a huge opportunity for other retailers, said Max Willens, a senior analyst at eMarketer.

With plummeting linear TV viewing and plateauing streaming, as well as lessregulated digital outlets that can present

brand safety issues, retail media groups have increasingly become a safe and valuable space to reach customers, Kahn said. The increased demand is also due to other digital avenues such as Facebook advertising becoming less efficient as a result of Google and Apple stopping their support of thirdparty cookies and mobile tracking. In this context, the rise of online grocery shopping, apps, and loyalty programs have created a situation where retail media groups make a lot of sense both for retailers and consumer packaged goods companies. On one hand, retailers can monetize their new digital traffic, in addition to physical storefront display opportunities and other creative uses of digital and physical real estate. On the other, CPG companies can precisely target a population that is actively shopping and insert their product directly into their purchasing process.

“You have inventory very close to the transaction,” said Willens. “It’s highly efficient.”

iStock

A COMPLEX GAME FOR CPGS

Consumer packaged goods companies get to advertise directly in spaces where customers make purchases. Seeing an extremely compelling TV commercial still requires the viewer to go to a store or online to make the purchase. Seeing the same product advertised directly on a grocery store app or social platform presents fewer hurdles in the way of buying it.

That has been proven out in the results: one marketing executive who works closely with several Fortune 500 companies ran a campaign for a high-profile consumer brand on Instacart that had a 20 percent conversion rate—almost unheard of for a traditional line of media.

“People using these platforms are comfortable transacting at a lot of different price points,” Willens said. “These are also people you know quite a bit about, and repeat purchases paint an even deeper picture of who they are. It’s a very rich environment for a good conversion rate.”

CPG companies can also benefit from pricing that remains below many traditional means. Television commercials are expensive and wide-reaching—but not as relevant as they were before the acceleration of cord-cutting. Meanwhile, retail media networks are growing and constantly reaching more eyeballs, allowing CPGs to put their funds into an ascending platform that may still be undervalued, according to the marketing executive.

Before any brand goes full steam ahead into retail media, there are some important considerations. These networks are great at serving relevant advertisements to people who are already mentally ready to buy, but targeting and personalization has a fine line between useful and creepy.

Customers like to be rewarded for their behavior, but can push back at being tracked in a way that provides value to CPG firms. “Consumer packaged goods companies have the most to gain, and the most complexity to deal with,” said Willens. “Retail media networks are exactly the kind of digital channels they should be spending money on. These retailers are essentially in the sediment of the relationships between their brands and customers. But there are risks.”

One fairly obvious one Willens and the marketing executive pointed out are the management issues that come with expanding a relationship with a retailer, which brings in their agencies and other executives. This can lead to situations where there are too many cooks in the kitchen, and sensitivities when a brand might want to retarget customers through a third party, which may not be in the interest of the retail media network.

FROM PRODUCE TO PRODUCING

Grocery stores have always had a low-margin core business, but retail media networks provide them with the opportunity to diversify into a historically more profitable niche: media and advertising. Walmart has had in-store TVs with advertising since the mid-2000s, while Amazon currently accounts for more than seven percent of the global online ad market, according to eMarketer. Other large retailers, including Kroger and Instacart, have taken notice of the growth and profitability of their peers and started retail media networks of their own.

“Grocery has historically been a tough business with very low margins,” said Willens. “Media, if done well, can have very healthy margins of 25 or 30 percent.

If you are in a single-digit-margin business, it’s hard to say no to.”

While the potential riches are enticing, Willens said retailers have to be pragmatic in how they approach setting up a retail media network or finding other ways to participate.

“This space is already fast-growing and fragmented,” he said. “Retailers have to decide if they have enough digital scale and/or first-party data to make their apps or websites worth seeking out for advertisers.

If both aren’t true, they should go in via aggregators.”

“Media, if done well, can have very healthy margins of 25 or 30 percent. If you are in a single-digit-margin business, it’s hard to say no to.”

Even some large grocers have decided they were better served by not going it alone. Last month, Sprouts Farmers Market, a national specialty grocery store, announced a partnership with Instacart’s Carrot Ads platform, allowing brands to advertise across both Sprouts and Instacart (which provides grocery delivery for Sprouts).

According to a June 2022 report from Wakefield Research, while consumer packaged goods companies are largely happy with the results from retail media networks, they’d like to see better data and insights. Sixty-six percent of consumer packaged goods companies would be very or completely likely to allocate more of their advertising dollars with a retail media network if it provided point-and-click data insights that allowed them to build their audience. Nearly one-fourth of CPG firms ranked audience segmentation and insights as the top additional service they would want to see from retail media groups. This presents a significant market opportunity for retailers that invest in the technology, security, and capabilities required to deliver trustworthy, actionable intelligence and data. “There’s no real trusted third party to say, ‘the spending on Kroger works, but the spending on this other platform doesn’t,’” Willens said. “It becomes difficult to decide on the incremental value of one network versus another.”

In addition, retail media networks provide a tremendous amount of brand safety that is truly unparalleled in traditional means. As culture wars have intensified in recent years, advertising on the wrong network or adjacent to the wrong celebrity has found certain brands caught up in an unintentional political backlash, as Kahn pointed out.

On the other hand, YouTube and other streaming services offer even less in the way of guardrails, which the marketing executive said is a problem that is increasing in awareness among brands. Redirecting advertising from there to Walmart’s television network or Instacart’s app removes any negative political associations and makes it all about the product.

A GOLDEN ERA

With an an uncertain and fragmented media landscape, growing efficiency in data targeting, and technology becoming even more integral to the shopping expereince, the ingredients are in place for a golden era for retail media networks. Consumer packaged goods companies now have access to an advertising medium that can convert upwards of one in five viewers to consumers, which is likely to only grow more efficient as they continue to learn customer behavior. And grocers and other retailers have a sustainable, highmargin, complementary business that could not only provide extra financial resources to reinvest or distribute to shareholders, but a treasure trove of information about customer behavior.

According to data from eMarketer, U.S. retail ecommerce sales per digital buyer are expected to rise more than 40 percent over the next five years, going from about $5,000 in 2023 to more than $7,000 in 2027. This should provide a significant boost to their retail media businesses, as customers will direct more spending to those channels. Willens sees plenty of growth ahead, but offers a warning from another industry that found riches in advertising before losing its way and focus: traditional media.

“Local news publishers learned the hard way that there is an opportunity cost to adding ad space to any product,” Willens said. “If your local grocer’s website looks like a local news website, that is a bad experience. A busy instore environment is also a problem. Adding incremental millions is great, but not if it comes at the cost of your core business.” ■

According to a June 2022 report from Wakefield Research, while consumer packaged goods companies are largely happy with the results from retail media networks, they’d like to see better data and insights.

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NuCal Foods

By Nate Rose

CONSUMERS ARE SHIFTING MORE FLUIDLY BETWEEN VALUE AND SPENDY FOOD AND BEVERAGE PURCHASES, LEAVING GROCERS TO STRATEGIZE HOW THE MODERN GROCERY STORE CAN SATISFY THE MOVING TARGET THAT IS CONSUMER PREFERENCE.

Suzy Monford was out for her Sunday bike ride when the weather had other plans. Dodging the rain, she pulled into a nearby H-E-B in Austin where she scored a breakfast taco,

will coin this and say it’s not the everything store, the modern grocery store is the essential and experience store,” she explains. “We have 100 percent of your essentials covered and your experiences covered. We aren’t just selling merchandise; we are providing experiences. That’s the big unlock and differentiator. The modern grocery store suits your lifestyle 24/7.”

Monford, a grocery veteran with leadership stints at Kroger and Andronico’s Community Markets who is CEO and Founder of the retail consultancy Food Sport International, believes every grocer must work to shape themselves into an essential-experience store if they are to meet the desires of shifting shopper lifestyles.

“I love this topic, and I don’t think there’s anything more relevant in the zeitgeist right now when it pertains to grocery retailing,” she says. “The best grocers will wake up every day and start with that question. If we ask ourselves as leaders and operators what’s the modern store, we can make sure we’re hyper focused, which is honestly what it takes to survive and thrive today.”

Ethan Chernofsky, Sr. VP of Marketing at Placer.AI, agrees, but with his own spin honed from years of working in leadership at the location intelligence company.

The New York Times, and a coffee. Sunday morning saved. This experience illuminated for her the answer to the question that is on the minds of grocers everywhere:

What is the modern grocery store?

“The ideal modern grocery store really comes down to answering who am I serving,” he says. “Very often it’s asking what’s the store’s identity. Top grocers really understand that. And the biggest thing in grocery is the modern store doesn’t look the same for each chain. There are broad strokes, sure, but it’s not supposed to be the same. It’s supposed to be different, and that’s why so many of these chains can thrive. It’s not like consumer electronics or home improvement where there’s a winner. Grocery has a much more diverse mix because each brand can communicate and associate with unique things.”

The Consumer Mindset

As Chernofsky and Monford explain, the successful modern grocery store must clearly and intentionally define its target audience, then seek to fulfill the audience’s lifestyle needs around the clock. This reality leaves grocers to grapple with how to best serve a 21st century shopper who often toggles between seeking essentials or experiences seemingly on a whim. Restaurants again account for a greater share of food spending than food at home. Lifestyles have been reshaped by cemented trends, such as working from home and the urban exodus. Economic conditions continue to play a major role in shaping shopping habits.

On top of these headwinds, consumers increasingly think about how each purchase says something about themselves and their values. Gone are the days of one type of yellow mustard satisfying every shopper. Barry Schwartz wrote the national bestseller The Paradox of Choice in 2004 to explore the psychology of consumer choice, identity, and how American abundance affects satisfaction. The subtext of his book is “why more is less,” and he has spent his career studying decisionmaking as Professor Emeritus at Swarthmore University in Pennsylvania.

“When there are only two kinds of jeans: Lee’s and Levi’s, the jeans you choose says very little to the world about who you are,” Schwartz explains. “When there are 2,000 kinds of jeans, the jeans you buy make a statement of identity. What that means is that even mundane choices make the stakes go up. You’re the kind of person that buys x rather than y. When there are infinite number of options, it’s easy for what you choose to be attached to who you are.”

This facet of life for modern consumers is no less true at the grocery store. In the pandemic many brands and grocers reduced the number of SKUs to account for supply chain issues and to prioritize the most essential and popular goods.

However, as life falls into the familiar patterns of before, grocers are again working to differentiate themselves through their own retailing identity. For a brand-focused consumer, a grocer’s identity is largely defined by the brands they carry. Especially as social and environmental causes remain top-of-mind, consumers are looking for brands that reflect their values.

“I do think that grocery shopping has become much more of a moral and therefore fraught enterprise in comparison to what it used to be,” Schwartz elaborates. “Is this good for the planet. Will this laundry detergent take more water. Is this a healthy choice. With a concern not simply about yourself being healthier, but also of what impression you make. It’s very hard to just buy cereal.”

Each consumer is therefore choosing their own adventure whenever they make a consumptive decision. But despite what consumers say—that they appreciate all the optionality presented to them—Schwartz believes his research shows all this choice ultimately, and perhaps ironically, leaves consumers unhappy. After all his years of research, he believes it’s unsurprising Trader Joe’s continually succeeds at making its shoppers happy through its tight curation of products.

“Anything that imposes constraints is a blessing,” he says. “It’s not a blessing in Russia, but it’s a blessing here. Having no choice is terrible and having too much choice is also terrible. Creating that sweet

spot is the secret. But it’s a moving target, and it’s really hard to try to find a formula that satisfies everybody and I think it’s a huge mistake to try.”

The Purpose of Audience

Even as grocers know they must seek to differentiate their retail operations through brand and experience, every grocer also seeks growth. This is akin to going as wide as you can within given constraints. Whether that’s the constraints you give consumers or the constraints you place upon your own brand through audience definition.

Adam Salgado, Chief Marketing Officer at Cardenas Markets and CGA Board Member, says that his goal is to strive to offer the most fresh and authentic variety of items that reach the broadest audience possible.

“At times, this becomes challenging, given the different needs our multigenerational Hispanic customer base is looking for,” he adds.

“Where we win is when we connect our customers with the authenticity and nostalgia of a variety of brands that help them remain true to who they are, while maintaining their heritage intact. Beyond brands, it’s more about the cultural connection the experience of such brands provides.”

You can think of audience definition as plotting your brand on a graph where the x-axis covers the essential-experiential dichotomy and the y-axis includes good, better, and best brands, according to Monford. “The basic structure for this choose your own adventure consumer is using brands,” she explains.

“Typically, the good-better-best brand strata. You can use that strategy if your’e looking to appeal to a little bit of everyone. If you’re bicfurcating some of that demographic… Let’s say you’re somewhere you don’t need to think about a value consumer, then you lean into better-best. And potentially, if you’re not serving value and also not interested in mainstream, you’re highlycurated and dialed in—like natural and organic. In that scenario, you are just targeting the best brands.”

When Monford was CEO of Andronico’s Community Markets, she deployed such a best-in-class strategy by determining their target customer base. She then used brands and store design to curate an experience that spoke to her customers.

“Is this good for the planet. Will this laundry detergent take more water. Is this a healthy choice. With a concern not simply about yourself being healthier, but also of what impression you make.”

For Chernofsky the fragmented consumer that uses brands to shape their identity offers a tremendous opportunity to retailers. It’s not a zero-sum game where one grocer will win out.

“You have to ask yourself where do these products fit in a consumers matrix?” he says. “But the cool thing is, if you’re someone who’s succeeding in getting visits, what’s the likelihood if you’re in my four walls that you’re leaving with nothing. And then if I can get you to come back in a repeated way, I want to be part of your mix. I might not own your entire basket, but if I can be a part of your mix, I think I’m really succeeding as a grocer.”

This thought-process is intuitive for the Placer.ai marketing leader as the company’s data intimately tracks datapoints like foot traffic and in-store dwell time.

“They all have Heinz ketchup, and they all have cereal,” he points out. “Maybe not the exact version, but that means you choose your grocer based on where you like shopping. The proximity is good, and it’s easy to get in and out; they have all the things I want in one place.”

“At Cardenas we think of our audience as ‘ever-changing,’ Salgado, the chief marketer at Cardenas Market, says. “We understand there is a constant evolution to how and where customers gather the information they need to make their shopping decision every week. We also get that they expect a simpler shopping experience that we are able to offer through the use of technology, digital platforms and an assortment of items that are based on today’s trends. We must adapt and adjust in order to accommodate their needs to ensure a stronger brand loyalty.”

Technology’s Role to Play

In the face of today’s consumer specificity and the essential-experience driven mindset that many believe is key to success, every

grocer must continue to sharpen its go-tomarket strategy. This necessarily means moving away from the middle approach and cobbling together a broader audience out of smaller ones.

“What happens to good enough?” Monford posits. “You have to move out further into the fringes. If I’m playing the middle ground, then generally speaking, I’m probably far over-indexed in national brands and maybe not enough in local and owned brand. So, what that means is I’m playing price and item, and I’m competing against everyone who sells Campbell Soup and Cheerios. There’s no differentiator. It’s literally the race to the bottom on price and item.”

Executing against this schema requires greater granularity for which technology is the most likely answer.

Chernofsky sees the footprints of technology’s ability to impact how grocers build the modern grocery store in his company’s proprietary location data.“What’s changing about grocery is the ability to think much more granularly on a location-by-location basis about how to have the right products and right experiences to those audiences.”

Placer.ai closely follows the data closely on these geographic trends, and Chernofsky believes we don’t yet know what stage of the post-pandemic cycle society is in.

“There’s this lovely conversation around the new normal and virtual work,” he explains. “Would it shock you if in a year from now it’s this 60 percent of where it was pre-pandemic and that’s the standard. That’s what I would bet, but we have no idea where we are in this longer-term cycle.”

Monford extends the real estate conversation into a metaphor for the inside of the store, where technology becomes the lynchpin to a more efficient and less wasteful operations model.

“As a grocer, we are at all times kind of a real estate developer.,” she details. “We have this little village we are running. How do we get sales and gross margins per square foot, and how do we create a flywheel that runs all day long. I have to be able to bring my goods to market.

“Technology is everything,” Monford continues. “Any grocer not leaning into tech right now might not be here in five years. Anything that is fun in our business is all based on technology today.”

“Gone are paper tags, here are electronic shelf labels,” she says. “We are so far behind even Europe. Electronic shelf labels enable dynamic price and promotion. It’s money, but also reduces shrink and carbon footprint. I want to order better, procure better, I want JIT so I have less waste. Less waste lowers cogs, when I lower cogs, I can lower price which attracts customers. When I do all of that, I can reinvest savings into wages and pay people better. Then you add the AI computer vision camera so that I know exactly what’s on shelf or not on shelf at any time and from there I can reverse engineer my entire go to market model. I can prioritize replenishment; I can surprise and delight customers. I can make that person’s job easier, faster, better, more fun, and more profitable. That’s the great unlock.”

Shiny Happy Customers

When Schwartz wrote The Paradox of Choice in 2004, the internet was only just beginning its ascent and social media had not yet come to dominate the digital landscape and the consumer zeitgeist as it does today. The Professor Emeritus thinks, if anything, it has proved his theory correct. Social media has accelerated and exposed consumers to trends and what’s considered best-in-class by their peers at a more rapid rate. They then try to maximize every decision lest a choice reflect poorly on their constructed identity.

“Most of what we buy is the same stuff we bought last week,” says Schwartz. “And we really only go through this excruciating decisionmaking process on a few of the items in the basket for the most part. Is this the best toilet paper? I have no idea, but it’s good enough. So that’s what saves us. But people don’t like to admit that they are being thoughtless. When you are doing things out of habit that means you are doing things thoughtlessly.”

How many happy faces out of 10 would your average customer circle after their visit? If Schwartz is right, and consumers are rendered dissatisfied by abundance and overwhelming choice, the modern grocery store that is the best curated and most adept at intentionally serving a distinct customer wins. Salgado, the Cardenas CMO, sees a similar dynamic in his company’s approach. “I would define the ‘modern grocery store’ as one that has understood their customers, simplified the experience for them and evolved over time to adjust to their needs and expectations,” he shares, building on Schwartz’s thesis. “Some examples of such

adjustments which grocers should be paying attention to include expanding beyond the four-walls of the stores into e-commerce; providing a quick and easy check-out process via self-checkout ordering; improving the omnichannel marketing approach to make sure customers are seeing a consistent message across all vehicles.”

“Everything depends on what you’re trying to achieve,” adds Chernofsky. “At the end of the day it’s a challenge to get people into stores. You’re competing with so many things. So, the question is who the right audience for you is and how do you incentivize that visit. In some cases, it’s about location, and location if it’s the most important thing then could mean figuring out a different format than your classic format…it’s that balance. One of the things we see across retail is this ability to be multi-format and have different locations which is centered around the idea that I understand how to get the right products into the right places.”

While creating the modern grocery store that satisfies consumers is a big challenge, Monford believes California’s grocery community continues to be on the vanguard.

“I think there are some of the best grocers in the world in California,” she concludes. “You have the big banners like Kroger and SafewayAlbertsons. Incredible regionals like Nugget Markets. Category and mind-bending ‘groceraunts’ like Erewhon. I see highly-curated concepts up and down the chain. There are some terrific Hispanic markets. I think in California, we do a very good job of defining the concept and playing within those guardrails.” ■

connecting growers to retailers

Reflecting on the Last 25 Years of the Association and Looking Forward

By Grace Becker

SOWING THE SEEDS

Originally named the California Retail Grocers and Merchant Association, the California Grocers Association (CGA) was formed in 1898 and celebrated its centennial anniversary in 1998. Twenty-five years later, this year marks the 125th anniversary of the Association and today’s landscape looks much different, with new technology, evolving customer priorities, and a changing regulatory environment in California.

Since its inception, CGA has taken root in the Golden State’s grocery industry, branching out its services and support to members in all corners of the state and standing tall to represent the industry and weather approaching storms. Considering all that’s changed over the past two and a half decades, our industry has remained united and resilient, and has much to be proud of. Together, let’s reflect on major milestones from the past 25 years of CGA, and look towards future growth for the Association as it supports and uplifts the industry responsible for feeding our great state.

1998-2008: Laying Groundwork for Leadership 2014: CGA and CIGA Merge

While its mission to serve California’s food and grocery industry has remained unchanged, the Association has evolved significantly over the past 25 years.

Its transformation was ignited by CGA’s past president, Peter Larkin, who was only a couple years into his tenure when the Association turned 100 years old. Under his leadership, Larkin changed the tone of the organization and met growing demands from members.

“Peter started the revolution of modernizing CGA,” said CGA President and CEO Ron Fong. “He professionalized the Association and brought in astute professionals in finance, government relations, and association management.”

It was also around this time that CGA members asked for a stronger emphasis on the Association’s government relations efforts. “Government relations started to become higher up on the priority spectrum,” said Fong.

By the time current CGA President and CEO Ron Fong took the wheel, the demand for a robust Government Relations program had climbed.

“When I took over in 2008, the Association ramped up to the next level of professionalism with high-level lobbyists and a greater government relations emphasis,” said Fong.

To properly support CGA’s vast membership, comprised of 300 retailers operating more than 6,000 brick-and-mortar stores, and approximately 150 grocery supply companies, Fong also enhanced the breadth of the Association’s leadership through its Board of Directors.

Senior Director of Events and Sponsorship

Beth Wright, who has been an employee of CGA since 1996, noted how much the Board has evolved through the last 25 years alongside the industry. She recalled when she first started working at CGA, only two women sat on the Board. “Under Ron’s leadership the diversity of the Board has really changed,” she said.

Since, the Board has nearly doubled in size and now includes a broad range of industry members. “When I started, the board was around 25 people. The expansion of supplier members in our bylaws, introduced by former CGA Chair Jim Amen, really increased the Board size,” said Wright.

California’s grocery industry was strengthened in May 2014 when the California Independent Grocers Association merged into the California Grocers Association, adding 126 operators and around 50 supplier companies to the Association’s membership. The move united the industry’s voice and bolstered the industry’s advocacy efforts at both the state and local levels. It also allowed the Association to speak for the kinds of retailers that resonate most with legislators: momand-pop businesses and family-owned stores. “I think by combining our two associations we got the best of both worlds because we have a more robust organization and we are serving a broader field of grocery retailers,” said Fong. “Independents have thrived with the backing of CGA. Their programs have ramped up and reached a higher level.”

Since the merger, CGA has championed the independent grocery community and retained and evolved several of its signature programs and events, including The Independent Operators Symposium and Independent Grocers Golf tournament, which remain successful to this day.

Past CGA President Peter Larkin and current President Ron Fong.

Ron Fong on Governor Newsom’s Task Force on Business and Jobs Recovery

“The CIGA and CGA merger created an association with a much stronger support system for the CIGA members and stronger financial stability for both organizations.

I’m very proud that all the commitments CGA made to the CIGA members have been honored and the independent grocer is stronger today because of its membership in the California Grocers Association,” said 2023 Board Chair and indepdent store operator Dennis Darling.

A merger of this kind may not be the last. “I foresee consolidation in associations. The association world is much like the grocery world, it’s hard to make it if you’re small. So, if smaller associations partner with someone big, like CGA, it’s beneficial,” said Fong.

2016: CGA Achieves Plastic Bag Ban Victory

2019: CGA Moves House

While the Association has reinforced the industry’s presence at the Capitol, formed political alliances, and achieved many legislative victories over the last 25 years, perhaps the most notable regulatory feat was the 2016 single-use plastic bag ban.

As grocers will remember well, back in 2014 CGA scored a major political victory for the industry when SB 270 was signed into law by Gov. Jerry Brown, setting a statewide standard by banning the distribution of single-use plastic carryout bags and requiring the use of recycled paper bags or reusable plastic bags for a modest fee. Within hours of the bill signing, the American Progressive Bag Alliance filed a referendum, Proposition 67, to overturn the new statute. They also filed a separate referendum, Proposition 65, which would have redirected all revenue from the sale of reusable or recyclable paper bags to a state environmental fund. Together, CGA and its members rallied to raise over $300,000 toward the Yes on 67 campaign.

CGA led a coalition that earned the support of elected officials, business and environmental groups, community leaders, and endorsements from nearly every major newspaper in the state. On November 8, 2016, California voters approved Proposition 67, the statewide Single-Use Carryout Bag Ban, culminating in a victory for California’s grocery industry.

A new era for CGA kicked off in 2015 through the purchase of a historic, 20,544 square feet, three-level office building in downtown Sacramento. After extensive renovations, the member-owned headquarters for CGA and the CGA Educational Foundation opened in April 2019. The open house and gala drew more than 100 elected officials, Association members, and invited guests. Not only was the CGA building a sound investment by the CGA Board of Directors to benefit the Association for years to come, but since its opening the headquarters have served as a hub and resource for CGA members to hold trainings, meetings, and events.

“The decision by CGA’s leadership, Board, and membership to truly put a stake in the ground and invest in a memberowned building exemplified our industry’s continued commitment to California and the communities we serve collectively,” said Past Chair Kendra Doyel, who led the Association at the time of the grand opening. “The building serves as a center for the incredible work that CGA does not only in Sacramento and California as a whole, but, as the largest and most impactful association in the country, across the United States. The decision to invest precious resources in this way has proven to be a marked piece of the Association’s continued influence and success.”

Ribbon cutting for the CGA Headquarters Grand Opening in 2019.

2023 Indepdent Operators Symposium in Maui

2020: Navigating COVID-19

It goes without saying, 2020 marked the beginning of a historic few years for the grocery industry. The COVID-19 pandemic thrust grocers into the spotlight and highlighted the essential nature of the industry. CGA was with our members every step of the way, helping navigate through emergency orders and lockdowns, mitigating panic buying through public messaging, delivering PPE equipment to members, and making sense of what seemed like an endless stream of local ordinances. The Association maintained connection throughout our industry, quickly pivoting events to a virtual format so members could gather, even while apart.

The grocery industry was front and center through the pandemic, which created new opportunities to quickly adapt to new technologies and processes to maintain the health, safety, and prosperity of the industry, its employees, and its shoppers. President Fong was out it front representing the industry in the media and via his appointment to Governor Newsom’s bipartisan Task Force on Business and Jobs Recovery to jumpstart the state’s economy.

IN Bloom

Returning to the present, today the Association is thriving with healthy reserves and new programs ahead. While it’s important to reflect on the many changes and victories in our industry since the centennial celebration, there’s no shortage of offerings to look forward to.

Recalibrating Government Relations

As California’s regulatory landscape increasingly targets the business community and grocery industry, CGA is taking its government relations strategy to the next level. In the short-term, the Association is working to increase its political action campaign, GroPAC’s, annual budget with a goal to fundraise $200,000 in 2023.

“The regulatory and legislative work has ramped up tenfold. There is so much regulation and legislation affecting grocery now, even from 10 years ago, which is why we’ve had to refocus our staff and our operations to accommodate for what our members need most,” said Fong. In today’s political landscape, moderate Democrats and Republicans are shaping key political debates at California’s Capitol and local city halls. CGA is proactive and steadfast in forming vital relationships with key members, including Chair of the Moderate Democratic Caucus Blanca Rubio who spoke to members at CGA’s advocacy event Grocers Day, and incoming Speaker Delegate of the Assembly Robert Rivas, who joined CGA and store owner Chang So for a tour of Hollister Super last month. Moving forward, CGA will direct campaign contributions to the Legislature’s Moderate

Caucus members and local elected officials who support the industry and California’s business community at the Capitol.

Further, CGA will continue to educate and inform our membership on the intricacies of California’s statewide and local political landscape, and how it affects their business.

Diversified Offerings & Innovative Events

CGA is finding new ways to diversify offerings through its for-profit company, RMS, which provides cart retrieval, maintenance, sanitation, coupon redemption services, and more to grocery retailers. Adding to its offerings, RMS will take on a leading role to revamp the CRV bottle recycling program in a way that is feasible for grocery retailers following the reform of the “Bottle Bill”.

Over the past 10 years, the Association has adjusted its events to better serve members and has developed a full suite of new events. The CGA Stategic Conference, which was once a traditional trade show, transformed into an energetic three-day event with valuable educational programs and handorchestrated business meetings between

Chair of the Moderate Democratic Caucus Assemblymember Blanca Rubio speaking at Grocers Day.

CGA Delivers PPE equipment to members.

retailers and suppliers. Last year CGA hosted a Leadership Summit to connect top grocery executives and key elected officials, including Governor Newsom.

CGA also toured Board Members around the Bay Area, visiting Google, the Port of Oakland, and vertical farm Plenty, for its Retail Tomorrow, California event to discover new innovations in retail and explore supply chain challenges. Looking forward, members can expect the Association to keep finding fresh and innovative ways to support our industry with new events and programs that meet the industry’s needs in real-time.

“We try to always be on the driving edge of what’s coming and what the need is now instead of sitting back. It’s about being in tune with the industry and what our members tell us they need,” said Wright. This summer, the Association introduced a brand-new event offering, the Food Industry Economic Forecast, featuring a keynote from an expert economist to give grocers a forward view of the economy and how it impacts customers and business. July also brings the return of the one-day Store Leader Training Seminars to provide store-level managers with hands-on retail-specific training for an opportunity to build their skillset and grow their grocery careers.

“We are a growing, evolving association, much like the grocery business is changing. We like to bring new event to our members and try new things that have never been tried before,” said Fong.

Promoting Industry Education

As the industry’s dedication to employee education builds, the CGA Educational Foundation (CGAEF) continues to serve as a meaningful resource, changing the lives of industry students through its signature college scholarship and tuition reimbursement programs.

“The Foundation is flourishing,” said CGAEF Director Brianne Paige. To date, the Foundation has raised a total of $8,900,150 in college scholarships and has awarded $2,028,668 in tuition reimbursement. These figures translate to thousands of students achieving their educational goals and molding into future grocery leaders.

“The Foundation is moving towards a million-dollar annual investment in member employees through the college scholarship and tuition reimbursement programs. We’ll continue to find ways to expand our programs and resources to meet the changing needs of our members,” said Page.

On the Horizon

Looking ahead, California remains a frontier for innovation and new customer demands.

“I think consumers are getting more involved and bought into legislative and regulatory matters. Consumers care more and are more educated about the products and foods that go into their bodies, so they’re lobbying for what they want to buy from our grocery stores,” said Fong. “They’re telling us what they need and we’re doing our best to keep up and put those products into our stores.” Despite changing expectations and regulatory challenges, Fong foresees a healthy business climate in California and plenty of mouths to feed.

“You’re going to have continued growth and a consistent customer base in California, but along with that comes a changing consumer palette which will challenge our grocers to stock new items,” said Fong.

CGA is proud of its long history supporting California’s food industry and is honored to grow with the grocery industry into the future—whatever it brings. “The grocery industry is so worthy of good representation and it’s my personal pleasure, and the pleasure of our staff, to represent this group of people,” said Fong. ■

CGA Board visits Google during 2022 Retail Tomorrow, California event.

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Hall of Achievement

HONORING

Mimi Song

Superior Grocers

United Natural Foods, Inc. (UNFI)

APRIL 27, 2023

ANAHEIM MARRIOTT

Mimi Song

But that’s how she describes her entry into the grocery world, which has led to her 42 years leading Hispanic grocery banner Superior Grocers.

After immigrating from Korea to Southern California in the late 1970s, Song had to find a job to help support her family. Her family had arrived in the U.S. with very little money, and Song knew she had to help.

“I was the eldest daughter in my family and knew I had to work even though I didn’t really speak any English or know how to get around in this big strange city,” Song says.

She began as a cashier at an Asian supermarket, her first exposure to the grocery business. Song realized she wanted to do more than cashier for minimum wage—which was about three dollars an hour at the time. After about a year, she left to start an office job in accounting. Not long thereafter, Song got a second job at a conventional supermarket in Los Angeles. Working both jobs, Monday through Sunday, Song’s schedule didn’t allow for days off.

“Since I was learning about the grocery business, I thought, I can try to do this on my own,” Song says. “People need to eat! I can get products, I can sell, I can make money. It was a simple, naive thought.”

As fate would have it, Song learned that Smith’s Food King was closing down one of its locations in Covina, California. She just happened to find out about it around the time she was looking for her next move.

“The Smith’s Food King store came along and they just let me take over,” she says. “They gave me their lease and some inventory. Since I had no money to pay, they came up with a 12-month payment plan. That’s the way I started.”

With that first location in Covina, Superior Grocers began in 1981. It was in a mostly Caucasian area, and Song quickly hired a manager to help run the store, especially since she was still learning English. She also recruited employees from other grocery stores and a nearby community college.

Song recalls that everything was new. The industry, products, cultures and customers. So she set out to learn everything she could from the bottom up, hiring meat and produce managers and others who could teach her along the way.

She also was an avid reader of the Los Angeles Times, which featured a food section every Thursday and extensive advertising from grocers. That’s how she learned more about how Americans consumed food and what occasions they celebrated.

“At that time it was one of the biggest resources for grocery store advertising,” Song says. “Every Thursday I’d open up the food section and I learned the grocery business from the Los Angeles Times food section.”

For someone with a storied career in grocery, it’s remarkable that Mimi Song got into the grocery business by accident.

Mimi as a young girl (on the right), with her family

Mimi and her management team

For example, reading the section in March and seeing the corresponding ads helped her learn about what grocers in the U.S. sold around Easter. In July, she recognized the products and specials for the Fourth of July—ribs, beer and watermelon. It was different from her experience growing up in Korea, where they only ate special food on the Full Moon Festival and New Year’s Day.

DEVELOPING THE CONCEPT & CULTURE

Song’s first location was a standard grocery format that catered to everyone, but when she opened her second store in 1982 in South Central Los Angeles, she recognized the need for a Hispanic grocer as the population grew.

Song recalls the various shops including Hispanic bakeries, tortillerias and more—but they were all small and separate. She thought that if she brought all those features together under one roof, it could make a great Hispanic warehouse concept.

As a Korean-American, Song knew the life of an immigrant intimately, and that’s what inspired her when she decided to focus her business on Hispanic culture.

“Because I am a first-generation immigrant, even if I am not a Latino, I have been able to learn and understand the people,” she says. “I understand their focus on budget each week, and their worry.”

She said the inner city community was in need of an affordable grocery store, so Superior Grocers tried to provide the lowest price with the best quality products to everybody, even as it focused on the Hispanic community. Song tried to minimize labor at the store so better prices could be passed along to the customer.

The slogan for Superior Grocers at the time became, “U-Bag, U-Save.” Since then, each Superior Grocers location has followed a similar model and catered to the Latino community.

Song spent time traveling to Mexico. She visited Tijuana, Ensenada and other cities to learn about Hispanic eating habits, lifestyle and culture. Sharing the background as an immigrant helped her understand the community, and it was one she admired.

One of her favorite parts of the culture was that Latinos loved to gather with family to celebrate —something that Song said is a shared value among immigrant communities. With limited income, the best way for families to stretch a budget is to get together with family, have a party or a barbecue and celebrate birthdays and other special occasions, she explained.

“Family gatherings are really important. I love how the Hispanic culture values family and getting together almost every weekend,” she says, “I can relate to this as it is very similar to my own culture.”

Because of that, Superior Grocers saw a huge draw to its bakery department, with its cakes becoming especially popular. People also loved the store’s fresh meats, fresh tortilla chips and produce. The banner continued to find success in its communities.

FINDING A PASSION FOR THE BUSINESS

Truth be told, Song wasn’t a huge fan of the grocery business for at least 10 to 15 years, even as her business was growing.

“I worked long hours seven days a week, and that was in my twenties and thirties,” Song says. “It was not easy for a young girl to work so much. I never got to do the fun things you want to do when you’re young.”

But while those early years were a challenge, Song said she just stayed focused on her new job.

“When you don’t have a choice, you just do it,” she says. “So you just stay there and you open one store, two stores. Ten years passed, and then I got another three stores.”

Mimi and sister Marie in early years of the business

“Since I was learning about the grocery business, I thought, I can try to do this on my own,” Song says. “People need to eat! I can get products, I can sell, I can make money. It was a simple, naive thought.”

◀ Continued from page 47

Song’s constant dedication to hard work has remained through the present day. Rich Wardwell, president and CEO of Superior Grocers, has worked with Song for the past eight years. And while he’s worked with his share of hard-working business owners, he said Song works harder than anyone he’s ever known in an ownership role.

“She is always pushing me, she’s always challenging me and she’s always ahead of me—which is something that I find both annoying and rewarding,” Wardwell says with a chuckle.

Beyond the friendly competition, Wardwell notes that Song also cares deeply about her business and her employees—something people don’t always see from the outside. In addition to investing time in Wardwell and giving him room to make mistakes and learn, Song is thoughtful about how employees are treated in each and every store.

“My sister gave me encouragement every day and we’ve worked together for many years. She’s one of my best friends, my best business partner, and without her, I couldn’t have been able to stay in the business this long.”

Now she enjoys the business more than ever, and says she is still trying to open more stores.

CGA President & CEO Ron Fong speaks fondly of Song, whom he’s known for many years.

“Her story just puts a smile on my face because it’s similar to my family’s story,” he says, sharing that his family also started a small grocery business where the entire family worked seven days a week. “Mimi started from those humble beginnings as well.”

Fong says it’s especially unique and special to have a female executive of Asian descent be the top leader in one of the top grocery chains.

“That’s unusual in the grocery business,” he says. “That all goes to Mimi’s drive, her perseverance, her way of doing business, the fierceness in her demeanor,” he says.

STANDOUT MEMORIES

In running a grocery business for four decades, Song has seen a lot happen in the communities she serves. One experience that is burned in her memory is witnessing the civil unrest that occurred in Los Angeles, California in 1992.

Wardwell recalls walking locations with Song and seeing her check out the restrooms and break rooms in every store to make sure they’re suitable for employees. In one instance following an acquisition, Wardwell said Song called him to voice her concerns over the lack of proper space for employees to sit or rest in the building.

“She cares about the people, and they know it,” he says. “She’s just special.”

Song notes that she has thousands of people to thank who influenced her journey to owning 70 grocery stores. The most important, perhaps, is her sister, Marie Song. Marie worked with Song for several years in the business.

“It was difficult to see how the Los Angeles community was impacted by violence and looting, but I was also impressed to see how the same community came together and supported each other”, she says, “We were able to stay open and serve our community during this difficult time.”

And of course, the Covid-19 pandemic stands out as a defining experience in her career. Song said she’s grateful her stores had the opportunity to serve the community with food, especially in the last two to three years.

“Superior did a great job, and I’ve never been prouder to be a grocer.”

Mimi with Superior Grocers’ President & CEO Rich Wardwell visiting stores

Mimi and sister Marie visiting a new store

“She is always pushing me, she’s always challenging me and she’s always ahead of me—which is something that I find both annoying and rewarding”

Through these experiences and more, Song recognized that the grocery business remained a staple in people’s lives and continued to serve communities, despite what was happening outside the doors.

A SECOND CAREER IN GIVING BACK

As Song reaches the latter part of her career, she’s recognized her passion to give back, specifically to local schools and children with special needs. Her heart for this cause began with a single visit about 20 years ago.

“I had an opportunity to visit one of the elementary schools in the city of Lynwood,” Song said. “When I went there, I saw many opportunities where I could help. Budget cuts had impacted local schools and one of the first programs affected was the arts.”

Song recalls that when she attended public school in Korea in the 1970s, despite the fact that the country was developing, its education system and the buildings within it were strong. In Korea she had mandatory arts classes every week.

The experience inspired her to launch The Superior Foundation, which began with a golf tournament to raise money for visual and performing arts, computers and more for inner city schools. Song works hard through the foundation to supply schools with musical instruments, art supplies and other items needed to teach students about art and culture.

“I really believe art is an international language, and gives more emotional intelligence,” she says.

In addition to supporting the arts, Song is particularly passionate about helping children who have special needs or are coming from low-income households. If she can help them from feeling isolated from other children, she hopes their lives can be a little bit better.

“I hope I can do more when I retire,” Song says. “That will be my second career.” ■

Mimi supports local community organizations

“We were able to stay open and serve our community during this difficult time. Superior did a great job, and I’ve never been prouder to be a grocer.”

Mimi celebrates a new store opening

ABOUT OUR HONOREE

Bob Garibaldi

For Bob Garibaldi, lifelong career success comes down to enjoying his work and maintaining a strong team mindset.

Garibaldi has dedicated his career to the wholesale grocery industry, climbing the ranks and remaining with the same couple of companies through mergers and acquisitions. Now he is President of the Pacific Division of United Natural Foods, Inc. (UNFI), a wholesale food distributor that has grown into what it is today through a handful of mergers.

For the last four years, Garibaldi, who resides in Northern California with his wife Rachelle of 30 years, has been with UNFI, and prior to that he worked for SUPERVALU and Unified Grocers for over three decades.

WORK ETHIC AT AN EARLY AGE

Before trying his hand at a job in the grocery space, Garibaldi began his career after college with his dad’s business—a Coors distributorship where Garibaldi worked for two years. During that time, he realized he wanted to sharpen his skills outside the walls of the family operation.

“I left to learn, go outside and work for a co-op, Certified Grocers, and bring some experience back to the family business,” Garibaldi says. “But I enjoyed it so much that I didn’t want to leave. The career path was happening fast on the Certified Grocers side, so I just decided to stay.”

Garibaldi credits his work ethic to his background in family business. Even before he worked in the beer business, he got his feet wet at the young age of eight in the food and candy distribution business that his grandfather owned.

“Learning how to work and taking pride in what you do every single day, that’s a great trait to learn as a young person,” Garibaldi says. “To this day I think it’s the single most important thing that has ever happened to me.”

He says his grandfather always told him that if he worked hard and went to get an education, he could get anywhere he wanted to go.

Garibaldi continued to build on those lessons and kept that advice close to heart as he entered college at UCLA, where he attended school on a football scholarship to play wide receiver. He played in three Rose Bowls, a Fiesta Bowl and a Holiday Bowl.

“What I learned in athletics and competing every single day just set me up for what was to come in the real world, where you compete every day,” he says.

Garibaldi notes that learning how to work in the structure of a team toward one goal and remaining competitive has propelled him throughout his career.

In his current role, Garibaldi is responsible for nine distribution centers in the Western U.S. that serve around 6,000 retail grocery stores. That service area generates about $8 billion in purchases annually and is one of the largest divisions in the company— and is still growing.

“I left to learn, go outside and work for a co-op, Certified Grocers, and bring some experience back to the family business,” Garibaldi says. “But I enjoyed it so much that I didn’t want to leave.”

Can you spot Bob during one of his many appearances at the Rose Bowl?

His humble but competitive nature is well-known among colleagues and customers. Tod Marks, vice president of sales for Southern California at UNFI, works closely with Garibaldi and says that his ambitious edge comes from his football years at UCLA.

“He’s very competitive, but also very humble. He’s not one of those individuals who brags or beats their chest,” Marks says.

Garibaldi has made great strides over his 35-year career. He spent roughly 22 years at Certified Grocers, which eventually changed its name to Unified Grocers after acquisitions. Several more mergers occurred, and then SUPERVALU purchased Unified Grocers. For a couple years Garibaldi stayed at SUPERVALU and then moved on to UNFI—which eventually acquired SUPERVALU.

IT’S ALL ABOUT THE PEOPLE

When it comes down to it, the people are perhaps the best part of the job. Throughout his career, Garibaldi has worked primarily with independent, family-owned retailers—usually with about 10 stores or less but some that have grown well beyond that.

He says he loves working as a distributor with independent grocers, and he especially admires how they put everything on the line for their businesses. In Garibaldi’s mind, UNFI and its customers are partners, playing an integral role in one another’s success.

“They open their doors to us, the family, and they let us inside,” he says. “We are part of the decision-making process, we are part of the failures, the successes, the arguments…we are intimately involved in all of that because it’s such a hands-on business.”

Garibaldi has developed a positive reputation over the years especially because of his relationships with independents. Those in the industry, including Fong, know Garibaldi best because of it.

“You talk to any independent grocer, they know Bob. He is very close to his customers, even now, even though he’s president of a much different company,” he says. “He is revered by his independent customers from way back in the day when he was working as a sales rep.”

One of those customers is fellow Hall of Achievement Honoree Mimi Song, owner and chairman of Superior Grocers. Fong explains that each year, the CGA Educational Foundation Board selects its retailer honoree first, and then asks them to offer names to consider

“It was full circle for me,” he says.

CGA President & CEO Ron Fong notes that Garibaldi’s tenure with the companies he’s worked for speaks to who he is as a person and as a professional—and it’s a unique story in the industry, especially in today’s world where people change jobs more frequently.

“It’s rare to find someone who starts with one company and stays with them over a long span of time,” Fong says. “That really speaks to his loyalty.”

Garibaldi says the last merger, when UNFI bought SUPERVALU, was one of the biggest shifts he’s gone through professionally and gave the company, and him, a tremendous competitive advantage. Through that merger, UNFI has become a wholesaler with natural, fresh foods and conventional foods, which Garibaldi says doesn’t exist anywhere else in the market today.

“Quite frankly, being President of the West Coast is probably the pinnacle of what I could accomplish, and I’ll be able to work for the next few years until I retire in that role and in my mind, go out on top,” Garibaldi says.

to be honored alongside them. Song recommended Garibaldi, whom she worked with through Certified Grocers many years ago, and to this day continues to work with at UNFI because of their connection—which is no easy feat in today’s competitive market.

“Mimi chose Bob, and I think that tells the whole story,” Fong says. Garibaldi says witnessing the spirit, drive and enthusiasm of these retailers is rewarding, especially as they work nonstop day in and day out.

“What I learned in athletics and competing every single day just set me up for what was to come in the real world, where you compete every day.”

Bob with Charles & Kristie O’Brien of O’Brien’s Markets

Bob with his bride of 30 years, Rachelle

◀ Continued from page 51

Another partner who has worked closely with Garibaldi over the years is Bay Area grocer Mollie Stone’s. General Manager Elliot Stone says he has known Garibaldi for as long as he can remember and is a well-known leader in the industry.

“He is a leader, supporter, innovator and a true friend,” Stone says. “His commitment to the industry and making everyone around him better makes him one of a kind.”

Marks echoed the sentiment of Garibaldi’s work with independent retailers, noting Garibaldi’s commitment to doing the right thing for his customers, no matter what.

“Bob is always willing to jump in, probably more than he should, to help,” he says. “If something has happened with a retailer or someone is struggling, he will jump in. The customers just love him because they know he’ll do the right thing for them,” Marks says.

To Garibaldi, it’s all in a day’s work.

“They become your partners, your best friends, and it’s super rewarding,” he says.

NEVER A DULL DAY

Garibaldi also attributes his long tenure in the business to the variety that each day offers. From the beginning, he found that every day was unique, whether selling products or services or equipment.

“It was different every single day and I thought that was super exciting, and I loved what I did,” he says.

The industry has changed over time, and that keeps it exciting but also keeps Garibaldi and his team on their toes. He says the landscape today for wholesalers is much different than it used to be. When he first started out, there were four wholesalers on the West Coast. Now there are essentially two, but there has been a heavy amount of consolidation over the years.

Today, things change even quicker than they used to, and businesses are always accelerating and advancing.

“If you’re not reacting instantly or very quickly, then you’re falling behind,” Garibaldi says. “There’s a need to continually improve your company and the services or the products that you have because there’s so much competition outside the traditional role, whether it be online or technology companies that are getting into the food industry.”

The influx of technology has never happened at this pace and is threatening the traditional wholesale business. But Garibaldi is focused and says consistent improvement is imperative.

“Otherwise, you’ll be one of those companies that doesn’t exist anymore.

With Garibaldi’s track record and competitive edge, UNFI appears to be in good hands as the company looks to the future. Garibaldi’s division makes up roughly 30 percent of the company’s revenue, and it is still growing.

The years have been good to Garibaldi, and he’s made it a point to give back when he can. He participated on the retail board of the California Independent Grocers Association before it merged with CGA, and supported committees that raised money for the Boy Scouts and Girl Scouts. He has also supported efforts to raise money for cancer treatment and research center City of Hope.

Through all the work, volunteering and change, Garibaldi has made lifelong friends.

“It’s been a great experience, it’s been wonderful to me,” he says. “That’s the best part of the industry. You meet so many great people and become friends for life.” ■

As a avid golfer, Bob enjoys hitting the links with friends and colleagues, pictured here with Aaron Stone, Mollie Stone’s Markets.

“He is a leader, supporter, innovator and a true friend,” Stone says. “His commitment to the industry and making everyone around him better makes him one of a kind.”

UNFI Congratulates

Mimi Song & Bob Garibaldi, inductees of the

2023 CGA Educational Foundation Hall of Achievement

MIMI SONG Chairman Superior Grocers

BOB GARIBALDI President, Pacific Region

Health is Wealth

In addition to trying new foods in these classes, I shared nutrition information as we prepared meals and snacks in a way that was simple, fun, and approachable, leaving attendees with new recipes and knowledge. Everyone enjoyed the classes and asked follow-up questions about grocery shopping, reading labels, and healthier cooking techniques. As a result, I started leading group grocery shopping tours. We spent an hour walking around the store, talking about seasonal produce, and sharing ideas on how to cook veggies. But most of our time together was on “nutrition label literacy” as I educated the group on how to interpret labels, what to look for, and what to avoid. For many people, this was the first time they had been educated on the complex number and naming conventions for common ingredients in food, so it was very rewarding sharing this knowledge with others.

Years later, I received an email from one attendee sharing how much this experience improved her health. She mentioned that with this new information, she was able to make healthier choices and ultimately lower her cholesterol levels and beat her intense sugar cravings.

With “health as wealth” at the top of consumers’ minds according to The New Consumer Foods and Wellness Report for 2023, a fun and important challenge awaits us as we educate shoppers. Today’s consumers are reconsidering what is most valuable to them, with health taking a front seat.

We live in an age of information overload where many of us are left confused about what and how to eat. As a holistic nutritionist, I see firsthand how consumers are overwhelmed with ideas on how to be healthy. There are so many “diets” and food choices that decision fatigue sets in and can prevent people from making healthier choices.

With the Foods and Wellness report revealing that the number one goal for Americans this year is to consume more fruits and vegetables and eat less refined sugar, grocery stores have a prime opportunity to find new ways to engage with their customers and help them achieve their goals.

So how can we do this?

We know that many people are using social media as the first step to find new recipes, but that doesn’t reach all age demographics.

Grocery stores can become more than just a place to buy the ingredients, but also a place to learn more about the healthy foods they are seeking.

I saw this approach featured at my local farmer’s market, and thought it was a great marketing and educational tool. A local vendor had all their in-season produce for sale and provided a healthy recipe to take home featuring the ingredients they were selling. The vendor talked up the health benefits of the ingredients as I was looking at the recipe and provided additional information about the health benefits of the produce.

It was a fun way to try something different and I kept returning each week for a new recipe, because it was unique, but also convenient for me to make.

KATIE BRESSACK FOUNDER HOLISTIC NUTRITIONIST

Several years ago, I taught healthy cooking classes at local Whole Foods stores as a part of their community outreach program. I really enjoyed sharing my love of nutrition and watching people try new foods.

This engagement with the consumer not only helps to motivate them to make healthier choices, which is top of mind for everybody right now, but it’s also a way to increase loyalty among customers and reach new customers once word gets out that the store is providing easy ways to support their health goals.

Another reason to build a healthy eating community is to help customers who are facing the effects of increased costs and inflation. One way that people are looking to save money is by cooking more at home and dining out less, which means people are shopping for their groceries more intently.

By providing new recipes each week, customers will look forward to coming back to the store to try new things they might not have tried in the past. This creates an approachable way to help people pursue healthier habits. Research from the Centers for Disease Control (CDC) and prevention indicates when we make eating healthy more accessible, more people can reach their health goals.

If that is not reason enough, the Foods and Wellness report also shows that consumers are searching for new recipes and ways to be healthy. This can be a great opportunity for grocery stores to provide added value for

customers. It can be as simple as a new recipe with a shopping list for all the ingredients or “here are five ways you can make broccoli” followed by meal ideas.

The fact that Americans would rather feel 25 percent healthier over earning 25 percent more money reiterates how important education and awareness will be moving forward. Not only will you play a role in improving someone’s health, but you’ll also have a fun way to engage with your customers, both loyal and new. ■

Coachtopia

Following a branding overhaul in 2022, heritage leather brand Coach launched sub-brand Coachtopia to appeal to eco-conscious Gen Z customers. Dubbed “a new world of circular craft from Coach” Coachtopia is a community of designers, thinkers, consumers, and makers founded upon the idea that circularity is the future of fashion. The initiative moves the company towards less waste and eliminating new material, reimagining both new products and classic silhouettes using reused or remade materials.

Can Do

Maybe it’s the looming recession, or maybe it’s talks online of European summer, but fancy canned beans are on the rise (thank canned fish for paving the way). Heyday Canning is bringing bright design and bold flavor to the world of canned beans. Heyday simmers their beans in aromatic and vibrant sauces to achieve ready-to-go flavors like Tomato Alla Vodka Cannellini Beans, Kimchi Sesame Navy Beans, Apricot Glaze Baked Beans and more.

Wellness Pays

Wellness startup Ness is taking self-care to the bank. Ness’ Wellness Credit Card incentivizes a healthy lifestyle for users with wellness perks including 5x points on health & wellness merchants, $200 credit on health & wellness, free salads at Sweetgreen each month, and up to 20k points on healthy activity, to name a few.

LAWN ROOMBA

Swedish company Husqvarna’s robotic lawnmower now comes with a “rewilding” mode, designed to leave 10 percent of lawn unmown to attract bees, butterflies, other pollinators. Let’s back up, the robotic mower, think Roomba for your lawn, offers this new setting to encourage biodiversity, allowing you to customize the rewilding zone on your app. The mowers are battery driven, produce zero C02 emissions while in use, and operate quietly.

A Classic Reborn

L.L. Bean has found a new audience in Gen-Z. The company reported that its net revenue in 2022 reached the second strongest result in its more than century-long history. The “Ironic Boat and Tote” trend is partly behind the spike, in which younger customers put L.L. Bean’s personalized embroidery services to work to sew ironic words and phrases onto their totes. There’s even an Instagram account dedicated to the ironic tote movement, @Ironicboatandtote.

Dupe Swap

Stainless Steel Sustainability

Reusable water bottle brand Hydro Flask has launched the first of its kind trade-in program in efforts to reduce its company footprint. Customers can trade in used or damaged insulated water bottles, tumblers, and stainless steel products in exchange for redeemable store credit. Each product earns customers a $5 promo code. We’re sensing a theme here.

CIN CIN!

Athleisure brand Lululemon hosted a twoday “Dupe Swap” pop-up in L.A., giving away a free pair of $98 Align leggings to around a thousand attendees in exchange for a pair of knockoffs. “Dupes,” affordable copies of a product, have drawn a lot of attention on social media as users share popular dupes with their following. Chief brand officer at Lululemon said the activation was intended to showcase the brand’s “superiority in this space” by allowing attendees to feel the difference themselves. Unsurprisingly, coverage of the event soared on social media.

You may have first seen non-alcoholic apertif brand Ghia on Shark Tank. Now the mod beverage brand has reformulated their spirits-free product (intended to mix with something sparkling) and settled into a new office— or should we say house. The young company works out of a two-bedroom Tudor home in Beachwood Canyon, Los Angeles to inspire creativity and collaboration. The heart of the warmly decorated and freshly muraled office, of course, is the kitchen. Ghia is far from the first contemporary brand that’s opted to work out a single-family dwelling over a skyscraper: see Lauren Conrad and Seth Rogan’s lifestyle companies. Ghia

Hydro Flask

Lululemon

L.L. Bean

Hatch Chile | Bleu Cheese & Cr

Modern Mom. Modern Shopper.

KIMBERLY RAE MILLER WRITER

When it comes to shopping, I will admit to being a polyamorist. No one market could ever fulfill all my needs. Some places I shop provide me with variety, others specificity. Some I visit—and I’m slightly embarrassed to put this in writing—solely for the bougie environment because just walking through the aisles feels like a luxury. Some places I visit at the end of the pay period when my wallet is leaner, and some I never step foot in and food magically appears on my doorstep on weeks I’m too busy to manage all the everyday responsibilities of grown-up life. But regardless of my many loves, shopping for food has become less of a simple requirement over the last few years and more of an experience.

The places I shop fill specific needs for me, but they also regularly remind me of how the world is changing, and so is how we shop. Some of the general trends I’ve seen in the markets I prefer to frequent include:

Child-Friendly Amenities. More and more markets are creating a child-friendly shopping environment, with amenities like clean and spacious restrooms, baby-changing stations, and shopping carts with built-in car seat attachments or spots for more than one child to sit.

Healthy and Organic Options.

My kids have never seen a commercial for sugary cereal or Lunchables, but they know that brown bread is better for them and that apples are best in the fall. It’s a new generation of shoppers with new priorities regarding food. I have noticed that markets make organic and natural products less of a specialty item and more of a stock staple, even having cheaper store-brand options for healthier foods.

Meal Solutions and Recipes.

I wish I could cook everything from scratch every day, but like most modern families, my husband and I juggle multiple jobs while our kids juggle multiple activities. I appreciate when markets offer pre-packaged meal solutions, recipe cards, or ready-to-cook ingredients that cater to busy parents who are short on time but still want to prepare healthy meals for their families.

Online Ordering and Delivery.

We live in a hybrid world, and just like I switch up my days in the office, I switch up my weeks at the market based on my more pressing responsibilities. Ordering food from local markets from my phone to either pick up on my way home from work or have delivered to my doorstep, allows me to continue to support my community and get all the benefits of online shopping.

Sustainability Efforts.

I care about my community, and I care about my impact on it. When I see stores implement environmentally friendly practices such as reducing plastic waste, offering reusable shopping bags, promoting recycling, and supporting local farmers and suppliers, it makes a difference in the regularity of my visits. ■

The way we shop is changing with the times. And that’s not a bad thing.

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Premium Brands Still a Powerhouse for the Pet Aisle

By Joe Toscano, Vice President, Trade & Industry Development at Purina

It can be easy to get caught up in trends and just focus on what’s new. Trendy and new feels fresh and can offer an exciting world of possibilities. In the pet category, this can mean that retailers sometimes overlook one of the largest categories in pet –premium pet food – which includes trusted, iconic brands like Dog Chow®, Cat Chow®, Friskies® and Beneful®. In fact, Cat Chow is the number one dry cat brand in the U.S. based on dollar sales1 and Dog Chow has the number one SKU in the dry dog category2 These brands are true pet food powerhouses.

The pet category is booming. Over the last three years, the pet population in the U.S. has also grown by a little more than four percent and has added 7.5 million mouths to feed, which brings the total number of dogs and cats in the U.S. to 185 million. Consequently, the pet care category continues to grow at near record highs. As of October 8, 2022 3, the pet care category has seen a 16 percent increase in sales versus the previous year. This strong growth is also seen in the premium pet food category with many of Purina’s premium pet food brands showing double-digit growth with most actually exceeding the total category growth.

But what does that mean for retailers?

In the dog category, premium dry dog food has the second highest number of households, and the highest pound buying rate. On average, the premium dog food household purchases 139 pounds of dog food each year, which is 38 pounds more than that of the value dog buying household. That is a lot of dog food! The premium dry cat food

category has the highest household count with roughly 19.7 million households buying premium cat food in 20214 . On average, the premium dry cat households buy an average of 62 pounds of dry cat food a year, which is 63 percent more than super premium buyers.

When we look at grocery and mass stores, we also know that the majority of puppy and kitten owners start their pets off with premium dry food nutrition. Puppy Chow® and Kitten Chow® are the household leaders in puppy and kitten nutrition, and these brands are specially formulated to meet the unique nutrition needs puppies and kittens have during their first year of life to support their rapid growth and development. With such a large buying power, it is no wonder the premium segment has such a large impact on the total pet food category.

As we look ahead to the impact of ongoing inflation, we know that the premium pet food category will be key for consumers and retailers. The core consumers within the premium segment are the most loyal to their brand of any segment. This high degree of loyalty and confidence in these iconic brands means that premium pet food shoppers are not likely to switch.

It is important that retailers offer a variety of the premium formulas these consumers prefer and in the sizes they want. Retailers carrying the premium dog and cat food products their consumers desire are able to turn shoppers into loyal consumers who know they don’t have to look beyond your store to find what their pets need. Are you allocating the right space in your store to value, premium, and super premium pet products? To learn more, reach out to your Purina sales associate.