Progressive Grocer - October 2014

Sweet and Savory Sensations Creative merchandising, partnerships make big gains Page 83

Land of Plenty

Exclusive produce & floral research blooms with insights Page 117

Good Reads

Page-turning profits remain in store for supermarkets Page 152

Turn to Page 24

October 2014 • Volume 93 Number 10 $10 • www.progressivegrocer.com

pop. sales. repeat.

Introducing new WHEAT THINS Popped Crackers– The only wheat-popped snack packed with 10 delicious grams of Whole Grain.

HIGHLIGHT WHOLESOME. Quality ingredients and better-for-you attributes.

TURN EVERY SNACKING MOMENT INTO A GROWTH DRIVER To learn more, visit www.MondelezInternational.com

WHEAT THINS Popped serving size is about 26 chips (30g) for 130 Calories, and 10 grams of Whole Grain.

Chips enlarged to show detail. © Mondelēz International group

New Cranberry Ginger Shandy Capitalize on Shandy Growth

· · ·

35% of shandy drinkers are incremental to the beer category1 Berry flavored craft brands have 42% dollar share within the category2 Available November through February in 6 & 12 pack bottles

Snowdrift Vanilla Porter Proven Portfolio Performance

·

Snowdrift Vanilla Porter’s case volume increased 15% and flavored craft brands grew 6%3

·

Carrying multiple varieties of Leinenkugel’s products increases the average rate of sales for the brands4

·

Available November and December in 6 & 12 pack bottles

1 Lieberman – Leinenkugel’s Summer Shandy Study, October 2011 2 Source: Nielsen Scan, xAOC/Conv - Beer, xAOC – Wine & Liquor, 52 weeks ending 7-20-2013 3 Source: Nielsen Scan, US FOOD – Beer, 52 weeks ending 9/4/2014; Internal sales to retailer volume 11/1 2013 versus YA 4 Nielsen – 2013

ŠGeneral Mills

Brands

Innovation in Value, Convenience and Health that meet your shopper’s needs.

Capabilities Actionable Insights that drive traffic, loyalty and profit.

Solutions

Customized Event Solutions that bring shoppers to your store and grow basket ring.

October 2014

features

Volume 93, Issue 10

cover story

fresh food

75

Cause Marketing

Forces for Good Retailers and suppliers hope to increase brand equity by supporting causes near and dear to consumers’ hearts — and their own.

111

Meat PriCing

More Cash, Less Cow Grocers need to be proactive in helping shoppers navigate a more expensive meat case.

117

2014 retail ProduCe & floral review

24

2014 retailer of the year

83

Category ManageMent

Tricks for Treats Retailers need to stay ahead of trends, merchandise innovatively and partner with suppliers to drive sales of candy and snacks.

150

industry events

PG Launches Connected Consumer Summit Conference aimed at helping retailers and CPG companies work together to boost sales.

156

industry events

Digital Discussion Dominates Executive Enclave GMA Leadership Forum explores hot issues for retailers and CPG companies.

Neighbors for Life In recognition of the Better Neighbor promise not just espoused, but embraced, at all levels of the organization, Progressive Grocer honors Ahold USA.

Horn of Plenty With produce sales trending at all-time highs, category leaders have ample cause to trumpet the benefts of their department’s bounty to more health-conscious consumers.

grocery 92

snaCks

Healthier Selling Manufacturers ofer strategies for what works best when it comes to raising the profle — and profts — of better-for-you snacks, both inside and outside the store.

grocery/ frozen & refrigerated 99 Cross-MerChandising

Creating Ties That Bind Cross-merchandising creates shopper solutions, and hopefully stronger store loyalty.

126

ProduCe

Budding Brands Produce takes a cue from center store, with packaged goods that are fast gaining a loyal following.

136

PMa PersPeCtives

Up and Coming Rethink your role in the digital environment for relevance with generations to come.

October 2014 | progressivegrocer.com |

7

equipment & design 570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 224 632-8200 • www.progressivegrocer.com

141

EDITORIAL Editorial Director Joan Driggs 224-632-8211 jdriggs@stagnitomail.com Chief Content Editor Meg Major 724-453-3545 mmajor@stagnitomail.com Editor-in-Chief James Dudlicek 224-632-8238 jdudlicek@stagnitomail.com Managing Editor Bridget Goldschmidt 201-855-7603 bgoldschmidt@stagnitomail.com Senior Editor Katie Martin 224-632-8172 kmartin@stagnitomail.com Senior Editor Anna Wolfe 207-773-1154 awolfe@stagnitomail.com Digital Editor Kyle Shamorian 224-632-8252 kshamorian@stagnitomail.com Art Director Bill Antkowiak bantkowiak@stagnitomail.com Contributing Editors Bob Ingram, Tammy Mastroberte, Barbara Sax and Jennifer Strailey

Signage

Vital Signs Supermarket signage is advancing through the implementation of LED and other technologies.

technology

144 Mobile appS

Grocery Apps Gone Wild Whether retailer-branded or third-party, today’s popular grocery apps ofer consumers savings, rebates, shopping lists and dietary guidelines.

nonfoods

152

ADVERTISING SALES & BUSINESS VP, Group Publisher Jeff Friedman 201-855-7621 jfriedman@stagnitomail.com Midwest Marketing Manager John Huff 224-632-8174 jhuff@stagnitomail.com Western Regional Sales Manager Elizabeth Cherry 310-546-3815 echerry@stagnitomail.com Eastern Marketing Manager Maggie Kaeppel 630-364-2150 • Mobile: 708-565-5350 mkaeppel@stagnitomail.com Northeast Marketing Manager Mike Shaw 201-855-7631 • Mobile: 201-281-9100 mshaw@stagnitomail.com Marketing Manager Janet Blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) jblaney@stagnitomail.com 630-364-1601 Account Executive/ Classified Advertising Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@stagnitomail.com Advertising/Production Manager Courtney Warnimont 224-632-8215 • Fax: 888-847-1791 cwarnimont@stagnitomail.com Classified Production Manager Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com MARKETING & PROMOTION Director of Market Research Debra Chanil 201-855-7605 dchanil@stagnitomail.com Audience Development Manager Shelly Patton 215-301-0593 spatton@stagnitomail.com List Rental The Information Refinery 800-529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media 877-652-5295 sales@wrightsmedia.com Subscriber Services/Single-copy Purchases 978-671-0449 or email at Stagnito@e-circ.net

publicationS

Now Read This Books and magazines can help boost supermarket sales, especially if grocers lean into the category.

departments 11 EDITOR’S NOTE: GETTING A HOLD OF YOUR HEART 12 BRAIN FOOD 14 BEHIND THE HEADLINES: REVISITING THE MARKET BASKET SAGA 16 IN-STORE EVENTS CALENDAR: DECEMBER 2014 18 NIELSEN’S SHELF STOPPERS/SPOTLIGHT: MEDICATIONS AND REMEDIES/SLEEPING AIDS 20 MINTEL GLOBAL NEW PRODUCTS: CLEANING EqUIPMENT 22 NEW HORIzONS: THE NExT FRONTIER 148 PROGRESSIVE VIEWS: A GLIMPSE OF NExT-GEN FOOD STORES 158 WHAT’S NExT: EDITORS’ PICKS FOR INNOVATIVE PRODUCTS 160 THE SUPPLIER SIDE 162 THE LAST WORD: MR. ROGERS WOULD APPROVE

8

| Progressive Grocer | October 2014

President & CEO Harry Stagnito Chief Information Officer Kollin Stagnito SVP, Partner Ned Bardic Chief Brand Officer Korry Stagnito VP & CFO Kyle Stagnito VP/Custom Media Division Pierce Hollingsworth 224-632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris Human Resources Manager Sandy Berndt Corporate Marketing Director Bruce Hendrickson 224-632-8214 bhendrickson@stagnitomail.com Promotion Director Robert Kuwada 201-855-7616 rkuwada@stagnitomail.com VP/Events John Failla 201-855-7634 jfailla@stagnitomail.com Director of Digital Media John Callanan 203-295-7058 jcallanan@stagnitomail.com Audience Development Director Cindy Cardinal

STAGNITO BUSINESS INFORMATION PUBLICATIONS

Progressive Grocer (ISSN 0033-0787, USPS 920-600) is published monthly by Stagnito Business Information, 570 Lake Cook Rd. Deerfield IL 60015. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Deerfield, IL 60015 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to Progressive Grocer, P.O. Box 1842 Lowell, MA 01853. Copyright ©2014 Stagnito Business Information All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106.

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

LET’S TALK SEASONS. HERSHEY BRANDS DRIVE THE SEASONAL CELEBRATIONS. With the Hershey portfolio, you have even more reasons to celebrate during Valentine’s Day, Easter, Summer, Halloween and the Holidays. Our iconic brands play a critical role in helping consumers celebrate the traditional rituals they hold dear. So if you want to own seasonal sales, let’s talk!

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editor’s note

by Jim Dudlicek

Getting a Hold of Your Heart

I

t’s one thing to talk about how well a retailer practices philanthropy in the areas where it does business – it’s another to actually witness it up close.

I had that opportunity one weekend this past July at the invitation of Ahold USA, our 2014 Retailer of the Year. Ahold hosted its Our Family Foundation recognition dinner to celebrate the success of the parent company and its Stop & Shop, Giant-Carlisle, Giant-Landover and Martin’s divisions at raising money to beneft children’s charities in the Northeast.

Ahold executives, associates and key supplier donors assembled at Te Hershey Lodge in Hershey, Pa., for the gala event, which was clearly not an exercise in back-patting. Te real guests of honor were some of the kids who’ve benefted directly from the grocer’s philanthropic activities, kids who, with their parents, thanked the foundation for its gift of life to them through donations to Johns Hopkins, the Children’s Hospital of Philadelphia, Children’s National Health System, Geisinger Janet Weis Children’s Hospital, Penn State Hershey Children’s Hospital, University of Virginia Children’s Hospital and Children’s Hospital of Richmond at VCU. Kids like Eli, who required complex surgeries to reconstruct his intestines. Like Zannah, who from birth has been treated for a muscular heart defect. Like Pearce, who is cancer-free at age 16 after undergoing treatment for a brain tumor at 11. Like Grayson, who was treated for a brain tumor at age 2. Like Carsten, who at 14 is an ambassador for children with cancer after undergoing chemotherapy for leukemia starting at age 6. Like Amanda, who at age 2 had her leg amputated due to bone cancer. Like Anna, who’s had multiple surgeries for a hole in her heart. Like Tyler, who’s been treated for a cleft palate, acid refux and sleep apnea. Like Kennedy, who continues to battle a congenital brain abnormality. Like Caden, who was prenatally diagnosed with Down syndrome and since birth has developed other complications.

Like Brandon, who underwent 2½ years of chemo for leukemia. Like Sydney, who received extraordinary care after a serious fall during a gymnastics meet. Like Gregory, who required a bone marrow transplant for Burkitt’s lymphoma. Like Kaitlyn, who participated in a clinical trial that helped shrink her brain stem tumor. And like Quincy,

who’s had multiple surgeries to treat a rare small blue round-cell tumor.

Tere were few dry eyes left in the house.

Meeting these youngsters and their parents — and hearing them tell their stories in their own words about how their grocer really, really cares about them — just made it even more real.

Sure, you can write a check and walk away. But making sure that donation does what it’s supposed to do inspires a legacy of giving.

Join us in paying tribute to Ahold USA and its divisions, starting on page 24.

RIP Glenn Snyder Glenn Snyder, who covered the supermarket industry for nearly four decades as senior editor of Progressive Grocer, died Sept. 7 at age 89 after a 10-year battle with Parkinson’s disease.

Widely known for his “Inside Non-Foods” column, Snyder received the General Merchandise Distributors Council’s Lifetime Achievement Award in 1997 for his groundbreaking research into the nonfood category and for his pioneering coverage of supermarket operations. Over the course of 35 years at PG, he wrote countless articles about the benefts to sales, profts and customer satisfaction that robust promotion of nonfood merchandise such as health and beauty products could create. Along the way, he was a frequent speaker at events hosted by FMI, GMA and other trade groups.

Snyder retired from the magazine in 1997 and formed his own consultancy, hosting panels and moderating workshops with executives from such companies as Duracell, Gillette, Hartz Mountain, P&G and Unilever.

Our condolences go out to Snyder’s family and friends, and we thank him for his role in making PG a leader in grocery trade journalism. PG

You can write a check and walk away. But making sure that donation does what it’s supposed to do inspires a legacy of giving.

Jim Dudlicek Editor-in-Chief jdudlicek@stagnitomail.com Twitter @jimdudlicek

October 2014 | progressivegrocer.com |

11

Accolades / Insights / Trends / Opportunities

Coborn Named N.D. Grocer of the Year

H2O Happenings

The most frequent drinkers of bottled water tend to comprise a younger generation, with the 35-to-44-year-old age group showing the highest likelihood, according to Packaged Facts.

Additionally, adults who drink large quantities of bottled water are more likely to be part of a multicultural population segment — 31 percent more likely than average to be Hispanic and 36 percent more likely to be African-American.

The multicultural makeup of those who drink bottled water also implies a larger household with children under the age of 18. In terms of lifestyle, those who drink bottled water are more interested in staying physically fit and more likely to drink thirst-quencher/ activity drinks as well.

A big tip of the cap to Chris Coborn, president and CEO of St. Cloud, Minn.based Coborn’s Inc., for being named 2014’s North Dakota Grocers Association (NDGA) Grocer of the Year.

Coborn was recognized for his company’s growth in the Peace Garden State, including its newest stores in Jamestown, Watford City and Minot. Each year, NDGA bestows its honor on a grocer who exemplifies steadfast store operations, individual standards, association service, contributions to the grocery industry, leadership, community service and activities. Congrats, Chris!

—Packaged Facts

Healthy Eating Driving Snack Sales

Snack foods are further staking their claim as the go-to eating occasion among U.S. consumers, according to new research from The NPD Group, which finds consumers reaching for traditional snack foods both in between and at meals, particularly those that are perceived as healthy, which NPD forecasts will drive approximately 5 percent growth of snack foods eaten at main meals over the next five years.

The fastest-growing snack foods eaten at meals will be in the better-for-you categories, including refrigerated yogurt, bars and fresh fruit, which consumers perceive as more healthful and convenient. Sweetened snack foods and desserts, which are less likely to be mealtime candidates, will experience flat growth over the next five years.

For more on snacks in this issue, turn to the category management story on page 83 and the grocery article on page 92.

—The NPD Group’s “The Future of Eating: Who’s Eating What in 2018?”

Retailers and brand manufacturers are experiencing information overload as they seek to stay informed of the rapidly growing number of innovative solutions coming into the market. CART’s platform is designed to help retailers and brands discover, evaluate and engage new technologies.

There is nothing else like it available in the retail industry today.

What’s the Big Idea?

—Gary Hawkins, CEO of the Center for Advancing Retail & Technology (CART), whose new Marketplace online platform helps retailers keep pace with supermarket technology innovation through white papers and case studies, as well as ratings and reviews from fellow retailers. The platform also offers opportunities for CPG brands to test in-store merchandise innovation through its “live learning labs.”

12

| Progressive Grocer | Ahead of What’s Next | October 2014

92% Percent of executives from companies that are applying Big Data and report being satisfied with results

—Accenture’s “Big Success With Big Data” research report

Behind the Headlines

Revisiting the

Market Basket Saga Family feud brings New England retailer to the brink.

By Kyle Shamorian

A

TAKING BACK MARKET BASKET Employees and loyal shoppers rallied behind ousted Market Basket CEO Arthur T. Demoulas (top) until he was reinstated.

14

tumultuous summer for Tewksbury, Mass.-based Market Basket saw its reins of leadership yanked from the hands of CEO Arthur T. Demoulas and placed in those of his cousin, Arthur S. Demoulas, following the June 23 ouster of Arthur T. and key members of his management team.

Te leadership change that shifted control of the company’s board of directors from Arthur T. to Arthur S. brought the years-long simmering family feud between the two cousins to an abrupt boil, leading many observers to predict an ignominious end for the family-owned, 71-store New England grocery chain.

Although Arthur T. has since regained the company’s helm, following a $1.5 billion buyback, the Market Basket narrative signifes a telling — and agonizing — example of personal confict disrupting company operations.

Te struggle for Market Basket leadership brought to light a number of troubling issues, foremost of which was the unforeseen impact that executive-level decisions can have on store-level employees.

As evidenced by the spate of protests, rallies and stalled deliveries — the last of which led to dwindling product on store shelves — those loyal to Arthur T. made it abundantly clear that the ousting of their beloved leader would not go unfought.

| Progressive Grocer | Ahead of What’s Next | October 2014

Business as Usual?

According to PG Managing Editor Bridget Goldschmidt, who closely covered the story throughout the three-month stalemate, “One of the most fascinating — and potentially troublesome, at least according to some industry observers — takeaways of the Market Basket saga is that it afrmed, in rather dramatic fashion, just how crucial it is for retailers to take into account the expectations and needs of their associates and shoppers when making business decisions.”

Further, although some might surmise that midsize regional retailers no longer play an integral role in shaping the ever-changing retail landscape, Goldschmidt says the Market Basket scenario afrms that’s far from true.

To the contrary, she notes, “Te age of infuential regional independent players is alive and well. Despite persistent rumors that large international retailers like Delhaize or Ahold might swoop in and buy up Market Basket’s stores, ultimately the chain ended up back in the experienced, local hands of Arthur T. — which in the court of public opinion, is precisely where it belonged.”

In a Sept.12 interview with Te Boston Globe, Arthur T. noted Market Basket’s stunning bounce-back since his reinstatement, with sales returning to “100 percent of where they were last year. Bakery, produce and meat are mostly in. Everyone just got to it and worked as hard as they could.”

While the turmoil has since subsided and the company’s allied troops are resuming their roles with a business-as-usual approach, it remains to be seen how things will ultimately shake out in the years to come. For now, however, it appears that Market Basket is ready for the journey ahead. PG

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in-store

December 2014 is...

events S

M

T

National Stress-free Family Month Read a Book Month Tie Month Universal Human Rights Month

W

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F

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9

10

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Cyber Monday.

This day marks the traditional start of online Christmas shopping, so make sure your website can handle the increased traffic.

Check on all New Year’s Eve decorations and merchandise.

In honor of Worldwide Candle Lighting Day, organize a small ceremony where shoppers and employees can pay tribute to the children in their lives who have passed away.

For the Winter Solstice, the longest night of the year, encourage shoppers to curl up with a warm beverage by holding a sale on ready-to-drink eggnog – just heat and drink!

Nail down your game plan for the New Year’s Eve deli rush.

National Brownie Day. Feature your best varieties in the in-store bakery.

Cupcake Day. Hold cooking classes to show customers of all ages how to create memorable sweet treats for the season of giving (and eating).

Date Nut Bread Day. Showcase a foolproof recipe in your circular.

Thank all of your employees for a successful year, with a cold buffet lunch.

Giving Tuesday.

Poll your staff on what local causes you should support during the holiday and the coming year.

Techno Day. Get your associates’ blood pumping with a little electronic dance music break.

Hanukkah, the Jewish festival of lights, begins at sundown and continues through the 24th.

It’s Festivus, the nondenominational holiday made (in)famous by “Seinfeld.”

Bacon Day. Don’t you wish every day was?

It’s National Cookie Cutter Week. Build a display of the wildest, most whimsical cookie cutters you can find, and crosspromote them with ready-touse dough.

For National Lager Day, plan an exclusive tasting event for your most loyal customers.

National Maple Syrup Day. It’s not just for breakfast — post on your Facebook page a wealth of recipes featuring the versatile sweetener.

Christmas Eve

New Year’s Eve. Resolve to surpass last year’s sales!

Plan a day to prewrap gift baskets for grab-and-go gift purchases.

Choose a selection of shelfstable food and housewares.

UNICEF’s birthday (1946). Donate a percentage of your sales this week to that worthy organization.

Tweet your staff’s top holiday entertaining tips.

Christmas Day

International Volunteer Day

National Poinsettia Day. Run a special one-day promo in your floral section to tout the occasion.

National Oatmeal Muffin Day. Why not offer a complimentary one to early-bird shoppers?

Kwanzaa starts today and ends on Jan. 1

Hold a meeting to review Christmas inventory, giftwrapping supplies and all materials related to the big holiday.

St. Lucia Day. Capitalize on the higher profile it’s gained from TV’s “Welcome to Sweden” by sampling some of that country’s delicacies.

Finalize travel arrangements to the January trade shows.

Set up New Year’s Eve decorations and collect all Christmasthemed items for a post-holiday clearance sale.

E-mail your calendar submissions to

awolfe@stagnitomail.com.

16

| Progressive Grocer | Ahead of What’s Next | October 2014

Front End

Market Intelligence By The Numbers GRoCERY’S Top 10

Shelf Stoppers

Medications and Remedies Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Aug. 2, 2014)

Sales % Change Dollars (Millions) 2014 2013 Lip Remedies-Remaining

$51.0

Units 2013

12.9%

10.8%

12.4%

41.0

8.1

5.8

4.6

6.4

Eye Drops and Lotions

132.5

6.7

6.8

2.9

2.7

Sleeping Aids

84.5

6.0

57.6

6.1

49.7

Medical Wraps and Braces

9.8%

% Change 2014

Eye Care-Remaining

27.4

5.8

7.8

4.2

6.5

Medical Accessories-Remaining

35.2

5.0

4.9

3.3

0.7

280.1

4.4

4.4

3.4

3.0

30.7

4.0

2.3

2.5

0.2

Anti-smoking products

65.5

3.9

5.4

11.2

13.5

Laxatives

271.2

3.3

-4.3

2.5

-1.4

2.9%

2.1%

1.6%

1.8%

Adult Incontinence Insoles

Total Category

$2,241.9

NielseN’s Spotlight

Although most consistently taken by empty nesters and senior couples, with pockets of higherthan-average consumption scattered across behavior stages and lifestyles, the slumbering elephant in the room is the super-elevated usage of sleeping aids by young transitionals in modest working towns. Perhaps stiff competition for jobs in a still recovering economy and the struggle to make ends meet are taking their toll among this demographic, leading to sleepless nights.

CRoSS-MERCh Candidates

Consumption Index: Sleeping Aids LIFESTYLE BehaviorStage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Modest Working Towns

Plain Rural Living

Total

wITh ChILDREN: startup Families

67

48

66

24

47

79

56

small-scale Families

68

134

90

38

53

98

84

Younger Bustling Families

37

70

80

20

60

67

58

Older Bustling Families

98

62

74

31

77

122

77

Young Transitionals

64

83

113

88

376

60

144

independent singles

61

106

72

92

73

68

77

senior singles

140

57

86

69

94

141

102

established Couples

85

101

122

107

106

105

105

empty-nest Couples

127

135

149

120

140

135

136

senior Couples

132

128

125

77

148

122

126

Total

88

95

103

70

127

104

100

HHs with young children only <6 small HHs with older children 6+ large HHs with Children (6+), HOH <40 large HHs with children (6+), HOH 40+

No ChILDREN: Any size HHs, no children, <35 1-person HHs, no children, 35-64 1-person HHs, no children, 65+ 2+-person HHs, no children, 35-54 2+-person HHs, no children, 55-64 2+-person HHs, no children, 65+

n Very High Consumption (150+)

18

n High Consumption (120-149)

Average Consumption=100

| progressive Grocer | Ahead of What’s Next | October 2014

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Cleaning Equipment MarkEt OvErviEw l U.S. sales of household cleaning equipment have slipped in recent years. The slowdown is linked to difficult economic conditions driving consumers to curb spending and look for affordable options, especially for everyday commodity items. l

Stabilization of the economy means that the market is set to see growth of 1.7 percent in 2014 (versus the previous year), 1.9 percent in 2015, 1.7 percent in 2016 and 1.8 percent in 2017.

l

Dominant in terms of market share but more expensive durable items such as cleaning tools, mops and brooms, meanwhile, have fared poorly. This performance is linked to frugal-minded consumers waiting longer to replace worn items and focusing more sharply on price when they do.

kEy issuEs Some 40 percent of U.S. consumers agree that they would pay more for cleaning tools that are more environmentally friendly (e.g., made from recycled or sustainably grown materials), but not at the expense of effectiveness.

l

l

Convenience claims drive new product development in the North american cleaning equipment market, accounting for 39 percent of recent launches, and these are on the increase.

Eco-friendly new product activity is on the rise again after decreases in recent years.

This is perhaps in line with a slowly improving economic situation arguably encouraging people to spend again on generally more expensive eco-friendly product lines.

What Does it Mean? l

l

20

Advertising effectiveness and convenience will remain important for eco-friendly cleaning equipment products, given consumer interest. Indeed, only 31 percent of U.S. consumers are willing to compromise on effectiveness for greater environmental friendliness.

Products that donâ&#x20AC;&#x2122;t require the use of detergent are in a good position to

better flag eco-friendly credentials by limiting use of chemical-heavy detergent. Longer-lasting products could also be better marketed on an eco-friendly platform by focusing on reducing waste, and could also help fend off the threat to cleaning cloths posed by disposable wipes and paper towels. l

Cleaning equipment that promises savings of time and effort stands

| Progressive Grocer | Ahead of Whatâ&#x20AC;&#x2122;s Next | October 2014

a good chance of commanding a premium price, even more so than equipment that promises superior cleaning performance. l

Other players, beyond Procter & Gamble, with its many household brands, could better tap into the co-branded trend as a way to strengthen brand loyalty/awareness, add credibility and reinforce product efficacy.

©2014 POM Wonderful LLC. All Rights Reserved. POM POMS, POM POMS WONDERFUL and the accompanying logos are trademarks of POM Wonderful LLC. PA11696

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Nonfoods

Category

Companies that ignore the unique qualities of multicultural women are doing a disservice to all women — and to themselves.

NEW

Horizons

By Joan Toth

The Next Frontier

When it comes to advancing women, one approach doesn’t fit all.

M

ore than 36 percent of U.S. women are multicultural — by 2050, they’ll be the majority of women. Tis shift has already transformed our retail consumer base and workforce, but it’s not being refected in our leadership ranks.

Not so long ago — when “diversity” was known as “equal opportunity” — diversity was seen as black and white, male and female. Little attention was paid to the extraordinary experiences and contributions of multicultural women, and this created a gap in understanding that persists today.

Survey Says …

Earlier this year, 1,950 Network of Executive Women (NEW) members and supporters — most of them women — completed an in-depth survey on multicultural women’s leadership (a report based on these survey results will be published this fall).

Te fndings were eye-opening.

Although women share many experiences in the workplace and perceive many of the same barriers to leadership, there are many instances when the perceptions of multicultural and white women vary widely. (Multicultural in this reporting refers to individuals who identifed themselves as AfricanAmerican or Black, Hispanic or Latino, Asian/ Pacifc Islander, mixed-race, Native American/ Alaskan, and “other.”)

For instance, multicultural women surveyed were much more likely than white women to say they “have experienced workplace bias” (44 percent versus 32 percent). While 56 percent of multicultural women said they face greater work bias than white women do, fewer than 28 percent of white women agreed. Likewise, multicultural women were more than twice as likely as white women to say that white women are more likely to advance in the workplace (51 percent versus 21 percent).

Te majority of all respondents agreed that “white men have an advantage in the workplace,” but a greater percentage of multicultural women agreed.

It was no surprise that white women (and men) were less likely to perceive bias in the workplace —

22

| Progressive Grocer | Ahead of What’s Next | October 2014

it’s harder to see bias happening to someone else — but these wide diferences in perception should serve as a wake-up call.

Companies Get Low Marks White women were more likely to agree that “my organization includes the perspectives of multicultural women in making important decisions” than multicultural women (32 percent versus 26 percent), but neither group gave our industry high marks on this telling question.

While more than 75 percent of both multicultural and white women surveyed said they’ve had “mostly positive” workplace experiences, one-third of all women (32 percent) and 38 percent of multicultural women said their careers are “stuck.”

Only half of those surveyed said they have a sponsor or mentor, and an astounding 54 percent reported being bullied or harassed at work.

Although most women agreed with the statement “I trust my supervisor,” white women were more likely (73 percent) than multicultural women (62 percent) to do so. No wonder, then, that multicultural women are less likely than white women to feel free to be open and authentic at work. Forty-fve percent of multicultural women said they “don’t share important aspects of their personal life at work,” compared with 35 percent of white women.

Bad For You Company policies and corporate cultures that ignore the unique qualities of multicultural women are doing a disservice to all women and to their organizations. It’s bad for multicultural women deprived of opportunities to advance, for work teams denied the benefts of diverse leadership, and for retailers that lose multicultural women’s unique insights. PG Joan Toth is president and CEO of the Network of Executive Women, Consumer Products and Retail, a learning and leadership community with more than 8,000 members, 750 companies, 100 national sponsors and 20 regional groups in the United States and Canada. For more information, visit newonline.org.

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2014

Retailer of the Year

Neighbors for

Life

In recognition of the Better Neighbor promise not just espoused, but embraced, at all levels of the organization, Progressive Grocer honors Ahold USA and its divisions. By Meg Major

W

hen times get tough — as they often do — there’s simply no substitute for good neighbors, who instinctively surface at just the right time with a welcome meal, a helping hand and a caring heart.

Tose same traits are what inspired Progressive Grocer to present Ahold USA and its divisions with its highest annual honor as the 2014 Retailer of the Year, a recognition bestowed chiefy for its vast and exceptional philanthropic contributions provided to the numerous communities served by its regional operating divisions: Stop & Shop New England, Stop & Shop New York Metro, Giant Landover and Giant/Martin’s.

Serving millions of customers in some of the nation’s most densely populated and competitive geographic corridors, Ahold USA operates roughly 770 supermarkets in 14 states — from Massachusetts to Virginia under its four sister divisions, each with its own support business, along with the online grocery and delivery leader, Peapod. Accounting for an estimated 60 percent of its Dutch parent’s sales, Ahold USA, led by COO James McCann, is carrying out a broad array of activities to fulfll its directive to deliver on an aggressive Reshaping Retail crusade while working to preserve the heritage of its local brands, with a strong focus on reinvesting in value, service and quality, alongside an expansive omni-channel blueprint to meet shoppers’ needs both today and in the future.

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| Progressive Grocer | Ahead of What’s Next | October 2014

Additional reporting by Jim Dudlicek, Bridget Goldschmidt, Joan Driggs and Kyle Shamorian October 2014 | progressivegrocer.com |

25

2014

Retailer of the Year

We know we’re not going to become a great retailer unless we’re also a great place to work , and a great neighbor in the communities which we serve and where we live. Every single one of our divisions has been a key player in their communities, and has continuously found ways to give back.”

—James McCann, COO, Ahold USA

26

McCann is humbled and gratifed by PG’s Retailer of the Year honor, which comes nearly two years into the company’s aforementioned Reshaping Retail strategy, at the core of which is a trio of interconnected promises “we make to our customers, our associates, and the communities and neighborhoods where we operate: to be a great place to work, a great place to shop and a great neighbor.”

Far more signifcant than an admirable catchphrase, Ahold USA’s Reshaping Retail framework “defnes our strategic ambitions, how we operate and what we want to be as a company,” McCann notes. “It speaks to our common set of values across all our businesses, and a shared vision for the future.” While the formal strategy was originally announced in early 2013, he continues, “the commitment dates back much longer than that at each of our operating divisions, which share an enormous legacy of being a good neighbor.”

While being a good neighbor is satisfactory, becoming a better neighbor is superior, maintains McCann, and also critical to the company’s broader “good-togreat efort of getting better every day,” which includes parallel investments in its customer and value ofering to make its stores better places to shop.

Te ongoing good-to-great journey, explains McCann, is rooted in an aggressive aim “to strive as hard as possible to make our stores the best places possible to shop. We know we’re not going to become a great retailer unless we’re also a great place to work, and a great neighbor in the communities which we serve and where we live. Every single one of our divisions has been a key player in their communities, and has continuously found ways to give back.”

And though the programs, acts and deeds may vary within each division, “the central philosophy is very, very similar, and a core part of what we do,” he maintains.

Since his arrival, the British-born McCann, 45, has focused closely on strengthening Ahold USA’s e-commerce proposition and customer loyalty programs. He joined Ahold as chief commercial and development ofcer in September 2011 after spending more than 20 years with some of Europe’s largest retailers, including Carrefour France, where he was executive director and a member of the group executive board. He has also held top roles at Tesco, including leadership of some of its most

| Progressive Grocer | Ahead of What’s Next | October 2014

Ahold USA COO James McCann and EVP of Operations Mark McGowan serve ice cream to patients and families at the Dana Farber Cancer Institute.

successful markets, among them Hungary, Poland and Malaysia, and before that worked for Sainsbury, Mars and Shell. He was appointed to Ahold’s management board in the spring of 2012, and a year later assumed his present COO duties.

When asked about his observations on the company’s greatest strengths and leading points of diference, McCann, with 18 months of stewardship under his belt at the time of the interview, says he can’t help but marvel at Ahold USA associates’ bigheartedness, which surpasses anything he’s ever before seen. “I’ve worked on three continents and in 10 countries, and I’ve never seen a company’s community engagement more profoundly embedded in its DNA than what exists in the divisions of Ahold USA,” he asserts.

We are Family Especially meaningful was the 2012 unifcation of disparate divisional foundations that had existed during the early phase of Ahold USA’s transition, into the formation of Our Family Foundation. In 2014, the divisions and the foundation donated an astounding $67 million to local organizations committed to fghting hunger, improving the lives of children, and building healthy communities, thanks to its associates, vendors and customers.

Cognizant of the essential, important role the company’s family of stores plays in bringing to life Ahold USA’s Better Neighbor promise, McCann shares his colleagues’ pride in the various initiatives focusing on the key areas of healthy customers, healthy kids and healthy communities.

In addition to its core anti-hunger mission, Ahold USA and its divisions are committed to improving the lives of children throughout the

Way to grow!

Congratulations to Ahold USA for being named Progressive Grocer’s Retailer of the Year. From your friends at the Kellogg Company.

AHOLD USA

®, ™, © 2014 Kellogg NA Co.

2014

Retailer of the Year

Customers today want to know that they’re doing business with a good corporate citizen.”

—Tracy Pawelski, VP, External Communications, Ahold USA

communities they serve. Trough its Our Family Foundation, the company combined these two missions and accelerated the urgency to do everything possible to alleviate childhood hunger by reaching more food-insecure children with healthy meals. In early 2013, the foundation embarked on a three-year initiative to distribute $9 million in Fighting Child Hunger grants as part of its larger aim to provide 10 million meals to underserved children by 2015.

Until the Reshaping Retail plan was formally launched, McCann says, “I don’t think everyone understood how important it was. But I believe the simple framework enables everyone to understand where it fts into our overall journey, and why it’s so important that we continue to become stronger as a better neighbor.” Not taking lightly “all the work that goes on in every single store each and every day,” McCann heartily applauds the “massive engagement of associates and customers, who last year helped” generate millions of dollars to aid local residents. “Tat’s a big number, and it’s gratifying to know that it’s been used for causes that make our communities stronger and better.”

Ahold USA’s Tracy Pawelski poses with Miracle Kids at Our Family Foundation’s 2014 Recognition Dinner in Hershey, Pa.

To Have and to Hold McCann is particularly fond of the focus the Our Family Foundation “has brought to the causes that we put most of our money into” — notably children’s nutrition and pediatric cancer research, care and rehabilitative programs — which he says has been nothing short of “exceptional.

To know that we are able to make a diference with a child’s understanding of what good nutrition is early in their life, or having a massive impact on the ability to fund treatment, care and research for sick children — in some cases for the rest of their lives — is remarkable,” and something McCann steadfastly champions.

Accordingly, he draws inspiration from the company’s 120,000 associates, who bring the Better Neighbor promise to life at the local level, headed by four division leaders: Joe Kelley, president, Stop & Shop New England; JUST RELEASED • ORDER YOUR COPY TODAY Don Sussman, president, Stop & Shop New York Metro; Gordon Reid, Giant Landover’s president; and Tom LenLearn how to analyze mountains of data, extract “golden nuggets” of kevich, president of Giant/Martin’s. information, and polish them into brilliantly communicated business Te divisional leaders have spearinsights. Contains clear, practical, easy-to-understand information, extracted headed and maintained a commitment to their numerous neighborhoods “for from Delta’s highly regarded training programs for retail professionals. many, many years,” McCann notes, Twenty-five industry professionals have already given it advance praise. “but we’ve been very humble about it.

For that reason, we are very grateful Read what they have to say on: and very proud to accept and share www.delta-assoc.com Progressive Grocer’s Retailer of the Year Buy it now on award with every member of our staf, which symbolizes all of the great work they do on behalf of the communities we serve on a daily basis.”

WHAT THE SUCCESSFUL RETAIL PROFESSIONAL IS READING THIS YEAR.

28

| Progressive Grocer | Ahead of What’s Next | October 2014

Healthy Commitment Runs Deep Indeed, giving back to the communities is a cornerstone instilled by the founders at all of the Ahold USA divisions, which together operate roughly 770 supermarkets and 200 pickup points in 14 states, along with Peapod, the company’s online grocery shopping/delivery service.

Says Giant Landover President Gordon Reid: “From hunger relief eforts to helping improve the health of our communities’ youngest residents, we are committed to doing all that we can to be a better neighbor through product and fnancial contributions, as well as volunteering our time.” While the Maryland-based division’s core areas of giving have long included anti-hunger, education, and health and wellness, it has also in recent years expanded its support of programs and initiatives for members of the military and their families.

Last year, Giant Landover’s monetary and in-kind contributions for all community relations eforts across Washington, D.C.; Maryland; Virginia; and Delaware exceeded $13.3 million. “We are very proud of our longstanding philanthropic programs, including our annual September Hunger Action Month campaign to support local food banks, and our school fundraising through our A+ School Rewards program, which has raised a total of $90 million for over 2,000 local schools,” notes Reid. “We also support the Johns Hopkins Kimmel Cancer Center and the Children’s Cancer Foundation through our Triple Winner program to beneft pediatric cancer research.”

Charitable giving roots run equally deep at Giant/ Martin’s, whose president, Tom Lenkevich, similarly afrms the Carlisle, Pa.-based division’s “long commitment to feeding the hungry and helping children in our local communities,” a mission that starts “with our associates in the stores. Tey make it all happen,” says Lenkevich. “It’s just tremendous to see the enthusiasm of our store teams, who are the foundation of our eforts.”

In addition to working with hundreds of local organizations to help raise the “healthy communities” bar,

From left, Giant Landover President Gordon Reid, Ahold USA’s Mark McGowan (back), and Giant/Martin’s President Tom Lenkevich join the reigning Miss America at the 2014 Our Family Foundation Dinner in Hershey, Pa.

2014

Retailer of the Year Ahold USA Operating Divisions

Stop & Shop

The Stop & Shop Supermarket Co. LLC employs approximately 59,000 associates and operates 395 stores throughout Massachusetts, Connecticut, Rhode Island, New York and New Jersey. The company helps local communities fight hunger, combat childhood cancer, and promote general health and wellness, with a particular emphasis on children’s educational and support programs. In its commitment to be a sustainable company, Stop & Shop is a member of the U.S. Green Building Council and EPA’s SmartWay program, and has been recognized by the EPA for the superior energy management of its stores. www.stopandshop.com

Giant/Martin’s

Based in Carlisle, Pa., Giant/Martin’s operates nearly 200 grocery stores in Pennsylvania, Maryland, Virginia and West Virginia under the names of Giant Food Stores and Martin’s Food Markets.

Founded in 1923, Giant/Martin’s employs more than 31,000 associates, and has a long-standing commitment to eradicate hunger and improve the quality of life for children, in addition to working with hundreds of local organizations annually. The company was recognized for its leadership in the fight against hunger with the Golden Grocer Award by the U.S. Department of Agriculture. In addition, Giant/Martin’s is one of the top 10 fundraisers in the country for local Children’s Miracle Network hospitals. www.GiantFoodStores.com | www.MartinsFoods.com

Giant Landover

Giant Food LLC, based in Landover, Md., operates 169 supermarkets in Virginia, Maryland, Delaware and the District of Columbia, employing approximately 20,000 associates. Included within the 169 stores are 157 fullservice pharmacies. Giant opened the first supermarket in the nation’s capital on Feb. 6, 1936. Giving back to the community is a cornerstone that was instilled by the company’s founders more than 78 years ago. Core areas of giving include hunger, education, health and wellness, and supporting service members and military families. In 2013, Giant’s monetary and in-kind contributions exceeded $13 million. www.giantfood.com

Peapod

Peapod is the country’s leading Internet grocer, serving 24 U.S. markets throughout Connecticut; Illinois; Indiana; Maryland; Massachusetts; New Hampshire; New Jersey; New York; Pennsylvania; Rhode Island; Virginia; Washington, D.C.; and Wisconsin. Founded in 1989 as a shopping option for busy households, Peapod has since delivered more than 26 million grocery orders. Customers can order online or on Peapod’s free mobile app for delivery to homes and workplaces, or pickup at many convenient locations. www.peapod.com

30

| Progressive Grocer | Ahead of What’s Next | October 2014

“we constantly ask ourselves, ‘How can we help bring good health to those around us? What more can we do?’” Lenkevich notes.

As his division is one of the top 10 fundraisers in the country for local Children’s Miracle Network (CMN) hospitals, Lenkevich is especially gratifed by Giant/Martin’s special relationship with its local hospital afliates.

Don Sussman, president of the Stop & Shop New York Metro division, is also “enormously proud to be part of the team that is forcing pediatric cancer to retreat.” In place for 26 years, “Triple Winner has become a campaign that has saved lives, created research paths and provided genuine hope to families waiting for a cure,” says Sussman.

“Tere is now a proud and growing Triple Winner family of young people who have a bright future because we have been able to put dollars into cancer research. I can’t think of a better reward for everyone who continues to make this campaign a success.”

Storm Centers When it comes to community engagement, no single event supersedes the impact created by Superstorm Sandy in 2012. “Tis was far beyond anything we had experienced in our lifetimes,” afrms Sussman, a Long Island native who’s intimately familiar with many of the hardest-hit areas. “Conditions in many communities were desperate, and in many places the local grocery store was the only place to get food.

“Tat said,” Sussman continues, “we lost power in 120 of our 182 stores. Beyond that, we had four totally fooded stores, which we managed to reopen in 10 days. I can’t tell you how proud I was of our people, who worked around the clock for the six weeks after the devastation of Sandy to help minimize the hardships of others. And in many cases, our own associates and their families were enduring many hardships of their own.”

McCann is also astonished at associates’ instinctive willingness to unfalteringly answer whatever call comes their way, including the above-and-beyond post-Sandy

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2014

Retailer of the Year is the company’s talented teams. “In my experience, investing in people — giving them the training and encouragement, and ofering honest feedback — is, far and away, the best investment you can make.

Tere is no substitute for motivated people who feel part of a team, with a common mission.”

Peapod by Stop & Shop comes to the rescue with food and water for those affected by Superstorm Sandy on Long Island.

I can’t tell you how proud I was of our people, who worked around the clock for the six weeks after the devastation of Sandy to help minimize the hardships of others.”

—Don Sussman, President, Stop & Shop New York Metro Division

32

eforts, which produced “a great sense of satisfaction for all involved. Troughout this company, we have a vast number of people for whom the good work is deeply embedded,” says McCann, noting that it’s a virtually “efortless process” to assemble the troops and resources to spring into action. “It just happens, and we see it every time there’s an opportunity for our associates to step up.” In the devastating aftermath of Sandy, he recalls: “Our associates were feeding neighborhoods and providing water, and other desperately needed electricity and other services. Nobody told them to do it; they just took it upon themselves.

And we see the same thing in small, medium and large ways all the time. Whenever our associates see the need or opportunity, they are unequaled” in their readiness to respond.

For his part, Stop & Shop New England President Joe Kelley also never ceases to be amazed by the charitable eforts displayed by his division’s family of associates, be it through time or monetary and/or food donations, “which has and always will be a top priority for us as a company.”

Tat’s an especially important cause worth celebrating in 2014, when Stop & Shop is commemorating a truly signifcant milestone: its 100th anniversary. “It also marks an achievement that would not have been possible without the dedication of our associates and our customers pushing us to succeed over the past 100 years,” during which time “we’ve operated our business with a single goal in mind: delivering unmatched selection, quality, value and service. I’m proud to say that commitment continues,” notes Kelley.

For Ahold USA to remain responsive, relevant and successful, he adds, “We need to continue to test and deliver innovations that enhance a customer’s shopping experience,” the central ingredient of which

| Progressive Grocer | Ahead of What’s Next | October 2014

‘Centerpieces of the Community’ Discussing the extraordinary support that Ahold USA’s divisions and Peapod provide for the communities in which they operate, Tracy Pawelski, VP, external communications, describes the stores’ central role as that of “centerpieces of the community. Te relationships we have with our customers and the communities as a grocery store is very different than other retail establishments, which don’t see customers as frequently. Our story is built on the legacy of our brands, and part of being a better neighbor means being there for our customers, associates and communities.”

And though many may not realize the full scope of Ahold USA’s divisional philanthropic eforts, Pawelski believes, “Customers today want to know that they’re doing business with a good corporate citizen.” While shoppers in its marketing territories readily associate the company’s retail banners’ messaging of “great prices, great places to work, and great places to help shoppers fnd afordable, healthy choices for their wellness goals,” Pawelski afrms the company’s commitment to building close community connections — be it at the grass-roots, local level with cake donations, or by undertaking massive relief eforts to help rebuild communities after catastrophic events — is enduring.

And so it goes with the rapid changes within the industry, which McCann describes as ubiquitous and intense. “It’s no secret than the industry is changing more quickly now than it has in earlier years,” he notes, an evolution compounded by the onslaught of formats now selling groceries. “Our plan is to become a great retailer in other formats as well,” including digitally, with the Skokie, Ill.based Peapod division, as well as with smaller-format stores, plans for which McCann and company are studying “closely, to explore and test what might work well for us.”

While McCann says that “no concrete plans at present” have been mapped out for an Ahold USAbrand small-store concept, he confrms: “We’ve got a very good R&D team behind it, gearing up for tests and trials to see if there’s something out there that we want to develop and deploy. We believe that we have the people, the brands, the store locations, the infrastructure and the fnancial resources to be able to do it, which is truly a part of what our good-to-great journey is all about.”

Continued on page 36

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2014

Retailer of the Year Continued from page 32

Becoming Famous In his ceaseless quest for innovation, McCann is pumped about the possibilities of the Peapod online retail division, which reached a number of key milestones by the end of 2013. After opening 200 pickup points and a digital innovation hub in Chicago, Ahold USA continues to accelerate its online growth.

While Ahold USA is decidedly further along with its e-grocery platform than many, McCann says that continued “speed and development is necessary in order to stay ahead.” Online retailing is one of the three areas “we want to become famous for. We truly want to become better than everyone else in the markets where we compete.”

In addition to digital retailing, McCann has related aspirations to make the company “famous” across a broader spectrum with upgraded products, paramount to which is produce, “which welcomes customers into stores at the entrance and which is often the primary reason people come shop. It’s also because it’s a

product category that people really interact with and have strong feelings about.”

Te third leg of Ahold USA’s “famous” aspirational stool rests on private label, not only as it pertains to the obvious better-margins component, but also because of its greater afordability for customers and its expediency as an ideal learning platform.

However, according to McCann, the biggest single advantage with private label “is that it’s exclusively available in the stores. We want customers to enjoy our brands, stores, people and products so much that they do all of their shopping with us and recommend us to others.” In turn, he adds, “We must continue to strive to develop an even better, more relevant assortment to meet customers’ daily needs, with a broader range of products and services, including new and innovative own-brands products.”

Health on an Accessible Shelf As it strives to become a great place to shop, whether in stores or online, another priority for Ahold USA is helping its divisions provide customers with a variety of health-and-wellness resources so they can make healthier choices for themselves and their families.

McCann cites the Healthy Ideas on-shelf labeling

Giant/Martin’s nutritionist Courtney Schoepe helps a customer select Healthy Ideas products.

program, developed by the company’s in-store nutritionists, which covers thousands of national and private brands sporting blue-and-green shelf tags to help customers identify healthy and “free-from” options.

“People are increasingly becoming more interested in the provenance of product, and the companies that produce it,” explains McCann, “as well as [foods’] nutritional and allergic aspects.” He notes that 49 percent of households “have somebody with a special dietary requirement. Whatever we can do to make it simpler and more afordable for families to eat well is critical in our Better Neighbor mission.”

So, too, is the expansion by its retail divisions of an in-store nutritionist program, which has been recently enhanced to emphasize the integration of the pharmacist and nutritionist. Te frst in-store nutritionist came aboard in 2005; several divisions now plan to deploy more nutritionists by 2015. “Tey’re wonderful people that lend a whole new dimension to stores,” McCann says, noting their integral role in the company’s Passport to Nutrition health-andwellness program, which uses various interactive tools to teach children about nutrition and healthy lifestyles. Te program provides student workbooks that highlight small changes kids can make, such as building a balanced plate with appropriate portion sizes and learning how to read food labels.

“Nutrition is not the same when you’re 20-something, versus when you’re 40-something. Understanding how your body’s needs change over time, and those of your family, as well as when diseases or intolerances are diagnosed,” requires a whole new skill set when food shopping, McCann acknowledges.

“Nutritionists provide a service that helps customers stay healthy and live longer, happier lives. And hopefully, they’ll reward us by coming in to shop with us.”

McCann brings a palpable sense of urgency,

I’ve worked on three continents and in 10 countries, and I’ve never seen a company’s community engagement more profoundly embedded in its DNA than what exists in the divisions of Ahold USA.” —James McCann, COO, Ahold USA

2014

Retailer of the Year

Giant/Martin’s nutritionist Valerie Waters and the Flying Squirrels mascot show off the new Healthy Ideas checkout lane to remind kids to snack on nutritious foods.

and equally evident fervor, to his marshaling of the company’s vast talent, resources, infrastructure and energies “to do more for customers than anyone else. Our divisions are in local communities where associates live, and they are absolutely a part of the

neighborhoods that we operate in. So, when you look at how to become a great retailer, we believe it’s just not possible without frst being a great neighbor, along with being a great place to work and a great place to shop. Tis is absolutely the foundation of a fundamental journey that we are on. And by putting it into these three simple ‘promises,’ everybody can understand the importance” of the mission at hand, he asserts.

“Customers tell us that the three things they want from us are to be able to save money, save time and feed their families well,” explains McCann. “When they come into when they come into Stop & Shop or Giant, they are looking for that bundle of things, and the reason we put these promises forth is that we have a measure of how we are doing against them. And if we do those three things better than anyone else, which is the goal, then customers will shop with us because they like — and increasingly, hopefully love — what we ofer, in the way that we ofer it. Tat’s our entire purpose, and we know that if we’re succeeding on all the above, we can reinvest money back into banners, and ultimately, the customer proposition.

“I feel very proud about our associates and the work that they do,” McCann concludes, “and our grass-roots involvement makes all the diference.”

Ahold USA… the spotlight is on you!

Congratulations on being named 2014 Retailer of the Year.

We’re proud to be partners with you. In your continued commitment to providing innovative products to your shoppers, thank you for including GE Lighting in the mix.

© GE 2014

2014

Retailer of the Year

Playing to Win

“W

It’s really about the trusted relationships our associates have with customers, which personifies the central foundation of our Better Neighbor promise.”

—Kathy Russello, EVP, Human Resources, Ahold USA

40

e are a group of associates who really like to win,” declares Kathy Russello, Ahold USA’s EVP, human resources, “but it takes teamwork to make it happen,” the required ingredients for which consist in equal parts of “bringing the right people together; having a healthy respect for diferences of opinions, thoughts and perspectives; and a willingness to share.”

An accomplished leader for more than 30 years, Russello — who earned distinction as a PG Top Woman in Grocery in 2011 — is a self-described “passionate believer in the retail supermarket business” and a strong advocate for people from all ranks of the company, each of whom is central to Ahold USA’s Better Neighbor promise. Leading the company’s eforts “to ensure we’ve got the right people in the right roles and to empower them with the capabilities to propel growth,” Russello oversees the full scope of Ahold USA’s human resources support functions, with a singular focus: “to foster a culture of people development and growth.”

Russello’s supermarket roots run deep. Beginning her career in store operations for Mayfair Supermarkets, she joined Ahold in 1995 as part of the human resources support team for the New York division of both Edwards and Stop & Shop.

Troughout her career, she has taken on progressively challenging leadership positions within human resources and labor relations, which has in turn given her a deep understanding of and appreciation for the broad range of career opportunities.

Russello is a big believer in investing in associates’ careers by ofering growth opportunities, training and development programs that bring out their best. “We’ve got a family of companies that have been around for a very long time, and I’m really proud of that,” she says, noting that the retail banners’ longevity ultimately refects on its stellar associates. “We’ve got a number of people who have worked for each of our diferent

| Progressive Grocer | Ahead of What’s Next | October 2014

Stop & Shop associates enjoy competitive benefits and celebrate being part of a 100-year legacy in the northeastern United States.

companies for many, many years. Tey followed in the footsteps of other generations who’ve worked for the company, so our heritage is truly about our associates, who take such good care of customers.

We have centuries of experience, and our people are driving us forward.”

Another interesting aspect of Ahold USA’s heritage, Russello adds, is its loyal customers. “I knew many of our customers on a frst-name basis, and I know the same is true for so many associates. We often like to think it’s about great products, prices and services,” she continues, and these are undoubtedly important. “But it’s really about the trusted relationships store associates have with customers.”

When talking about the grocery industry as a place to build a career, Russello applauds the many diverse and rewarding paths it ofers to existing employees seeking advancement, as well as to prospective job candidates. Ahold USA’s divisions, she reports, “have done a great deal to do promote the industry as an employer of choice,” particularly in the past fve years, during which time Russello has seen a surge of interested applicants from outside the food industry.

She notes, “Our employer brand is changing, and people are coming in from other industries,” in many cases via word-of-mouth referrals from friends and co-workers. “People are seeing the real opportunities, for a few good reasons, including that we are competitive, with very good salaries and great benefts; we reward and recognize great performance.”

Equally important, she continues, is that aside from retail management, a career at an Ahold USA company provides people with the chance to grow in careers across a multitude of areas, includ-

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2014

Retailer of the Year

Ahold USA and Giant/Martin’s associates enjoy the Our Family Foundation Golf Outing in central Pennsylvania.

Diversity and inclusion are valued at every level of our organization and are integral parts of our business culture.”

—Kathy Russello, EVP, Human Resources, Ahold USA

42

ing merchandising, fnance, human resources, legal, IT, operations, marketing, real estate, construction management and supply chain. “Our companies are also doing lots of interesting things focusing on digital marketing,” Russello says, adding that the feld has attracted talent from top universities, “who are sharing their knowledge and skills to help us drive the digital advancements” currently underway company-wide.

Tese successful employer-of-choice objectives also dovetail well with its Better Neighbor promise when seeking and recruiting new employees, and promoting from within. “People give a lot of time to a company, and they want to be proud of their employer. And when candidates learn about the vast amount of time, money and efort our divisions contribute to supporting the communities where we work and live,” Russello says they can’t help but be impressed. “It’s clearly one of the biggest selling points from a human resources perspective for attracting interested candidates.”

Follow the Leader When asked what advice she would give to aspiring grocery industry leaders, Russello ssays that “a general trait we’re looking for in anyone, regardless of the position, is someone who is a strong leader. You have to have someone who can focus on associates, and someone who is passionate about customers and delivering the best. Tose are the kind of people that are most successful, because they are inspiring leaders. Tey might not know everything about retail, but if they’re passionate about food and their fellow associates, their passion is contagious, and sparks a fre under their team.”

In turn, fred-up teams are best equipped for

| Progressive Grocer | Ahead of What’s Next | October 2014

job one, which Russello says is “taking care of customers.” And it takes just “a simple ingredient to make it happen: engaged associates who make it a better place to work and a better place to shop. If you engage and inspire associates,” she afrms, “they’ll run through walls for you, and will become as loyal as the day is long by giving 100 percent.”

Russello is deeply proud of Ahold USA’s embrace of diversity as a natural extension of its role as part of a dynamic global workforce, whose employees live in several countries and serve customers from every walk of life, every day. “Diversity and inclusion are valued at every level of our organization and are integral parts of our business culture,” she explains.

“We work hard to foster an environment where all employees can demonstrate their abilities, skills and experiences,” she says, “and where they can realize their full potential.”

Diversity Paves Way for Success To that end, Russello continues, “We engage all associates and seek out their valued feedback, to ensure we’re focused on doing all that we can to take advantage of our diverse pool of associates, who are very willing to share and teach and help us continue to grow.”

Te company’s business resource groups, dedicated to female and multicultural associates, among others, provide a formal opportunity to network, learn and share experiences with one another, in addition to enabling the company and its divisions to better develop its training procedures, which, Russello says, “demonstrate the value of giving each other diferent perspectives to enhance the understanding of people’s needs in the various communities we serve.

“We spent lots of time and focus on diversity initiatives, and will continue doing so on an ongoing basis, because our success is paved directly by our diversity eforts,” Russello asserts, citing the intrinsic importance of stores and associates mirroring the communities they serve. “We otherwise wouldn’t have authenticity in products, assortment or connections with our customers, and it really comes down to understanding the specifc needs of a store,” which she says is best accomplished by attuned associates.

Considering Ahold USA’s next generation of leaders, Russello says that people who can adapt to and withstand the rapidity of change — abilities that rank high among the company’s foremost priorities — are best positioned to succeed. “Te companies that are going to succeed are in the forefront working to stay one step ahead. I think we do really well in this regard, because we take nothing for granted. We have a healthy dissatisfaction for status quo. We’re proud of what we’ve done, but we’re also humble because we know we can get better.”

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2014

Retailer of the Year

A Family of Better Neighbors

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hold USA’s Our Family Foundation is a key element of the company’s philanthropy, according to Bhavdeep Singh, EVP, new formats and chair of Our Family Foundation. “It gives us a platform to enhance our Better Neighbor strategy,” he says, noting that, collectively among all of its divisions, the company has given $67 million to charities this year.

Most of these eforts focus on hunger (47 percent of all giving), children (31 percent) and building healthy communities (22 percent).

“Being a better neighbor in the communities we serve is critical to our broader efort of getting better every day,” afrms Singh. “Our eforts support work to relieve hunger year-round in the Ahold USA support organization and in the Ahold USA divisions.

Tis is why the core Fighting Child Hunger grants are supplemented by volunteer grants that support regional food banks based on associate volunteerism.”

Made in the USA

44

| Progressive Grocer | Ahead of What’s Next | October 2014

Te foundation itself has disbursed $13 million so far this year: Trough its Triple Winner campaign, $5.6 million will be donated to support pediatric cancer research and care at local hospitals in the Stop & Shop and Giant Landover operating areas. Tis includes the Dana-Farber Cancer Research Institute, Memorial Sloan Kettering, Johns Hopkins Sidney Kimmel Cancer Center and the Children’s Cancer Foundation. Since 1990, the Ahold USA divisions have raised more than $80 million to fght childhood cancers. “Tat’s huge,” Singh remarks. “It’s a feel-good moment for us that we’re doing so much for children.” $3.2 million will be donated to Children’s Miracle Network hospitals throughout the Giant/Martin’s market to assist in providing medical care and lifesaving research for children. A supporter of local children’s hospitals for nearly two decades, Giant/Martin’s is one of the top 10 fundraisers in the country for Children’s Miracle Network hospitals.

As part of the second year of the three-year

Fighting Child Hunger grants , nearly $3

million was donated to more than 20 food bank partners to serve 10 million meals to underserved children.

Bhavdeep Singh, EVP, new formats and chair of Our Family Foundation

Local YMCAs and Boys & Girls Clubs will receive $250,000 as part of a three-year grant cycle focused on teaching youth the importance of healthy eating and wellness. “It’s about teaching kids about living healthy lives,” Singh says.

A $500,000 donation will support the Jake Gittlen Cancer Research Foundation, in Hershey, Pa., to continue funding groundbreaking cancer research.

We Built a Playground As this issue went to press, Ahold USA and divisional executives, associates and community leaders were pitching in to build a much-needed playground for children in Bridgeport, Conn., just the latest of such magnanimous projects. “When the day is done, you say to yourself, ‘Wow, this is pretty great,’” Singh says. “It’s not just something we support, but we believe in passionately. We have a tremendous legacy of giving. It’s astonishing, the stories you’ll hear among the divisions.”

Asked what he’s most proud of as an Ahold USA employee, Singh recounts a recent occasion on which he was walking down a corridor at corporate headquarters and overheard discussions in two separate meetings being held in adjacent rooms, one on budgets and other on giving programs, with equally passionate debates taking place in each. “You’d be hard-pressed to tell them apart,” he recalls.

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Being a better neighbor in the communities we serve is critical to our broader ef fort of getting better every day.”

—Bhavdeep Singh, EVP, New Formats and Chair of Our Family Foundation

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45

2014

Retailer of the Year framework upon which legions of dedicated associates step up each and every day.

“We’ve left enough room for store managers to pick up the ball and run with it. …

To have both going is powerful, and that’s what makes us so great,” Singh says. “It’s the culture that exists around giving and thinking beyond yourself. Tere is so much passion … ‘How do we do more?’ … It’s as important as being a better retailer.”

Miracle Workers While the Our Family Foundation is a key element of Ahold USA’s overall Better Neighbor strategy, Singh points out: “It’s only one aspect of our longstanding commitment to philanthropy and corporate citizenship. Each of our divisions has their own legacy around community engagement, but they all share the following” commitment to serve customers and communities:

The Giant Landover 2014 Triple Winner kick-off, with ambassadors and Giant Landover divisional leadership; Dr. Donald Small, M.D.; and coach Gary Williams.

We have a tremendous legacy of giving. It’s astonishing, the stories you’ll hear among the divisions.”

—Bhavdeep Singh, EVP, New Formats and Chair of Our Family Foundation

Te company also has excelled in coming to the public’s aid during natural disasters and other emergencies, such as when Superstorm Sandy struck the Northeast in fall 2012.

“Our divisions stepped up in a big way,” Singh says. “We were approving things left and right [on a corporate level], but that was just a small part of it.

Store managers stepped up and took the initiative to do things on their own. We have countless stories about what people did. We had store managers letting people stay in their homes.”

“When there’s an opportunity to step in, we shine,” Singh says. “I don’t have to ask a store manager, ‘Would you mind helping?’ Tey’re fve steps ahead.”

Our Family Foundation is becoming an everincreasing piece of Ahold USA’s Better Neighbor strategy, Singh says, noting that it’s just the

Keep on Trucking A stalwart ally of Ahold USA in the quest to eradicate hunger is New Haven-based Connecticut Food Bank. The organization is receiving a Fighting Child Hunger grant from the grocer’s Our Family Foundation of $250,000 for three years. In 2013, the foundation revealed a $9 million commitment to fighting child hunger.

Connecticut Food Bank is using the grant to fund mobile food pantries, including a model —referred to as a “Grow Truck” or, on at least

46

Supporting community organizations, and improving the quality of life in the neighborhoods where associates live and work Supporting community organizations through a combination of fnancial support, product donations, sponsorships, volunteer eforts and United Way Strengthening communities through leadership and associate engagement, including volunteerism, nonproft board service, and lending skills and expertise to nonproft partners “Trough the foundation, we are able to make a diference in our local communities by fghting hunger, improving the lives of children and building healthy communities,” says Singh. “It has enabled us to continue to build on our [Better Neighbor] commitment.”

one occasion, as a “Grow Mobile” — targeting lowincome families with young children.

Nancy Carrington, the food bank’s executive director, describes the concept as “almost like a mini market [and] about the size of a UPS truck.” Outfitted with a refrigerated space for milk and eggs, a freezer section for meat and other items, some shelfstable product, and unrefrigerated produce such as apples, oranges and fresh vegetables, the mobile pantry furthers the organization’s aim of bringing good nutrition directly to underserved communities.

| Progressive Grocer | Ahead of What’s Next | October 2014

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2014

Retailer of the Year

Better Neighbor’s Road to Zero Waste

J

ihad Rizkallah, VP, responsible retailing for Ahold USA, has a healthy appetite for zero waste. Accordingly, he’s been pivotal in setting the aggressive agenda that’s driving the company’s corporate responsibility commitment. “It fts with our [Better Neighbor] promise,” says Rizkallah, the key building blocks of which are “also part of our commitment to caring for the environment, and the health of the communities we serve.”

In tandem with one of its Our Family Foundation’s primary missions of eradicating hunger is Ahold USA’s waste reduction efort, which leads with a bold goal to reach zero by 2020, “meaning at least 90 percent of our waste is diverted from landflls and incineration to other uses,” Rizkallah explains. Tis includes the expansion of organic recycling programs, and the identifcation of new opportunities for recycling cardboard and plastic.

Jihad Rizkallah (center), VP, responsible retailing at Ahold USA, the parent company of Stop & Shop, explains the banner’s leading role in the reduction of greenhouse gas emissions in Massachusetts.

At its Wayland, Mass., store, which boasts many sustainable features like electric car chargers and more than 600 solar panels, Stop & Shop announced its commitment to a 20 percent reduction of its carbon footprint by 2015.

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2014

Retailer of the Year

We’re big on energy conservation across the company.”

—Jihad Rizkallah, VP, Responsible Retailing, Ahold USA

To wit: Ahold USA divisions have to date reduced the number of disposable bags by 447 million, compared with the 2011 baseline, says Rizkallah, who notes the company’s wider goal of upping that number to 1 billion bags by 2015. Te company is also working with cashiers and baggers to further reduce the number of bags used by ensuring they’re properly flled, which he says is one of the single best ways to encourage customers to curtail wastefulness.

“We’re big on energy conservation across the company,” Rizkallah declares. Te company’s commitment to reducing its total carbon footprint by 20 percent by 2015 is “a primary tenet of Ahold USA’s main corporate responsibility priorities, and … helps us minimize our impact on the environment while at the same time making operations more efcient,” he adds.

Without question, Ahold USA’s demonstrated, ongoing commitment to the communities and neighborhoods its stores serve on a daily basis, coupled with its pioneering leadership in the green building movement, is vividly evidenced by a variety of environmental leadership accolades, including recognition by the

Want Not, Waste Not: Anaerobic Digester Takes Shape While Ahold USA’s enduring commitment to environmental stewardship is undeniably remarkable, its pièce de résistance, blending technology and sustainability, is now underway at the Stop & Shop distribution center in Freetown, Mass., which is slated to become home to a 12,000-squarefoot anaerobic digester that will divert energy from food waste in landfills and incinerators by converting spoiled food to energy.

Central to the cutting-edge $19 million project — which taps into the hidden energy value of unsold food and creates renewable energy from organic materials — is the construction of a Product Recovery Operation (PRO), which uses anaerobic digestion to recover the economic value in unsold food products to produce electricity and heat for this facility, as well as generating a fertilizer byproduct from the solid residue created, which can create secondary-market compost for use in fertilizers and gardens.

“We are very proud of this major undertaking, which supports our commitment to zero waste by 2020,” and also which corroborates “our industry-leading stance for operating efficiencies and clean energy,” affirms Jihad Rizkallah, Ahold USA’s VP, responsible retailing, who is working closely with state and local officials to bring the renewable, clean-energy-generating project to completion in the next 15 months. “We’re hoping by the end of next year to turn the lights on,” adds Rizkallah.

While Ahold USA already diverts its unsold food to

50

U.S. Environmental Protection Agency (EPA) as the eighth-largest green-power purchaser among retailers, as well as No. 7 on EPA’s Top 20 retail list and No. 30 on its national Top 50 list of green-power purchasers.

According to EPA, Ahold USA’s green-power purchasing is equivalent to eliminating the carbon dioxide emissions of more than 20,000 passenger vehicles per year, or pulling the plug on the electricity usage of nearly 13,000 average American homes annually.

Its eco-minded diligence, notes Rizkallah, has enabled the company to purchase more than 149 million kilowatt-hours (kWh) of green power annually via renewable energy certifcates (RECs) and self-generated green power from its on-site renewable energy systems.

Since 2008, Ahold USA has been developing its renewable- and clean-energy portfolio, which includes roof-mounted solar photovoltaic systems and a fuel cell project at a Stop & Shop in Torrington, Conn., which consumes natural gas to produce electricity and waste heat. Te electricity generated provides 95 percent of the store’s annual electricity requirements, and the waste heat ofsets the gas consumption required to heat the air and provide hot water for the store.

composting and animal feed facilities, the project takes its efforts one giant step closer to greater environmental and economic benefits by converting organic material into electricity and reusable materials for soil.

The complex yet highly practical initiative takes unsold produce, bakery, deli items and other unsaleables to the distribution center in heavy-duty plastic-lined containers, sealed to fully contain the product, stored in designated areas at source sites and retrieved within 24 hours of the containers’ being filled.

“It’s actually an easy process, which turns product into a slurry mix that’s taken to a biological tank and turned into a biogas, which will feed the generators to produce electricity that will be used by the distribution center,” Rizkallah explains. “The electricity produced by the operation will provide up to 40 percent of the distribution center’s on-site electrical power needs, and backup power in the event of an outage.”

Further, the operation will process an average of 95 tons per day of unsold food product, and have the capacity to produce 1.137 megawatts for electrical power and heating purposes.

“The idea that you can take all of the waste products from stores and reverse them back to the distribution center on a return trip, then convert them into methane gas for electricity, and solid compost for farmers to grow more crops, is incredible,” marvels COO James McCann.

McCann hopes to see additional retailers throughout the industry follow suit, “because the benefits to doing so for business, society and the planet as a whole are a really, really good thing.”

| Progressive Grocer | Ahead of What’s Next | October 2014

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2014

Retailer of the Year Nurturing the Promise, Powering the Charge Further evidence of the company’s continuing quest to illuminate its green cred can be seen in six of its recent stores having earned Leadership in Energy and Environmental Design (LEED) certifcation from the U.S. Green Building Council.

Ahold USA ranks as having the largest number of LEED-certifed stores among U.S. grocery retailers, with more to follow.

“We have made, and continue to make, major investments in renewable energy sources,” says Rizkallah, who’s leading the charge to further lighten Ahold USA stores’ energy loads with LED lighting, energy-efcient refrigerated cases and other eco-friendly retroftted equipment, all of which netted $41 million in electricity savings in 2013. He also spearheads related grass-roots action in stores via “mini conservation initiatives that encourage everyone to play a role. We’re looking at healthy communities from all aspects,” afrms Rizkallah, an architectural engineer by training who’s a natural ft for his infuential and wide-reaching role.

Despite these achievements, when asked about the signifcance of the impressive strides Ahold

Stop & Shop has invested in a large-scale solar power system at its Rhinebeck, N.Y., store. By choosing solar energy, Stop & Shop demonstrates that it’s possible to support clean-energy technology. This initiative is part of Stop & Shop’s Responsible Retailing commitment and the promise to be a better neighbor by caring for the environment and the communities it serves.

USA has taken in its eco-conscious approach, Rizkallah is the picture of modesty: “We’re not doing these things for publicity or awards; we genuinely believe it’s just the right thing to do.”

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2014

Retailer of the Year

Fare Well

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eing in the food industry provides a built-in advantage for Ahold USA to make a real diference in the health and well-being of its customers and associates. As such, John MacDonald, director of Giant/ Martin’s marketing and external communications, is ardent when discussing the company’s healthand-wellness prowess in general, and its in-store nutritionist program specifcally, which he believes is not only “a noble goal, but something which I also think is very unique and special.”

A self-proclaimed “passionate advocate” of Ahold’s in-store nutritionist program, which took wing in 2005 at Giant’s then “test-bed” Camp Hill, Pa., store, MacDonald notes, “Te program’s evolution from then to now is incredible — we’ve taken it from one to fve, then decided to really invest in it to become community leaders, with 10 certifed, licensed nutritionist professionals.” Current plans call for more than 20 more by 2015. “Any hospital facility would be happy to have them on their staf,

Left to right: Mike Golden, district director of Giant Food Stores, John MacDonald, Giant/Martin’s director of marketing and external communications; and Joe Arthur, president of the Central Pennsylvania Food Bank, are all smiles at a check presentation to the food bank.

and our customers are taking great advantage of their services and expertise,” MacDonald says, adding that this in turn translates to loyal customers.

As he works to foster and expand the in-store nutritionist program, which includes personalized

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2014

Retailer of the Year

We are really building on health-andwellness needs throughout the entire store. It’s an extremely important piece of our Better Neighbor promise.”

—John MacDonald, Director, Marketing & External Communications, Giant/Martin’s

plans, aisle-side consultations, store tours and classes, MacDonald observes: “One of those obvious things realized when it’s pointed out is that when you’re talking about health, wellness and nutrition, there’s really no better place to do that than in a grocery store — where hands-on education and interaction can take place, which is tremendous for our customers.”

From its Carlisle, Pa., headquarters, Giant/ Martin’s operates nearly 200 grocery stores, which are “really building on health-and-wellness needs throughout the entire store. It’s an extremely important piece of our Better Neighbor promise,” affrms MacDonald, noting that the chain’s supermarkets provide a variety of resources to help shoppers make healthier choices for themselves and their families. “And it’s not just about helping those with special dietary needs,” he adds, but also storewide wellness assistance that all customers can access.

Having recently enhanced Giant/Martin’s wellness program to emphasize the integration of the pharmacist and nutritionist, MacDon-

ald says the new scheme allows the teams to “build personal, one-on-one relationships with customers and associates,” to help them discover new and creative ways to incorporate healthy foods into their diets.

Giant/Martin’s independent, self-funded nutritionist program “focuses on the individual needs of customers, who increasingly want choices” about what to eat when striving to maintain a healthy lifestyle, he notes, with even snack foods and cookies included — when consumed in moderation, of course.

In addition, as part of its leadership to connect parents, caregivers and kids to important nutrition and wellness information, MacDonald notes that Giant/Martin’s is seeing tremendous success with its popular Kid Healthy Ideas magazine and companion Passport to Nutrition program. First introduced in 2010, Passport to Nutrition is an engaging, interactive program designed to provide kids with the necessary tools to learn about nutrition and a healthy lifestyle, both at home and school. Striving to make the topics compelling for kids, the free Passport kits include a robust set of materials cover-

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| Progressive Grocer | Ahead of What’s Next | October 2014

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2014

Retailer of the Year

We’re committed to doing all that we can to help people to make healthier choices, especially kids.”

—John MacDonald, Director, Marketing & External Communications, Giant/Martin’s

ing such topics as food labels, portion control and hydration.

“Te kit provides teachers with a turnkey food and nutrition program that allows them to easily craft a curriculum around healthy eating,” explains MacDonald. “All we ask is that they contact us to let us know what they need, and we send it right out.”

Giant/Martin’s also ofers free Kid Healthy Ideas store tours that provide teachers, parents and troop leaders a fun and interactive way to help teach children how to make healthier choices and reinforce nutrition curricula taught in local schools.

At last count, more than 17,000 youngsters have taken part in a total of 985 tours held at participating stores. “Te ability to have personal nutritionists educate kids through schools in a classroom setting, or during a live store tour, helps children look at things completely diferently in the supermarket,” a prospect MacDonald fnds extremely rewarding as the father of three teenagers.

Party On! A new twist on Giant/Martin’s nutrition outreach, which began last year and has seen great success, is the advent of Twitter parties, which are fast-paced

virtual gatherings using the social media platform.

Typically lasting from one to two hours, these events provide “a fantastic way for people to interact and discuss a nutrition and wellness topic of choice on a very casual level” with expert hosts, MacDonald asserts.

Te monthly parties spark connectivity with in-store shoppers through “live shout-outs” over the stores’ public address systems. “Te response has been tremendous,” according to MacDonald, who notes the “instantaneous feedback from social media” generated by the events.

“Te personalized, credible information is reaching tens of thousands of people, if not over 100,000,” he says. “Customers’ needs and interests are changing rapidly, and if they have a problem or need guidance, they take it [to social media,] which allows us to respond as quickly and appropriately as we can,” MacDonald observes. “So our ability to adapt to how people increasingly want to get their information is really gaining emphasis in building connections with our customers.”

Since the decision to eat healthfully often begins in the supermarket, MacDonald pledges, “We’re committed to doing all that we can to help people to make healthier choices, especially kids.”

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Pauline Pauline Feddo: Feddo: While While interest interest in everyday in everyday cookies cookies is stll is stll strong, strong, there’s there’s a growing a growing interest interest in unique in unique formats, formats, flavors flavors andand offerings, offerings, creatng creatng anan opportunity opportunity forfor retailers retailers to to offer offer mult-tered mult-tered programs. programs.

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| Progressive Grocer | Ahead of What’s Next | July 2014

cookie cookie that that hashas nono artficial artficial flavors, flavors, nono artficial artficial colors, colors, nono artficial artficial preservatves preservatves andand nono high high fructose fructose corn corn syrup. syrup.

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2014

Retailer of the Year

A Better Way to ‘Meat the Needs’

A

Bringing fresh, affordable food to communities is important, and we equally feel that helping our less-fortunate neighbors, those who go to food banks, is part of this mission.”

—Christopher Brand, Manager, Public and Community Relations, Giant/Martin’s

60

s part of the company’s strong commitment to supporting hunger relief and improving the lives of children, a centerpiece of Giant/Martin’s Living Here, Giving Here program is its Meat the Needs frozen meat donation program, which since its inception has distributed more than 3 million pounds of meat, which would otherwise go unsold, to its regional food bank partners. “Ten years ago, that meat was going right to the dumpster. Sad but true,” notes Christopher Brand, manager, public and community relations at Giant/Martin’s, based in Carlisle, Pa. Piloted in 2011 with 16 Harrisburg, Pa.-area stores and one district with 10 stores in Philadelphia, Meat the Needs is a consumable food taskforce put together to redirect unsold food to regional food bank partners. Most retailers have a day-old bread program for out-of-code stock, but Meat the Needs takes that practice a dramatic step further.

Te program’s focus is on providing protein, a challenging and expensive product for food banks to provide their customers. Key partners in the program are the Harrisburg-based Central Pennsylvania Food Bank and Philadelphia’s Philabundance.

Te major issue addressed through the pilot program was food safety and training, ensuring that Giant/Martin’s meat associates and managers kept the cold chain intact. Managers pull the meat — including poultry, beef and pork — just ahead of expiration. Te meat is scanned for donation and placed in the freezer. During the pilot, a food bank refrigerated truck would arrive at the grocery store once a week to take receipt of the meat. However, Giant/Martin’s has since taken on the additional responsibility of delivering frozen meat to the food banks.

Innovative and Incredible Te burden — including costly fuel, trucks and people resources — of visiting multiple stores to pick up meat has been removed from the food banks.

Weekly, as the Giant/Martin’s perishables team drops of fresh product, it also takes receipt of meat to be donated, returning it to the distribution center, where it’s palletized and sent out to major food banks. Tis move reduces the amount of handling and makes it easier to keep track of product.

Giant/Martin’s President Tom Lenkevich de-

| Progressive Grocer | Ahead of What’s Next | October 2014

Christopher Brand, manager of public and community relations at Giant/Martin’s, helps in the distribution center at the Central Pennsylvania Food Bank.

scribes the program as nothing short of incredible.

“We’re always looking for innovative ways to help the community,” he says, and Meat the Needs is a textbook example. “All it took was a little will, and we found a way. It’s so gratifying to provide thousands of meals to neighbors in our local communities who may otherwise go hungry,” Lenkevich says.

Making a Difference at the Local Level “We’re making a diference in our communities,” says Brand. “We’re fulflling our mission, and we’re fulflling the expectations of our customers, who know us as a good community steward. Tey’ve been terrifc and loyal to us. It’s our obligation to listen to them and do good for the community.”

Today, all 200 Giant/Martin’s stores are engaged in Meat the Needs. “Our mission is to eradicate hunger and improve lives of children,” says Brand. “Grocery is a noble business, and bringing fresh, afordable food to communities is important. We equally feel that helping our lessfortunate neighbors, those who go to food banks, is part of this mission.”

Meat the Needs continues to grow throughout Ahold USA’s four divisions. Te program currently supports 25 regional food banks.

Like other giving initiatives, including the Bag Hunger Campaign and the annual November turkey drive — known as Turkey Express in New England — the company reinforces its community focus. “If people are donating at the register to Bag Hunger, they know the money stays local,” Brand says. “We live here and we give here.”

Continued on page 64

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2014

Retailer of the Year

Continued from page 60

Laying the Foundation While Meat the Needs has been successfully redirecting meat to those in need for five years, it took several years to develop the protocol that made the process possible. “There couldn’t be a frozen meat rescue program unless the USDA was involved, and that’s no small thing,” explains Joe Arthur, executive director of the Central Pennsylvania Food Bank. Giant/Martin’s, he says, made this happen.

While the Central Pennsylvania Food Bank had been running an efficient organization at the time, it wasn’t handling a significant level of meat, notes Arthur. “Giant took the lead on the process, protocol and expertise. In collaboration with the USDA’s inspection service, we wrote procedures before we ever started moving meat,” he says.

Giant helped facilitate the buy-in throughout the hierarchy of the USDA inspection service, which proved tremendously helpful.

“The important part of that is what it’s done for us the past five years,” says Arthur. “By converting to a recommended 4-ounce serving, we’ve distributed more than 6 million meals worth of meat over five years. Last year alone, it was 2.5 million meals of meat. We’re good at sourcing the other dry goods, beverages and even fresh produce now, but the hardest thing is the center of the plate. That’s the grand scale of what [Meat the Needs] does for us in terms of meals.”

All told, 55,000 individuals are served by Central Pennsylvania Food Bank agency partners each week. The organization serves 27 counties in central Pennsylvania, about double the service it provided in 2007.

“As Giant/Martin’s has grown its business, stores and service, its relationship with us has grown as well,” Arthur says. “We’ve always been able to rely on Giant for food product and running fundraising campaigns ... but [now] it extends to other areas.”

Giant works creatively with its vendor partners to serve communities. For example, according to Arthur, Giant initiated a fuel program under which its vendor fuels the food bank’s fleet of trucks. “It’s cheaper fuel than we could get on our own,” says Arthur. “That saves us $25,000 to $30,000 a year. We would never have been able to put that together ourselves.”

Giant also supports the food bank by allowing its management team and select associates to attend training sessions. “We actually have a whole host of areas where Giant has been an invaluable partner to us,” he observes. “Giant has helped us adopt best practices and create some revenue streams.”

64

Encouraging Strengths, Nurturing Careers

B

uilding on strengths and exploring new opportunities — that’s the core of career development at Ahold USA and part of what equips PG’s Retailer of the Year with the talents and skills it needs to excel in a highly competitive marketing area.

Te company encourages associates to constantly review their performance and personal goals “to make sure they’re aligned” with district and corporate goals, says Larry Jones, human resources manager, Stop & Shop New England. “Reassessing performance constantly, compared to the goals, keeps us focused and performance-driven. Associates are challenged to evaluate what they’re contributing to the company and challenge their teams to do the same.”

Twice a year, in spring and fall, associates complete surveys to assess their progress. Reviewed by teams of associates, the surveys pinpoint each employee’s top three strengths, which they’re encouraged to continue and hone, and top three opportunities for improvement. Store performance is similarly assessed. “We empower department heads to run their departments like their own businesses,” Jones says. Aiming to drive business on all levels, department heads “challenge each other” and share ideas, he adds. Te mutual learning process makes them “feel empowered to get the best results.”

So what makes Stop & Shop a great place to work?

In addition to “competitive” wages and benefts, it’s the opportunities for enrichment and advancement, Jones says. “I make it clear we have lots of opportunities — whatever your passion or background, there’s a position in our organization,” he asserts. “We’re going to challenge them to grow their leadership qualities.”

He continues: “Every career path is as unique as the individual who works for us. ... We identify what their strengths and

Stop & Shop New England division associates celebrated the banner’s 100th anniversary with a specially designed anniversary car for the 100 Days of Giving initiative. Checks of $1,000 were provided to 100 nonprofit organizations selected by local store managers.

| Progressive Grocer | Ahead of What’s Next | October 2014

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2014

Retailer of the Year opportunities truly are, and help them reach their end goal. We spend a lot of time with associates gauging where they’re at and revising goals as needed, working on what they need to be a better leader. Tey’re involved at every step; we don’t just tell them what to work on.”

Among the ways in which Stop & Shop has shown its appreciation for its associates was to boost

its employee discount to 10 percent as part of 100th anniversary festivities for the Stop & Shop banner.

All 395 stores in the chain served cake to “celebrate and say thank you” to associates and customers, Jones says. Certain store-brand products sported commemorative packaging, associates and support personnel wore 100th-anniversary pins and aprons, and posters displayed in stores documented the journey of the company over the past century.

Additionally, the company marked the milestone with 100 Days of Giving, during which the grocer donated $1,000 each to 100 organizations between Memorial Day and Labor Day, delivering giant checks along with cake and balloons in decorated vehicles to each group. “Tese organizations are doing great work, and we love to partner with them,” Jones says.

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| Progressive Grocer | Ahead of What’s Next | October 2014

A 20-year company veteran who started as part-time grocery clerk while in college, Jones “never thought it could be a career,” he says of grocery retailing.

“My store manager took an interest in me, which was diferent from everywhere else I worked. He talked to me.

He listened to me. Tat sort of attention helped me see myself as an important part of the team. … I felt like I contributed to the overall goal of the company.”

Jones worked his way up to full-time general merchandise clerk, and then to assistant store manager and store manager, before attaining his current post.

“I’ve always felt important and listened to — that’s what makes this company feel like a family,” he says. “I don’t think that happens in every organization.”

His duties include conducting exit interviews with retirees, among them the associate who brought him into the organization: “It was great to sit with the store manager who hired me 20 years ago and talk about our experience.”

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2014

Retailer of the Year

Daring to Care

A

nne Demchak, store manager at the Stop & Shop on Whalley Avenue in New Haven, Conn., may have been honored as one of Progressive Grocer’s Top Women in Grocery in 2011, but she’s not one to rest on her laurels. Instead, Demchak usually goes right on to the next thing, but in a recent chat, PG encouraged this ageless dynamo to take a brief look back to see how far she’s come.

Starting out at Stop & Shop back in 1981 as a “bologna slicer” — a gig that lasted all of two weeks, until she took a job as a meat wrapper to replace a woman who had broken her leg — Demchak eventually enrolled in the banner’s apprentice program to become a deli manager for seven years, and then did stints as a night manager and a deli trainer (specialist) before fnding her ultimate calling as a store manager.

Still, Demchak remains modest about having risen through the ranks. “Te career path chose me; I didn’t choose the career path,” she insists, expressing gratitude that Stop & Shop paid for the undergraduate and graduate degrees she earned while working for the company.

Being a store manager is a lot like being a teacher, except we’re teaching life skills, not arithmetic.”

—Anne Demchak, Stop & Shop Store Manager

68

Summits of Achievement It was while managing a store in the poorest part of New Haven that Demchak, along with fellow Connecticut Food Bank member Kate Walton, now with Interfaith Volunteer Caregivers of Greater New Haven, devised a program that became Stop & Shop’s Healthy Food Summit series. Walton wanted to start nutrition classes for kids, and Demchak ofered her store to prepare the meals taught in the lessons. Te frst summit was held in that store in 2010, with subsequent events targeting seniors (2013) and teens (2014). Te summits have even attracted the notice of nearby Yale University, which has contributed to various panels.

Te teen program, which featured a “Hunger Games”-style scavenger hunt, has proved the most popular so far, according to Demchak, who subsequently hired two of the adolescent participants on the inaugural event’s panel.

Among her current and upcoming projects are a series of fve to six small nutrition classes for diabetics of 10-15 attendees, which could become weekly, and the privately funded MOMs Partnership, created with the aim of helping single mothers deal with stress, for which Demchak has carved out dedicated space by her store’s entrance, to be stafed by volunteers.

| Progressive Grocer | Ahead of What’s Next | October 2014

Anne Demchak (second from right), Stop & Shop’s New Haven, Conn., store manager, participated in the first Healthy Senior Summit with Elderly Services, City of New Haven. Panelists offered advice to elders on how to eat better and how the supermarket plays an important role in providing a variety of healthful food choices. Attending the summit was a customer (center) who had recently celebrated her 101st birthday.

‘Teaching Life Skills’ Another priority for Demchak is mentorship. To that end, she routinely steers promising workers to associate module training that enables part-timers to become full-timers. She notes that Stop & Shop is “extremely supportive” of associate development, describing it as “the backbone of how we grow” and observing that 90 percent of the banner’s managers come from within the organization.

According to Demchak, being a store manager is “a lot like being a teacher, except we’re teaching life skills, not arithmetic.” As recompense for her eforts, former associates often come back to thank her; one, who as a newly hired 18-year-old was always tardy, returned to report proudly, “I’m not late anymore!”

Inspired by such examples, Demchak attributes her longevity at the grocer to the fact that she loves what she does, particularly promoting other people.

Despite the fact that she plans to retire next year — an almost unthinkable prospect, given her boundless energy level — Demchak plans to remain involved with the Healthy Summit and MOMs Partnership programs, as well as retaining her various local board memberships.

Given all she’s been able to accomplish, what’s the secret of Demchak’s success at Stop & Shop?

“Tey never say no to me. I tell them [what I want to do], and they let me do what I want,” she replies, only half-joking.

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2014

Retailer of the Year

‘Trooping’ Support Through Community Engagement

Terry McGowan, director of quality assurance for Giant Landover, at the ESGR signing event. A member of the U.S. Marine Corps Reserve for 25 years, he currently serves as a platoon commander in a Wilmington, Del., reserve unit. McGowan has completed multiple tours in Iraq and Afghanistan over the past 10 years.

A

Supporting our nation’s military men and women and their families is one of our core community engagement areas for Giant.”

—Terry McGowan, Director of Quality Assurance, Giant Landover

70

hold’s Maryland-based Giant Landover banner supports the nation’s military as a key service to the community, as demonstrated by the slate of programs designed to aid U.S. service members.

“Supporting our nation’s military men and women and their families is one of our core community engagement areas for Giant,” said Terry McGowan, director of quality assurance and a 25-year veteran of the U.S. Marine Corps Reserve. His reserve career has followed a supermarket career spanning Philadelphia to Fort Worth, and now the Baltimore-Washington area. He has completed tours in Iraq and Afghanistan during the past 10 years, and is currently a master sergeant and platoon commander in a Wilmington, Del., reserve unit.

“Service members and their families are obviously a unique and valued part of the fabric of our region,” McGowan afrms. “We have a lot of military in this area, between Baltimore and Washington, D.C., so it’s a big part of our business.”

| Progressive Grocer | Ahead of What’s Next | October 2014

Statement of Support McGowan mentions an event last year in which Giant revealed an aggressive military hiring initiative and signed an ofcial statement of Employer Support of the Guard and Reserve (ESGR), a Department of Defense agency that develops and promotes support for guard and reserve service.

“Last year, we also participated in some job fairs throughout the region, including a large one at the M&T bank stadium — home of one of our partners, the Baltimore Ravens,” McGowan says.

“Another such event took place at the Washington, D.C., armory shortly after. We have hired 24 veterans since the beginning of this initiative.”

USO Partnership Giant-Landover has also maintained a strong partnership with the USO of Metropolitan Washington and Baltimore, along with the USO of Delaware, according to McGowan.

Of the company’s annual USO giving campaign, McGowan notes: “Tis year, we collected monetary donations from thousands of our patriotic customers, who bought 17,000 snack-pack care packages — a small box of diferent snacks, hand sanitizer, etc. — and through customers’ generous support, the USO received a $100,000 donation and the 17,000 care packages were donated to deployed service men and women.

“From my personal experience of being deployed to Iraq and Afghanistan over the past 10 years as a reserve member, I can speak to the tremendous impact that those care packages have when you’re deployed,” he adds.

Serving the Nation’s Capital Given the grocer’s proximity to the nation’s capital, Giant’s commitment to military members certainly has an impact on the local community. “Tere are 15,000 major military installations in our operating area, so more than 10 percent of our country’s military force is actually based in the Washington metropolitan region,” McGowan observes, adding that every branch of service maintains a major installation within the chain’s store footprint, including Dover Air Force Base, in Delaware, on the northern end, and the Marine Corps, based in Quantico, Va., to the south. ““Te individuals who serve in those bases are our neighbors, our friends, our family members and, in many cases, spouses, so, it’s one of the reasons I’m proud of the work that we do supporting military families,” he says.

‘Giant Proud’ “I tell this story many times, when — back in November 2011 — I had just been with Giant for about a month,” recounts McGowan, “and they published a list of all the contributions the company made within

Teri Llach

Chief Marketing Officer, Blackhawk Network

With prime gift card season approaching, Progressive Grocer reached out to Teri Llach, chief marketing of�icer of Blackhawk Network, to discuss how automated solutions to gift card destinations can be optimized to realize increased consumer satisfaction and increased sales for all retailers. She shares her thoughts with Progressive Grocer’s readers below.

Progressive Grocer: Giving gif cards purchased from a variety of retail locatons has become such a prevalent practce for so many occasions—birthdays, anniversaries, holidays and even weddings. How do retailers improve what they are currently doing in the gif card space?

Teri Llach: The third party gif card market is extremely successful because it offers the consumer what they want – convenient access to a large selecton of prepaid and gif cards. Today, a majority of transactons for these cards occur at physical brickand-mortar locatons. Research shows that 95% of gif card buyers plan to buy more cards from the same store.* It is no surprise that the in-store experience has to be excellent and contnually improved. There are a number of important factors

that go into how in-store displays are designed and how product is placed, which allows retailers to drive sales while providing maximum convenience and selecton for the customers.

Blackhawk contnually works with retailers to optmize these prepaid destnatons.

PG: What are some of the key factors that drive the purchase of gif cards at physical retail locatons?

TL: Blackhawk Network has found that many factors contribute to consumers’ purchase habits in-store such as card selecton, consumer demographics, geography and display design. For example, products sold above average rates when point of purchase and redempton points are within five miles of each other. Another example is the way gif card consumers scan for products. They tend to stand in one place and visually scan for the specific brands they’re looking for, which dictates where certain cards are placed on the rack and which cards are placed together.

On the backend, there is additonal placement logic to follow such as brand blocking, where groups of products (say iTunes gif cards) are kept together, and grouping sub-segments like pizza restaurants. Brand blocking and grouping these subsegments can be very tme-consuming tasks but very important for consumer convenience and ease of shop.

PG: How can Blackhawk help retailers save tme and stll create the kind of eye-catching displays that will optmize gif card sales?

TL: With so many factors to consider, Blackhawk Network has developed a soluton to automate how displays are planned.

This automated soluton takes the creaton of planograms into the 21st century. It allows displays to be accurate, and to effectvely reflect shifs in consumer behavior. Moreover, the automaton allows customizaton that takes retailer, geographic, demographic and chain size into account and delivers a highly consumer-friendly display, delivering top-line revenue and additonal store visits. *Source: Meyers Research, Decision Tree, 2013

For more informaton on developing an in-store display and how Blackhawk’s soluton works, visit www.blackhawknetwork.com.

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2014

Retailer of the Year the past year. I remember being amazed at the amount of programs we were involved with,” he concludes, noting the following as among the most noteworthy: $2 million raised and donated through the

A+ School Rewards program, which benefts

more than 2,000 schools in the company’s operating area Triple Winner, which raises millions of dollars

for adult and pediatric cancer research 1 million pounds of food donated to hunger relief organizations, plus an additional 5,000 turkeys given to regional food bank partners around Tanksgiving Partnerships with such organizations as Toys for Tots Foundation and the Salvation Army

Customer Participation Tere is no shortage of ways for customers to get involved in Giant’s support programs, the most substantial of which is the efort with the USO to send service members care packages — 17,000 of which have been purchased so far by customers.

Refecting on the ways in which he aspires to

Cinderella Story The USO’s 4-year partnership with Ahold USA’s Giant Landover division is “such a great relationship,” enthuses Elaine Rogers, president and CEO of the USO of Metropolitan Washington.

Through donations at the register or the purchase of care packages sent to the troops overseas, Giant Landover has raised more than $350,000 for the USO over the past five years, Rogers notes.

In 2011, Giant Landover’s 75 th anniversary coincided with the USO’s 70th anniversary. As a way of commemorating the milestone, the grocer offered snack packages to be purchased at the register and given to traveling service personnel and their families at airport USO lounges; they sold out in a week and a half.

“They have to be at the airport eight to 10 hours before their flight,” Rogers says, explaining the pressures on service personnel

72

live up to Ahold USA’s Better Neighbor promise, McGowan says: “I’m involved in many of Giant’s responsible retailing initiatives,” including plastic, cardboard and organic recycling programs, as well as a new campaign to eliminate 1 billion bags from the company’s operations by the end of 2015. McGowan has also worked to launch Giant’s Meat the Needs meat donation program, in which meat that hasn’t been purchased by its sell-by date is frozen, stored and donated to local food bank partners.

Of all of those activities in which he takes part, however, “I’m probably most proud of being a member of the board of directors for the Children’s Cancer Foundation, which raises funds for children’s cancer research and diferent support organizations,” he concludes, adding that Giant is the corporate sponsor of the Children’s Cancer Foundation’s annual gala.

“It’s a great organization, we’re their biggest benefactor, and we’ve been a partner for over 30 years,” he says of the foundation. “It’s been the core of our operation.” PG For more information on Ahold USA and its divisions visit, Progressivegrocer.com/ RetaileroftheYearAholdUSA.

and how the snacks provided some comfort during their travels. “This is an example of a large company truly making a meaningful impact. It was a way for their customers to thank military personnel in a more tangible way. We love that aspect of it.”

And in Giant Landover’s market area in particular, there’s a large military population serving at 26 installations in Washington, D.C.; northern Virginia; and Maryland. In fact, many Giant employees are ex-military themselves who help the USO’s efforts.

Among these efforts is the Cinderella program, which provides formal outfits and accessories for military spouses who couldn’t otherwise afford dresses to attend fancy base functions; Giant supplies all of the flowers.

That’s in addition to the monthly distributions to area food banks. “There are Giant employees who are veterans who are very supportive and proud to be able to give back after their service,” Rogers says. “Without volunteers, we wouldn’t survive as an organization. … It’s the money, the in-kind [donations], the people giving back.”

| Progressive Grocer | Ahead of What’s Next | October 2014

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Cause Marketing

Feature

Forces for

Good

Retailers and suppliers hope to increase brand equity by supporting causes near and dear to consumers’ hearts — and their own.

By Bridget Goldschmidt

W

hen Sunbury, Pa.-based Weis Markets considers which causes to throw its support behind, it looks no further than the issues that matter most to the residents of the areas it serves.

“We lean towards supporting causes that will beneft our local communities,” afrms Gretchen Suydan, Weis’ director of marketing. “We support pet shelters and locally based food banks and pantries through our cause marketing programs in May and September,” the latter of which is Hunger Action Month. “We also support the fght against breast cancer through the sale of our Weis Quality Strawberry cheese cake ice cream, which we sell in October, as well as our pink reusable bags highlighting this cause. We are also proud to participate in the Wounded Warrior Project, which supports our veterans. In the past,

we’ve also done emergency checkofs for Haiti and the victims of Hurricane Katrina.”

When it comes to mounting successful cause marketing programs, Suydan believes that well-informed employees make a big diference. “It starts with training our associates at store level and communicating the importance of the programs,” she notes. A key to our success … is the commitment of our store associates — they, along with our customers’ support, are [what] make our cause marketing programs successful. When we circle back with a store that has generated strong donation totals, we usually fnd that it was an associate or a group of associates who made the diference. Sometimes, they talk it up at the front end. Other times, it is a creative display or a contest.”

Also key is providing shoppers with a choice of how they can help. “Giving our customers several ways to participate is important,” asserts Suydan.

“Tis includes allowing the customer to round up

FEEDING THE NEED Food Lion Feeds, the grocer’s recently introduced giving platform, enlists associates to help fulfill its commitment to provide 500 million meals by the end of 2020.

October 2014 | progressivegrocer.com |

75

Feature

Stock our delicious Triple Chocolate Fudge, Strawberry and Lemon cakes today and you’ll be helping Café Valley Bakery make a donation of $15,000 to City of Hope Breast Cancer Research.

T hat ’s pretty sweet.

To participate contact Brett Morrison brettmorrison@cafevalley.com (972) 523-4220 From all of us at Café Valley Bakery, we thank you!

Cause Marketing

their order, allowing them to make a monetary donation at the checkout or online, or [letting them] drop of nonperishable items at our stores.”

When asked whether Weis’ corporate responsibility activities directly infuence customers’ decision to shop there, Suydan responds carefully: “While it is difcult to quantify, customers notice when you are a good neighbor and when you are not. We see our customers nearly three times a week, and they are part of the community. When an area is hit by a natural disaster, our stores have been helpful to communities and local emergency organizations. Cause marketing helps reinforce our commitment to being a good neighbor.”

Manufacturing Connections Like food retailers, grocery suppliers often have to make tough decisions about which eforts to get behind. “Tere are so many worthwhile causes that need support, and while we wish we could help them all, Café Valley Bakery supports causes that touch the lives of our teammates and customers, have a connection to our hearts, and whose mission is aligned with that of our organization,” says Amy Armstrong, VP marketing for the Phoenix-based provider of in-store bakery products.

Armstrong is a big believer in making sure such campaigns at retail are not only hard to miss, but also absolutely clear in their intentions. “Retailers that support the same causes as manufacturers are able to unite eforts to make an even bigger impact for a cause/charity,” she observes. “Consumers want to know which organization is benefting from cause marketing programs, and by how much. Tat transparency builds consumer confdence in a brand and longevity in the cause marketing program as it continues to grow year over year and donation amounts increase. Te best consumer-facing programs for cause marketing have strong visibility at the store level. POP signage, attention-getting displays and front-of-store or front-of-bakery placement ensure the program even greater success and participation by consumers.”

In Armstrong’s mind, there’s no question that the causes a company chooses to champion make a deep impression on shoppers. “Consumers connect with and rally behind manufacturers/brands that are successful and are willing to share that success by supporting causes important to both of them,” she asserts. “Consumers connect deeply and loyally to manufacturers and retailers that truly get behind a cause and give back to the community as a whole. For Café Valley Bakery, it’s not something that we have to do, it’s something that we love to do. Te ability to be of service and to make a diference is everyone’s responsibility. Corporations are able to unite dedicated communities to make it a team efort.”

As Weis’ Suydan indicates, among the most popular causes backed by retailers and their supplier partners are hunger relief (only natural for those in the business of selling food) and battling breast cancer (also not surprising, given the fact that female supermarket shoppers are still the majority). Following is a closer look at what some grocery industry players are doing in those arenas.

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Feature

MILK MONEY When shoppers give to Kroger’s Pour It Forward program, they’re ensuring that food banks have access to milk — one of the most requested items by their clients.

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Cause Marketing

Hungry Hearts Weis launched its seventh annual Fight Hunger Program to run throughout Hunger Action Month in September. The program donates food and funds to local food banks and emergency food providers in the grocer’s 163-store service area, which spans Pennsylvania, Maryland, New Jersey, New York and West Virginia.

Te program enables customers to donate shelfstable items, as well as buy $2, $4 and $6 vouchers at checkout, with all proceeds going to local food banks to help fll gaps in food supplies. Weis additionally ofers convenient Fight Hunger donation boxes for under $10, already flled with pasta, sauce, fruit, vegetables, tuna, cereal and soup.

“Since 2008, our Fight Hunger campaign has raised nearly $1 million for local food banks and pantries at a time of soaring demand,” notes Suydan.

“During this time, we’ve also donated more than $1 million to the food banks we work with.”

Salisbury, N.C.-based Food Lion has recently ramped up its own hunger relief eforts through the formation last June of its new giving platform, Food Lion Feeds, which focuses on eliminating hunger in communities served by the chain’s stores. “At Food Lion, we believe no one should have to choose between dinner and paying rent or gasoline and buying groceries,” says Courtney L. James, coordinator, external communications and community relations at Delhaize America, of which Food Lion is a banner.

To mark the launch of Food Lion Feeds, the grocer’s associates traveled to fve cities in fve days across its footprint to donate 1 million meals during a Week of Giving.

Ten, from Sept. 15-19, the company held its frst annual Week of Service, during which hundreds of employees from across Food Lion’s 10-state operating market area volunteered to provide 400,000 meals to needy individuals and families struggling with hunger in their local communities.

In addition, over the course of the year, Food

| Progressive Grocer | Ahead of What’s Next | October 2014

PET PROJECT Among Weis Markets’ cause marketing efforts is Paws for Pets, which helps homeless domestic animals through customer donations.

Lion teams with its customers on three in-store campaigns in support of Food Lion Feeds. From June 9-30, the purchase of one Food Lion Feeds reusable bag provided fve meals to local food banks in partnership with Chicago-based Feeding America, resulting in the donation of 1 million meals to area food banks. From Sept. 17-Oct. 7, customers could buy a bag of specially marked Gala apples for $2.99, prompting the chain to donate fve meals to local food banks, again in collaboration with Feeding America. And from Nov. 19-Dec. 23, Holidays Without Hunger boxes will be available for purchase in Food Lion stores, from which they’ll be sent directly to local feeding agencies.

Further, each of the banner’s 1,100-plus stores is paired with a local feeding agency through the grocer’s food recycle program. Under the program, several times a week, local agencies pick up excess fresh and shelf-stable items and give them to local food-insecure individuals and families.

As a result of such eforts, only four months after it committed last June to provide 500 million meals by the end of 2020, “Food Lion has already provided more than 23 million meals to individuals and families in need, in partnership with its food bank and feeding agency partners,” notes James.

Ten there’s Kroger’s Pour It Forward initiative, which invites shoppers at more than 2,000 stores to purchase a $1, $3 or $5 milk voucher donation while checking out during Hunger Action Month, with all donations collected benefting local food banks afliated with Feeding America, which will provide free milk coupons to their clients.

“Trough our Pour It Forward campaign, we are adding a new way for our customers, associates and company to support local food banks by ofering them access to an important food — fresh and wholesome milk,” says Lynn Marmer, group VP of corporate afairs at Cincinnati-based Kroger.

Pour It Forward is part of the Great American Milk Drive, the frst national program of its kind, which was launched by Te Milk Processor Education Program (MilkPEP), National Dairy Council and Feeding America in April 2014.

“Our research shows retail is the key driver for program donations,” notes Victor Zaborsky, marketing director at Washington, D.C.-based MilkPEP. “Early results [of the Great American Milk Drive] are positive, and, to date, more than 105,000 gallons of milk have been donated nationwide.”

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Feature

LET THEM EAT CAKE The Café Valley Bakery Pink Cake Promotion provides eyecatching colorcoordinated signage to retail partners to support the fight against breast cancer.

“Customers notice when you are a good neighbor and when you are not.”

—Gretchen Suydan, Weis Markets

Cause Marketing

Te reason for the program is straightforward, according to Zaborsky. “Milk is one of the most highly requested items by food bank clients, yet there’s a nationwide shortage because it is rarely donated,” he explains. “Te Great American Milk Drive is a program that not only works to fll a major nutrient gap with a highly demanded item, but it also makes donating milk simple via a click of a mouse at www.milklife.com/give.”

Further, the decision to enable shoppers to give at checkout was based on MilkPEP consumer research revealing that “it is the preferred touchpoint for donation collection,” says Zaborsky. “We also work directly with retailers to develop custom programs and ofer a robust toolbox of resources to help build awareness for the cause and make it easy for shoppers to purchase an extra gallon of milk for those in need.”

In the Pink Every October, countless grocers and suppliers across the United States festoon packaging, signage and displays with pink ribbons to mark National Breast Cancer Awareness Month — among them ongoing multi-retailer eforts such as Pink Ribbon Produce — with many companies’ commitment going way beyond a single month of the year, but Café Valley Bakery’s current cause marketing program adds a sweet incentive to the quest to eradicate this deadly disease.

Te Café Valley Bakery Pink Cake Promotion “features an exclusive pink base created by

The Humane Factor Because of their unique relationship with consumers, grocers and food companies are obvious choices for organizations representing a range of causes. One such organization is the Washington, D.C.-based Humane Society of the United States, which, according to its food policy director, Matt Prescott, has teamed up “with dozens of major food retailers and producers,” among them Safeway and Kroger, “on cause marketing efforts related to the treatment of animals in their supply chains.”

As Prescott explains it, “When companies do the right thing for animals, like by switching to cagefree eggs or eliminating gestation crates from their pork supply chains, many rightfully want to let the public know about their good work.”

In Prescott’s view, supporting animal causes is a

80

Pactiv for us for our three best-selling 16-ounce Bundt Cakes: Triple Chocolate Fudge, Lemon and Strawberry,” says Armstrong. “Te cakes also feature a new customized label with a pink ribbon and ‘Help us support Breast Cancer Research’ on the label. For our retailers that run an ad feature, each store receives a custommade pink stanchion and customized POP for their in-store bakery displays. Te pink cakes stand out beautifully on the in-store bakery table, and with the stanchion and POP, [they’re] a clear attention-getter.”

It’s not just about looks, though. “Te bottom label on the cakes include a QR code that invites consumers to write a review on our website and visit our Facebook page to celebrate their loved one by writing a tribute to someone they love who was touched by breast cancer,” explains Armstrong, adding that the entire Café Valley team was scheduled to take part in City of Hope’s Walk for Hope to Cure Breast Cancer on Sunday, Oct. 5 in Phoenix.

As Armstrong, “a two-time breast cancer conqueror” herself, notes, “Te best cause marketing programs are those that not only touch consumers and support customers, but also engage employees and their families, so that everyone’s lives are enriched by the spirit of the program — to give back.” PG For more on cause marketing activities in the grocery industry, visit Progressivegrocer.com/causemarketing.

logical fit for companies involved in the food industry. “The closer a company is linked to a predominant social issue — and the more top of mind that social issue is to consumers — the more likely the company is to address it,” he notes. “Food production, for example, is so closely linked to animal well-being — and virtually everyone agrees animals deserve proper care — that animal welfare has become a major program for the industry.”

Further, he believes there are myriad rewards in store for businesses that support such causes. “Addressing social issues like animal welfare can help a company in many ways,” Prescott observes. “It can relate to customers a sense of shared values. It can convey to employees a positive feeling about their company. And it can generate positive earned and social media for the company, worth potentially millions of dollars.”

| Progressive Grocer | Ahead of What’s Next | October 2014

Candy and Snacks

Category Management

Tricks for

Treats Retailers need to stay ahead of trends, merchandise innovatively and partner with suppliers to drive sales of candy and snacks.

By Jim Dudlicek

D

espite the rise in better-foryou products and an ongoing assault by the “food police” on anything more than occasional indulgence, grocers and manufacturers remain optimistic about the future of candy and snacks.

Te trick, they say, is to not merely stay on top, but to stay ahead, of shopper trends and leverage them when deploying efective category management strategies designed to promote lift within the category as well as complementary products.

Probably the biggest challenge facing grocers today in raising category sales, according to Mike Nisevich, category manager at Highland, Ind.-based supermarket chain Strack & Van Til, is the abundance of new outlets promoting

candy. “It seems everyone is capturing the impulse of the category,” Nisevich says. “Mass has become bigger and bigger every year, while being ultra-competitive.

Teir strength has grown as they have become better merchandisers throughout the store, not only in the candy aisle or seasonal area.”

And with the increasing use of syndicated data, retailers also have the ability to analyze mix and seek out opportunities that may exist elsewhere, Nisevich notes. “Likewise, the dollar channel has stepped up its emphasis of the category, as can be readily seen when entering a store. Home improvement centers have become a bigger player, with such stores as craft and hobby also stepping up their game,” he says. “With more retail outlets selling candy, the pie gets sliced into smaller pieces. Grocers must stay current and meet the needs of their shoppers.”

With more retail outlets selling candy, the pie gets sliced into smaller pieces.

Grocers must stay current and meet the needs of their shoppers.”

—Mike Nisevich, Strack & Van Til

October 2014 | progressivegrocer.com |

83

Category Management

Candy and Snacks

Maintaining the Chain Meeting those needs means making sure, above all else, that the products people want are on the shelves. According to Nisevich, the largest supply chain challenges concern seasonal candy and new item introductions.

“Tough seasonal orders may be submitted on time, deliveries can be delayed due to product shortages caused by the infux of orders fowing out of the system in a fxed window. Initial internal forecasting hedging against anticipated orders could be improved, as to build larger inventories, before the orders are even processed,” he advises. “Regarding new item introductions, manufacturers are sometimes caught short by the overwhelming success of their new products, a problem found in all CPG companies, not only candy and confections.

Again, forecasting, research and hedging inventory against the anticipated demand are a must.”

Jenn Ellek, senior director of trade marketing and communications for the Washington, D.C.-based National Confectioners Association (NCA), notes that supermarkets and CPG companies work closely together to plan holiday

Linchpin of Center Store?

“Confections is a large, growing and profitable category,” declares Jenn Ellek, senior director of trade marketing and communications for the Washington, D.C.-based National Confectioners Association, which hosts the annual Candy & Snack Expo in Chicago.

In grocery, candy is the third-largest center store category, “making it hard to achieve strong year-over-year gains,” Ellek says. “Yet candy growth continues to outpace that of center store overall. For instance, when we look at the first half of this year, confections grew 2.3 percent, compared with total edibles, at 2.1 percent, and the entire store, at 1.6 percent.”

An important challenge,

84

events as much as a year ahead.

“With changing dates and infuences of weather and last-minute shopping, avoiding out-of-stocks in seasons, and every day, is crucial,” Ellek says.

“Our research shows that 45 percent of shoppers experience out-of-stocks in confections sometimes, regularly or very frequently. When encountering out-of-stocks, 43 percent did without, 40 percent bought a diferent item, 29 percent bought a diferent size or brand, and 8 percent diverted the purchase elsewhere. Tis means that out-of-stocks can cost you dearly, whether you are the manufacturer or the retailer, with dollars either not being spent at all, spent on a competitor’s brand or in another store.”

Another supply chain challenge involves the rising ingredient costs of confections, especially cocoa, Ellek notes. “Manufacturers and retailers are

Ellek asserts, lies in optimizing everyday and seasonal assortment. “In confections, it takes nearly 1,800 SKUs to reach 80 percent ACV, so variety and regionality matter,” she says. “This means CPG companies and grocers need to have a good understanding of the local market and the various demographics that drive candy preferences.”

For instance, Hispanic shoppers are more likely to prefer milk chocolate, whereas dark chocolate is preferred by older shoppers. Additionally, societal mega-trends are driving some huge gains in certain product segments; examples of this are chocolate with hazelnuts (up 16 percent) and dark chocolate ( up 9 percent). “Shoppers are also looking for fun, fruity and nostalgic candies,” Ellek adds, “with large gains in gummies, fruit-flavored and assorted candies.”

| Progressive Grocer | Ahead of What’s Next | October 2014

Category Management

SharIng the LIght Mars and Wrigley’s energyefficient LeD-lit racks impart a rising-tidelifts-all-boats reward for the entire front end confection category.

Candy and Snacks

working on fnding the right balance between rising costs and shrinking margins on the one hand, and afordability and meeting the needs of the value-seeking consumer on the other,” she says. “Competition also plays a role.

We have seen above-average growth of the value channels in recent years, especially dollar stores. Ofering a variety of pack sizes, both small and large shareable packs, is a great way to address various value needs as well as health-and-wellness solutions.”

Innovative Merchandising Confection and snack makers have their own ideas on how best to partner with retailers to buoy category sales.

Susan Gwinnett-Smith, VP of grocery/retail for Hackettstown, N.J.-based Mars Chocolate North America, says the biggest challenge is driving trafc down the candy aisle. “Studies show that 75 percent of shoppers don’t walk

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As such, cross-merchandising is key. “Since 75 percent of confectionery brand decisions are made in-store, and 75 percent of shoppers don’t go down the candy aisle, grocers should merchandise the candy category in multiple places throughout the store,” Gwinnett-Smith recommends. “If shoppers don’t see the candy, and they can’t fnd it,

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Category Management

Candy and Snacks

they can’t buy it. Tis will help drive proft on this category that’s highly impulsive, highly expandable, with high household penetration, highly proftable and incremental.”

Some of her merchandising ideas: grouping power brands in the center of the section, ensuring pack type adjacencies, starting the

aisle with premium chocolate to drive trafc, and merchandising confections with complementary categories such as baking, ice cream and snacks, especially around key moments like the Super Bowl and other big sporting events.

Chicago-based Wrigley, owned by Mars, is focusing on better merchandising for impulse sales.

“Candy and snack is a highly proftable and expandable category, but reminding consumers about our products and catching their attention at the point of purchase is essential in addressing this challenge,” says David Kennedy, Wrigley’s VP of U.S. grocery. “Wrigley is taking a 360-degree approach to develop and implement long-term and sustainable turnaround and growth in the category.”

For example, to counteract efforts by shoppers to move more quickly through the front end with self-checkout and mobile devices, Wrigley is working on solutions in self-checkout and front end lanes to make gum, mints and confections easier to fnd and more prominent.

Additionally, Wrigley is simplifying the product selection and ensuring that its top-selling brands are ofering the right assortment in packaging, sizes and prices that meet consumers’ needs.

Further, Wrigley is working closely with retailers to build better displays and develop programs that drive trial. One project is the creation of new LED merchandising displays.

Kennedy cites Nielsen research showing that LED lighting can increase sales of front end confectionery by 10 percent to 12 percent. “At grocery stores, we’re seeing positive customer and consumer feedback with the rollout of the LED displays at fullservice checkout,” he says.

What’s more, according to Kennedy, the oral care benefts of chewing sugar-free gum create opportunities for additional merchandising locations to engage and educate consumers on new occasions to chew. “Adding secondary display locations that complement other oferings,

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Category Management

Manufacturers and retailers are working on finding the right balance between rising costs and shrinking margins on the one hand, and affordability and meeting the needs of the valueseeking consumer on the other.”

—Jenn Ellek, National Confectioners Association

Candy and Snacks

such as in the deli or cofee sections, in addition to the front end, can help keep the beneft of chewing top of mind throughout the shopping process,” he says.

And with the rise in digital media leading to a decline in print magazines, historically a major front end power category, that space can be allocated back to categories that are driving growth, like candy and snacks, suggests Melissa Dodds, the Minnesota-based CSI director geo food for the Hershey Co., in Hershey, Pa. Dodds agrees that changing shopping behaviors is a signifcant challenge. “As the Millennial shopper becomes more technology-savvy and -reliant, how do we ensure we get them in brick-and-mortar locations and keep their attention when they are there?” she says. “Knowing that these changes are taking place in their routines, how do we reallocate store shelf space based on current category trends?”

One way: reinventing the candy aisle to make it a fun shopping experience that grabs shoppers’ attention, to set it apart from the rest of the store and that store’s competitors. “We can easily capitalize on the consumers’ love for this category, and the impulsivity confection can drive for the retailers’ basket size,” Dodds says.

Unlocking Latent Demand Category management decisions in today’s environment are no longer solely based on historical sales data, Dodds asserts, “but must incorporate shopper

Gimme 5 The National Confectioners Association has developed practical principles for winning everyday candy, a credo the Washington, D.C.-based trade group calls E-5:

Experience: Inspire shoppers and win future trips by using vivid colors, attractive displays and in-store sampling, and leveraging nostalgia. Improved in-store sensory engagement can lift sales by as much as 5.4 percent.

Emotion: Emotionally engaged customers are three times more likely to recommend and repurchase.

Effectiveness: Examine assortment, merchandising,

marketing and advertising to make sure you give your shoppers what they want.

Efficiency: Manage the category to work toward sustainable improvement of performance metrics.

Environment: Embrace mega-trends, e.g., value-based

shopping, convenience, health and wellness, and snacking.

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| Progressive Grocer | Ahead of What’s Next | October 2014

insights to truly unlock latent demand. Retailers and manufacturers need to stay attuned to the trends and changes we are living through right now — connecting to consumers and understanding their ever-changing priorities are critical.”

Center store categories are shrinking because of online ordering, Dodds observes, so “we have to make perimeter and impulsive categories work harder in the store.”

NCA’s Ellek says the organization’s manufacturer members have insights and tools to help retailers with category management. “As shoppers’ needs and wants are ever-changing, our members keep close track of successful ways to merchandise and cross-merchandise their products,” she afrms. “Additionally, NCA has developed practical principles for winning everyday candy [see sidebar at left].”

Ellek says all growth forecasts are strong for both candy and snacks. “Additionally, there is a rapidly growing market for hybrid candy and snack products, such as chocolate-covered popcorn,” she notes.

Mars’ Gwinnett-Smith predicts that the category will continue to grow “as retailers continue to engage shoppers and apply best practices across the three critical segments — seasonal, immediate consumption and future consumption.”

Nisevich, of Strack & Van Til, agrees that grocers must listen to shoppers and stay in tune with trends through trade journals, CPG reps, syndicated data and trade shows.

“I envision the candy category staying strong for years to come,” he says. “It has endured the prodding of the health-conscious and individuals citing a sometimes overwhelming amount of calories, sugar and fat. Te announced upside of the benefts of dark chocolate helped to quiet the debate. Candy has provided, and always will provide, a general sense of comfort. While it is diffcult to say how the category will evolve, as that will be based on consumer trends and potential innovation, one can conclude the category is here to stay and should remain strong.” PG

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Grocery

Snacks

Healthier

Sales Manufacturers offer strategies for what works best when it comes to raising the profile — and profits — of better-for-you snacks, both inside and outside the store.

By Bridget Goldschmidt

W

e all know that consumers are increasingly seeking out healthier snacks — that is, if studies like Packaged Facts’ recent “Te Future of Eating: Who’s Eating What in 2018?” (see Brain Food, page 12) are anything to go by — but what are the most efective ways to ensure that they’ll fnd them in the supermarket center store, and once they’ve located them, that they’ll actually buy them?

First, you’ve got to let them what you’re all about. For Popchips’ inaugural national TV campaign, “Te Popchips Way,” which debuted in September, “we’re using veteran comedy writers and … actors from famous improv groups to bring our fun, irreverent and cheeky brand personality to life,” says Marc Seguin, CMO of the San Francisco-based namesake company, which produces chips that are popped with hot air and pressure instead of fried in oil, enabling them “to have all the favor of a fried chip, but with half the fat,” as he puts it. “Te spots will be sure to entertain viewers with hilarious dialogue as they relay key brand messaging.”

Popchips also recently dropped its frst two national FSIs, combined with eFSIs. “We have seen some positive results, including additional displays and partnerships with key retailers to drive additional awareness,” notes Seguin. “As we look to 2015, we have fve promotional periods with media support, versus two periods in 2014.” He adds that three new veggie Popchips favors — hint of olive oil, sea salt and Tuscan herb — have recently rolled out to stores.

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| Progressive Grocer | Ahead of What’s Next | October 2014

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Grocery

By lowering our prices, we are making our products more accessible to consumers who are more pricesensitive.”

—Scott Jensen, Rhythm Superfoods

Snacks

The Right Price Austin, Texas-based Rhythm Superfoods, which makes Kale Chips and Superfood Chips, has reduced prices as a way to entice consumers. “We’ve gotten more efcient in how we make the kale chips and, as a result, have been able to reduce the cost to our distributor and retailer partners by about 20 percent,” explains President and CEO Scott Jensen. “Te resulting suggested retail price on our kale chips has gone down from $5.99 to $4.99. Not every retailer will be able to get to that lower price (shipping to customers further away from our plant costs more to, say, Florida or Boston, for instance). By lowering our prices, we are making our products more accessible to consumers who are more price-sensitive. We were able to accomplish this by increasing capacity and efciency on the production end, while at the same time increasing the quality of the product.”

“For healthier snacks, in-store promotions are very efective,” acknowledges Genelle Chetcuti, director of marketing for San Jose, Calif.-based RW Garcia, whose latest product is Tortatos, the frstever half-tortilla, half-potato chip, which features 25 percent less fat than traditional potato chips.

“With the launch of Tortatos, we worked with our retailers to ofer price promotions to encourage

Olives Anything But Drab Shoppers may not realize it, but one perennial center store staple is actually good for them.

“For consumers watching their carbs and cholesterol, Olives from Spain are a smart choice,” notes María Becerra Gómez, of commodity board Olives from Spain’s (OFS) marketing department. “They’re naturally sugar-free and are a ‘whole’ food, so have a cleaner label than many processed snack foods. They’re a mainstay of the popular Mediterranean-style diet that’s been associated with lower cholesterol and heart disease. In fact, Olives from Spain contain healthy monounsaturated fat, a fat that has been proven to be heart-healthy. For consumers concerned with calories, they’ll happy to know they can have 20 Olives from Spain for just 100 calories.

Surprisingly, olives are also a source of fiber, providing 3 grams of fiber per 20 large Olives from Spain.”

All right, but how common are olives as between-

94

initial purchase of the product. We also launched a social networking campaign promoting Tortatos and availability at stores nationwide. Response to both portions of the campaign has encouraged initial and repeat purchase successfully.”

“We fnd that selling bars in multiples (two for $3, four for $5 or 10 for $10) from shelf displays drives sell-through and increases awareness,” Paul Pruett, CEO of New York-based Mediterra, whose clean-label oferings, based on the Mediterranean Diet, consist of the frst “savory” bars on the market, in varieties such as Tomato/Basil/Capers and Olive/Walnut/Chives, along with Sesame Honey Energy Bars and Yogurt and Oat Bars.

As “variety is one of the key drivers for all salty snack purchases,” Popchips’ Seguin advises that “providing consumers a way to try/purchase more than one bag per visit is an interesting promotion.

Pairing a TPR with feature and display would be the ideal promotional strategy.”

NuGo Nutrition, meanwhile, doesn’t go in for price reductions, either of the temporary or the permanent kind. “Our strategy has always been exceptional everyday value while highlighting our commitment to ingredients and quality,” says CEO David Levine of the Oakmont, Pa.-based company’s non-GMO protein bars, which he notes are the only such product enrobed in real dark chocolate. “When

meal noshes for hungry U.S. consumers? “For snacking purposes in particular, the stuffed and seasoned options are very popular,” asserts Becerra, noting that “a full 95 percent of the … stuffed pimiento olives consumed by Americans are Olives from Spain.”

That’s far from the only way the fruit can be enjoyed, however. Adds Becerra: “Thanks to the numerous ways that they can be presented, the variety of types and processing methods, there is an extremely wide range of table olives available, [including on] retail shelves. We’re reaching consumers with new inspirations through Facebook, Twitter, Pinterest and YouTube engagement. Also, retailers and consumers alike can find more recipes and ideas [at] www.olivesfromspain.us.”

Through its outreach and various partnerships, OFS is encouraging consumers to “Look for the Logo” when they shop for olives. “Retailers can benefit from that consumer awareness by featuring the logo, or simply the words ‘Olives from Spain,’ on retail packaging,” observes Becerra.

| Progressive Grocer | Ahead of What’s Next | October 2014

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Grocery

Snacks

your bars taste so much better than the competition, there is less reason to reduce retails. Terefore, an everyday value pricing maximizes the sales from the cadre of loyal NuGo consumers.”

POP GOES THE COUNTRY An inaugural national TV campaign seeks to inform consumers about “the Popchips Way.”

Placed for Success Rhythm uses end caps to draw attention to its non-GMO, gluten-free, nutrient-dense, fber-rich, high-protein items, which include its Original Kale Chip, which Jensen characterizes as being “lightly dressed in sunfower butter, tahini and mild spices,” launching in November, and a limited-edition holiday-themed Cranberry Orange Kale Chip, available starting this month.

“Tis placement easily puts our products in front of consumers, giving us more opportunity to introduce our brand and category to people looking for better options,” says Jensen. “Additional great placements are near healthy fresh foods — for example, we often try to place our Kale Chips in or near the produce section near the kale, or on top of the salad bar,” the latter of which, he notes, is “great for hitting like-minded, healthier-focused consumers.”

“Having additional of-shelf merchandising, like single-serve pop-up bins or racks with share bags, helps to ensure minimal out-of-stocks and drive awareness and trial,” notes Seguin, while Pruett concurs: “Placement of our bars and of our of-shelf displays is critical.

Healthy snacks like Mediterra need to be visible in high-trafc areas of the store to drive trial.”

Matters of Taste “Demos also can be a huge help when promoting nutrition bars,” asserts Pruett. “Especially with a new brand, there’s nothing like getting the consumer to taste it.” Mediterra bars recently earned placement at Lakewood, Colo.-based Natural Grocers

by Vitamin Cottage, the frst large-scale natural retailer to ofer them, with 86 stores across 14 states.

NuGo, which is introducing two new flavors in its NuGo Dark Protein line this month, Dark Spicy Chocolate and Toasted Coconut, also engages in sampling with what Levine describes as “a large team of brand ambassadors.”

And, in a true case of bringing product to the people, Angie’s Boomchickapop, which recently rolled out Sweet & Spicy and Salted Caramel popcorn flavors, as well as debuting Organic Sea Salt & Vinegar and Organic Maple Sea Salt popcorn varieties at this year’s Natural Products Expo East trade show last month, has hit the road for

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| Progressive Grocer | Ahead of What’s Next | October 2014

its first Boom Tour. “The team is currently traveling in a tricked-out, popcorn-loaded, totally fantastical van they’ve affectionately named ShaBOOM to spread the word about better-for-you snacks in time for back-to-school and fall snacking,” notes Joe Driscoll, Angie’s VP of marketing. The eight-week tour started in Chicago and headed for the Northeast before ending up in the Mankato-based company’s home state of Minnesota this month.

Fans were able to follow the tour’s progress online at www.TheBoomTour.com, and could also enter the Boom Tour Sweepstakes on the Angie’s Facebook page for a chance to win prizes.

As for promotions timed to roll out in the near future, Coral Gables, Fla.-based Buddy Fruits, whose latest better-for-you product, FruitBreak, is geared toward adult snackers, plans to play up the health angle by encouraging consumers to get ft for the new year. “We’ll be giving away gym memberships every day in January to help shoppers get back on track,” explains VP Marketing & Communications Daniel Connors. “So we’re creating a social media campaign, reaching out to partner with national gym chains (like LA Fitness and 24 Hour Fitness), and we created exclusive POS material for produce buyers to market the promo to their shoppers.”

Regarding how manufacturers of better-for-you snacks should present their products — and which items retailers should stock in their stores — RW Garcia’s Chetcuti has some incisive advice. “Shoppers are looking for the same bright colors and bold favors they sought out in less healthier snacks,” she notes. “Colorful packaging and bold favors must be accompanied by an easy-to-read list of health information, as shoppers are attracted to a company that they feel is being transparent. A shopper wishes to emerge from the supermarket with the feeling that she has made the most informed decisions for herself and her family.” PG For insights into the future of better-for-you snacks, visit Progressivegrocer.com/healthiersnacks.

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Cross-merchandising

Grocery/Frozen & Refrigerated

Creating Ties

That Bind Cross-merchandising creates shopper solutions, and hopefully stronger store loyalty.

By Joan Driggs

B

ack in the day, CPG manufacturers were the kings of the grocery retail hill.

Tey created programs that retailers could pick up and that consumers could buy into — at least that was the idea.

But as the grocery retail industry consolidated, retailers started to demonstrate their awareness of shoppers. From this developed a guarded degree of collaboration between CPG vendors and retailers; consumers with more defned choices of where to shop could fnd the best “ft” for themselves.

Today, though, grocery shopping choices are more plentiful than ever, and the consumer is able to demand what she wants, when she wants and where she wants. Te pressure to meet consumer needs is not just intense, it’s also in a constant state of change. But by focusing on need states, specifcally through cross-merchandising, retailers have an opportunity to play against their strengths while giving consumers what they want.

Whenever we can assist our customers by putting together items that go together naturally, it cuts down on their time searching for the right products and allows them to focus more on meals than individual items.”

—Casie Broker, Price Chopper

Cross-merchandising helps grocery retailers stanch shopper “leakage” to other channels, one of the largest problems retailers have, according to Gordon Wade, chairman of the Best Practices Advisory Board of the Wimberly, Texas-based Category Management Association (CMA).

“It’s not about the diaper category, it’s about the baby development need state,” says Wade.

“To assure mothers their baby is developing normally, they’ll be looking at feeding, cleaning, fun and learning, clothing, care, and protection of their baby.” For good or bad, retailers are organized around categories, not shoppers or their need states, he notes. Crossmerchandising provides a shopper solution that likely includes several categories — bringing complementary products together to tie categories separated by aisles in the grocery store.

Such initiatives require more than the right mix, however. Tey also need to deliver the right experience.

“Cross-merchandising is important to our in-store displays and helps us provide our October 2014 | progressivegrocer.com |

99

Grocery/Frozen & Refrigerated

Cross-merchandising

Baby Need State ($HH) Categories

Annual $

Groc $

Leak $

% Groc

Feed Formula Juice Baby Food Clean Diapers Wipes Shampoo Oil Fun & Learn Toys Books Photo Wear Clothes Shoes Care OTC First Aid Safe Crib Care Seat Stroller Security

$691.6 130.0 41.6 520.0 $1,221.0 780.0 208.0 130.0 103.0 $553.8 442.0 18.2 93.6 $884.0 624.0 260.0 $327.6 197.6 130.0 $628.2 130.0 270.4 150.8 77.0

$378.0 91.0 27.0 260.0 $752.2 546.0 135.2 19.5 51.5 $243.2 221.0 8.2 14.0 $439.4 249.6 189.8 $117.8 59.3 58.5 $208.3 65.0 67.6 60.3 15.4

$313.6 39.0 14.6 260.0 $46.8 234.0 72.8 110.5 51.5 $310.6 221.0 10.0 79.6 $444.6 374.4 70.2 $209.8 138.3 71.5 $419.8 65.0 202.8 90.5 61.6

54.7% 70.0 65.0 50.0 61.6% 70.0 65.0 15.0 50.0 43.9% 50.0 45.0 15.0 49.7% 40.0 73.0 36.0% 30.0 45.0 33.2% 50.0 25.0 40.0 20.0

$4,306

$2,139

$1698

50.0%

Total

Source: Category Management Association

customers with a better shopping experience,” affrms Casie Broker, director of marketing at Price Chopper, which operates 50 stores in the greater Kansas City metro area, Missouri and Kansas.

“Whenever we can assist our customers by putting together items that go together naturally, it cuts down on their time searching for the right products and allows them to focus more on meals than individual items.”

Location-based Cross-merchandising Certco, a Madison, Wis.-based wholesale distributor to independent supermarkets, designed a WisconsinOwn summer program that promoted products from Wisconsin. Products from butter to beer, Racine Danish Kringle, and Oskri bars made in Lake Mills, Wis., were featured in store circulars. More than 35 retailers included POS signage to call out the special products.

Lake Mills Market took part in the promotion. The retailer also features locally grown produce that’s prominently displayed and accompanied by signage.

Mitch Eveland, owner

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Cross-merchandising, Cross-winning Cross-merchandising benefts the shopper, the CPG manufacturer, and the retailer. Shoppers beneft from having their needs met and a better shopping experience. Manufacturers beneft from more collaborative relationships with retailers and, in turn, a better understanding of the shopper; better in-store execution; and increased revenues from sales lifts. Retailers also gain through a more collaborative relationship with vendor partners, as well as the greater understanding of their customers, and more satisfed shoppers translate to more loyal customers and increased sales.

Collaboration between retailer and CPG vendor partners is the linchpin that can carry a program to success. While retailers have data that tells them what’s in their shoppers’ baskets, they usually rely on vendors for deeper analysis that provides the why behind the buy.

Graeme McVie, VP and general manager of business development at LoyaltyOne, a Cincinnati-based provider of loyalty marketing and programs, says it’s imperative that factors such as lifestage, lifestyle, and the potential value by customer and category all be taken into consideration when developing cross-merchandising programs. Lifestages might be considered fairly universal, he says, including young singles, young couples, families with babies, and so on, through seniors and grandparents. “But you can’t assume that someone buying diapers automatically is a family buying for a baby,” he cautions.

“It could be a grandparent or caregiver, so not the primary diaper shopper, but rather someone buying for a few weeks.”

Lifestyle further defnes the shopper, he says, such as time-starved or convenience-focused. “Do you

of the market, brings his store staff in on the locally grown promotion. Checkers, for example, can use the locally grown angle to engage with customers. “We provide a cheat sheet at the register for cashiers,” explains Eveland. “It gives them a heads-up as to where the local produce items are from that day. Even with signage in the department, many folks don’t notice it. It also gives our staff easy subject matter instead of just talking about the weather.”

Such programs are a great way to emphasize support for locally produced products and raise awareness of how much Wisconsin has to offer. “It reinforces our commitment to sourcing local product,” notes Eveland.

| Progressive Grocer | Ahead of What’s Next | October 2014

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Grocery/Frozen & Refrigerated

SUPER SELLING Successful crossmerchandising initiatives consider lifestage and lifestyle, as well as the value of the promotion to the customer and the benefit to the category.

Cross-merchandising

have a high cooking aptitude? Are healthy products important to you? By including these, you put together more robust support for your need states,” notes McVie. “If you’re time-starved and very healthoriented, you might not want prepared meals. You might want simple things to put together to cook from scratch, such as a pack of fsh to poach.”

By knowing what strengths the store can deliver against — fresh, value, convenience — retailers and CPGs are better able to design the most appropriate solutions, be it baby, special dietary issues, family meals, or entertainment.

Low-hanging Fruit “Meal solutions is our largest driver for cross-promotions,” says Price Chopper’s Broker. “Often, just deciding what to make for dinner is our customers’ largest hurdle. Anything we can do to help make that process easier goes a long way.”

A typical multiproduct promotion at Price Chopper will include two to four items. “Te displays work best when they are simple and don’t require the customer to make a lot of choices,” notes Broker.

“Seasonality absolutely plays into the cross-merchandising calendar,” she adds. “Fall is a great time

for pairings: apples and cheese, [and] ingredients and fxings for chili and other slow-cooker meals ft right into our overarching strategy.”

For example, a summer promotion at Price Chopper featured BelGioioso fresh mozzarella, tomatoes, basil and balsamic vinegar, which are frequently featured in salad and appetizer recipes.

At Lake Mills Market, in Lake Mills, Wis., owner Mitch Eveland is proud of his fall pumpkin

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Grocery/Frozen & Refrigerated

Cross-merchandising

display. Cross-merchandising displays not only ofer a solution, he asserts, but also make their mark on consumers who might not be ready to buy a pumpkin in September. An eye-catching display with the right mix of products is something shoppers will remember, and when it’s time to buy, they’ll know who’s carrying the products they need, he maintains.

Te key is creating a sense of theater, providing enough engagement to draw the consumer. Seasonal oferings, with the respective imagery, represent easy solutions: anything from football tailgate parties to Halloween decorations and treats. Decorative items in particular may be considered nonessential, but in a well-designed promotion, delivering the “wow” factor that resonates with shoppers will make these oferings must-haves. PG

Digital Cross-merchandising Fetch Rewards, based in Madison, Wis., is a startup that’s rolling out an app by the same name with the intention of uniting grocers, brands and consumers.

The app, which incorporates gamification and standard shopping tools such as lists, savings and specials, includes a seamless way to digitally cross-promote merchandise.

Shoppers scan the bar codes of products to learn of potential savings. Along with the savings, they can be led to other products, either with or without additional incentive for the shopper. Savings on a purchase of hot dog buns might be increased with the purchase of hot dogs, for example. If both hot dogs and buns are scanned, a reminder to buy mustard, soft drinks or beer might also appear.

This way, products are cross-merchandised, and it might not include initial savings, but could help a shopper accrue points in the Fetch system. When enough points are accrued, shoppers can redeem them for greater savings on groceries at participating retailers.

For a profile and photos of Lake Mills Market, visit Progressive Grocer Independent’s October issue at Progressivegrocer.com.

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• Purchases of healthy frozen meal options are on the rise.

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• Four out of five meals are prepared at home rather than dining out.

New social media strategies are driving home bakers to supermarkets this holiday season.

A

s the most frequently bought home baking product, sugar is the key to attracting home bakers during the year-end holiday seasonâ&#x20AC;&#x201D;and capturing incremental holiday baking ingredient purchases. Increasingly, these baking consumers are relying on social media to fnd and share baking recipes, learn more about baking techniques, and connect with their favorite brands.

54.3%

I use online cooking or recipe websites to get baking recipe ideas.

43.3%

I use online ingredient/brand websites to get baking ideas.

Source: Mintel

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In fact, market research suggests that when consumers engage in positive ways with a brand through social media, they are more prone to be brand loyal. Promoting branded sugar products from companies that know how to strategically leverage their digital connections can help retailers push higher sales totals in the baking aisle. That’s why Domino Foods, Inc.—whose Domino® Sugar and C&H® Sugar are used by more than 7 in 10 frequent bakers who used sugar as a sweetener in the past year, according to Gallup—has launched new digital initiatives designed to engage with consumers through fve popular platforms:

Pinterest for links to recipes based on seasonal trends and baking techniques

Facebook for consumer community with recipes, baking tips and featured holiday postings Instagram for photos that capture the fun of baking

Twitter for real-time engagement, baking tips and recipes

YouTube for videos that teach and inspire home bakers, including 12 new two-minute “How To” baking segments being rolled out for the 2014 winter holidays

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With shoppers now expecting brands to be available online to respond to questions and offer assistance, Domino Foods “is aiming to be a leader in the digital marketing space as a CPG brand,” says Maria Machita, Vice President, Consumer Sales & Marketing.

“Over the past 12 months, we’ve felded more than 215,000 incoming messages from our consumers through [our] online channels. Our aim is to delight the people who buy our products by being highly responsive to their inquiries and providing a positive brand interaction.”

Blogging for a new generation of home bakers To connect personally with younger Millennial consumers (ages 18 to 29), who tend to turn to the Internet frst when looking for recipes and baking help, Domino Foods unveiled two new blogs in July 2014:

Domino® Sugar’s Confectionista Project

C&H® Sugar’s Confectionista Project

Each blog features a 20-something professional with no baking background, who has been challenged to bake recipes from Domino Foods’ database and document her experiences. With more than 25,000 page views per blog site in the frst month*, the Confectionista Project blogs have generated a signifcant increase in online consumer activity. Overall website traffc is also up nearly 25% compared with the same time period in 2013, and website visitors are spending more time on site, showing a higher level of engagement from consumers who discover the brands through the blogs. *As reported by the websites’ Google Analytics, via Three Deep Marketing; July 2014

ADVERTORIAL

Specialties of the season Just in time for the 2014 holiday baking season, shoppers will be able to access fast, easy baking solutions through both the Domino® Sugar website (www.dominosugar.com) and the C&H® Sugar website (www.chsugar.com): n Domino® Sugar’s 1001 Cookie Starter Mix, a recipe base for gingerbread cookies, sugar cookies, fudge balls, brownies and more n Tips for hosting a C&H® Sugar Holiday Cookie Swap, with free holiday recipe labels to download and an invitation to share party photos with the C&H® Sugar Facebook community n Domino® Sugar’s Frosting Starter, a basic buttercream recipe base that can be favored and colored in endless ways n The C&H® Sugar All-in-one Cake, a simple recipe for preparing both cake and frosting

by combining a 2-pound bag of powdered sugar with other readily available ingredients Both brands will also have a new holiday feature for 2014 on their websites and on Pinterest, with ideas, recipes and printable tools for hosting a Holiday Cookie Decorating Party

Where to find Domino® Sugar and C&H® Sugar brands Domino® Sugar

C&H® Sugar

https://www.facebook.com/dominosugar

https://www.facebook.com/CandHSugar

https://twitter.com/dominosugar

https://twitter.com/candh_sugar

http://www.pinterest.com/realdominosugar/

http://www.pinterest.com/candhsugar/

http://instagram.com/dominosugar

http://instagram.com/chsugar

http://www.youtube.com/user/RealDominoSugar

http://www.youtube.com/user/RealCHSugar

Domino Foods, Inc. sells the nation’s best known sugar brands— Domino® Sugar in the East, C&H® Sugar in the West and Florida Crystals® Sugar nationally. Domino Foods, Inc. is part of ASR Group, the world’s largest refner of cane sugar and the largest marketer of refned sugar in the United States.

ADVERTORIAL

©2014 Domino Foods, Inc.

Contact: Nancy Barbee Marketing Manager nancy.barbee@asr-group.com

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Meat Pricing

Fresh Food

More Cash, Less Cow

Grocers need to be proactive in helping shoppers navigate a more expensive meat case.

By Jim Dudlicek

W

eather, illness and consistent demand amid dwindling supply have conspired against grocery shoppers’ eforts to get the most bang for their protein buck at the supermarket meat counter, putting increased pressure on retailers to deliver economical center-of-plate solutions to consumers.

“Shoppers are contracting their protein purchases, but they have not stopped buying,” says Kelly Mortensen, meat director for Salt Lake City-based Associated Food Stores. “Consumers are extremely selective when they make their purchases. Tight budgets are chasing the value items, but they still want quality, as natural and organic sales are outpacing some of the other commodities — if you can fnd them.”

Dollar sales are steady due to price increases but volume is down or fat, Mortensen observes. “Chicken has been the big winner in the latest turn of events, but we can’t get enough to meet our demands,” he says. “Poultry is trying to react to an 18 percent increase in sales, but they are doing it with a 2 percent increase in production. We thought pork would be our savior early this year ... It is hard to get a break in the protein category.”

Sales data from Nielsen’s Perishables Group indicate that for the 13 weeks ending July 26, 2014, consumers traded down to chicken products as prices increased, notes Kent Harrison, VP of marketing and premium programs at Dakota Dunes, S.D.-based Tyson Fresh Meats. For fresh beef, volume sales decreased 5 percent compared with the same period a year ago, as average retail prices increased 10.3 percent. During the same time period,

Although price is a big issue, an even bigger issue is supply.

It is now who can outbid the other for what protein is remaining.”

—Kelly Mortensen, Associated Food Stores

October 2014 | progressivegrocer.com |

111

Fresh Food

Meat Pricing

volume sales for fresh pork decreased 11.3 percent on an increase of 18.6 percent in average retail Retailers have price. Chicken was the only category up in pounds: an opportunity Volume sales increased 2.4 percent, even with an increase of 4 percent in average retail price.

to pull consumers in and secure their loyalty with strong brands that provide value.”

—Kent Harrison, Tyson Fresh Meats

Quality Versus Quantity “With meat prices on the rise, retailers must make sure they are diferentiating themselves from competitors,” Harrison says. “One way to do this is through branded meat programs. Retailers have an opportunity to pull consumers in and secure their loyalty with strong brands that provide value to consumers.”

Retailers also need to make sure they have the right product mix to meet their consumers’ needs, he asserts: “We continuously work with our retail partners to provide them with the right cuts to make sure they have the best product mix possible in their meat cases.”

But as Mortensen notes, that can be a challenge under current market conditions.

“Although price is a big issue, an even bigger issue is supply,” he declares. “Proteins are all connected, and when one is in stress, it is refected in the others.

We have lost protein, and demand has not come of

to equal out the shorter supply. It is now who can outbid the other for what protein is remaining.”

Unfortunately, this scenario doesn’t bode well for cost-efective solutions, according to Mortensen. “We are not going to compromise quality to sell inferior product, even if it was available. We do not think that is a long-term solution,” he says. “We can’t have consumers having a bad experience with our products, or we will lose them completely.”

Tat’s a concern not just for individual retailers, but also for the entire category.

“Consumers are highly price sensitive when it comes to purchasing meat,” afrms Michael Uetz, principal at Chicago-based Midan Marketing, a marketing and communications frm dedicated to the meat industry. “If we do not pay more attention to consumers’ needs, we will continue to see our customers buy less and less often, and begin looking for alternatives for their protein and for their center-of-the-plate food.”

Retailers and suppliers alike need to stay on top of the demands of Millennial shoppers, an increasingly important demographic with spending power poised to surpass that of Baby Boomers in the not-too-distant future. Uetz says this is a concern in light of increased carcass sizes for all proteins.

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injury-susceptible departments. Additionally, by keeping fingers, tools and counters clean, easy-open packaging reduces cross-contamination risks, helping safeguard both workers and the customers they serve from foodborne illness.

Sealed Air’s landmark Cryovac Grip & Tear® vacuum bag packaging enables users to open select fresh red meat, poultry, smoked and processed meat, and deli meat and cheese products by pulling a convenient exterior tab. As a result, both retail workers and consumers no longer need knives or tools to reach sealed items, virtually eliminating a common injury source.

Beyond these safety benefits, retailers can leverage the easy-open vacuum bag for improved presentation and quality on branded and private-label packaged products, ultimately maintaining brand image while delivering a stronger package to customers. Cryovac Grip & Tear ® vacuum packaging offers superior shrink and toughness without compromising its oxygen barrier to enhance freshness and performance. Through a reinforced, skin-tight vacuum seal and the elimination of tool and knife use, the package also shields products from puncturing and scoring. This measure adds another layer of product quality preservation for end-users.

Any reduction in the need for the use of sharp items by retail foodservice, deli, back-of-house and butcher teams has the potential to significantly improve safety and productivity within what have traditionally been the most To learn more about Sealed Air’s Cryovac Grip & Tear ® vacuum bag, and Sealed Air’s entire line of convenience packaging technologies, visit gripandtear.com or sealedair.com/foodcare.

To learn more about recent industry trends and consumer demands surrounding convenience packaging, scan the QR code:

Fresh Food

Meat Pricing

“With larger animals come larger cuts and package sizes, and with that, even higher per-unit prices,” he says. “We’re seeing shifts in large segments of the population, who are now looking for smaller package sizes and smaller cuts. Tis is especially the case with Millennials and Boomers.”

The question is, when will the consumer say no to meat protein and try and get it elsewhere?”

—Kelly Mortensen, Associated Food Stores

114

Selling the Whole Package Indeed, packaging will play a key role in making sure budget-minded shoppers keep coming back to the meat case.

According to the “2014 Power of Meat Report,” an annual survey of consumer attitudes and purchasing habits regarding retail meat and poultry, commissioned by the American Meat Institute (AMI) and the Food Marketing Institute (FMI), price per pound and total package price remain the top two factors infuencing consumer purchase intent and volume, notes Jerry Kelly, national retail account manager for the food care division at Elmwood Park, N.J.-based Sealed Air Corp., which helped sponsor the report.

“As natural and market factors continue to escalate meat prices to record highs, retailers face added pressure to deliver additional value in the meat case to drive continued consumer spending,” Kelly asserts. “Given these unique market conditions, there is great opportunity for retailers to leverage packaging innovations to help consumers achieve greater product quality and meal-planning fexibility, and ofset the impact of higher prices.”

Among the innovations: vacuum packaging, which can preserve the taste, lengthen the shelf life and enhance the visual appeal of meat products.

“Since this format is freezer-ready, customers can store proteins longer without concerns surrounding quality or freezer burn,” Kelly says. “Tis enhanced fexibility also gives consumers the ability to stock up during meat sales, while also being more inclined to purchase expensive cuts, knowing they can store and cook them within a longer timeframe.”

Even with higher prices, Kelly says, “the proft potential for retailers is signifcant,” citing a 2013 Sealed Air/Beef Checkof study that found purchase intent increased among consumers who understood the benefts of vacuum packaging. “Additionally, with less wasted or unsold products, there comes a potential reduction in shrink for retailers, which is essential for maintaining a healthy bottom line,” he adds.

Further, grocers who understand and proactively pursue their growing roles as educators can infuence protein purchases through in-store cooking and storage guidance. “Consumers may be especially unwilling to spend more on a product they ultimately may not be able to fully enjoy. However, the potential for retailers to capitalize by helping consumers achieve a tasty, quality fnal product are evident,” Kelly says, pointing to the “Power of Meat Report,” which reveals a strong demand among shoppers for such guidance from grocers.

| Progressive Grocer | Ahead of What’s Next | October 2014

Photo courtesy of sealed air corP.

“Te more comfortable that consumers feel with preparing meat, the more likely they are to purchase and experiment with diferent cuts and proteins,” Kelly concludes — perhaps regardless of the market’s current escalated prices.

Prices Up, Profits Down For the foreseeable future, cow herds and the number of cattle coming to market aren’t going to increase signifcantly, due to the continuing efects of the drought in the Southwest, Tyson’s Harrison says. “However, there will be some herd-rebuilding eforts, which will likely lead to a pricing plateau at retail for beef products at some point in the distant future,” he observes, warning that “2015, however, looks like another year of high cattle and high beef prices.”

On the pork side, Harrison adds, as the effects of PEDv (porcine epidemic diarrhea virus) are mitigated through vaccine usage and adjusted biosecurity practices, “we will see an increase in pork supplies that will help create a more traditional balance between supply and demand.”

Associated’s Mortensen concurs that prices will remain elevated for the time being. “Te question is, when will the consumer say no to meat protein and try and get it elsewhere?” he asks, adding: “Te latest trends in diets all place a very big signifcance on protein, so I don’t see demand falling sharply. Te nutritional aspects of protein are fnally getting some respect in at least some medical and dietitian discussions.

“Meat is still center of the plate, and I believe most grocery stores acknowledge this and still try and bring consumers into their stores with meat features,” Mortensen continues. “We are not making the proft on these items that we once were. Some of these features are a loss leader or are subsidized by other commodities in the stores.” PG To learn about the latest meat price trends, visit Progressivegrocer.com/meatprices.

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2014 Retail Produce & Floral Review

Horn of

Plenty

With produce sales trending at all-time highs, category leaders have ample cause to trumpet the benefits of their departmentâ&#x20AC;&#x2122;s bounty to more health-conscious consumers.

Produce SaleS change 12 Months Ending July 2014

Increased

Decreased

15.1% 9.2%

Stayed the Same

75.7%

4.5%

net change (%)

Analysis by Meg Major | Research by Debra Chanil

T

hough the average supermarket fresh produce department has been riding a wave of unprecedented gains during the past 12 months, retail category executives are modestly cautious about getting carried away by the possibilities of ever-riper category growth for the balance of the year, according to consensus viewpoints expressed in Progressive Grocerâ&#x20AC;&#x2122;s 2014 Retail Produce Review.

While fresh produce has long been the crown jewel of most supermarketsâ&#x20AC;&#x2122; overall fresh statement, the department is progressively taking on an even greater role in light of heightened consumer desire for more nutritious, less processed foods. And though fresh produce purchases continue to reign supreme for main meals, a growing number of consumers are embracing smaller meals and snacks, and are turning to conveniently packaged fruits and vegetables to fll the bill.

To take full advantage of the plentiful opportunities abounding thanks to higher fresh vegetable and

exPected for total 2014 70.7%

26.8% 2.5%

3.2%

net change (%)

Source: Progressive Grocer Market Research, 2014

October 2014 | progressivegrocer.com |

117

2014 Retail Produce & Floral Review fruit consumption, savvy store leaders are playing up sensory cues with more impactful displays accentuating a global — and, as often as possible, a local — bounty.

Mindful that the department is a top factor for today’s consumers in deciding where to shop, retail produce directors can ill aford to rest on traditional tactics to ensure that their stores’ fresh produce

proposition is maintained. Tat’s why many are turning up the wattage on planned investments of energy-efcient lighting, cases, signage and mobile merchandisers, as depicted on the chart on page 120 — just one of several important takeaways revealed in this year’s Retail Produce & Floral Review.

Results for PG’s exclusive, retailerdriven produce study were once again calculated from the direct input of a cross-section of national, regional and independent category leaders responsible for their stores’ produce procurement decisions. Responses to the annual benchmarking study, which unfolds on these pages, captures average sales and operational performance data for the 12-month period ended July 2014. Te study also features

Produce Shrink current Percent of Produce Shrink current year ago

5.4% 5.1%

comPared with laSt year, Shrink haS: Increased

Decreased

Stayed the Same

current

27.5% 47.5%

25.0% year ago

30.0% 45.0% 25.0% Source: Progressive Grocer Market Research, 2014

118

| Progressive Grocer | Ahead of What’s Next | October 2014

the better banana co.

2014 Retail Produce & Floral Review

floral sales change

Produce sales by segment

12 Months Ending July 2014

Percent

random-Weight vegetables random-Weight fruits Packaged salads organics local fresh-cut fruit Packaged fresh-cut veggies store-brand Produce (all) sPecialties/exotics floral Premium juices nuts other items refrigerated dressings and diPs

28.5% 28.2 9.6 7.2 5.5 3.7 3.5 2.6 2.2 2.1 2.0 1.9 1.3 1.7

Increased

1.8%

21.7% Source: Progressive Grocer Market Research, 2014

Produce census 2014

current year

year ago

33.0%

32.8%

17.4%

17.1% 2,865 sq. ft.

Percent of total store area

12.0%

12.1%

Weekly sales Per square foot

$10.02

$9.77

full-time emPloyees Per store

2.6

2.3

Part-time emPloyees Per store

$56.2b 12.1% $28,852 $1,500,307

2.8

2.5

average Weekly sales Per store average annual sales Per store

Source: Progressive Grocer Market Research, 2014

investment Plans for Produce/floral (any Plans-net) energy-efficient lighting/chill cases (net) energy-efficient lighting energy-efficient chill cases signage mobile merchandisers Portable bins theater fixtures/equiPment floral disPlays/bins other investment Plans no Plans

Plans in the next 1-2 years

future investments

Wish list

72.7% 54.5 50.0 18.2 50.0 36.4 31.8 22.7 13.6 18.2 27.3

50.0% 31.8 18.2 22.7 13.6 13.6 15.9 18.2 22.7 9.1 50.0

54.5% 40.9 13.6 40.9 15.9 30.7 27.3 34.1 27.3 9.1 45.5

Source: Progressive Grocer Market Research, 2014

120

$53.8b 12.0% $27,978 $1,454,856

Produce dePartment share of suPermarket sales

Source: Progressive Grocer Market Research, 2014

52-week point-of-sale data from Nielsen Perishables Group FreshFacts, which appears on page 124.

Among the key highlights of this year’s annual produce survey, 75.7 percent of PG’s produce survey participants confrmed stellar performance during 2014 thus far, while 9.2

2013 total Produce dePartment sales

2,880 sq. ft.

average dePartment size

40.8% net change (%)

Produce oPerations

net Profit

Stayed the Same

37.5%

Source: Progressive Grocer Market Research, 2014

gross margin

Decreased

| Progressive Grocer | Ahead of What’s Next | October 2014

Here’s to the next

1,000,000,000 lbs.

Seems like yesterday we eclipsed the 1 billion pounds threshold for Hass Avocados consumed, and now we’ve got 2 billion pounds in our sights. To keep the momentum going, the Hass Avocado Board is introducing the Love One Today™ program to help promote our nutritional research initiatives and make avocados even more compelling to consumers.

Visit HassAvocadoBoard.com to learn more about the Love One Today program and for the latest retail data, consumer insights, category reports, and more.

© 2014 Hass Avocado Board. All rights reserved.

2014 Retail Produce & Floral Review Merchandising TacTics

alongside 26.8 percent who anticipate status quo elsewhere in The sales for the remainProduce/Floral sTore (crossdeParTMenT ProMoTion) der of the year, ofset by a mere 2.4 percent who foresee neT (any Merchandising TacTics) 100.0% 52.2% potential sales declines. signage For weekly sPecials 100.0 30.4 Further, as depicted on the chart on counTry-oF-origin signage 95.7 21.7 page 120, while retail produce teams are increasingly stocking more ready-to-eat “local” signage 78.3 17.4 convenience products — such as packaged saMPling 69.6 13.0 salads (9.6 percent), organics (7.2 percent), signage For Meal/eaTing suggesTions 56.5 32.6 local (5.5 percent), fresh-cut fruit (3.7 percent) and veggies (3.5 percent), store cooking/new ProducT deMonsTraTions 13.0 34.8 brands (2.6 percent), and specialties/exotics oTher MenTions 17.4 13.0 (2.2 percent) — random-weight vegetables none 0.0 47.8 and fruit, at 28.5 percent and 28.2 percent, Source: Progressive Grocer Market Research, 2014 respectively, are still driving produce sales.

And although foral sales contribute an average 2.1 percent to the parent produce department’s total pie, percent reported declines, rounded out by 15.1 perthings are coming up roses for 40.8 percent of retail panelists, cent whose produce sales are holding the line with last as noted on the chart on page 120, alongside nearly the same year’s. However, when asked what they anticipate will (37.5 percent) who reported steady comparable foral category unfold with produce department sales during the most sales, good for a 1.8 percent overall gain. Te remaining 21.7 infuential selling period of the calendar year (Q4), 70.7 percent, however, reported decreased foral sales. PG percent of panelists expressed a more cautionary view,

2014 Retail Produce & Floral Review Produce dePartment category Performance Total U.S., 52 Weeks Ending July 26, 2014

Category

Fruits Berries Apples Grapes Citrus Bananas Value-added Fruit Melons Avocados Stone Fruits Cherries Specialty Fruits Pears Pineapples Other Fresh Fruits Vegetables Packaged Salad Potatoes Tomatoes Cooking Vegetables Onions Value-added Vegetables Peppers Lettuce Carrots Mushrooms Cucumbers Squash/Pumpkins Celery Cooking Greens Corn Beans Radishes Specialty Vegetables Sprouts

Dollars per Store/Week Percent Change vs.

Year Ago

Volume Percent Change vs.

Year Ago

Volume Percent on Promotion

$3,986 3,062 2,793 2,748 2,747 2,064 1,203 1,173 982 599 535 434 291 47

4.9% -1.6 5.5 4.7 0.2 9.4 3.1 14.9 3.2 -14.8 3.5 4.9 8.6 -8.5

1.5% 2.0 2.7 -2.2 0.3 4.7 3.3 0.8 -1.5 -13.2 -3.8 7.2 16.7 -7.8

39.0% 19.6 35.1 14.8 3.6 18.0 29.2 26.4 32.5 48.5 21.3 23.7 31.2 7.6

$3,433 2,619 2,567 1,803 1,559 1,507 1,395 1,280 911 837 732 646 513 401 372 149 68 25 21

6.8% 9.3 2.2 7.4 1.2 11.0 5.6 -1.8 -0.5 2.0 6.2 8.4 -2.9 15.2 0.4 -3.5 2.4 3.5 -11.2

3.0% -3.6 0.7 3.1 0.9 11.1 4.0 -1.6 -0.5 0.1 2.3 4.1 -1.2 11.6 -2.2 -4.0 1.9 2.0 -13.1

25.2% 24.3 21.5 24.8 14.8 14.1 20.1 12.7 17.5 21.5 15.1 22.2 21.5 16.5 40.3 31.9 8.7 12.5 6.2

Dollars per Store/Week

Volume Percent on Promotion Change vs.

Year Ago

2.0% -0.4 -1.7 -2.7 0.3 -0.9 -3.0 -0.9 0.6 -2.0 -3.1 -3.6 0.6 1.0 -1.6% -2.9 -1.1 -1.7 -0.3 -1.7 0.0 -3.0 -0.8 0.9 -2.2 -2.5 -0.8 -0.6 -0.3 0.0 -2.8 -5.1 0.1

Average Retail

Average Retail Percent Change vs.

Year Ago

$2.99 1.58 2.19 1.32 0.57 2.94 0.57 1.12 1.80 3.21 1.05 1.45 2.63 5.76

3.4% -3.5 2.7 7.0 -0.1 4.6 -0.2 14.0 4.7 -1.9 7.6 -2.1 -6.9 -0.8

$2.72 0.70 2.20 1.65 0.98 3.01 2.19 1.78 1.68 2.42 0.98 1.53 1.74 2.02 0.49 1.55 1.02 1.39 1.85

3.7% 13.4 1.4 4.2 0.3 -0.2 1.6 -0.2 0.0 1.9 3.8 4.2 -1.6 3.2 2.7 0.6 0.4 1.5 2.2

Source: Nielsen Perishables Group FreshFacts®

During the latest 52 weeks, fruit accounted for 46.9 percent of produce sales and vegetables accounted for 43.1 percent.

However average vegetable dollar sales growth (4.9 percent) outpaced fruit growth (3.5 percent).

Within the fruit super-category, the majority of categories increased average weekly dollar sales, and increased or maintained average weekly volume sales.

Avocados posted the largest dollar increase, as a result of a 14 percent average retail price increase. Value-added fruit and pineapples also posted strong dollar sales growth during the latest 52 weeks. Value-added fruit increased average dollar sales by 9.4 percent, in part due to a 4.6 percent increase in average retail price – however this did not negatively impact volume sales,

124

which increased 4.7 percent. Pineapples increased average dollar sales by 8.6 percent and volume by 16.7 percent, partly because of a 6.9 percent decrease in average retail price.

Within the vegetable super-category, the majority of categories increased both average dollar and volume sales, and average retail prices increased or remained steady in all but one of the 19 vegetable categories. Value-added vegetables and cooking vegetables (which includes products like kale, spinach and collard greens) both increased dollar and volume sales by more than 10 percent during this period, reflecting a sustained consumer demand for convenience and health products. Sprouts, the lowest-selling vegetable category, posted the largest vegetable sales decreases.

| Progressive Grocer | Ahead of What’s Next | October 2014

Fresh Food

Produce

Budding

Brands Produce takes a cue from center store, with packaged goods that are fast gaining a loyal following.

By Jennifer Strailey

F

resh produce has long been a decisive factor in terms of where consumers shop. Tese days, that freshness increasingly has a name.

“Branded produce is obviously a hot topic,” says Jonna Parker, director of account services at Nielsen Perishables Group, in Chicago. “In talking with our produce clients, [we fnd that] all of them have a brand in play.”

“Produce suppliers are also stepping up their game,” continues Parker. “Tey’re asking themselves, ‘How do we operate more like a center store manufacturer?’ Produce companies are supporting their brand, playing up brand image, introducing new packaging, and even running TV ads and placing coupons in the Sunday paper.”

However, leading suppliers aren’t purely focused on selling what they already do well. “There’s been a shift away from a commodity volume sales mindset,” asserts Parker, who sees produce companies considering the needs of consumers and retailers like never before.

Whether it’s putting a handle on a bag of lemons, launching lunchbox-friendly veggies and dip, or targeting kids by making fresh foods fun, the produce industry is innovating with unprecedented speed and agility.

Produce suppliers Not surprisingly, sales of are also stepping branded fruit and vegetables are up their game. up. According to Nielsen PerThey’re asking ishables Group, branded fruit’s share of total fruit was 28 percent themselves, ‘How for the 52 weeks ending July 26, do we operate more 2014, up 2 percent from a year like a center store ago. Te contribution of branded manufacturer?’” vegetables to all vegetables was 29 —Jonna Parker, Nielsen percent for the 52 weeks ending Perishables Group July 26, 2014, also up 2 percent from the previous year.

126

| Progressive Grocer | Ahead of What’s Next | October 2014

AS P ARAGU S The Fastest Growing Brand in Produce is On Trend!

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Fresh Food

Produce

Additionally, branded fruits grew a healthy 14 percent in dollar sales over a year ago, while branded vegetable dollar sales rose 12 percent.

Retailers are staking their claim to the category as well, as evidenced by the noteworthy growth in private label fruits and veggies. Private label fruit is up 5 percent and vegetables up 8 percent over a year ago, according to Nielsen Perishables Group data

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sourced from key retailers that operate food, mass/ supercenter and club chains, comprising more than 18,000 stores.

Historically, notes Parker, retailers in this country haven’t necessarily wanted strong brands in produce, as fruits and vegetables traditionally have been a grocer’s unique stock in trade.

“But now, just as retailers will carry a particular brand of cereal they know their customers want, retailers are starting to carry brands in produce that bring consumers into the store,” observes at PMA! Parker. “Te strength of those brands #3444 is having a halo efect on the retailer, plus the retailer doesn’t have to invest the efort in building brands in produce themselves.”

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Brand Trust Ironically, one of the same factors driving the tremendous demand for local produce may also be in play with branded produce.

“Where brands really start to matter is where they tie into people having more interest and concern about where and how their food is produced,” says Samantha Cabaluna,VP of marketing and communications for Earthbound Farm, in San Juan Bautista, Calif.

“With branded produce, someone can have a relationship with it,” she adds. “While it’s not the same as going to a farmers’ market, you can — through the magic of digital marketing — have a conversation with the people behind the product.”

At Earthbound Farm, having a recognizable brand means being able to connect with consumers in a variety of ways, including the company’s Organic Bound online gazette. Trough gorgeous photography, step-by-step preparation tips and interesting recipes, the gazette has garnered more than 310,000 subscribers to date.

“People have always known that produce is healthy for you, but people don’t really know how to prepare it to make it delicious,” notes Cabaluna.

Tis becomes all the more important as consumers embrace strongerfavored greens like spinach, kale and arugula for their nutritional value, but are perhaps less familiar with how to prepare them.

“Te American palate is broadening,” observes Cabaluna, “and

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Fresh Food

Produce

Fresh Beverages Just as life shows no signs of slowing down any time soon, neither does the demand for the ultimate grab-and-go nutritional boost: fresh beverages.

“Grab-and-go is as hot as it’s ever been,” afrms Paul Gregg, EVP of Miami-based Raw Foods International. “From single-serve salads, juices and even fruit in the c-stores, this is continuing to trend up across all channels.”

Another trend, according to Gregg, is the desire to adopt “clean eating” habits, even when it comes to snacks and drinks on the go.

With that in mind, the newest RAAW (Refreshing Anytime AnyWhere) Juice, Tropical Bliss, is a combination of guava, carrots and pineapple that packs nutritional punch.

“It’s probably our most nutrient-dense introduction,” notes Gregg, who expects the new juice to join Raw’s list of other top sellers, which includes Strawberry Purple Carrot, Very Berry Wheatgrass and Passion Fruit Wheatgrass.

Te nutritional value, in combination with the natural energy boost that beverages like these provide, has a growing number of health-conscious consumers turning to them in lieu of an afternoon cup of cofee or energy drink, observes Gregg, who adds that sales of Raw Foods International juices have more than doubled year over year. consumers really look to retailers as trusted resources, especially in the produce department.”

Showing customers how to make vegetables into a dish that will delight the whole family is a powerful promotional tool.

“It’s not about just sticking recipes on a J hook — it’s the same principle as an impulse rack,” she continues. “You want the customer to see that if they buy something that looks great, and grab these two other items in produce, that they can make a killer dish.”

Where brands really start to matter is where they tie into people having more interest and concern about where and how their food is produced.” Side Show —Samantha Cabaluna, Earthbound Farm

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As health-conscious consumers look to get more vegetables in their diets, suppliers are introducing increasingly innovative and convenient side dishes.

Baloian Farms, of Fresno, Calif., has developed easy-to-prepare side dish solutions by adding seasoning packets to its 3-pack trays of squash. Flavors include roasted red pepper and garlic, as well as parmesan herbs. In minutes, consumers can slice, season and sauté the squash.

Salinas, Calif.-based Mann Packing is another supplier with a stable of easy-to-prepare sides featuring produce. Its Veggie Mac-n-Cheese meal kits, for example, contain fresh broccoli, ready-to-heat fresh pasta and a cheese sauce.

| Progressive Grocer | Ahead of What’s Next | October 2014

Big Budget for Small Shoppers Te produce industry continues to appeal to kids with fruits and veggies presented in packages emblazoned with superheroes, princesses and colorful characters. Now a number of retailers are expanding their real estate devoted to kid-focused produce.

Pittsburgh-based Giant Eagle is reportedly installing child-friendly healthful snacking sections in about 200 stores, while Walmart, based in Bentonville, Ark., is aiming to unveil similar sections at some 1,500 stores this fall.

Bolthouse Farms, of Bakersfeld, Calif., has pitched grocers on the concept. Te company

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Fresh Food

Many produce growers and marketers are now hiring former CPG marketers to join their teams and educate them on how to sell to consumers.”

— Karen Caplan, Frieda’s Inc.

Produce

recently introduced a variety of healthful snack items for kids, including puréed fruit tubes, all-fruit smoothies, and Veggie Snackers, baby carrots that come with favorful seasoning packets.

“Branding produce for children is a big trend right now, and has been for the last few years,” concurs Karen Caplan, president and CEO of Frieda’s Inc., in Los Alamitos, Calif. “Disney was defnitely the pioneer in this area, with placing their Disney characters on packaged produce.”

Crunch Pak, of Cashmere, Wash., was an early adopter of produce designed to appeal to kids. It continues to promote healthy eating through its Marvel’s Ultimate Spider-Man and Marvel’s Te Avengers, which are featured on packages of fresh sliced apples.

As the industry becomes savvier, Caplan sees a new breed of produce marketer emerging. “What has happened is many produce growers and marketers are now hiring former CPG marketers to join their teams and educate them on how to sell to consumers,” observes Caplan. “Until recently, most growers only thought about selling the product to their retail clients. Tey never had to think about selling it to the consumer.”

Grown-up Grazing As snacking continues to replace three squares for many Americans, a number of suppliers are introducing healthful

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snacks the whole family can enjoy.

“More and more consumers are snacking and looking for snacking solutions, especially on the go,” notes Jeremy Lane, sales manager for Baloian Farms, which recently introduced a grab-and-go cup of mini sweet peppers with a fat-free ranch dip.

According to Baloian Farms, a recent consumer survey found that 58 percent of those surveyed said they would purchase such a product if it were available at a retail location. “It’s highly portable and ofers another snack solution choice that is fresh and healthy,” adds Lane.

While vegetables with dips like ranch and hummus have a proven track record, several produce suppliers are introducing vegetable-and-seasoning combinations. For example, Bolthouse Farms’ ShakeDowns are a grown-up version of its Veggie Snackers. Te product line features fresh-cut peeled baby carrots paired with a natural seasoning packet in two varieties: Ranch and Chili Lime.

Farmington Fresh, a Stockton, Calif.-based supplier of fresh-cut apples, recently spiced up the produce biz, by striking a deal with Houstonbased Tajin International Corp. to include singleserve packs of Tajin chili pepper-based seasoning with single-serve packs of Farmington’s fresh-cut fruit for foodservice. Farmington now ofers six SKUs of fruit (sliced red apples, green apples, pears, peaches, nectarines and orange wedges) in 2-ounce to 4.7-ounce packs, each accompanied by a sachet of Low-Sodium Tajin.

Building Brand Awareness As produce suppliers diversify, strategic, impactful merchandising and displays become even more important sales drivers.

Fresh Food

Branded instore displays and bins are the No. 1 trigger for trial of our products.”

—Jasmine Hodari, Paramount Farm and Paramount Citrus

Produce

Los Angeles-based Roll Global, parent company of Paramount Farms, POM Wonderful and Paramount Citrus, is known for transforming commodities, such as pistachios, pomegranates, almonds and mandarins, into household brand names.

“Raising awareness in and out of the store is extremely important in branded produce,” says Jasmine Hodari, VP of marketing at Paramount Farm and Paramount Citrus. “One of POM Wonderful, Paramount Citrus and Paramount Farms’ main promotional plans is branded in-store displays and bins, as we’ve learned they are the No. 1 trigger for trial of our products.”

The Story of Salad The produce industry is seeing that salads get their due as center-of-the-plate meals. With the addition of protein, and f lavorful combinations of fruits and veggies, salad bowls are bowling over consumers.

Touting them as “complete meals,” Del Monte Fresh Produce N.A. Inc., of Coral Gables, Fla., recently introduced single-serve salad bowls under the Nature Made brand. Te salad bowl

Pear Season Branded produce is sizzling stuff, and pears — that quintessential fall fruit — are no exception.

“More and more suppliers are engaging in interesting packaging and really taking pear marketing and merchandising seriously,” notes Cristie Mather, director of communications for the Pear Bureau Northwest, in Milwaukie, Ore. Through its USA Pears website, the bureau is offering tools to help grocers sell more pears, from bulk to branded. “Our online training program for retail personnel, whether professional or newbies, provides information about marketing and merchandising pears,” explains Mather. “It gives retailers a little bit of an edge for the performance of their pear category.”

2013 marked the inaugural year of the training program, which has been fine-tuned and recently relaunched. “It’s better than ever,” says Mather of the program, which takes just 30 minutes to complete. “It’s fun, interactive and easy to commit to memory.”

This year, participants who pass the training receive a pear marketing and merchandising certificate.

The bureau also offers two styles of an exclusive hat as a reward for taking part.

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range, made with Del Monte fresh fruits and vegetables, includes Caesar Salad with White Chicken, Greek Style Salad with White Chicken, Turkey and Bacon Cobb Salad, and a Chef Salad with Turkey and Ham. “Our focus is the on-the-go consumer seeking a convenient, healthy and complete meal,” says Dennis Christou, VP of marketing, North America for Del Monte Fresh.

Consumers are also getting smarter about the kinds of convenient foods they choose. As a result, it takes more than buzzwords to motivate them to buy.

“Right now, the overarching trend seems to be ‘no excuses,’” concedes Tristan Simpson, VP, corporate communications for Irwindale, Calif.based Ready Pac Foods Inc., whose Bistro Bowl Salads, Bistro Bowl Wrap Kits and Ready Snax Snack Packs ofer convenient solutions for consumers seeking fresh and healthy food.

She adds: “Consumers are growing savvier, and they aren’t satisfed with foods masquerading as healthy if they rely solely on ‘low-fat’ or ‘reduced-calorie’ labels. Tey want truly natural sources of nutrients, delivered in convenient and efcient formats.” PG

Mather is quick to point out that more than half of pears that are purchased are an impulse buy. USA Pears is hoping to change those stats, and get pears on more shopping lists, through its colorful new campaign that asks: “Want it Sweet? Check the neck to know if it’s ripe.”

“Research shows that fewer consumers than we would like know how to judge if a pear is ripe,” explains Mather. The campaign, which features a pear in an ice cream cone and another dressed as a cupcake, sends another message. “If you’re craving something sweet like ice cream or a cupcake, have a pear instead,” she urges.

The campaign, which will appear in publications including Every Day with Rachael Ray, Bon Appétit, Weight Watchers and the Food Network magazine, is expected to make 15 million print impressions, with an additional 15 million digital impressions beyond that.

Grocers interested in creating in-store excitement for the pear category can participate in the second annual USA Pear Retail Display contest from January to March 2015. The organization will be giving away more than $11,000 in cash prizes. Additional details can be found at www.usapears.org.

| Progressive Grocer | Ahead of What’s Next | October 2014

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Emerging from a technology-driven world is a ‘participatory culture’ revolving almost completely around consumers, their digital activities, their desires, and how they’d like their world to look and work.

PMA (Fresh) Perspectives

By Eileen O’Leary

Up and Coming Rethink your role in the digital environment for relevance with generations to come.

T

hanks to the infux of mobile devices and constant online access, the intersection of food culture and digital culture is “Digital Food Life,” which is also the name of a new syndicated study from Te Hartman Group, now available through Produce Marketing Association (PMA).

Te smartphone plays a starring role in people’s digital food lives. Tese devices place a bottomless well of information at shoppers’ fngertips, covering everything from prices to ingredients to health and food science to peer networks and expert opinion to menus to location and availability of food and food services. Among smartphone users surveyed in the study, 81 percent say they believe that in the past 10 years, technology has genuinely improved how well they eat. More specifcally, smartphone users are twice as likely as nonusers to believe that digital technology has led to signifcant improvements in: Te quality of their eating, meaning how well they eat Teir ability to learn about and discover favors, ingredients and cuisines Teir ability to share knowledge and opinions about food How they go about getting something to eat, including planning for shopping, keeping track of what to shop for, and deciding where to shop or eat Being able to fnd places to shop or eat, including locating places and navigating to them Additionally, the study fnds that a surprising number of consumers rely on digital technologies to interact directly with food providers. Eighteen percent of smartphone users depend on digital services to order food to go from a local restaurant, and 13 percent have recently used an online service to sample unique snacks from niche market providers.

Generation Z, the group of people born after the Millennial generation, are reputed to move among diferent technologies as efortlessly as a multilin-

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gual person can switch among languages in a single conversation. Given their access to technology and so much information, these “digital natives” have wellformed opinions about seemingly everything, and as a result, their parents give credence to these opinions.

According to CommonSenseMedia.org, 75 percent of all children today have access to smart devices at home, and more use mobile devices than have never used them. Imagine what digital food life will look like in 10 to 20 years — or even just fve years from now — as Gen Z matures and technology’s infuence on consumers’ lives continues to build.

No wonder this generation wields unprecedented power in the American household, infuencing almost all purchase decisions, including groceries. Understanding the digital culture these kids are growing up in can help retailers reach multiple generations of shoppers now and lay groundwork for the future.

PMA (Fresh) Perspectives Cultural Shift Digital culture is more than social media, apps, banners or Google; it’s everything we think, say or do that’s in some way related to technology. Today, shoppers who interact with technology operate in this digital culture and are greatly infuencing the broader food culture.

According to Bellevue, Wash.-based Hartman, traditional business models are fading. Instead, emerging from a technology-driven world is a “participatory culture” revolving almost completely around consumers, their digital activities, their desires, and how they’d like their world to look and work. Today, it’s less about what shoppers want or need, and more about what they’re doing.

All of this digital activity is disrupting traditional relationships between companies and consumers, as well as signifcantly afecting the food marketplace.

Te Hartman study fnds that 70 percent of consumers use digital resources at least weekly to explore the food landscape. Tis new digital discovery and sharing of food are restructuring “shopping prep,” changing the way consumers think about menu planning.

Hartman’s study explains the following digital disruptions afecting the marketplace:

Syndicated Studies To help provide insights into consumer behaviors driving fresh fruit and vegetable sales, PMA is sponsoring three syndicated studies from the Hartman Research Group. “Digital Food Life 2014” has just been released and is now available on PMA’s website, www.pma.com. This trends report joins the already published “Outlook on the Millennial Consumer 2014.” The third report, “Organic and Natural,” will be published later this year.

Direct to consumer: Consumers are increasingly

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Digital media: Consumers are turning to each other

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products are emerging to align with the cultural shifts in how consumers eat, shop and live.

Speaking the Same Language Grocery retailers can discover, create and share information with consumers in this diverse and dynamic digital food life. Recognize that digital food life is a reality not just for adult demographics, but also all demographics, making connections with Gen Z just as important as connections with their parents or other adult decision-makers in their lives. Understanding this new family environment and the culture shaping young generations is the frst step to capturing their powerful infuence today and remaining relevant into the future.

Build your connections by marketing experiences that the whole family can beneft from, and when talking to kids, speak their language by addressing them in ways that speak to their expectations of creativity, customizability and personalization. PG Eileen O’Leary is the market research manager for Produce Marketing Association. With nine years of experience in research and development, O’Leary leads consumer-based research for the association.

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Signage

Equipment & Design

Vital Signs Supermarket signage is advancing through the implementation of LED and other technologies.

By Bob Ingram

A

s Bob Dylan might say, if he worked in a supermarket, “Te signs, they are a-changing.” And those changes in supermarket signage are the result of strides in lighting technology, material use, and the almost universal prevalence among shoppers of smartphones and other personal devices.

“Signage technology continues to advance at the same rapid pace as the LED industry,” notes Erich Bockley, signage portfolio manager at Osram Sylvania, in Danvers, Mass. “Supermarket signage, both interior and exterior, is inevitably going to convert to LED. Te energy, life, maintenance and image benefts for supermarkets in exterior applications are too great to ignore. Tis includes new construction and the retroftting of existing signs. Additionally, the ease of installation and application of LEDs in interior signage applications will provide supermar-

kets with an array of options to enhance the shopper experience; direct the attention of shoppers in vibrant, engaging ways; and diferentiate the brand of the supermarket from competitors.”

In San Antonio, Mikal Harn, president of Comet Signs, notes that his company has been a sign supplier for the past 10 years for H-E-B Grocery Co. there, one of the leaders in retail food marketing, and that “they force us to be on our toes.”

Harn points out that the improvements in LED technology from both cost and performance standpoints have resulted in 75 percent energy savings, adding that for a 120,000-square-foot H-E-B unit, according to Comet’s payback scenarios, there can be dramatic savings.

For exterior signage, Harn explains, “We focus a lot more on attraction and brand consistency. One of our taglines is ‘Bringing your brand to life.’”

He sees interior signage as being all about customer

SIGN LANGUAGE H-E-B “makes it fun for a sign company,” notes Mikal Harn, president of fellow San Antonio company Comet Signs.

October 2014 | progressivegrocer.com |

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Equipment & Design

Signage

With the

engagement. “It’s not just about informing,” he says, “but literally using diferent materials and treatments to attract the customer.”

Harn cites the evolution in materials as another leap forward in sign-making. He sees advances in computer routing, materials like steel and aluminum, and digital innovations as adding a lot more fexibility to sign manufacturing.

H-E-B, according to Harn, “really engages us in the design process. When you add a sign company at the end of construction, you’re not going to get as good a result. Te diference is interacting during the design phase.”

He adds that H-E-B customizes its signage based on customer research for each store, and that every store is focused on the community it serves.

“Tey’re not afraid to try something,” he observes.

“Tat makes it fun for a sign company.”

Bright Ideas At Osram Sylvania, Bockley notes that there’s an entirely new product line of LED BackLED and BoxLED modules specifcally targeted to illuminate channel letters and box signs in both interior and exterior applications. Tese products have higher efciencies and longer lifetimes than the traditional neon and fuorescent products that they replace, and will

Sign Retrofitting Made Easy At GE Lighting, in East Cleveland, Ohio, the new GE LineFit Light LED System was designed as a simple replacement for upgrading fluorescent cabinet and box sign lighting with energy-efficient LED lighting, providing 58 percent to 75 percent energy savings compared with T12HO fluorescents.

Available in 11 sizes and three color temperatures, the LineFit Light LED line offers versatility for a multitude of double-sided signage and styles, according to Mark Shepard, GE Lighting’s global product manager.

Using existing fluorescent sockets for a four-step installation, LineFit Light LEDs can be up and running in just minutes per fixture, slashing installation time and costs. Additionally, specialized rotating end caps ensure proper alignment and ultimate light output directed toward the sign face.

Shepard adds that GE’s patented OptiLens technology ensures that light is used efficiently, while at the same time helping to protect each LED against moisture, humidity, damage and corrosion. Unlike fluorescent options that emit light in a 360-degree pattern, each LED module is optimized to capture otherwise wasted light and redirect it where it’s needed toward the illuminated surface of the sign. OptiLens also eliminates the striping and shadows on the face of the sign that can occur with fluorescent tubes.

GE Lighting also offers a Tetra Signage design tool to enable customers to determine the type and quantity of the company’s LED sign-lighting products.

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use of LEDs, lower the energy consumpsupermarket tion and maintenance costs for supermarkets. signage will “Te brand image of the become an store can also beneft from integrated the bright look of LED-lit design element signage, and there is the of the store immeasurable beneft of that serves to having signage that doesn’t inform, direct sufer from outages or dark and delight letters,” he points out. customers as Bockley says that for soon as they interior retail applications, walk through Osram Sylvania has introduced a line of LED Tin the doors.”

Panel products available in —Erich Bockley, a variety of sizes to hang Osram Sylvania on a wall, in a window or from the ceiling, much like a picture frame.

“Tey are edge-lit with LEDs to produce a bright, uniform background to light signage graphics, photos, advertisements, point-of-purchase information, menu boards or specials — and changing the graphics in them is literally a snap,” he emphasizes.

Bockley notes that Osram Sylvania also ofers a line of highly fexible LED Border Flex tubing in a variety of colors mimicking the look of neon.

“With the use of LEDs,” he says, “supermarket signage will become an integrated design element of the store that serves to inform, direct and delight customers as soon as they walk through the doors.”

Rick Leeds, Osram Sylvania’s vertical marketing manager, observes that the use of smartphone GPS as a method of tracking consumers and identifying their purchasing needs, is an emerging technology for lighting and signage. “Imagine that a customer who has recently been searching for recipes on the internet comes into a store,” he says, “and suddenly the signage reacts to their presence and directs them toward the specifcs needed, and specials. Tat same customer receives emails or texts with instant coupons for those same items. It’s a developing technology, but it’s not perfected.

“I think that the future of supermarket signage could also include interactive tools that include consumer-specifc messaging right at their cart, tailored specifcally to their needs and purchasing preferences,” continues Leeds. “As people interact more and more with their media devices, they desire content that is specifcally tailored to their lifestyles.”

Comet’s Harn agrees. “It’s going to have a big impact,” he says. “Tere’ll be smartphone apps to control signage at store level. Tere’s a lot of work going on there. Care has to be taken because of privacy issues, but the younger people don’t mind that.”

And that’s yet another sign of the times. PG

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Technology

Mobile Apps

Grocery Apps

Gone Wild

Whether retailer-branded or third-party, today’s popular grocery apps offer consumers rebates, shopping lists and dietary guidelines.

By Tammy Mastroberte

T HITTING THE MARK HarvestMark’s ShopWell app enables shoppers on restricted diets to find food products that meet their needs.

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oday’s consumers are looking to save money, build lists, search recipes and check the nutritional ingredients in their favorite products, and the latest apps — both grocer-branded and third-party — are allowing them to do this and much more.

“Consumers want apps that help them and make the shopping experience faster and more efective,” Steve Bishop, managing director and co-founder of Brick Meets Click, a consulting frm based in Barrington, Ill. “Tey love deals and digital coupons, and based on our research, digital coupons and circulars are the No. 1 reason shoppers go to an app or a retailer’s website. It’s still the frst thing that drives consumers to action.”

Price-matching apps not specifc to a retailer ofer consumers the ability to compare ads, circulars and deals at a variety of retail locations in their area.

Some of the most popular include PriceMatcher, Grocery Smarts, Grocery Pal and Favado. Walmart also ofers its own version, Savings Catcher. If an

| Progressive Grocer | Ahead of What’s Next | October 2014

app user fnds a local competitor ofering a lower price on a product than that ofered by Walmart, the Bentonville, Ark.-based company will give her an eGift Card for the diference in price.

“Instead of going through and looking at all the circulars, with these apps, someone else has done it for consumers,” says Mark Heckman, principal at Bradenton, Fla.-based Mark Heckman Consulting, who works with supermarket retailers. “Right now, saving money, comparing circulars and downloading coupons are driving things.”

Also in the savings category is a group of apps providing rebates and cash-back post-purchase.

Tese include Checkout 51, SavingStar and Ibotta, which all allow customers to save money without coupons. Checkout 51 requires customers to take a photo of a receipt to redeem deals, and once an account reaches $20, the customer will receive a check in the mail, Bishop explains. Ibotta lets consumers transfer the cash earned from rebates to a bank account, using PayPal or Venmo.

Many leading grocers ofer digital coupons

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Technology

Mobile Apps

through their branded apps, including targeted promotions tied to loyalty programs and mobileexclusive ofers. Companies such as Hy-Vee, Safeway, Giant Eagle, United Supermarkets and Kroger either ofer digital coupons through their apps or enable customers to load digital coupons onto their loyalty cards.

“Customers are enjoying the many features available with the Giant Eagle apps, including viewing weekly sale items, quickly clipping and storing e-ofers to the Giant Eagle Advantage Card, and keeping track of [fuel rewards program] fuelperks!,” notes Daniel Donovan, spokesman for Pittsburghbased Giant Eagle.

Aside from coupons and rebates, consumers are also using the ability to build a shopping list, whether scanning products at home, pulling from past purchases or adding them from their favorite recipes. Tis is a staple feature of many of the grocerbranded apps available today, but there are also third-party apps dedicated to creating shopping lists, including Grocery IQ , Shopping List, Grocery List and MyShopi. Some also incorporate coupons into the ability to sync and share lists with others.

“After saving money, building a shopping list

would be the next requirement consumers are looking for,” Bishop says. “After that, it’s about personalized ofers through loyalty programs, recipes and other added content.”

Innovative Grocers When grocers frst began releasing mobile apps a few years ago, the main features included viewing weekly circulars, locating a store and building a shopping list, but today’s apps have gone further, and will need to continue to innovate to stay relevant, says Heckman.

“It’s about going beyond and saving the consumer time,” he notes. “Retailers need an app that breaks through the clutter to help people understand what their needs are, help them pre-shop at home or interface with the store so they can use it to check out. I see apps being used, but it’s amazing to me how few are seen in the hands of customers when actually shopping the store.”

Grand Rapids, Mich.-based Meijer’s mPerks app ofers coupons, builds in its loyalty program and allows customers to scan receipts, but it also helps them locate products in the store, and even gives them a heads-up on deals.

Te app “does a nice job, and it will even send a text message to customers letting them know when gas prices are getting ready to go up,” Heckman says.

Publix, based in Lakeland, Fla., also goes the extra mile with its app, allowing customers to preorder lunchmeats and set a pickup time. Tis fts into the consumer need for saving time and making the shopping trip easier.

“Tere is a refrigerated basket with the precut items so customers don’t have to wait in line,” Heckman points out. “Tese are the things that ofer time savings to a shopper.”

Pleasanton, Calif.-based Safeway ofers a separate app dedicated to grocery delivery, enabling customers to scan product bar codes at home to place orders. Some grocers, including Meijer and Giant Eagle, have launched separate pharmacy apps for shoppers looking to refll prescriptions, receive alerts when prescriptions are ready for pickup, and more, flling another need state for shoppers.

Even independent grocers are innovating their apps to do more, such as Wisconsin-based Madison Fresh Market, which launched its Fetch Rewards app enabling shoppers to scan items with a smartphone to check out, rather than having to place the contents of their shopping carts on the conveyor belts.

All About Nutrition For those struggling to engage consumers while they’re the store, the ShopWell app by HarvestMark reports that 50 percent of its usage takes place inside a grocery store. Consumers on restricted diets, such as vegetarian or gluten-free, can use the app to scan bar codes at home or in the store to check whether products meet their dietary needs, and the app will even suggest alternative options.

The app, which hit the market two years ago, has been downloaded by more than 1 million users, with 100,000 monthly unique visitors, according to Elliot Grant, founder and CEO of Redwood City, Calif.-based Harvest-

Mark. It can be customized to include weight management, heart-healthy, lactose intolerance and diabetes parameters, among others, and the company continues to add parameters based on customer feedback.

“Customers want more private label products added to the app, and also additional diets,” Grant notes. “Paleo is something we are looking into now.”

Te app lets users create a shopping list, compile favorite items and share with others via social media. It also engages them with weekly dietary tips targeted to the specifc goals entered, and gives rewards for completing surveys within the app, such as a $4 gift certifcate.

“We just launched the weekly quick tip, and more than 90 percent will hit the thumbs-up on a tip,” Grant says, explaining that the app allows the company to capture a variety of data, including what store a customer is shopping, trends in dietary needs, types of products scanned, and whether scans are taking place at home or at the store level.

Retailers and manufacturers can also purchase this information from the company.

“We can tell retailers who is shopping in their store and how it compares to shoppers in their geographical area,” Grant explains. “We might identify a spike in women looking for a heart-healthy diet, and can identify what products they are looking for, and we have geo-located every store in the United States, so when someone walks in, we know what store they are shopping.”

Right now, according to Grant, HarvestMark is working on taking these analytics a step further so it can not only identify what items are being scanned, and whether a shopper looks at alternatives suggested by the app, but also whether she ends up purchasing the item. PG

After saving money, building a shopping list would be the next requirement consumers are looking for.

Then it’s about personalized offers through loyalty programs, recipes and other added content.”

—Steve Bishop, Brick Meets Click

For more about grocery-related apps, visit Progressivegrocer.com/apps.

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Category

Today’s food shoppers expect to shop several stores instead of just one, and some of that spending is also moving online.

Progressive

Views

By Bill Bishop

A Glimpse of Next-gen

Food Stores

It’s wise for food retailers to plan their forthcoming store concepts now.

T

he next generation of food stores will operate on a whole new set of principles that will replace today’s self-service model with a personalized service model that lowers retailer costs and makes it easier for each shopper to satisfy unique needs.

Building a New Model Here are four things that will shape what these stores will look like:

New Footprints: Stores will be smaller, carry fewer products and be located closer to home. Tey will serve a broader set of everyday needs than stores of this size do today. Some will be operated by traditional food retailers, others by chain drug, convenience and dollar stores.

More Personalized Service: Stores will ofer “plat-

forms for customer engagement” located strategically across the store. Tere, staf (employed by the retailer or sometimes by brands) will establish customized service relationships with customers, providing the human touch in an otherwise efcient, high-tech experience.

Digital Connections Before, During and After Shopping: Stores will commu-

nicate with their customers more efectively and at a much lower cost, using a variety of digital touchpoints, from e-mail to text messages to social media.

Data-driven Operations: Assortment will be determined by combining data from scanning systems about what sells, with insight from customer feedback on what can sell. Modern inventory management will use data analysis to drive decisions about which items are stocked in the store and which are stored at a remote location, making it possible to minimize store size.

Creating New Dynamics Next-generation food stores will ofer retailers and product suppliers alike the opportunity to come

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up with diferent responses to what shoppers want.

Expect to see big changes in these four areas: Role Of Consumer Packaged Goods: A lot of the duplication currently on shelves results from carrying multiple brands and varieties of a single item. Reducing assortment has sometimes proved costly for larger stores, but it’s possible to do with smaller stores that are positioned diferently in the minds of shoppers.

Access to Unique Items: Today, strict shelf disciplines make it difcult for shoppers to fnd many unique items in food stores. Next-generation food stores will make it easy for customers to get these items, either at the store or through online ordering portals.

More Focus on Meals, Less on Ingredients: As time becomes even scarcer, more households will seek meal solutions. Next-generation food stores will likely position popularly priced meals as a destination.

Role of Brands in the Store: Next-generation food stores will invite brands in, on a selected basis, to play a more active role in the store and increase customer engagement without expending their own labor.

Start Planning Now Today’s food store shoppers aren’t satisfed with the traditional shopping experience. It takes them too long to fnd what they want, and their habits have changed for good. Now they expect to shop several stores instead of just one, and some of that spending is also moving online. Tis loss of sales isn’t sustainable in a slow-growth economy. If you haven’t yet felt these pressures in your business, it’s only a matter of time until you do. Now’s the time to start planning your next-generation store, or risk getting left behind. PG Bill Bishop is chief architect of Barrington, Ill.-based omni-channel consultancy Brick Meets Click. He can be reached at bill.bishop@brickmeetsclick.com.

Donâ&#x20AC;&#x2122;t get left behind Over 100,000 stores are driving incremental sales and traffic with Ibotta

Work with the scale leader on mobile. As the furthest reaching and most widely used third party mobile application in the US CPG & Grocery market, Ibotta is delivering new customers, incremental purchases and deeper loyalty with your stores. Get started today, email shopper@ibotta.com ibotta.com

Industry Events

Connected Consumer Summit

PG Launches Connected Consumer Summit Conference aimed at helping retailers and CPG companies work together to boost sales.

By Joan Driggs

Clockwise from above left: “Data Crush” author Chris Surdak says consumers are helping drive market capitalization; Graeme McVie, of LoyaltyOne, delivers a boardroom briefing to retailers; attendees mingle at a networking reception.

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rogressive Grocer wrapped up its frst Connected Consumer Summit last month, confrming the need for an event dedicated to bringing together grocery retailers, CPG marketers and technology companies. Te exclusive, invitation-only event featured four keynote presentations, boardroom briefngs presented by technology companies, and one-on-one meetings.

Te goal of the Connected Consumer Summit was to focus on the topics and issues that will help retailers and CPG companies collaborate more efectively to drive increased store trafc and increased basket size by leveraging digital marketing and media programs.

Te program kicked of Sept. 9 with a presentation by John Burchard, SVP and CIO/ CAO of Skokie, Ill.-based Peapod, an Ahold

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company. Burchard gave a refreshingly candid view of the Peapod online grocery business, including the recent unveiling of the company’s new 350,000-square-foot automated warehouse in Jersey City, N.J., which greatly expands the internet retailer’s ability to serve the New York metropolitan area.

Attendees heard from Chris Surdak, author of “Data Crush: How the Information Tidal Wave is Driving New Business Opportunities,” and current global subject matter expert for analytics, information governance and e-discovery for San Francisco-based HP Autonomy. Surdak not only wowed the audience with examples of recognition technologies currently in place, but also made them squirm a bit by driving home that consumers — everyday people — are among the biggest “products” driving market capitalization.

According to Surdak, there’s a fne line that companies must walk between intimacy (needs anticipation, reverse Grouponing, e-coupons, “liking” and suggestion lists) and creepiness (behavior manipulation, behavior modeling, iCoupons, geo-tracking, cookies). But for those who can successfully navigate them, predictive technologies — getting consumers to push “buy” — are generating billions of dollars.

Lindsay Mikos, senior manager of omni-channel at Deerfeld, Ill.-based Walgreens, kicked of the Sept. 10 session by describing the global drug chain’s strategy to provide an integrated and seamless experience for customers across retail stores and digital channels. An overriding goal for Walgreens is to focus on an ever-changing customer who lives in a world in which digital channels have surpassed traditional media. But, Mikos said, all channels

need to work together as one voice.

Te summit’s fnal keynote address introduced the role of CPG partners in the retail and technology loop. Laura Houghton, director of digital shopper marketing at Te Coca-Cola Co., in Atlanta, said that while many marketers are tempted to focus only on Millennials, Baby Boomers shouldn’t be overlooked. After all, Boomers are also “leaning in” to change, and consumers’ engagement with ofine marketing isn’t going away any time soon.

Coca-Cola’s current go-to-market strategy is co-creation and collaboration with other products, services and programs. “We have to make it easy to convert shoppers to buyers in-store,” said Houghton, adding that such a strategy creates a “sharing loop” giving shoppers a reason to impart a great experience via digital channels. PG

Clockwise from above left: Summit participants listen to a keynote address; Walgreens’ Lindsay Mikos discusses integrated digital strategies; former PG Senior Editor Joseph Tarnowski (now with ERCM) helps field audience questions; Softcard’s Marsha Link chats with retailers in a private meeting.

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Nonfoods

Publications

Time ANd SPAce Retailers that provide sufficient room for magazines and books experience higher-thanaverage category sales.

Now

Read This

Books and magazines can help boost supermarket sales, especially if grocers lean into the category.

By Barbara Sax

L

ike beverages and confectionery, magazines are a proft center for front end checkout. In-line, the category also delivers for supermarkets, with even more potential when grocers do more with it.

While the category has faced a year of challenges — the death of a major wholesaler, continued consumer migration to online and digital media, and a fat economy that keeps impulse

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spending in check — books and magazines continue to turn profts for supermarkets. While only 8 percent of supermarket shoppers purchase magazines, those consumers are crucial.

“Tey may not be a huge group, but supermarket shoppers who purchase magazines are among the most loyal — they are in the store most frequently and shop the entire store,” says Jackie Gray, director at Barrington, Ill.-based consultancy Willard Bishop.

Tey also spend more. “Tose consumers represent 32 percent of an average store’s sales. Teir average basket ring is $45, versus $34 for other shoppers, and they have an average of six more units in their basket than other shoppers,” adds Gray.

Bigger Baskets Research from Time Inc. Retail shows that basket rings containing a magazine are 135 percent greater than those without a magazine.

A recent study from the Parsippany, N.J.-based company revealed that magazines have an average unit price of $4.38 and generate three times the revenue of a gum or mint item.

“Magazines generate more than two times the per-unit proft compared to the other front end categories,” notes Bill Romollino, VP of shopper insights at Time Inc. Retail. “Magazines are also highly impulsive, which helps drive front end incremental sales.

Almost half of shoppers say they have purchased a magazine from the front end checkstand.”

Experts say that given more attention, the category can perform even better. “Te strength of any DSD category is that when it runs itself, it’s OK, but when corporate really engages and puts resources into the category, it really makes a diference,” points out Jerry Lynch, president of the International Periodical Distributors Association (IPDA), the trade organization for distributors. “Te chains that continue to have the greatest success are those that are closely managing their category.”

Nonfoods

Supermarket shoppers who purchase magazines are among the most loyal — they are in the store most frequently and shop the entire store.”

—Jackie Gray, Willard Bishop

Publications

Reality Check Chains that give the category ample space — even a place to sit and browse publications at some stores operated by Rochester, N.Y.-based Wegmans Food Markets — enjoy higher-than-average category sales. In addition to its large publication section, Ahold USA’s Maryland-based Giant-Landover uses foorstands to vary the department’s selection.

Merchandising at checkout is critical. “Improving checkout shopper conversion by only 1 percent nationwide across all front end categories could add over $560 million in revenue annually,” says Romollino.

“We know that 65 percent of shoppers like to read magazines while waiting in the checkout line. We are working on displays that convert browsers to buyers.”

Disrupting the checkout process is particularly challenging in self-checkout lines. Time’s research shows that less is more when it comes to front end merchandising. “Temporary displays in front of the checkstand end caps do not drive incremental sales,” notes Romollino. “Tose retailers that have less clutter at checkout have higher conversion rates. More isn’t necessarily better. At a certain point, it all becomes noise to the customer, and then it’s all irrelevant.”

Whole Foods Market makes a point of keeping its checkouts uncluttered, but still manages to maximize the space it gives to the category by using 4-foot spinner racks at the end of each lane to display facings neatly. Titles, which focus on health and gourmet cooking, refect the Austin, Texas-based chain’s upscale, health-conscious positioning.

Mainline sales can also be boosted with the right merchandise strategy and the right mix of product.

Magazines can be a key part of a chain’s diferentiation strategy. “Regional titles can help a chain align itself with its consumers, and food and wine titles can help establish a chain with its foodie consumers,” asserts IPDA’s Lynch.

Beyond Tradition Several segments within the category have been driving sales; for instance, children’s books have been a bright spot in the category. “Kids’ books are standing out as an extremely strong segment in both mass and supermarket channels,” observes Lynch.

Additionally, “bookazines,” single-topic publications that have high production values and retail for a higher price point than traditional magazines, have

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been increasingly successful over the past two years.

“Te segment has really picked up, and we’re not seeing it cannibalize sales of other products,” says Lisa Scott, executive director of the New York-based Periodical & Book Association of America (PBAA).

Tese products, adds Romollino, have a high perceived value and “seem to connect with consumers.”

Moving in-line magazines beyond their traditional merchandising set can also give the category signifcant lift. “Increasing the visibility of Gourmet or Saveur near the meat or fsh department is not only good for magazine sales, but good for the meat and fsh department,” notes Willard Bishop’s Gray. “It’s smart cross-merchandising to feature the July issue of Martha Stewart Living near a July 4th barbecue display, or to put coloring books or puzzle books next to children’s HBC, since a mom with a sick child is likely to pick up Mucinex, Tylenol and an activity book for a child who is home from school with a cold.”

Displays that work food titles into the wine aisle or health titles into the pharmacy department are like “signage without the signs,” adds Lynch. “Tey help a chain solidify its image with the shopper.”

Time Inc. is working with consumer packaged goods suppliers to create meaningful cross-merchandising programs. “Building solution centers has been successful,” says Romollino. “Programs that combine magazine titles with product, and are accompanied by incentives, are the most successful.”

Rodale Inc., in partnership with Time Inc. Retail, is testing new merchandising strategies.

Te Emmaus, Pa.-based publisher of health-andwellness titles recently piloted its Digest Display mainline digest merchandising unit that holds four digest-sized titles in less space than two B-sized magazines. According to Rodale, initial tests across all three channels have shown average sales increases of around 25 percent.

High-dwell, high-trafc areas like the deli and pharmacy departments are good opportunities for cross-merchandising. As such, Rodale has developed a deli spinner that can be used beneath the take-a-number ticket dispenser. In one test location, Men’s Health experienced a 55 percent sales lift.

Similarly, Rodale’s pharmacy power wing display, designed to hold three digests and eight B-size health-and-ftness titles, has been a big success in generating impulse sales in the pharmacy department.

Dick Terlaak Poot, Rodale’s senior national marketing director, notes in PBAA’s Retail Marketplace Conference report that “a major regional grocery chain showed impressive average sales increases in stores with the power wing, compared to stores without the unit.” According to Poot, sales of Prevention increased 63 percent, Men’s Health sales were up 73 percent and Women’s Health showed a 111 percent spike in sales at locations featuring the rack. PG

Industry Events

GMA Leadership Forum

Digital Discussion Dominates Executive Enclave GMA Leadership Forum explores hot issues for retailers and CPG companies.

By Jim Dudlicek

F

rom the opening keynote address by the president of Google to the individual sessions led by retailers, CPG manufacturers and consultants, the importance of becoming “digitally mature” in today’s fast-changing business landscape was the pervasive theme of the recent Grocery Manufacturers Association (GMA) Leadership Forum.

Held at the historic Broadmoor resort in Colorado Springs, Colo., Aug. 23-24, the forum hosted some of the heaviest hitters from across the grocery industry to discuss e-commerce, executive talent acquisition, food safety, collaboration and analytics, product recalls, changing demographics, sustainability, social media, ethnic marketing, and regulatory issues.

DIGITAL MATURITY Amit Singh, president of Google Enterprise, urges companies to leverage the web to build their brands.

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Succeeding in Grocery e-Commerce Leaders at Peapod, Kraft and Instacart discussed the tipping point that online grocery has reached in North America and how the market can deal with new growth opportunities.

Key drivers of grocery e-commerce are freshness, quality, convenience, urbanization and connectivity.

Te group shared recent research showing that 70

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percent of U.S. consumers are willing to try buying groceries online, while a third of shoppers are willing to pay for same-day delivery.

Michael Brennan, SVP and COO of Skokie, Ill.based Peapod, noted that e-commerce is a combination of grocery, logistics and the internet, although few companies have mastered all three: “If you get the balance right, there’s a ton of demand.”

Nilam Ganenthiran, head of business development and strategy for San Francisco-based Instacart, said barriers to consumer acceptance of online grocery sales lie in shoppers’ perception of quality, speed, choice and ease. He added that e-commerce “removes friction and makes bigger baskets easier.”

Unlocking consumer insights is a “continuing journey,” noted Tom Corley, EVP and president of U.S. sales and foodservice at Northfeld, Ill.-based Kraft. “E-commerce has growth written all over it.”

Big Shift in Technology, Demographic Trends Consumers are spending more time with digital than traditional media, so companies need to deliver experiences that translate to digital content.

Tat was the crux of the issue as discussed by Lisa Hammitt, VP of marketing for San Franciscobased Salesforce.com, and Karen Sauder, national industry director for food, beverage and restaurant at Google, in Mountain View, Calif.

Retailers and CPGs must understand consumers’ purchasing criteria, Hammitt stressed; they need to leverage digital for cultural relevancy and turn data into insights.

Sauder noted that constant changes in technology can slow down organizations, because ignorance begets slowness.

By 2017, Millennials will surpass Baby Boomers in purchasing power, according to data the panel presented, and half of Millennials live a “threescreen” lifestyle — a great segue to the session led

by Erin Liber of Cincinnati-based DunnhumbyUSA, who noted that Hispanics as well as Millennials will be driving future shopping trends.

Liber poked holes in some misconceptions about Millennials; to wit, they’re strong shoppers of center

store (particularly canned soup) as they struggle to strike a balance between freshness and convenience.

Meanwhile, Hispanics are least engaged in center store, but are strong in dairy, meat and bakery.

At one of the last Saturday breakout sessions, a panel of representatives from Google, IRI and Boston Consulting Group shared fndings of their joint initiative on e-commerce. “Te CPG industry is fast approaching a tipping point,” says the executive summary of the group report. “Companies need to plan for a ‘1-5-10’ market in the U.S. over the next fve years.” Tis means that digital’s current 1 percent penetration of the U.S. CPG market will likely expand to 5 percent by 2018 and could go as high as 10 percent, presenting both a challenge and an opportunity. Further, the path to purchase is fragmented, with shoppers regularly switching between digital and physical channels. CPG companies will need to serve multiple retail models as e-commerce continues to evolve.

As far as technology is concerned, according to Google’s Paul Gormley, “Te future is here — it’s just not evenly distributed.”

Tat means companies need to work harder to become what Amit Singh, president of Google Enterprise, calls “digitally mature.” As Singh explained in his opening keynote address, this means leveraging the web to build brands by engaging at scale, employing collective intelligence, working collaboratively and in real time, using data as a core element, and developing technology that’s easy to use.

Reaching Consumers Across Channels On day two of the conference, the discussion on the importance of digital continued. A panel led by Fox Television host and tech consultant Shelly Palmer debated the impact of “digital disruption” in the retail space, a term Palmer derided, since this has all but become the norm.

Digital content must have value, or shoppers — especially the coveted Millennial Moms — will opt out, the panelists warned. “All it takes is one of us to screw it up, and then we all have a challenge” in reach-

ing them, said Doug Rozen, chief innovation ofcer at New York-based Meredith Xcelerated Marketing.

Te rate at which technology is developing and becomes readily available to the masses should be an asset to smaller companies looking to gain an edge — or at least not wholly lose out — to new competitors. For example, Palmer said that local independent grocers could leverage the availability of Uber where available and use it as their home delivery vehicle to compete with Amazon Fresh.

At one of Sunday’s closing breakout sessions, a panel of CPG and retail executives discussed growth priorities among leading CPG companies as revealed by the latest Consumer Analyst Group of New York (CAGNY) study. Topping the laundry list: executing the “perfect store,” a goal that obviously requires the buy-in of retailer partners.

GMA Awards GMA bestowed several awards during the course of the forum, honoring new products, marketing and lifetime achievement.

On Sunday, the group presented retired Walmart president and CEO Mike Duke with its 2014 Hall of Achievement Award, the association’s highest honor.

“His visionary leadership has had a profound and lasting impact on the companies, communities and consumers he has served during the course of his impressing career,” GMA President and CEO Pamela Bailey said of Duke. Te previous day, GMA and its Advisory Council awarded two 2014 CPG Awards for innovation and creativity. Te Division A award, for companies with sales of less than $3 billion, went to San Francisco-based Big Heart Pet Brands for its development of Milk-Bone Brushing Chews to improve canine oral health. Te Division B award (sales over $3 billion) went to PepsiCo’s Frito-Lay team, based in Plano, Texas, for its “Do Us A Flavor” interactive campaign designed to bring younger, tech-savvy shoppers to the mature Lay’s potato chip brand. PG For live coverage of major industry events, follow me on Twitter: @jimdudlicek.

HALL OF ACHIEVEMENT Retired Walmart CEO Mike Duke (left) accepts GMA’s highest honor from General Mills boss Ken Powell.

POWER PANEL Discussing industry issues are (from left) General Mills’ Ken Powell, Hershey’s J.P. Bilbrey, Clorox’s Don Knauss and Sun Products’ Jeff Ansell.

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what s next Food, Beverage & Nonfood Products

The Right Choice

Delight Bites, from ConAgra Foods’ Life Choice brand, is a puffed multigrain snack combining a light, airy texture with a satisfying crunch. The product line comes in six flavors that meet a range of consumer flavor demands, including Parmesan Garlic & Herb, Sweet & Tangy BBQ, and Cinnamon & Brown Sugar. Further, each 24-piece serving contains just 130 calories and 40 percent less fat than potato chips, along with 6 grams of whole grains, but 0 grams of trans fats and no cholesterol. A 5-ounce bag retails for a suggested $2.48. www.conagrafoods.com

SupHerb Flavor

SupHerb Farms’ Fusions line of pastes, purées and blends, which aims to make it easy to develop and differentiate flatbread sauces and toppings, can help foodservice operators create such on-trend recipes as Indian Masala Flatbread. The company also supplies IQF culinary herbs and specialty vegetables to the foodservice sector. www.SupHerbFarms.com

A Smarter Way to Brush

Switzerland-based Vigilant has introduced Rainbow, billed as the world’s first smart toothbrush for children.

Connected via Bluetooth Smart, Rainbow helps kids learn dentist-recommended brushing techniques. The manual toothbrush uses motion and 3D sensors to track brush positions and movements inside the mouth, while an app for iOS and Android calculates variance and guides the user. The app also spurs children to perform best-in-class brushing techniques via an interactive phone/tablet game that models correct brushing behavior. Additionally, parents can now check their kids’ brushing habits by smartphone. The gadget retails for a suggested $49. www.usvigilant.com/rainbow

Crazy for Organic

Simply Organic Crazy Awesome Veggies, a line of three easy-to-prepare seasoning blends from Frontier CoOp, enables home chefs to spice up a wide array of vegetables. Available in Sesame Ginger, Sweet Cinnamon Chili, and Garlic & Herb, the blends make it so parents of normally picky kids “don’t have to sneak vegetables onto the dinner table,” in the words of Simply Organic Senior Brand Manager Ellen Bouchard. The SRP for a pack is $1.69. www.simplyorganic.com

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Shelf Score™ — august 2014 Purchase INteNt score

New Product

1 1 3 4 5 6 7 8 9 10

Eggo Waffles: Thick & Fluffy Blueberry Cobbler Pillsbury Parmesan & Basil Artisan Bread Mix DiGiorno Design a Pizza Kit: Chicken, Green Peppers & Red Onions with Pepperoni Stonyfield Petite Crème: Strawberry Kellogg’s FiberPlus Antioxidants Bar ALA Omega-3 Chocolatey Trail Mix Popchips: Hint of Olive Oil Veggie Chips Pepsi Made with Real Sugar M&M’s Candy Apple Chobani Oats: Banana Maple Lunchables Breakfast: Waffle and Bacon Dippers

70% 70 69 68 67 65 61 60 58 52

source: Instant.ly Shelf Score

People love carbs, which is evident in their domination of this grocery edition of Instant.ly Shelf Score. Purchase intent scores for August also indicate that food kits are trending, as two of the top three products require some preparation by the consumer. Also in this edition, Chobani adds oats to its line of yogurts, and M&M’s launches an interesting new flavor in preparation for the Halloween season.

Duck Out for a Drink

Developed and produced by Chinook USA and Duck Commander Family Foods, Uncle Si’s Iced Tea, featuring all-natural versions of the beverage normally quaffed by “Uncle” Si Robertson on A&E’s “Duck Dynasty,” officially launched at the Duck Commander 500 NASCAR race last April at the Texas Motor Speedway, in Fort Worth. The Sweet, Un-Sweet, Peach, and Half & Half (half iced tea/half lemonade) varieties are brewed with premium select teas, and contain real juices and natural ingredients. A 16-fluid-ounce bottle retails for a suggested $1.49-$1.59.

Welcome to the Tribe

Tribe’s single-serve To Go pack contains a portion-controlled amount of the brand’s hummus, accompanied by artisan pita chips. Available in Tribe’s most popular flavors, Classic and Sweet Roasted Red Pepper, the convenient item is also a nutritionally responsible choice, adhering to the dietitian-approved optimal snack equation of about 200 calories per serving. What’s more, its easy-to-handle design features a simple pop top and a see-through window that allows a clear view of the hummus. The SRP range per 2.75-ounce pack is $1.99-$2.99. www.tribehummus.com

www.duckcommander.com; www.chinookusa.com

Get Fresh

Robinson Fresh has added Green Giant Fresh asparagus to its lineup of consumer brands.

Offered in bulk packaging in club and retail boxes, as well as tags, wraps and poly bags, the yearround asparagus line is available nationwide through an exclusive licensing agreement. As with the Green Giant Fresh avocado program, also available through Robinson, the bagged asparagus will feature Box Tops for Education coupons. www.greengiantfresh.com; www.robinsonfresh.com

seasonal spotlight Lovely Bunch of Coconuts

In time for winter holiday-related baking activities, private label product provider Trailblazer Foods has rolled out an array of sweetened and unsweetened coconut shreds and flakes made from the fruit’s dried flesh. The SRP of a 7-ounce bag varies by retailer. www.trailblazerfoods.com

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the

supplier side Industry Veteran to Lead USC Food Management Program Cynthia McCloud is the new director of the Food Industry Management Program at the University of Southern California’s Marshall School of Business. A Marshall alumna, McCloud is the ffth director, and the frst woman, to lead the program, now in its 56th year.

McCloud was a student in the program before graduating summa cum laude with a BS in business administration in 1991; she earned an MBA in 1997 from the University of California, Irvine.

McCloud brings more than 35 years of domestic and international experience in the consumer packaged goods and grocery retail industries, for much of that time at the senior executive level. She has worked for Market Metrix, Catalina Marketing and Safeway’s Vons division.

“Te industry is changing faster than ever,” McCloud says, “and I am passionate about building awareness in the food industry around proactive strategic solutions, innovative new technologies, and competing diferently, and more aggressively, for share of consumers who have many options for what they buy and where they shop.” www.marshall.usc.edu/fim

Morgan Joins Snyder’s-Lance as Chief Sales Officer

Charlotte, N.C.-based snack food manufacturer Snyder’s-Lance Inc. has promoted Dan Morgan to chief sales ofcer. Morgan will lead a team of 650 employees focusing on sales, operations, distribution and support in the United States and across the world.

Morgan led DSD sales and operations for the company’s East division as SVP. He started working for Snyder’s-Lance after he sold Patriot Snacks in 2002, and has 27 years of sales and management experience. A board member and vice chairman of the Snack Food Association, Morgan will assume the chairman role next spring. www.snyderslance.com

Mann Packing Adds to Retail Sales Team Salinas, Calif.-based Mann Packing Co. has hired Terence Billingsley for its retail sales team. Billingsley comes to Mann from Unilever, where he was the Safeway customer business manager.

Billingsley’s experience includes VP of sales at Promoworks, where he worked with the Safeway marketing team to shape the in-store experience for all Safeway stores. He also led the business for Kraft Foods and its family of brands at Safeway.

“Terence will bring a focus on increasing market share, driving shoppercentric programs and promotional planning and trade development programs to our sales team,” says Jef Freeman, VP of retail sales. www.veggiesmadeeasy.com

King & Prince Hires New Chef for R&D Team Brunswick, Ga.-based King & Prince Seafood has hired chef Brett Smith for its research and development team. A graduate of the Culinary Institute of America in New York, Smith brings to his new position more than 24 years of diverse culinary and hospitality management experience.

“He’ll apply his culinary creativity and knowledge of back-of-house operations to develop proftable seafood solutions for our foodservice customers,” says Sue Gurkin, King & Prince director of innovation. www.kpseafood.com

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advertiser index

Agro America Amerlux Lighting Systems, Inc. Avocados from Mexico Beaver Street Fisheries Blackhawk Network Blount Fine Foods Bolthouse Farms C&S Wholesale Grocers Café Valley Bakery Catalina Coca-Cola CSM Bakery Products Datepac, LLC Del Monte Fresh Produce N.A., Inc. Delizza Inc. Delta Associates, Inc. Diamond Wipes International Domino Foods Duke Energy Dur-A-Flex, Inc. E&J Gallo Enjoy Life Natural Brands, LLC GE Lighting Solutions General Mills Inc. Gigwalk Giorgio Foods, Inc. Good2Grow Gordo’s Cheese Goya Foods, Inc. Great Lakes Cheese Co. Green Giant Fresh Grimmway Farms Harry’s Fresh Foods Hass Avocados House-Autry Mills, Inc. IBOTTA Idaho Potato Commission Imageworks Display & Marketing Group inBalance Health Corporation InnovAsian Kelloggs Company Kraft Foods Group Limoneira Loving Pets Products M&E Manufacturing Co. Majestic Drug Corporation Mariani Packing Company Mars Chocolate N.A. Mars Ice Cream MillerCoors MOM Brands Mondelez Mooney Farms National Beef Packing Co. National Raisin Company Nature Sweet Naturipe NEPA Carton & Carrier Company NJOY Oasis Brands Inc. Organic Valley Paramount Farms Premier Nutrition Private Label Manufacturing Association Progressive Grocer Puratos Corporation Raaw Foods International, LLC Rana Meal Solutions , LLC Rehrig Pacific Company Robbie Flexibles Robot Coupe USA, Inc. Sandridge Food Corporation Sealed Air Simplot Custom Foods Society Insurance Sovena USA Stefano Foods Store Brands Innovation & Marketing Summit 2015 Sun-Maid Raisins Sun Pacific Sun Products Corp.

Sunlight International That’s How We Roll The Hershey Company The Holiday Gift Check Program The J.M. Smucker Company Trion Industries Inc. Unified Grocers USA Pears Viva Tierra Organic, Inc. Well-Pict, Inc. Wholesum Family Farms

119 31 15 104, 115 71 Inside Back Cover 137 57 76 54 101 58, 59 116 129 98 28 143 77, 105-108 51 (Regional) 53 65 87 39 4-5 145 138 6 66 43 48 127 128 47 121 29 149 23 140 86 103 27, 61 Outsert (Regional) 118 153 36-37 81 88 85 13 3 91 Inside Front Cover 125 110 82 10 139 146 Cover-Tip, 62-63 33 93, 95 21, 34-35 155 17 109 (Regional) 41 122 67 69 44-45 56 38 112, 113 52 109 (Regional) 73 102 51 (Regional) 97 49 55 131 19 9 89 Back Cover Insert 74 133 123 135 79

www.onebananas.com www.amerlux.com www.avocadosfrommexico.com www.seabest.com www.blackhawknetwork.com www.blountfinefoods.com www.bolthouse.com www.cswg.com www.cafevalley.com www.catalinamarketing.com www.cokesolutions.com www.csmbakeryproducts.com www.naturaldelights.com www.freshdelmonte.com www.delizza.us www.delta-assoc.com www.diamondwipes.com www.dominosugar.com www.duke-energy.com/eegrocer www.dur-a-flex.com www.gallo.com www.enjoylifefoods.com www.gelighting.com www.generalmills.com www.gigwalk.com www.giorgiofresh.com www.good2grow.com www.gordoscheesedip.com www.goya.com www.greatlakescheese.com www.greengiantfresh.com / www.chrobinson.com www.trueorganicjuice.com www.harrysfresh.com www.hassavocadoboard.com www.house-autry.com https://ibotta.com www.idahopotato.com/retail www.imageworksdisplay.com www.inbalancehealthcorp.com www.innovasiancuisine.com www.centerstoregrowth.com www.kraftfoodsgroup.com www.limoneira.com www.lovingpetsproducts.com www.facetofaceequipment.com www.dentistoncall.com www.mariani.com www.mars.com www.mars.com www.millercoors.com www.mombrands.com/bull www.mondelezinternational.com www.bellasunluci.com www.nationalbeef.com www.nationalraisin.com www.naturesweet.com www.naturipefarms.com www.nepacartons.com www.njoy.com www.oasisbrands.com www.organicvalley.coop www.pomwonderful.com www.premiernutrition.com www.plma.com www.progressivegrocer.com/awards-events www.puratos.us www.raaw.com www.giovannirana.com www.rehrigpacific.com www.robbieflexibles.com www.robotcoupeusa.com www.sandridge.com www.gripandtear.com www.simplotretail.com www.societyinsurance.com www.olivarioliveoil.com www.stefanofoods.com storebrands.info/IMS2015 www.sunmaid.com www.sunpacific.com www.sunproductscorp.com www.dulcich.com www.dippinchips.com/ www.mrsthinsters.com www.hersheys.com www.giftcheckprogram.com www.smuckers.com www.triononline.com www.unifiedgrocers.com www.usapears.org/experts www.vivatierra.com www.wellpict.com www.wholesumharvest.com

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 Phone: 224 632-8200 Fax: 224 632-8266 www.stagnitobusinessinformation.com STAGNITO BUSINESS INFORMATION ALSO PRODUCES:

Harry Stagnito President and CEO 224-632-8217 hstagnito@stagnitomail.com Kollin Stagnito Chief Operating Officer 224-632-8226 kollinstagnito@stagnitomail.com Ned Bardic Senior Vice President/Partner 224-632-8224 nbardic@stagnitomail.com Korry Stagnito Chief Brand Officer 224-632-8171 korrystagnito@stagnitomail.com Jeff Friedman Vice President/Group Publisher 201-855-7621 jfriedman@stagnitomail.com John Huff Midwest Regional Sales Manager 224-632-8174 jhuff@stagnitomail.com Elizabeth Cherry Western Regional Sales Manager 310-546-3815 • Cell 310-990-9597 echerry@stagnitomail.com Maggie Kaeppel Eastern Marketing Manager 630-364-2150 • Cell 708-565-5350 mkaeppel@stagnitomail.com Mike Shaw Northeast, Marketing Manager 201-855-7631 • Cell 201-281-9100 mshaw@stagnitomail.com Janet Blaney Marketing Manager (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 jblaney@stagnitomail.com Courtney Warnimont Advertising Manager 224-632-8215 cwarnimont@stagnitomail.com

October 2014 | progressivegrocer.com |

161

the last word

by Meg Major

Mr. Rogers Would Approve

I

f we based our Retailer of the Year selection strictly on the fnancial performance of a given candidate, Ahold USA wouldn’t be an obvious choice. As it happens, however, our publication’s highest annual honor is based on far more than Wall Street metrics and uninterrupted executive teams, and instead on the overall merits of a multistate U.S. food retailer’s entire oeuvre, inclusive of its stance as a tough competitor; vendor feedback attesting to its equitable, productive trading partner relationships; its ability to create and foster a great place to work; and, above all, the measurable — and immeasurable — support provided by its stores and associates to their local communities.

With this the case, we found the collective assessments of Ahold USA and its divisions — Stop & Shop New England, Stop & Shop New York Metro, Giant Landover and Giant/Martin’s, many of whose stores have been enduring fxtures in their respective markets — well deserving of our top prize. Recognized by PG for its Better Neighbor promise carried out daily by an extended family of 120,000 associates throughout its 14-state marketing territory — hefty pockets of which are punctuated by competitive pressures of cosmic proportions — Ahold’s four retail divisions have undoubtedly been put the test in the years leading up to the present. It’s been no easy task for the midmarket retail banners, whose obligations have become all the more formidable when competing for today’s hybrid consumers shopping at both ends of the value/quality spectrum — in hard discounters for staples, and at upscale retailers for experiential products.

Te sister retail divisions’ big constant, however, has been stellar associates, many of whom have worked at its four diferent companies “for many, many years. Tey followed in the footsteps of other generations,” as Kathy Russello, EVP, human resources, noted during our recent sit-down at the company’s Carlisle, Pa., headquarters. “Our heritage is truly about our associates. We have centuries of experience, and our people are driving us forward.”

Our Ahold USA/Retailer of the Year coverage, which begins on page 24, provides a full retrospective of

the multidivisional grocer’s Better Neighbor pledge, part of the parent company’s larger Reshaping Retail blueprint, which we’ve been covering on our website in recent months, and which aims to support enhancements with improved fresh oferings, expanded private label penetration, heightened service levels and targeted price reductions. Funded largely by its concurrent Simplicity cost savings campaign, the program is currently in place at some 320 stores, and will be rolled out to more than half of all stores by year’s end.

Meanwhile, Ahold USA’s e-grocery operation, Peapod, is sprouting double-digit sales growth while consolidating its leading online grocer status with a new warehouse in New Jersey that has doubled capacity. Further fortifed by 200 pickup points and a Chicago digital innovation hub, Peapod is reportedly aiming to triple its online food sales by 2016. “Te retail world is changing fast, and fulflling the needs of the connected customer is a crucial part of future growth,” as well as a linchpin of Ahold USA’s Reshaping Retail ambitions, COO James McCann afrmed during our recent interview.

“While we’re a little bit ahead” in the e-grocery derby, McCann foresees “revolutionary industry change in the next four years, particularly as it relates to the devices that we all carry now. Everybody’s online all the time, but as we transition from touchscreens to wearable devices, our shopping environment is going to change exponentially.

We truly believe that,” he asserted, “and we’re planning for it, by making investments in infrastructure and logistics, as well as in our stores, to make it possible. But we’ve got to be really clear, and make really good choices over the coming months and years,” he adds, citing a recent revelation that one of the “foremost reasons people like Google Glass is [for] fnding products in grocery stores.”

Drawing a comparison with yesteryear’s difculties navigating roadways without a GPS, McCann observed: “We’re coming up on the same scenario in the grocery world with digital devices. Tat’s what we’re positioning for, and placing our bets on.”

It sounds like a safe wager to me, and a futuristically neighborly one to boot. PG

The sister retail brands’ big constant has been stellar associates, who have centuries of experience and are driving Ahold USA’s divisions forward.

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| Progressive Grocer | Ahead of What’s Next | October 2014

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