California Grocer, Issue 4, 2022

2022, ISSUE 4

CALIFORNIA GROCERS ASSOCIATION

WHAT DOES 2023 LOOK LIKE? Reading Tea Leaves

What the November General Election signals for grocers

Independents on the Up

CGA’s New Board Chair Dennis Darling lays out his independent grocery agenda

Where Next?

Examining the food system after two years of record inflation and supply chain issues

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.

and

CGA Board Chair

Renee Amen Super A Foods on her year of service

Dennis Darling Foods Etc. for his new role as CGA Board Chair for 2023

CGA | BOARD OF DIRECTORS

EXECUTIVE COMMITTEE

CHAIR APPOINTMENTS

Independent Operators Committee Chair

DIRECTORS

CALIFORNIA GROCERS ASSOCIATION

Chair Dennis Darling Foods Etc.

First Vice Chair Lynn Melillo Bristol Farms

Treasurer Michel LeClerc North State Grocery

Immediate Past Chair Renee Amen Super A Foods

Second Vice Chair Steve Dietz United Natural Foods, Inc.

Secretary Richard Wardwell Superior Grocers

Brendan McAbee Bimbo Bakeries USA

Chang So Hollister Super

Tiffany Menyhart The Kraft Heinz Company

Jeff Schmiege Unilever

Karl Schroeder Albertsons Companies

Bertha Luna Stater Bros. Markets

Sergio Gonzalez Northgate Markets

Greg Sheldon Anheuser-Busch InBev

Chris Dehoff Dehoff ’s Key Markets

Adam Salgado Cardenas Markets

Bryan Jankans Mondelez International, Inc.

Michael Molinar PAQ, Inc. / Food4Less

Tim Mahoney Gelson’s Markets

Joe Mueller Kellogg Company

Donovan Ford Save Mart Supermarkets

Brian Pohl Classic Wines of California

Subriana Pierce Navigator Sales & Marketing

President/CEO Ronald Fong

Director CGA Educational Foundation Brianne Page

Denny Belcastro Kimberly-Clark Corporation

Elliott Stone Mollie Stone’s Markets

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

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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 Senior Accountant & Assistant Office Manager William Quenga California Grocer is the official publication of the California Grocers Association.

1005 12th Street, Suite 200 Sacramento, CA 95814 (916) 448-3545 (916) 448-2793 Fax cagrocers.com

For association members, subscription is included in membership dues.

Subscription rate for non-members is $125. © 2022 California Grocers Association Publisher Ronald Fong rfong@cagrocers.com Editor Nate Rose nrose@cagrocers.com Assistant Editor Grace Becker gbecker@cagrocers.com For advertising information contact: Bailey Dayen bdayen@cagrocers.com

CONTENTS | ISSUE 4

FEATURES COLUMNS

16 Understanding Food Prices and Where They’re Headed Dr. Ricky Volpe, Ph.D. breaks down the inflationary factors contributing to today’s food prices and forecasts what factors lie ahead in 2023.

President’s Message Year in Review. . . . . . . . . . . . . . . . . . . . . . . . .

5

Chair’s Message Strength in Togetherness. . . . . . . . . . . . . . . .

6

Viewpoint Message Discipline. . . . . . . . . . . . . . . . . . . . .

8

Inside the Beltway Consumers Adapt to Evolving Economy and Maximize Their Holiday Grocery Budgets. . . . . . . . . . . . . . . 10 Washington Report What Independent Grocers Can Expect from the New Congress. . . . . . . . . . . . . . . . . 12 Capitol Insider New Faces at the Capitol: Changes to the State Legislature in 2023. . . . . . . . . . . . . . . . 15 Mommy Blogger Shopper Beware. . . . . . . . . . . . . . . . . . . . . . . 52

24 Dennis Darling to Serve as 2023 CGA Board Chair Dennis and his wife, Ruth, have owned and operated Foods Etc. in Clearlake and Susanville, California for 25 years.

DEPARTMENTS Retail Roadmap CGA Strategic Conference 2022. . . . . . . . . 40 CGA News. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 CGA New Members. . . . . . . . . . . . . . . . . . . 45 Outside the Box New Retail Perspectives. . . . . . . . . . . . . . . . . 48

28 California’s Midterm Election: A Recap and What’s Next Campaign strategist Jessica Mause, Senior Vice President at Rodriguez Strategies, recaps the November General Election results.

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PRESIDENT ’S MESSAGE

Year in Review

RO N F O N G PR ES IDEN T AN D CEO CALIFOR N IA GR OCER S AS SO CIATIO N

Reflecting on what was, a very good year for the California Grocers Association and the industry it represents This issue is all about looking forward.

From food prices to a new board chair and what the most recent election means for the future of California politics, the end of the year marks a perfect time on the calendar to envision what’s to come.

We like to say that the Association serves as the waypoint for the state’s grocery industry. Whether it’s the government relations program or events, the staff and I continue to feel the buy-in and support from the industry.

Yet, it’s also a time for practicing gratitude and reflection. The California grocery industry has come out of the pandemic as strong as ever. I attribute this belief to the community—grocery retailers, suppliers, and wholesalers can accomplish much more together than apart. Yes, you are competitors with businesses to build, but when unified in pursuit of industry-wide improvement, everyone benefits.

Together, we’ve accomplished sell-out events and secured significant governmental wins for grocers. The appetite for the in-person CGA Strategic Conference continues to grow coming out of the virtual and hybrid COVID-driven models. In fact, sponsorship opportunities were sold out months in advance for 2022. Our grocery community also had a great time hitting the links and aiming for Topgolf targets. We even offered our first-ever Crisis Communications Seminar, which was free for members and a necessity for the challenging social environment facing grocery stores today.

On the government relations front CGA has aggressively fought to improve conditions for grocers to do what they do best: nourish communities. The Association steered the industry out of the potential Prop 12 “Bacongate” via a legal victory and secured an opportunity to reform the Private

Attorney General Act (PAGA) via the ballot box in 2024. After several years of tireless work to improve the state’s recycling program, CGA earned the most significant overhaul in decades when SB 54 was signed into law by Gov. Gavin Newsom. And let’s not discuss all the work that goes into mitigating the many well-intentioned, but ultimately misguided ordinances and bills that could make operating a grocery store in California a much trickier proposition.

The message here is that we are stronger together. Every time you engage with CGA your business and the wider collective benefits, which in turn enhances the work the Association does on your behalf. It’s a flywheel effect that you can see manifested in CGA’s overall health after a year when the grocery community was eager to reconnect and build relationships with each other, its customers, and elected officials.

Thank you for an outstanding 2022 and cheers to another great year for grocers to come. ■

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CHAIR’S MESSAGE

Strength in Togetherness

R EN EE A M EN S UPER A FOODS, IN C.

As grocers of all sizes, we can accomplish far more together than we can individually I started off 2022 at the Independent Operators Symposium in Hawaii with my fellow independents tackling priorities for this year. And as the year comes to a close, along with my time as Chair of the California Grocers Association Board, I am so proud of all we accomplished together. Though doing business looks a lot different than it did in years past, we’ve managed to stay united, lean on one another for help, and rely on the Association to lead us forward.

Reflecting on this year, my main takeaway is one of gratitude. I’m eternally grateful to be the third Amen to have the honor of serving in this role for California’s grocery community. I am thankful for the foundation laid for me by the Chairs who proceeded me, Hee-Sook Alden and Phil Miller, who both guided the Association through extremely tough times and allowed me to pick up where they left off.

My experience as Chair has opened my eyes to a different side of the industry.

We all know what it takes to run our stores day-to-day, but so much goes on behind the scenes that impacts how we do business. It’s been wonderful to pull back the curtain and be involved in that side of our industry. For small independents like Super A who don’t have the same staff capacity or resources as

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larger chains, the Association is here to guide us through new legislation, interpret complicated legal matters, and provide resources for compliance and education through the Educational Foundation. Just this year, CGA has led us through the back-andforth of Prop 12 enforcement and regulations, major reforms to the Bottle Bill, and has continued to charge the fight against PAGA, none of which we could have faced alone.

Especially in navigating unfamiliar waters with local and state governments’ emergency executive powers left over from the pandemic, the Association has led us through industry issues far beyond what just one store could tackle. I’m so grateful for the small but mighty CGA staff who has a pulse on how to support the industry, what we need to do, and how to do it.

All of this has shown me how important it is that we stick together as an industry. I am so grateful that we have a community within our grocery industry full of different points of view, experiences, and backgrounds. What I know for sure is that we’re stronger as a community than we are as individual people or companies. That’s what makes CGA so special; retailers big and small work together and contribute their own unique perspectives to the larger success of our industry.

In fact, it was eye-opening to take part in the Retail Tomorrow event this past August in the Bay Area and have a company as massive and successful as Google wanting to hear our input and opinions as an industry.

Nowhere else in the country does the grocery industry have the kind of bond we have in California. Seeing the Strategic Conference successfully return to full strength this year reminded me of how lucky we are to share in this community. Together, we all help each other out as colleagues and friends and navigate through the chaos of California politics and running our businesses. It’s been such a unique privilege to collaborate with fellow board members and witness their openness and honesty to tackle industrywide issues.

I can’t put my gratitude into words, not only for the opportunity to serve in this role, but also to all my colleagues and peers for your support this year. It’s my pleasure to pass on the baton to the next Chair of CGA, Dennis Darling. A fellow small independent store operator who is passionate about our industry, I know Dennis will do a fantastic job in leading the Association through the next year, no matter what’s in store. ■

connecting growers to retailers

VIEWPOINT

Message Discipline

K EV I N CO UPE FOUN DER MOR N IN GN EWS BE AT.COM

“The medium is the message,” communication theorist Marshall McLuhan once wrote.

I’d like to turn that on its head and suggest that these days, there is no room for “medium” when you craft your message.

Your message needs to be “hot” when the moment calls for it. “Cool” when appropriate. But never, ever “medium.”

Because “medium” is wishy-washy, weak and often so much nebulous verbosity.

As opposed to Sharp. Effective. Illuminating.

Actionable.

slammed into the headwinds of inflation, the almost certain prospect of recession, and yet at the same time, had to deal with low unemployment and an economy that in a lot of ways was in overdrive.

The business is challenging in the best of times. But in these times? Well, to quote a now-deceased relative of mine … Oy! But here’s the deal. Your customers may be as confused as you are. Maybe more so.

McLuhan argued, in his 1964 book, “Understanding Media: The Extensions of Man,” that “hot media” is the kind that requires very little from its audience because of its inherently high definition. (This was written way before high-def; McLuhan was referring to media that was so strong that you could just sit and watch it to get the message, with little participation beyond that.). “Cool media,” on the other hand, requires more participation from users.

It has become almost a cliché to say that these are extraordinary, unprecedented times, but it is worth repeating if only to underline the point that traditional solutions may not apply. We had a pandemic that threw so much of the food industry into warp speed in order to meet the needs of consumers. Then, the food business

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East River to the tip of Manhattan. Part of this trip meant going through Hell Gate, which, to put it simply, is where Long Island Sound, the Harlem River and the East River converge, creating a considerable amount of turbulence in the form of whirlpools and undertows. It is hard for any vessel to make it through, but, as I understand it, especially hard for large, hard-to-maneuver ships. Which is what my friend was on.

On the bridge.

Part of the deal was that ships like my friend’s were required to bring a maritime pilot on board who knew the waters and was an expert at navigating through them. On the bridge, for those minutes, he outranked everybody. Even the Captain.

So the ship enters Hell Gate, and almost instantly is taken for a ride by competing and difficult currents. Everybody on the bridge turns to the pilot, looking for guidance. He holds up his hand: Wait. The ship keeps moving, picking up speed. Wait. The ship starts heading toward a wall. Wait.

Let me share a story with you…

And then, just as everyone on the bridge is convinced that they’re going to hit the wall (and probably be court-martialed), the word came from the pilot: Hard to port. Now.

I have a friend who was a career officer in the U.S. Navy. A long time ago, he was serving on a ship that was making its way down the east coast, and was going to enter Long Island Sound and then go down the

They turn to port. (Left, for you landlubbers.) Fast. Hard. And the ship turns faster than anyone expected, faster than it ever had before, and catches a current and essentially shoots out of Hell Gate.

iStock

VIEWPOINT

iStock

To me, that is an almost perfect metaphor for what retailers are dealing with these days. There’s a maelstrom of factors affecting retailers, and timing is everything. You have to be aware of everything going on around you, know when to keep moving straight ahead and when to tack to the left or right. If you time it right, you actually can shoot out of the turbulence with speed and accuracy, in a way that helps the business achieve its goals and reach its destination.

There is just one part of the Hell Gate experience that I find wanting: the maritime pilot didn’t explain his strategy and tactics, which created anxiety on the bridge. They knew he was supposed to know what he was doing, but in those moments when the ship seemed be controlled by the water and heading for a wall, I’m sure their confidence had to be a little bit shaky. (It is a pretty good bet that the pilot enjoyed making those Navy guys sweat, but that’s another column.)

What retailers should do, I believe, is constantly explain the current economic maelstrom and its impact on the food shopping experience to their shoppers.

Educate them about why prices are going up, and what you are doing to make the food shopping experience affordable. Disabuse them of the notion—being circulated by a lot of mass media, prompted, I’m guessing by advisory press releases—that eating at a restaurant is cheaper than buying and cooking food yourself. Illuminate them about why “price” and “value” often are not the same thing, and why in the long run, value is way more important.

conversations with suppliers in which he is advocating for shoppers. Wegmans constantly is focusing on how, if you are a smart shopper at Wegmans, a flavorful and nutritious meal can cost two or three bucks a serving. It all is actionable information, part of a broader message positioning these companies as advocates for their shoppers.

And that, in a phrase, is what every retailer needs to do. Always, but especially now.

Sometimes cool, in a way that elicits customer participation. Sometimes hot, requiring very little from the shopper.

But always seeking to be sharp, effective, illuminating, and actionable. ■

In my neck of the woods (New England), retailers like Stew Leonard’s and Wegmans seem to be constantly engaged in this educational process. Ste Leonard Jr. produces videos that are posted in emails and on social media offering advice about how to save money, and sharing details from ongoing

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INSIDE THE BELTWAY

Consumers Adapt to Evolving Economy and Maximize Their Holiday Grocery Budgets J EN N I F ER H ATC H ER CHIE F PUBLIC POLICY OFFICER & SENIO R VICE P RESIDENT, FOOD MAR K E TIN G IN S T ITUTE

In late October, FMI released the sixth installment of our U.S. Grocery Shopper Trends 2022 series Titled “Holiday Shopping” The report looks at how consumers are maximizing their dollars in an inflationary environment, particularly as they make plans for their holiday celebrations.

According to our research, while the majority of shoppers are seeing higher prices on many needed household items, consumers feel they have at least some degree of control over their finances, particularly when it comes to their grocery budgets.

Regarding their holiday plans, shoppers are most concerned about the price of holiday meals (45%), even more than travel or gifts.

Most shoppers feel they are in control of their grocery shopping budgets and are adjusting their holiday meal shopping (71%) to address rising food prices.

These adjustments include looking for deals, buying more store brands, substituting ingredients for more affordable options and sharing responsibilities for the menu, such as encouraging potluck dishes for their holiday gatherings.

The majority of shoppers (62%) also tell us they are spending more at the grocery store compared to a year ago. However,

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despite fears about inflation, average weekly household grocery spending has remained steady at $148 over the last six months. This is down from $161 per week at the height of the pandemic, but higher than the 2019 pre-pandemic average of $113.50.

Consumers are coping with inflation by eating out less frequently, hosting fewer holiday celebrations, enjoying more home cooked meals, and buying fewer and more practical family gifts.

This indicates shoppers are able to find budget friendly items to meet their needs.

Furthermore, nine out of ten consumers consider home meals more economical,

so enjoying all the benefits of a family meal at home is a financial, emotional, and nutritional win.

We realize that money is tight for many families this winter, and we know our members are doing their best to ensure people can enjoy their traditional Thanksgiving or other holiday meals at an affordable price point, although we do recommend that shoppers plan ahead to take advantage of specials and budget for these small price increases in certain areas. Consumers tell us they aren’t overly concerned about food items being out of stock. Should shoppers encounter out-ofstocks, half (50%) say they plan to try something new, while more than one-third (36%) say they will use the opportunity to experiment with a new recipe.

Our research demonstrates that consumers are incredibly resilient and adaptable in finding affordable and creative solutions offered by the food industry in order to feed their families. While they may be making some tradeoffs this holiday season, shoppers are confident in the degree of control they have over their grocery budgets.

INSIDE THE BELTWAY

Food retailers that can continue to provide shoppers with options through private brands, meal or ingredient substitution suggestions, and discounts through loyalty programs can demonstrate to customers that they are valued partners in helping them mitigate the effects of inflation while feeding their families delicious, nourishing meals this holiday season. ■

To download the U.S. Grocer Shopper Trends 2022 – Holiday Shopping report and access our previous reports in the Trends series, visit www.fmi.org/GroceryTrends.

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WA SHINGTON REPORT

What Independent Grocers Can Expect from the New Congress G R EG F ER R A R A PR E S IDE N T AN D CEO N AT ION AL GR OCER S AS S OCIATIO N

While the “red wave” predicted by many pollsters failed to materialize in November’s midterm election and Democrats maintained control of the Senate, Republicans captured a slim majority in the House of Representatives and control of the legislative agenda in the lower chamber.

With a divided 118th Congress poised to convene on Jan. 3, 2023, it’s anticipated that gridlock will ensue. But what else can independent grocers expect next year?

The NGA Government Relations team has provided an analysis of the top issues: • SNAP and nutrition programs—The 2018 Farm Bill, which authorizes nearly all USDA spending including SNAP, expires next year. Republicans have focused on ways to rein in government spending, including SNAP benefits, but their ability to do so becomes more constrained with Democrats controlling one legislative chamber. Additionally, conservatives have long pushed for SNAP to be converted into a discretionary block grant for states and such provisions may resurface during the Farm Bill debate. Expect a Farm Bill process in which Democrats have a strong upper hand to extend gains in SNAP spending and reinvest in programs like nutrition incentives. Likewise, Democrats in power also increases the likelihood that we could see important reforms to WIC.

• Antitrust reforms—With a thin Republican majority in the House, factions within the Republican caucus will hold outsized power over their party’s governing agenda. NGA has cultivated a strong cross-section of Republicans who support our efforts to revive and reform the Robinson-Patman Act. These figures could extract concessions from Republican leadership, especially with issues that share strong support across the aisle.

• Swipe fees—If a red wave had materialized, efforts to rein in credit card swipe fees through legislation like the Credit Card Competition Act would have been a heavy lift. Most Republicans are friends with merchants and banks,

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so Republican leadership would try to avoid a vote that splits two large business constituencies. Democrats controlling the Senate floor schedule could mean a greater likelihood of a vote on credit card legislation and a stronger negotiating posture for merchant advocates in Congress.

• Labor and employment—Organized labor has few legislative prospects no matter who is in charge, but that is why we expect a strong effort by the Biden administration to use its executive branch power to accomplish through regulation the Big Labor priorities it could not achieve through Congress.

• Government spending—Republicans will have some leverage to rein in government spending, which they blame for inflation.

But Democrats could have the ability to extract concessions from Republicans on revenue measures, especially as we expect a raft of business-friendly tax policies, such as the pass-through deduction and 100% bonus depreciation, set to expire over the coming years.

WASHINGTON REPORT

Whether or not their side of the aisle mirrors yours, policymakers need to be aware of how their decisions impact an industry responsible for providing more than a million jobs, generating billions in tax revenues and keeping millions of Americans fed: the independent supermarket industry.

Being engaged in the political process and having relationships with lawmakers is the best way to illustrate how important independent grocers are to creating and maintaining robust, vibrant communities.

For more ways you can get engaged, visit GrocersTakeAction.org. ■

We Proudly Honor

Congratulations Renee Amen

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CAPITOL INSIDER

New Faces at the Capitol LO UI E B ROW N IN T HE S ACR AME N TO OFFICE O F KAHN, S OAR E S AN D CON WAY, LLP

2023 will bring a number of changes to the Legislature Brown

We will see the largest new class of members since 2012, new leadership in the Assembly, and a much different economic outlook than the last two years.

The class of 2012 was set to term out in 2024 and was to be the year with the first major transition since the new term limits kicked in. However, due to the outcome of the redistricting process, a number of members chose to retire early. Add to this a couple resignations and a handful of gubernatorial appointments, and you had nearly one-quarter of the Legislature made up of new faces at the December 5 swearing in ceremony.

Of the 20 Senate seats up for election in 2022, nine are sending new members to the Capitol. In District 16 Sen. Melissa Hurtado pulled slightly ahead of David Shepard, but he refused to concede and formally request a recount. You may recall the early drama with Sen. Hurtado who originally wanted to run in her hometown, District 14. However, this was heavily discouraged by Senate Leadership as she would have challenged Sen. Anna Caballero. After convinving Hurtado to move to Senate District 16, the Senate committed significant resources to the race as it became the top priority to protect.

Even with those resources committed to the race, this was the closest state Senate race in over a century.

In the Senate, some notable members will not be returning due to term limits, including Sen. Jim Nielsen, Sen. Pat Bates, and Sen. Bob Hertzberg. Sen. Jim Nielsen, the Dean of the Senate, officially retired after 40 years of public service. Sen. Pat Bates, former republican leader, was elected to the Orange County Board of Supervisors.

Sen. Bob Hertzberg, former Speaker of the Assembly and well-known deal maker, was also termed out but lost his bid to the Los Angeles Board of Supervisors.

Of the 80 Assembly seats up for election in 2022, 23 are sending new members to the Capitol. And suprising no one, the Democrats retained their supermajority status.

Leadership of the Assembly will also transition in 2023. Asm. Robert Rivas was elected to be the next Speaker of the Assembly, beginning July 1. Rivas’ trek to become Speaker started in May when he challenged current Speaker Anthony Rendon during a Monday afternoon floor session.

The caucus met for six hours that day with no vote being taken. Two days after the November election, the caucus met again for

another six hours. However, this time a vote did take place and a ‘peaceful’ transition of power was agreed to, which allows Rendon to serve until June 30, 2023.

2023 will also bring drastic change to the budget. The State of California had record surpluses the last two years, thanks to significant funds from Congress and capital gains tax revenue. These surpluses resulted in the triggering of the Gann Limit, which required the state to return money to taxpayers. According to the Legislative Analyst’s Office (LAO), that will all change in the 2023-24 fiscal year with the state facing the possibility of a $25 billion deficit.

Even though Gov. Newsom and Legislature have done a good job building the rainy-day reserve fund, the focus during this next budget cycle will not be on district goodies, like skate parks and community pools, but on how to minimize the cuts to social programs and education. This is a stark difference and a bitter reality for the new members.

If the election and the budget are foreshadowing the 2023 legislative session, then we can definitely expect it to be a doozy! ■

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Understanding

Food Prices and Where They’re Headed

By Dr. Ricky Volpe, Ph.D. Cal Poly San Luis Obispo Agribusiness Department

In 2022, the United States saw food price inflation reach levels not seen since the 1970s. Consumers don’t have the luxury of buying less food when food prices increase, and therefore food price increases have real economic impacts on American households. According to the United States Department of Agriculture (USDA), grocery spending in real terms has increased by an average of about 0.8% every year since 2000. But it increased by 4% in 2020 and 2.7% in 2021. Accordingly, during this time, the share of household income spent on food in the U.S. ticked up, reversing a trend of increasing food affordability since the post-World War II boom years. The food expenditure numbers are not yet available for 2022, but we are on track for grocery prices to increase by about 10% over 2021 levels, compared to an annual average of about 2% since the turn of the century. This will almost certainly have implications for food access and food insecurity in the U.S. Everybody from consumers to folks in the food industry want to know: Has this wave of inflation finally crested, and when will food prices return to normal?

Continued on page 18 ▶

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◀ Continued from page 17

To understand where food prices are headed, it is important to understand where they stand right now. The Consumer Price Index (CPI) is the best measure of national food price changes. To nobody’s surprise, the prices in most food categories remain considerably higher than they were one year ago. For some categories, including eggs and soybean-based oils, the 12-month percent changes are at or near all-time records. But the trajectory of prices in the last three months of data, from July to October, is more promising. For most categories prices are nearly flat, and prices for beef, milk, and fruit have fallen. We are

and new concerns are emerging on the horizon. The Producer Price Index (PPI), which measures national prices paid by companies within the supply chain, is helpful for understanding where retail prices are headed. The story told by the PPI numbers is a mixed one. On one hand, the prices for goods and services that are central to food price formation are almost uniformly much higher than they were one year ago. This suggests that costs remain high for food companies throughout the supply chain and that transportation, storage, and raw and intermediate goods are continuing to

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still seeing strong inflationary pressure for eggs, which have been severely impacted by the avian influenza, and fats and oils, which are a function of oilseed prices and have been affected by the conflict in Ukraine.

Looking ahead to 2023, some of the key inflation drivers of 2022 are abating, others remain doggedly persistent in their impacts of the food supply chain,

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apply inflationary pressure. For every PPI shown in the charts, two things are true.

First, the 12-month percent change in September 2022 is higher than the average 12-month change since the pandemic began, meaning that costs remain higher than normal. But second, the maximum 12-month change is behind us, and therefore upward cost pressures have begun to subside.

With the current situation in mind, USDA forecasts food-at-home, or grocery, prices to increase 2.5 to 3.5% in 2023. This is a significant fall from 2022 levels, though it reflects inflation higher than the historical average. Our discussion begins with the reasons why we can expect food price inflation, if not the prices themselves, to come down in the coming year.

Perhaps the most important factor in relieving food price inflation is lower energy prices. The food supply chain is energy intensive and higher energy costs drive ripple effects through every sector of the food system, from production, to manufacturing, to transportation. Crude oil prices remain high but the price per barrel is down 24% from the high in June 2022. This translates into significant relief in operating costs that will filter through to retail prices into 2023 and beyond, barring another spike.

The food manufacturing sector was hit particularly hard by COVID-19, with plant shutdowns occurring regularly through 2020 and 2021 due to labor shortages and safety concerns related to the pandemic.

Shutdowns and reductions in capacity resulted in shortages and price hikes for foods ranging from beef products to breakfast cereals that continued into early 2022. The manufacturing and processing sector has largely recovered from these impacts and productivity has returned to normal levels, alleviating both price inflation and volatility. In an additional spot of good news, ports around the world have cleared up significantly in recent months, with wait times and logjams falling. Ocean freight rates, which in some cases increased about tenfold in 2022, have begun to come back down as well, which has helped reduce the price of imported food.

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Transportation and labor costs have driven food price inflation in the U.S. for years, but their impacts accelerated with the onset of the COVID-19 pandemic.

The shortage of truck drivers in the U.S. continues to worsen in most parts of the country, and average driver age continues to increase. This has translated into challenges for food companies to find transportation, which is an acute issue for highly-perishable foods. According to the USDA Agricultural Market Services, the incidence of refrigerated truck shortages has increased by more than 50% since 2019. As a result, truck rates have increased considerably, amplifying costs as food moves through the supply chain from farms to factories to supermarkets.

Long haul rates increased 70% in the U.S. between the first quarter of 2012 and the first quarter of 2022. As points of comparison, the food-at-home CPI increased 19% over that same time, while the all-items CPI, which measures the average prices of all goods and services in the economy, increased 25%.

Manufacturing PPI Percent Change, 9/21-9/22

Fo

Rounding out positive news for food price movement, the outlook for domestic grains and oilseeds, the fundamental building blocks of the food supply chain, is strong.

Yields are up for corn and soybeans, and while total wheat production is slated to be flat or even slightly down, exports are also expected to decrease, leaving the domestic supply unchanged going into 2023. Looking ahead to 2023, the World Agricultural Supply and Demand Estimates forecast corn and wheat prices to be flat, animal feed prices to be down about 14%, and soybean oil prices to fall slightly. Some commodities, such as sorghum and barley, are expected to increase in price, but the current outlook is not a recipe for strong inflationary pressure from commodities.

Labor remains a challenge for food companies across the spectrum of the supply chain. According to the U.S. Census of Business, separations have outpaced hirings, on average, for producers, manufacturers, and retailers since the pandemic began in 2020. This has translated into higher turnover, which is costly and problematic for firms.

Independent supermarkets throughout the country remain understaffed, which in many cases means that managerial employees are carrying out tasks typically designated for entry-level staff. As workers increasingly demand flexible schedules and the ability to work from home, hiring and retaining employees is projected to continue to be problematic throughout the food sector, and this will continue to drive up operating costs.

There are additional factors with the potential to affect food price inflation in 2023 and beyond, but quantifying

their impacts at this point is guesswork.

The war in Ukraine continues to affect international commodity markets. The U.S. is not a major importer of grains from that region of the world, but the extent to which Ukraine is able to export wheat during the conflict directly affects the global demand for U.S. wheat, and therefore the domestic price of cereals and bakery products. Ukraine and Russia are also major exporters of cooking and vegetable oils, and this is a major factor behind the surges in soybean prices in the U.S. and the resulting inflation for fats and oils in the supermarket. The war has also disrupted global metal and fertilizer markets, which has caused shortages and price spikes for many materials vital to the food supply chain, including aluminum.

The resolution of the war in Ukraine, when it takes place, will initiate a process that will gradually alleviate inflationary pressures on various food prices in the U.S. Continued on page 20 ▶

CAL I FORNIA G RO CER | 19

◀ Continued from page 19

Industry PPI Percent Change, 9/21-9/22 35.0 30.0 25.0 20.0 15.0 10.0 5.0

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Finally, severe weather, exacerbated by climate change, is arguably the single greatest x-factor shaping food price inflation moving forward. The drought in the western U.S. has now become the continental drought, as drier conditions are affecting agriculture markets throughout the country. Water levels in the Mississippi River have fallen so low that barges are unable to travel on it, limiting the options for bringing grains and oilseeds to the port of New Orleans.

This primarily affects U.S. exports and further tightens the global food supply during an already challenging time. And domestically, this adds more stress to our truck and rail sectors as the crops grown in the Midwest, which in many cases have already exceeded storage capacities, must be moved by other modes

20 | CAL I FOR N I A G RO C E R

of transportation. In California, acreage for crops including tomatoes, rice, citrus fruits, and more has already been scaled back due to drought conditions and further reductions are expected in 2023.

Throughout the western U.S., drought conditions have driven up alfalfa and hay prices, which, in turn, increases costs for ranches and dairy operations. And the U.S. is hardly alone in facing extreme weather that affects crop production.

The past year brought floods in Australia, an unprecedented drought in China, a summer heat wave in most of Europe, and more.

Severe weather, conflict, and supply chain bottlenecks in any region of the world affect imports, exports, or both.

In today’s interconnected global market for agricultural commodities and food

products, this means that these events, even those taking place halfway around the world, have ripple effects for food prices domestically. Many of the major factors that drive record food price inflation in the U.S. are subsiding, but the global food market is tight and under a great deal of stress from multiple angles. Currently, we are on track for a significant reduction in food price inflation in U.S. supermarkets in 2023, which will bring relief to millions of households. Food companies, from growers to retailers, continue to make investments in automation, renewable energies, controlled and indoor agriculture, and traceability that will help to ensure the long-run sustainability of our food system. But in the short term, it is still quite possible that heavy inflation will rear its head again. ■

CGA gives me a voice in Sacramento that I otherwise wouldn’t have. Through CGA I’ve been able to lobby directly with elected officials and their staff on issues that effect my business.

RICK STEWART, PRESIDENT SUSANVILLE SUPERMARKET ONE STORE – SUSANVILLE, CA

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24 | CAL I FOR N I A G RO C E R

Foods Etc. – Dennis Darling to Serve as 2023 CGA Board Chair

By Jessica Love During the California Grocers Association annual meeting on November 30, outgoing board chair Renee Amen passed the gavel to Dennis Darling, who will serve as the next CGA Board Chair for 2023.

Darling and his wife, Ruth, have owned and operated Foods Etc. in Clearlake and Susanville, California for 25 years. At the end of 2024 the couple is retiring, and their daughter and son-in-law will take over the business. In the meantime, Darling is going to step back from the day-to-day operations and take on a more strategic role while he serves as CGA Board Chair.

As a longtime owner of an independent grocery store, Darling is especially familiar with the grocery industry from the perspective of an independent business. He has experienced many challenges over the years, most recently with the challenges of COVID compliance and labor issues. But Darling also believes wholeheartedly in the benefits of running his own business, noting that it’s been a rewarding experience that allowed his family to be an integral part of the communities they serve.

Prior to his membership and work with CGA, Darling was active in the California Independent Grocers Association (CIGA), which represented the voice of independent grocers for many years. In 2013, Darling and Bob Parriott began working with CGA to discuss a merger. CIGA was struggling with leadership but had funds to contribute, and CGA was eager to add more independent operators to its membership.

Thanks to the work of Darling and a handful of others, the two organizations officially merged in mid-2014. The move strengthened the grocery industry in California, boosting advocacy efforts and creating a more diverse

member pool. Since then, CGA has been a strong voice for independent grocers in addition to larger chains and companies.

As the grocery industry faces ongoing challenges from inflation to labor and supply chain, Darling expects 2023 to be a busy year.

“In the eight years since that merger, funds from CIGA have been used for education in helping independent grocers with training and compliance,” Darling said.

“If we had even one of those at a time it would be very challenging, but to try and deal with them all at the same time has really made the business much more difficult,” he said.

“The industry has been really good for me and my family, and this is an opportunity for me to give back,” Darling told CGA. “And you know what, I just love the idea of being able to communicate with all these different grocers and vendors, too. There are so many outstanding people who are involved in CGA and I’m just really proud to be a part of that group.”

During his time as board chair, Darling also wants to focus more on advocacy at the local level for both chains and independent stores—in addition to CGA’s already active efforts at the state and national levels.

CGA also established the Independent Operators Committee, which Darling said has been integral to ensuring small independents are well-represented within CGA. The committee meets twice a year and supports independent grocers with issues like compliance, hazardous waste disposal, workers’ compensation, and labor and employment issues.

“It’s been a great merger. I think it’s been really good for both entities and frankly I don’t even really think about it much anymore, we’re just one family,” Darling said.

“Ron is excellent to represent everybody. Not just the small chains, but the independents.”

“The independents are really well-positioned to advocate on behalf of the industry at the local level,” he said. “They know who their local elected officials are, they know the sheriffs, they know who the local regulatory people are, and so I think they'll be a big help in that.”

With the support of CGA, Darling is confident all CGA member companies are in good hands. Darling notes the outstanding CGA staff and their efforts in government relations and communicating with members, as well as a successful lineup of trainings and events that are always “first-class.”

While there’s a full calendar ahead of Darling as CGA Chair next year, there will also be some fun. Darling notes that CGA’s Independent Operators Symposium will take place in Hawaii in January, an event carried over from CIGA that CGA happily embraced.

“Again, I’m just really proud to be part of that and be able to give back to the industry that’s been so good to us,” he said. ■

CAL I FORNIA G RO CER | 25

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MIDTERM BY THE NUMBERS As usual, it’s good to be a Democrat in California. This cycle, however, features a few caveats after November’s midterm elections. While Democrats nationally fared better than pre-election political prognostications and economic headwinds, Democrats’ overall performance in California provided something of a mixed bag.

With a non-competitive race at the gubernatorial level and no compelling statewide candidate matchups, voter turnout in the state underperformed expectations. Those who did vote showed themselves to be concerned about the trajectory of California, distrustful of special interests’ influence in the political process, and upset about the lack of progress on the seemingly intractable problems facing the state. As such, the Democratic Party faced more headwinds than usual.

STATE LEGISLATURE At the legislative level, the impact of term limits kicked in this cycle with numerous senators and assemblymembers opting to retire early or seek other elected offices. This was also the first cycle in over a decade featuring significant turnover: 24 new members in the Assembly (30%) and 10 new members in the Senate (25%).

It wasn’t so long ago that a Democratic supermajority in either chamber was considered a major milestone. Now both chambers contain Democratic supermajorities. The Assembly flirted with a lasting supermajority from 2012 to 2016 before cementing it after 2016. Senate Democrats secured their supermajority for the first time in 2016, lost it from a recall, and then won it back in 2018.

In the years since, the only questions surrounding Democratic dominance of both chambers is how large will those majorities be.

In the 2022 midterms, Democrats gained two seats in the Assembly, giving them a 62 to 18 advantage. In the Senate, Democrats improved their lead by a single seat, expanding their caucus to 42 members compared with eight Republican seats.

FEDERAL As mentioned above, Democrats outperformed both historical precedents for an incumbent party in an off-year election and poor economic indicators. However, deep blue California did feature some highly-competitive races in congressional seats. In the end, all incumbents—both Democrat and Republican—won contested races stretching from San Diego (Dem. Rep. Mike Levin) in the south through Orange County (Dem. Rep. Katie Porter and GOP Reps. Young Kim and Michelle Steel), Los Angeles (GOP Rep. Mike Garcia) and the Central Valley (GOP Rep. David Valadao).

However, Democrats did take some hits. Sky-high costs of living, record gas prices, surging crime, and the ever-growing homeless population have driven many Californians out of the state and

capped overall growth. As a result, the most recent census numbers caused California to lose one of its congressional seats during redistricting. In addition, the party lost a previously Democratic seat in the Central Valley.

Thus, while Republicans ended up taking the House of Representatives by a historically slim margin (222-213), California was responsible for two of those gains.

LOOKING AHEAD The new Republican majority in the House naturally means leadership changes from the Speaker of the House to committee chairs. The narrow GOP majority has created some uncertainty for California Congressman Kevin McCarthy’s path in the race to succeed Nancy Pelosi as House Speaker. That said, the odds still favor that the gavel will remain in the state moving south from San Francisco to Bakersfield. As such, California will continue to play an outsized role in national politics and policy.

Pelosi stepping down as Democratic Leader signals a likelihood that she leaves sometime during her upcoming term, triggering not only a special election for her seat but also the likely retirement of some long-serving members of the congressional delegation. Some of Pelosi’s peers appear likely to join her in leaving. These retirements will generate a new round of musical chairs as local and state elected officials seek congressional office.

On the Senate side, Dianne Feinstein appears poised to move on in 2024 as well—assuming she makes it through her entire term. Jockeying has already begun behind the scenes for her seat.

Any Senate primary is certain to be a competitive and expensive proposition with the potential (again) of two Democrats facing off in the general election. Current congressional members like Adam Schiff (D-Burbank), Katie Porter (D-Irvine), Ro Khanna (D-Fremont) and Barbara Lee (D-Oakland) all are rumored to be looking closely at a race as are several state and local officials.

Continued on page 30 ▶

CAL I FORNIA G RO CER | 29

◀ Continued from page 29

Adding to the overall sense of drama, should Feinstein vacate her post mid-term, the appointment of her replacement falls to Gov. Gavin Newsom. Newsom previously has pledged to appoint an African American woman to the seat, immediately putting folks such as Rep. Barbara Lee and San Francisco Mayor London Breed on any shortlist.

STATEWIDE Democratic dominance at the statewide level continued unabated in 2022 with the party sweeping all nine constitutional offices. With no competitive race at the top of the ticket after Governor Newsom blew out the 2021 recall attempt, all eyes turned to the statewide ballot measure contests.

Voters weighed seven statewide measures this year, and they gave corporate special interests big (and expensive) losses in November.

The DraftKings and FanDuel sports betting initiative, Lyft’s wealth tax to fund electric vehicles and the tobacco industry’s referendum on the state’s flavored-tobacco ban spend over $200m combined and all were blown out on Election Day. On the contrary, voters showed their progressive bona fides by approving with huge margins a constitutional amendment codifying abortion rights in the state constitution and a passing a huge, dedicated stream of funding for arts education.

LESSONS LEARNED Continued Democratic growth coupled with the Republican Party’s retreat in the state show no signs of reversing any time soon.

However, outside of the partisan outcomes, what did we learn about this year’s electorate and what might we surmise about what the future holds?

Well despite voters’ consistent and vocal concerns about the direction of state and local government, they did little to fundamentally alter the political orientation or policies currently in place. Indeed, in many local races, the electorate remained with the status quo or moved left.

No better city exemplifies this trend than Los Angeles. By all metrics, Los Angeles has gone backwards: its homeless population continues to explode; crime is up; numerous scandals over the past few years have engulfed city officials; cost of living has priced out long-time residents; and repeated audits of recent tax increases show that those revenues rarely go towards their intended purpose.

Yet Los Angeles voted in the ultimate insider in former California Speaker and Member of Congress Karen Bass—an elected official deeply embedded in the political machinery of the city. No matter your position on the Caruso versus Bass matchup, her victory hardly represents serious change in city government. On top of that, the council continued its march leftward despite a deteriorating quality of life emanating from those very policies.

30 | CAL I FOR N I A G RO C E R

Second, even with significant losses for corporate special interests (think Lyft, tobacco and the online gaming industry), expect the business community to continue heading to the ballot for relief.

With the current makeup of state and local governments, corporate entities have little choice but to take their issues directly to the electorate, which is generally more amenable to corporate issues especially when they involve anti-tax initiatives.

Third, expect the cost of elections to continue its upward ascent.

Universal Vote-By-Mail in the state has now elongated “Election Day” and the spending that accompanies it to five-plus weeks. Want to know why you’re getting more mail pieces and seeing unrelenting YouTube ads in August? Well, that’s because any voter can now vote in the first week of October, and campaigns need to leave no stone (or vote) unturned in their quest for victory.

What was interesting was when Californians voted this cycle.

Historically, Republicans used to vote early. Under the Trump administration that dynamic began to flip as Democrats, champions of greater access to the polls and tactics to facilitate that (vote by mail, early voting locations, etc.) cast their ballots early.

Late votes left campaigns desperate for money in the final weeks of the cycle. Campaigns spent too much money communicating with voters too early. What does this mean for campaigns in the real world?

One thing we can be sure of is that campaign expenditures will continue to rise because of the length of the voting window. As a result, campaigns, especially candidate-funded ones, will need to look to outside sources of spending and independent expenditures to allow them to communicate with voters over the prolonged campaign period. Candidates need to raise more money or rely on more special interest funding to bridge the gap.

FORECAST California will see continued labor dominance at the state legislative level. The trend in California, and nationally, is toward more aggressive labor positioning both in the workforce and aiming to dictate how corporations run their business models.

AB 5 (employee classification), AB 257 (fast food wage and labor council) and hazard pay are all examples of a more aggressive labor movement trying to force companies to implement policies, whether or not the macroeconomic indicators justify them. This dynamic is unlikely to cease, and in fact is likely to accelerate.

As such, business interests in the state need to be aggressive in defining bad policies early and going to the ballot when they can to make their cases directly to voters. Unless the business community becomes more aggressive, these bills and political dynamics will proliferate because legislators are not paying a political price for pushing these policies.

California politics never fail to produce fireworks. Expect more of the same in 2023. n

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THANK YOU! Super A Foods and the Amen Family thank Renee for her year of service as CGA Board Chair

Congratulations!

Smart & Final would like to congratulate its SIXTY 2022 Piggyback Scholarship Awardees! And a special congratulations go out to...

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Incoming 2023 CGA Chair

DENNIS DARLING - Foods Etc. -

Outgoing 2022 CGA Chair

RENEE AMEN - Super A Foods -

Susanville Supermarket A l l a bo u t f r e s h

CAL I FORNIA G RO CER | 33

Congratulations Dennis Darling Foods Etc.

Incoming CGA Chair

THANK YOU Renee Amen Super A Foods

Outgoing CGA Chair

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After years of facing the day-to-day pandemic grind, it was a breath of fresh air to look forward to what lies ahead for the industry during the 2022 CGA Strategic Conference.

This year we were able to shift our gaze towards “what’s next” for the world of retail and how we can best plan for it. Following hybrid-event formats and evolving travel restrictions over the years, this year our event returned to full capacity in Palm Springs, and the spirit of our industry was electric.

On Sunday afternoon, attendees warmed up with an energizing Emerging Brands Pitch Contest, hosted in collaboration with Navigator Lighthouse Foundation, where up-andcoming brands competed for the attention of top retailers in California. After brands delivered their best five-minute pitch, retailers could bestow “golden tickets” upon the brands they would like to carry in-store. Contestants, including first-place winner, Drunk Fruit, walked away with a handul of golden tickets and even more valuable— retailer business cards.

Undoubtedly, the crème de la crème of our event is the hundreds of hand-coordinated business meetings between retailers, wholesalers, and suppliers that allow guests’ the most efficient experience to build lasting connections and generate new leads.

To supplement busy meeting schedules and networking events, our top-shelf keynote speakers delivered thoughtful presentations to get guests thinking about new approaches to drive forward culture and business in a new landscape.

The event kicked off with an interactive keynote session delivered by Galen Emanuele, who broke down how empowering a simple “Yes” can be to the performance, mindset, and engagement of your team. Through think-on-your-feet exercises, Galen helped the audience harness the power of the improv to transform conventional approaches to culture within organizations.

Monday morning’s General Session opened with poignant insights from CGA President and CEO Ron Fong, Board Chair Renee Amen, and Illuminators Headlite Joe Perez on how the industry has changed over the past few years, and where it’s going. Then, Kehe’s Executive Vice President of Growth and Innovation, Amy Kirtland, joined us to unpack what making and moving goods looks like in today’s landscape, rife with persistent supply chain challenges.

Continued on page 42 ▶

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◀ Continued from page 41

Following the session, Keynote Kevin Carroll took the stage—bringing along his red ball—to remind us to embrace our inner child and infuse our work with play. Kevin inspired the audience with touching personal stories from his own background and childhood, demonstrating his ability to build grit and resilience in the face of challenges—something that, he says, can be taught.

Tuesday morning launched with a thought-provoking presentation from top retail influencer Carol Spiekerman, who offered a new perspective on retail and brand strategy. Carol challenged guests’ existing impressions of retail and encouraged boundary-pushing to drive growth and opportunity into the new year and beyond. She also forecasted what’s next for retail, presenting her thoroughly researched Ten Transformation Trajectories.

Between productive retailer-supplier meetings, our lunchtime keynote, Purpose Strategy Expert, Kathy Varol, helped us address hard but necessary truths about ESG and sustainability as our industry faces evolving consumer expectations and increased concern for our planet.

The Association put hundreds of hours into planning the 2022 CGA Strategic Conference. Years of distance taught us how vital in-person connection is, and how much our industry thrives being together.

Through resilience and collaboration, California’s grocery community has proven that together, we can face any road ahead.

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Mark your calendars for next year’s Conference on September 24–26, 2023 in Palm Springs!

2022 CGA STRATEGIC CONFERENCE SPONSORS CGA wishes to recognize and thank the many sponsors that helped to make this year’s conference a tremendous success.

PREMIUM SUITE

WHITEBOARD SESSIONS

DIRECTOR LEVEL

Anheuser-Busch InBev

RMS, Inc.

Baloian Farms

Bimbo Bakeries USA C&S Wholesale Grocers CA GROWN

OPENING GENERAL SESSION Instacart

Cam Services Certified Federal Credit Union Chemours

Chobani

AFTER-HOURS SOCIAL

Crown Poly, Inc

Jelly Belly Candy Co.

Molson Coors Beverage Company

DISTANT LANDS COFFEE

Kellogg Company Kimberly-Clark Corporation Molson Coors Beverage Company Mondelez International Nestle Purina Petcare

WI-FI C&S Wholesale Grocers

CHARGING STATIONS Upside

PepsiCo Procter & Gamble Reyes Coca-Cola Bottling/ Coca-Cola North America RMS, Inc. The Hershey Company The Jel Sert Company The Kraft Heinz Company Tyson Foods, Inc. UNFI

ECOS e-Mission Control F. Gavina & Sons, Inc. Garda Construction, Inc. Hussmann Corporation/Aperion Lone Peak Labeling

ENTERPRISE RISK PROTECTION SUMMIT

PepsiCo

Front Line Safety

PreZero US Packaging, LLC.

RMS, Inc.

QM Power

PRESIDENT LEVEL Alkaline88 American Greetings/Papyrus Amplify Snack Brands Arcadia Publishing Constellation Brands

Reyes Coca-Cola Bottling Sioux Honey Association SnackFutures, a division of Mondelez Torani Italian Syrups TRUNO Retail Technology Solutions Unified Protective Services, Inc.

EXECUTIVE LEVEL

Ferrero USA

Classic Wines of California

EMERGING BRANDS

Flowers Foods

Botticelli Foods LLC

Chosen Foods

Frito-Lay

Organic Foods International

Danone North America

Harris Ranch Idahoan Foods

Rosewalk Global/Latvian American Chamber of Commerce

Inmar

Viva Tribe, LLC

REGISTRATION Post Consumer Brands

Itasca Retail

OPENING RECEPTION

KeHE Distributors

CA GROWN

Kind Brands

E. & J. Gallo Winery

Loacker USA NuCal Foods Phononic Wonderful Sales

CAL I FORNIA G RO CER | 43

CGA NEWS

MEMBERS GATHER IN SOCAL FOR CGA GOV. RELATIONS DAY Just off the heels of the General Election in early November, CGA gathered members at Anheuser-Busch in Southern California for the first in-person Government Relations Day since 2019.

The morning was filled with political insights from experts like Stuart Waldman, president of the Valley Industry Commerce Association, mixed with vital regulatory updates and election results from Capitol insider and CGA contract lobbyist Louie Brown. Team CGA provided local and state government updates, and Downey Brand filled in attendees on the status of Prop 12 and new developments on Prop 65.

In the afternoon, we pivoted to a Crisis Communications Seminar, led by Nancy Heffernan from Lucas Public Affairs, where attendees learned how to deliver key industry messages to make the most impact.

Our day concluded with interactive practice drills where members put their newfound media training into action. ■

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TEE IT UP FOR SCHOLARSHIPS In mid-October more than 150 grocery retailers, manufacturers, and wholesalers from across the state joined the second annual CGAEF Top Shot @ Topgolf tournament for a day of networking and fundraising for the CGAEF College Scholarship and Tuition Reimbursement Programs.

iStock

“This new style of golf tournament is a fantastic opportunity to help fund our two main giving programs. It allows players of all skills levels to network with their industry peers while raising money to support the next generation of leaders in the grocery industry,” said CGAEF President Ron Fong. “The Foundation is extremely appreciative of the many companies that joined this first-of-its-kind tournament. Your support helps deserving college students of all ages fulfill their educational goals.” ■

CGA NEW MEMBERS

NEW MEMBERS CGA welcomes the following members:

Arcadia Publishing 210 Wingo Way Ste 200 Mt. Pleasant, SC 29464-1819 Contact: Casey Bearsch, Dir., Sales & Marketing E-mail: cbearsch@arcadiapublishing.com Phone: (843) 853-2070 Website: arcadiapublishing.com

National Vitamin Company 1145 W Gila Bend Hwy Casa Grande, AZ 85122-4308 Contact: Ali Verlander, National Sales & Marketing Manager E-mail: alisav@nationalvitamin.com Phone: (225) 719-0216 Website: nationalvitamin.com

Northwest Grocers 1101 Andover Park W Ste 100 Tukwila, WA 98188-3911 Contact: Karen Cononetz, President E-mail: karen.cononetz@nwgrocers.com Phone: (206) 406-8257 Website: nwgrocers.com Logo attached.

Snacks R Us 1055 E Cooley Ave San Bernardino, CA 92408-2819 Contact: Cameron Sanchez, General Manager E-mail: cam@snacksrus-dsd.com Phone: (949) 412-1803

Stewart’s Enterprise Holdings Inc. 716 Newman Springs Rd Lincoft, NJ 07738 Contact: Eric Breiding, President, Sales E-mail: eric.breiding@stewartspiked.com Phone: (561) 632-8852 Website: stewartspiked.com

Superior Farms 2530 River Plaza Dr Sacramento, CA 95833 Contact: Lesa Eidman, VP, Sales E-mail: lesa.eidman@superiorfarms.com Phone: (530) 297-3523 Website: superiorfarms.com

TRAX Industrial Products Corp.

PO Box 2089 Loomis, CA 95650-2089 Contact: Delmar Marks, President/General Manager E-mail: dmarks@traxindprod.com Phone: (916) 708-7112 Website: traxindprod.com

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CGA Events Calendar

INDEPENDENT OPERATORS SYMPOSIUM January 7-14, 2023

CGA STRATEGIC CONFERENCE September 24-26, 2023

Fairmont Kea Lani Maui, Hawaii

Palm Springs Convention Center Palm Springs, CA

GROCERS DAY AT THE CAPITOL April 12, 2023

CGAEF TOP SHOT @ TOPGOLF October 19, 2023

Sacramento, CA

Roseville, CA

CGAEF HALL OF ACHIEVEMENT Honoring Mimi Song, Superior Grocers & Bob Garibaldi, United Natural Foods, Inc.

SUPPLIER EXECUTIVE COUNCIL PROGRAMMING Store Tours: To be determined Winter Event: November 30, 2023

April 27, 2023 – Anaheim, CA

Throughout California

INDEPENDENT OPERATORS GOLF TOURNAMENT June 7, 2023

CURRENTLY UNSCHEDULED EVENTS

Foxtail Golf Course Rohnert Park, CA

Leadership Summit Store Leaders Seminars

MOS SADAMS.COM

OPPORTUNITY RISES IN THE WEST Innovative solutions. Active collaboration. Forward-looking perspectives. It’s how we bring West to business to help more than 70 grocery companies strategically stay ahead of change and plan for what’s next. Discover how our industry-focused services can help your business thrive.

RISE WITH THE WEST. Assurance, tax, and consulting offered through Moss Adams LLP. ISO/IEC 27001 services offered through Cadence Assurance LLC, a Moss Adams company. Investment advisory offered through Moss Adams Wealth Advisors LLC. ©2022 Moss Adams LLP

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OUTSIDE THE BOX N EW RETAIL PERS PECTIV ES

On a Quest to Social Media users are fed up with their hyper-curated feeds. Enter: BeReal—the latest social media app that has surged in popularity in recent months. BeReal encourages real-time, authentic posting in contrast to highly edited content on apps like Instagram. The app sends random daily alerts to users asking them to post a picture within two minutes to show whatever they are doing in that moment. The catch? You can’t view your friends’ posts until you’ve posted yourself. Scrolling through your BeReal feed, you’ll see posts as mundane as friends watching TV or at their work desks. In the name of authenticity, posts can’t be edited or filtered and friends can see how many times you’ve retaken your photo.

Gen-Z’s Consumerhaus Claire Spackman knows what Gen-Z wants from their shopping experience. A member of Gen-Z herself, Spackman founded Consumerhaus, a curated online market and shopping hub for Gen-Z consumers. The platform is set to launch on January 3, featuring over 700 products from 100 small brands spanning food and beverage products, health and wellness goods, pet supplies and personal care items.

A majority of its inventory—60% that is—will be grocery items.

Biodegradable Bottles Water and the environment are two hot topics right now, especially in the Golden State. California-based material innovation company Cove is partnering with upscale Los Angeles grocer Erewhon to offer the first fully biodegradable water bottles. The plastic-free bottles are made of natural polymers called polyhydroxyalkanoates, or PHAs, that can be broken down by microorganisms, allowing them to disintegrate after disposal.

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OUTSIDE THE BOX

Forecasting Brought to You by Instagram

Instagram’s 2023 Trend Report confirmed what we already know to be true: sustainability is a top priority for young adults. The report, conducted with the help of leading trend forecasting company WGSN, found that more than half of respondents plan to make or reconstruct their own clothes in 2023. With inflation and rising costs, more than one-quarter of respondents plan to turn to thrifting for their clothing in 2023—a trend that has been gaining momentum on TikTok over the past couple of years.

DRUNK FRUIT

drunkfruit.com

Hard seltzer startup Drunk Fruit took home the top prize during the first-ever Emerging Brands Pitch Contest at the 2022 CGA Strategic Conference. The up-and-coming beverage brand offers hard seltzers in a variety of classic Asian fruit flavors, including Yuzu, Lychee, and Melon, on a mission to share its Asian American heritage with the world. Founders Kenn Miller, Steven Tang, William Zeng and John Zhang—all college friends with backgrounds in tech and business— conceived of the company when Miller raved about the fruity fizzy beverages he’d tasted on his honeymoon trip to Japan.

Magentaverse Pantone has revealed a vivid shade of dark pink as its 2023 color of the year: Viva Magenta. According to Pantone, the color evokes optimistic celebration, experimenPantone® tation, and unrestrained self-expression.

The unveiling took place at the immersive “Magentaverse” exhibition in Miami Beach, Florida housed in technology-driven venue Artechouse. This year, Pantone used the A.I. tool Midjourney to generate images featuring Viva Magenta that explore the connections between nature and technology.

iStock

NOT YOUR MOTHER’S TINNED FISH The words ‘tinned fish’ don’t evoke the most modern image. But female-founded and led food company Fishwife is changing the tinned fish game to be a delicious and ethically-sourced household staple. Fishwife makes small-batch tinned seafood in fun flavor combos including campfire cod, rainbow trout jerky gems, smoked Atlantic salmon, and more. The vibrantly packaged seafood brand sources from responsibly managed fisheries and aquaculture farms and hand-packs tins in family-owned canneries in Washington State and British Columbia. Prioritizing nutrients and quality, fish is raised without antibiotics or chemicals, and fish are fed zero waste, nutrient-rich diets.

Virtual “World of Beauty”

Courtesy of Laura Mercier

Cult classic beauty brand Laura Mercier opened its first virtual store, “World of Beauty” with experiential e-commerce company Obsess. The store will feature three virtual rooms where shoppers can search for their perfect shades, purchase products, and do a 3D unboxing. The brand launched its virtual store with a livestream shopping event. Laura Mercier joins a fresh lineup of brands experimenting with virtual stores, including Bloomingdale’s and Lacoste.

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CAL I FORNIA G RO CER | 49

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Shopper Beware K I M B ER LY R A E M I L L ER WR IT E R

The importance of creating a sense of security for shoppers I am not someone who generally feels unsafe in the world. I leave my purse in the car more often than I should and let my kids strike up conversations with strangers as long as I’m in earshot. I have always believed that the world was made up of mostly good people, with a few bad apples thrown in for variety. But the world doesn’t feel as safe these days as it once did. Maybe it’s the economy, the aftermath of the pandemic, the tribalism of American politics, or maybe it’s always been this way and I didn’t realize it. Still, even in the quintessential Americana-esque town where I raise my family I have begun to question how safe I am walking through parking lots and roaming supermarket aisles.

Last February, a woman I know from our day care was held up at gunpoint in a parking lot shared by a Whole Foods, Target, and craft store. It’s a shopping center I regularly frequent, as do all the other moms in my area. At 2:30 in the afternoon, she was attacked while she buckled her two-year-old in their car seat. She thought faster than I would have, scaring the attacker off by pressing the panic button on her keys.

Afterward, she took to a local Facebook group to share her story. People accused her of fearmongering until the incident and video from the parking lot surveillance was aired on the news.

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That’s not the only story that has circulated among women I know in real life, women I trust, of being followed down supermarket aisles or to their car, only to have their suspicions confirmed by store management and local authorities. A quick Google search turned up oodles of recent news reports of moms with young children being targeted in parking lots all over the country. Moms with little ones are easy targets. Our hands are full.

Our attention is scattered. And our instinct is to protect our kids above all else.

People don’t always believe women when we say we’re scared. Worries are often dismissed as neurosis, but at the same time, we’re told to always be on guard and able to protect ourselves. This juxtaposition often leaves

iStock

us questioning our instincts when we feel unsafe. But fear is a powerful emotion; it changes behavior and routines. I don’t go to that Whole Foods or Target anymore if my husband isn’t with me. If I need groceries and I’m home alone with the kids, I’m much more likely to order online for pickup or delivery.

You can’t necessarily control the bad apples that find their way to your store, but you can ensure that shoppers know they’re safe when they’re there. Having visible security cameras, security guards, and people out and about in parking areas or to greet shoppers throughout the store goes a long way toward making us feel comfortable. Be transparent about your efforts to keep shoppers safe. ■

PET SPECIALTY

SUPPLIER PERSPECTIVES

Winning in E-Commerce: Top Tips to Make the Sale with Pet Owners E-commerce – it’s not so much a trend as it is a new way of life for an increasing number of pet owners.

The growth of e-commerce has been steadily gaining momentum, in particular over the last two years. As a result, there has been a shift toward behaviors that reduce the number of trips to a brick and mortar store. The pet care industry is moving faster than ever to meet pet owners’ needs in this evolving landscape.

Pet owners who shop both online and in brick and mortar stores spend 50% more than pet owners who only shop in brick and mortar stores.* The growth of this channel paired with the growth of the pet category presents a big opportunity for brick and mortar retailers with an online presence. However, many shoppers are not choosing their store-based retailer for their e-commerce needs.

“Driving awareness of your online pet solutions is important in navigating this competitive space,” said Joe Toscano, VP of Sales at Nestlé Purina. “Fortunately, there are some simple yet effective ways to meet your pet shoppers’ needs and promote customer loyalty.”

Consider the following tips when planning your e-commerce strategy: • Meet pet owners when and where they choose to shop. Offering a variety of fulfillment options is key.

An effective e-commerce strategy should have an omni-channel fulfillment model that includes ship to home, BOPIS (buy online, pick up instore) and curbside pickup. *Source: Nielsen Homescan Panel Custom Crosstab 52wks ending 8/13/2022

• Promote your platform. Storebased retailers have the unique opportunity to meet shoppers when and where they choose to shop. Share with them – both in-store and in aisle – that you have an online platform. Because shoppers are moving online, it’s important to let them know you can meet their needs allowing them to stay with your franchise and increasing their loyalty to you as an omni-channel retailer.

• Prioritize top selling products and brands. Think about your online platform as a mirror of in-aisle selection. Position your bestselling brands prominently on your pet landing pages, and feature engaging brand content, such as product photos, video and ratings and reviews. Add large sizes or bulky items online for shoppers to fulfill when there isn’t enough shelf space in store.

• Make it easy. Shoppers report that using a site once motivates them to go back and shop there again. Offering autoship or auto replenishment will not only allow shoppers to save time and money, but it will also increase repeat buyers. In fact, a Purina study found that more than two-thirds of pet buyers who use subscription for pet say they are very likely to continue. Simplify the online checkout process and offer free shipping.

E-commerce has changed the way shoppers buy their pet food and supplies. As the pet care category leader, Purina offers retail partners customized strategies to capture the valuable pet shopper’s sale.

If you have questions or need assistance, reach out to your Purina sales rep.

Purina trademarks are owned by Société des Produits Nestlé S.A. Any other marks are property of their respective owners.

California Grocer Online Read California Grocer on your mobile device, or share with an associate.

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