Progressive Grocer - February 2016

Page 1

Frozens Thaw

Aisle heats up with innovation, merchandising Page 54

Meat Matters

Category leaders dish on well-done departments Page 82

Like Person, Like Pet Furry friends eat more like their owners Page 126

Frozens Thaw

Aisle heats up with innovation, merchandising Page 54

Meat Matters

Category leaders dish on well-done departments Page 82

Like Person, Like Pet Furry friends eat more like their owners Page 126

FridGe’s dare Grocery shopping is about to get a whole lot smarter Page 24

February 2016 • Volume 95 Number 2 $10 • |

*Data Source: IRI Infoscan Data, 52 Weeks Ending November 29, 2015. Geography Total US Multi-Outlet **Data Source: IRI Infoscan Data, 52 Weeks Ending November 29, 2015. Geography Maine to Washington D.C. © Pete and Gerry’s Organics, LLC 2016

Š2016 Blitz-Weinhard Brewing Co., Milwaukee, WI * Flavored Malt Beverage

February 2016

features 22

Volume 95, Issue 2

cover story


progressive grocer’s 2016 retAil meAt review

Meat’s Rare Moment After a stretch of declining sales, retail execs forecast juicer times ahead.

AssociAte Development

The Best Store Managers Can Get Better Learning how to write and implement goals is key for personal — and store — development.

92 proDuce

Double-digit Darlings Sales of organic produce continue to climb, as consumers spend more than $13 billion on fruits and veggies.

34 Front enD report

The Future of Front End Innovations promise to revitalize the section.




proFile in progress

Fridge’s Dare Te frst supermarket to lend its name to an IoT appliance, ShopRite has formed a smart-fridge pilot partnership that marks a brave new chapter in an ever-changing grocery battleground.

They’ll Drink to That Today’s fresh juices ofer nutrition-packed enjoyment for consumers on the go.

fresh food



HeAltH BeAuty & wellness

38 BreAkFAst cereAl

Cereal Progression Te morning staple aims for continued relevance.

Deli insigHts, pArt 2

frozen & refrigerated 54

Frozen FooD HAnDBook

Cold War Manufacturers innovate to deliver on convenience and taste, as grocers reinvigorate the freezer aisle.

proDuce cAtegory spotligHt


The Deli Looks Ahead Questions abound as the section preps for its next iteration.

Supplementing Health Te newest generation of products targets particular conditions.

110 toBAcco AlternAtives

Smokin’ Hot Electronic cigarettes set out to overtake their traditional counterparts.

February 2016 | |


technology 114

Price OPtimizatiOn

What is the Price of Consumer loyalty? Keep shoppers coming back.

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 224 632-8200 • vP, brand director 201-855-7621


Editorial Editorial director Joan driggs 224-632-8211 Chief Content Editor meg major 724-453-3545 Editor-in-Chief James dudlicek 224-632-8238 managing Editor bridget Goldschmidt 201-855-7603 technology Editor John Karolefski 440-582-1889 senior Editor Katie martin 224-632-8172 senior Editor anna Wolfe 207-773-1154 digital Editor Kyle shamorian 224-632-8252 art director bill antkowiak Contributing Editors Kathleen Furore, Bob Ingram, Jenny McTaggart, Lynn Petrak, Barbara Sax and Jennifer Strailey

Digital DialOgue

Personalization deconstructed Does personalization as we know it deliver value for grocery?

operations 118 SuPPly chain

safety first Retailers’ FSMA preparations are strengthening supply chain visibility and collaborative business planning.

equipment & design 122


the Case for Kiosks Tese increasingly sophisticated devices make supermarket sense.

Jeff friedman

pet care

advErtisiNG salEs & busiNEss midwest marketing manager John huff 224-632-8174 Western regional sales manager Elizabeth Cherry 310-546-3815 Eastern marketing manager maggie Kaeppel 630-364-2150 • Mobile: 708-565-5350 Northeast marketing manager mike shaw 201-855-7631 • Mobile: 201-281-9100 marketing manager Janet blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 account Executive/ Classified advertising terry Kanganis 201-855-7615 • Fax: 201-855-7373 advertising/Production manager Jackie batson 224-632-8183 • Fax: 888-316-7987 Classified Production manager mary beth medley 856-809-0050 marKEtiNG & PromotioN director of market research debra Chanil 201-855-7605 audience development manager shelly Patton 215-301-0593 list rental the information refinery 800-529-9020 Brian Clotworthy reprints and licensing Wright’s media 877-652-5295 subscriber services/single-copy Purchases 978-671-0449 or email at

126 Pg Pet

EvEnts • MEdia • REsEaRch • infoRMation

the Natural, organic, Non-Gmo Pet Human food trends perk up the category.

uNitEd statEs marKEts Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green

departments 8 Editor’s NotE: What KiNd of rEtailEr arE You? 12 PG PulsE 14 iN-storE EvENts CalENdar: aPril 2016 16 NiElsEN’s shElf stoPPErs/sPotliGht: CoNdimENts, GraviEs aNd sauCEs/hot sauCE 18 miNtEl Global NEW ProduCts: sPirits aNd liquEurs 20 all’s WEllNEss: hEalth iNsidE thE frEEzEr CasE 133 What’s NExt: Editors’ PiCKs for iNNovativE ProduCts 135 thE suPPliEr sidE 137 thE last Word: safEtY iN NumbErs


| Progressive Grocer | February 2016

CaNadiaN marKEts • Convenience • Pharmacy • Foodservice

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 Production manager anngail Norris human resources manager sandy berndt Corporate marketing director bruce hendrickson 224-632-8214 Promotion director robert Kuwada 201-855-7616 director of Events Ken romeo 224-632-8181 director of digital strategy matt mcGuire 224-632-8180 audience development director Cindy Cardinal

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editor’s note by Jim Dudlicek

What Kind of Retailer Are You?


s the web your store, or is it a lane in your store? Tat’s a question omnichannel retailers need to answer, according to one of the exhibitors I spoke with at the recent National Retail Federation (NRF) show, in New York. But it was defnitely a sentiment shared in many of the discussions I had at this annual event, at which overall connectivity was the order of the day. So, grocers, I put it to you: Are you a brickand-mortar retailer that — oh, by the way — happens to have an online presence? Or are you a retailer with multiple access points to engage consumers on their terms? You need to be the latter, and I know you know, because NRF exhibitors told me they were encountering you in large numbers this year, signifcantly more so than at previous shows. “Te pressure customers are putting on retailers is tremendous,” said Michael Day, of Teradata. Among the “megatrends” Day identifed: the convergence of physical and web stores. And these days, he noted, the connective data and analytics needed to make that happen are “table stakes” for doing business. More retailers overall are identifying e-commerce growth as a priority over the in-store experience, according to Peter Zaballos, of SPS Commerce, a cloud-computing company ofering a new platform that tracks individual items to customers. His observation: “Tere’s probably more innovation coming in grocery than all the rest of retail combined.” Tat ranges from digital couponing and online shopping lists to shrink prevention and cold-chain management. Te one innovation that really has us jazzed here at PG is the Samsung Family Hub, a “smart fridge” unveiled at the recent Consumer Electronics Show in Las Vegas. Tis innovation promises to take the omnichannel experience to a whole new level. Te Family Hub is designed to track your grocery use, anticipate your needs and place orders for home delivery, all from your kitchen. Among the partners on the project is ShopRite, which has been a leader in click-and-collect and home delivery, and shows great moxie in being the frst traditional grocer to get in on something we think is truly revolutionary. Admittedly, at a suggested retail of nearly $5,000, it won’t be taking consumers by storm, but it’s defnitely the next phase of retail’s evolution. We look at the Family Hub in detail this month, starting on page 24.


| Progressive Grocer | Ahead of What’s Next | February 2016

Grocers understand the challenges that they face and are pursuing the steps they must take to meet the future, which is now. Meanwhile, NRF ofered grocers a look at ways to ramp up their click-and-collect capabilities. NCR demonstrated its ordering app for shoppers that communicates directly with a company’s storepicking application. Te app applies digital coupons, recognizes sales, and sends a bar code to shoppers’ mobile or wearable devices to be scanned at pickup. Orders received at the store are processed by NCR’s picking app, which tells store associates in what order products should be picked based on store planograms, product sell-by dates and other criteria. Te system allows up to eight orders to be picked at once, zoned to allow multiple pickers to fulfll the same orders to maximize efciency. NCR also displayed something really cool: FastLane, its sixth-generation self-checkout stand, which can be converted to cashier operation in about 25 seconds, and can switch back and forth to accommodate changing store demands. Other highlights included AT&Ts partnership with RetailNext on an application that tracks store trafc and what people are buying against macro sales data, Kronos systems that track staf levels against trafc demands in high-margin departments like deli and prepared foods, and Giant Eagle’s explanation of its new integrated real-time store operations system. Are retailers truly prepared for their new reality? A 2015 omnichannel implementation and technology survey by SPI suggests not. Caroline Dunn, the software company’s head of marketing, said the survey concludes that most retailers aren’t ready for omnichannel. But it’s reassuring to see that grocers understand the challenges that they face and are pursuing the steps they must take to meet the future, which is now. PG Jim Dudlicek Editor-in-Chief Twitter @jimdudlicek


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What’s trending on …

Walmart’s mid-January move to abandon its Express format stores and shutter 269 locations — along with a companion story detailing the significance of the decisions made by the Bentonville, Ark.-based retailer’s president and CEO, Doug McMillon — rapidly became’s top two most popular stories of 2016 through Jan. 18. Other high-interest headlines capturing significant click-throughs included Save-A-Lot’s IPO filing, Gordy’s Market’s switch of wholesalers from Supervalu to SpartanNash, artanNash, and the planned retirement of Publix’s longtime CEO, Ed Crenshaw.

Walmart Closing 269 Stores W bi

Top 5 Trends that Will Shape Grocery in 2016

Walmart CEO Doug McMillon Discusses Store Closures

Save-A-Lot Files for IPO

Safeway Stores Hit With Skimming Attacks

Whole Foods Settles Overchargingg Claims

Gordy’s Switches to SpartanNash as Primary Wholesaler 1ONwYzT

Publix CEO Ed Crenshaw Retiring;; Todd Jones Taking Helm D


| Progressive Grocer | Ahead of What’s Next | February 2016

#1 organic protein shake in the food channel.

Contact or your Organic Valley salesperson to place your order.

1.800.444.MILK | Source: SPINSscan Conventional: Total US Food: 12 weeks ending 11/1/15 ŠOrganic Valley 2016-10001

April 2016 is...

National BLT Sandwich Month National Soyfoods Month National Soft Pretzel Month National Grilled Cheese Month National Garlic Month National Florida Tomato Month








For International Fun at Work Day, engage your associates in some diverting but productive activities, like a prize for who can fulfill a customer request the fastest.

Email your calendar submissions to


National Chocolate Mousse Day


Final round of The Masters, in Augusta, Ga.


International Carrot Day


National Cheese Fondue Day. Request customers’ favorite recipes, and have them vote on the best.


Caramel Day. Sample caramelcoated goodies and coated caramels throughout the store.


National Grilled Cheese Sandwich Dayy


New Beer’s Eve. Start a new tradition by promoting local specialty beers. National Fresh Tomato Day


National Peach Cobbler Day


National Beer Day. Set up a big display of glasses, steins, growlers and craft beers.

Celebrate National Egg Salad Week with special sandwiches in the deli.

National Cheeseball Day


Feel like a kid again — It’s National Animal Crackers Day.

National Garlic Day. Celebrate the “stinking rose” on social media.


National Pineapple Upsidedown Cake Day


National Chocolate-covered Cashews Day

Time to compare brackets! The NCAA Final Four is in Houston. The final game is April 4.



Tax Day National Glazed Ham Day

National Pecan Day


National Peanut Butter and Jelly Day


National Empanada Day. Introduce customers to these delicious savory pastries.

National Licorice Day




National Coffee Cake Day




Earth Day National Jelly Bean Day

It’s National Soyfoods Month, so build end caps and displays of soy snacks, entrées and beverages.

National Baked Ham with Pineapple Dayy NACDS Annual Meeting begins in Palm Beach, Fla., and continues through April 19.


Celebrate National Picnic Day with meal kits in the deli.

Passover begins


National Pigs-in-ablanket Day. Offer coupons on mini hot dogs, refrigerated crescent rolls and mustard.



National Zucchini Bread Day


National Pretzel Day

27 2

Make sure everything is ready for Cinco de Mayo.

| Progressive Grocer | Ahead of What’s Next | February 2016


Take Yours Sons and Daughters to Work Day National Blueberry Pie Day



National Shrimp Scampi Day

International Jazz Day. Play some cool tunes in the aisles today.

Arbor Day. Donate a tree in a local park or open space in your store’s name.

National Oatmeal Cookie Day. Share favorite recipes on Pinterest.

Empanadas Argentinas

Š2016 Goya Foods, Inc.

Your shoppers ďŹ nd this and other great recipes at

*Nielsen Strategic Planner, Total US (dollar sales), 52 weeks ending 12/19/15

Front End

GroCErY’S ToP 10

Market Intelligence By The Numbers

Shelf Stoppers

Condiments, Gravies and Sauces Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Nov. 21, 2015)

Glazes-Meat Sauces-Miscellaneous-Shelf-stable Fish, Seafood and Cocktail Sauce Vinegar Hot Sauce Cooking Sauce Chili Sauce Barbecue Sauces Tabasco/Pepper Sauce Catsup

Sales % Change Dollars (Millions) 2015 2014 $11.8 15.9% 14.2% 561.5 6.5 8.7 111.8 6.4 -6.1 341.8 6.3 6.7 127.7 5.7 2.2 155.6 5.1 7.6 90.6 5.1 10.4 455.0 4.6 0.8 94.3 3.6 1.9 448.7

Total Category



% Change 2015 14.3% 4.5 3.8 2.2 1.9 1.0 5.2 0.0 2.2

Units 2014 9.0% 9.7 -7.2 4.6 -1.2 3.1 8.0 -1.9 0.1








NielseN’s Spotlight

They sure like their hot sauce in the city. The fiery condiment scores biggest in struggling urban cores, with the highest use among households with kids, although other pockets of well-above-average consumption can be found in modest working towns and rural areas. in addition to any cultural inclination toward spicier dishes, perhaps time-pressed city families appreciate hot sauce’s ability to add zest in a flash to even the plainest fare, be it scrambled eggs or canned tomato soup.

CroSS-MErCH Candidates

Consumption Index: Hot Sauce LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Modest Working Towns

Plain Rural Living


wITH CHILDrEN: startup Families








small-scale Families








Younger Bustling Families








Older Bustling Families








Young Transitionals








independent singles








senior singles








established Couples








empty-nest Couples








senior Couples
















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+

Very High Consumption (150+)


High Consumption (120-149)

Average Consumption=100

| Progressive Grocer | Ahead of What’s Next | February 2016

• Prepared Food-Dry Mixes • Juice and DrinksCanned and Bottled • Personal Soap and Bath Additives • Soft DrinksNoncarbonated • Spices, Seasonings and Extracts • Packaged Meats-Deli • Shortening and Oil • Detergents More oNLINE Dig up actionable e research and additional al intelligence at


SEASON I’m b u san eno on

dwich es!

Avocados From Mexico – the #1 selling brand of avocados in the U.S. – and the Fanwich promotion targets consumers looking to include better options for health and wellness in their grocery carts. Avocados From Mexico and Healthfull® premium breads are teaming up for Fanwich season to inspire consumers with new sandwich ideas while driving avocado consumption. Delicious and packed with good-for-you fats and nutrients, avocados transform any sandwich into a tasty favorite with the flavor of Avocados From Mexico and Healthfull® premium bread 365/24/7.

Mintel Global New Products Database Category Insights

Spirits and Liqueurs Market Overview The U.S. market maintains a slightly higher per capita consumption than its neighbor Canada and is forecast to record a moderate value growth over the next five years. key iSSueS A major driver in the North American spirits category has been flavor innovation, particularly sweet or extreme flavors, which manufacturers have been trying to balance with sophisticated and premium varieties. Consumer interest in dark spirits has recently been growing, thanks to consumer preference for more complex varieties. This is reflected by the fact that one in five U.S. spirits drinkers say that dark spirits are more sophisticated and have a more unique heritage than white spirits. Dark-spirits sales, especially whiskey, have recorded healthy growth by tapping into the craft trend and new flavors.

For more information, visit or call 800-932-0400.

Coffee maintains a popular reputation for being a sophisticated adult drink, and spirits brands have successfully adopted coffee flavors to attract adults. Many consumers appreciate the pairing, as coffee-flavored spirits continue to drive the market forward. Rum has long struggled for growth, but recent launch activity shows that brands are seeking to reboot the category with aged and spiced varieties capitalizing on dark spirits’ continued popularity.

What Does it Mean? Mainly driven by consumers’ exposure to ethnic cuisine and the overlapping desire for a more flavorful and intense taste experience, especially among Millennials, hotter/spicier flavors in spirits are growing in popularity. Brands can stand out in the


market by innovating around more different complex varieties of chilies and by dialing up the heat level. A greater emphasis on craftsmanship suggests that rum is moving on from its party drink

| Progressive Grocer | Ahead of What’s Next | February 2016

status to being a more premium and exclusive drink. The rise of ultra-premium spirits has been synonymous with high markups and is most likely to push the category forward in the long term.


Hard cider is one of the hottest categories in beverage alcohol and favors are at the forefront with refreshing taste profles that appeal to consumers. Strongbow’s Cherry Blossom Hard Apple Cider delivers the ultimate cut through taste with a cherry blossom aroma, subtle sweetness and a ripe apple fnish.


















JUNE 2016

CONTACT YOUR DISTRIBUTOR REPRESENTATIVE TODAY Enjoy Our Products Responsibly. ©2016 STRONGBOW® Hard Apple Ciders. Produced by Stassen SA. Imported by Bulmers Cider Company, White Plains, NY * SOURCE: Nielsen Scan Food OR FDCM+L52 w/e 12.5.15

Dietitians have long recommended some frozen foods as a convenient way to meet nutrition recommendations and get a balanced meal on the table fast.

All’s Wellness By Diane Quagliani

Health Inside the Freezer Case Thaw shoppers’ resistance to frozen foods.


o question — frozen foods are convenient and often economical choices to get a quick meal on the table. Despite that, they’re given an icy stare by some health-conscious shoppers, who view frozen foods as less nutritious than, or somehow not as “good,” as fresh. March, designated as both National Nutrition Month and Frozen Food Month, is a great time to set the record straight about the benefts of frozen foods.

Case for Good Nutrition Many retail dietitians recommend frozen fruits and vegetables as nutritious options because they’re usually harvested and processed at peak ripeness and nutrition. Tis advice is supported by two recent studies conducted at the University of California-Davis in partnership with the Frozen Food Foundation. Te researchers compared the vitamin, mineral, fber and phenolics (health-promoting plant compounds) in frozen and fresh versions of several popular fruits and vegetables (blueberries, strawberries, carrots, corn, broccoli, green beans, green peas and spinach) and found them generally comparable. Tere’s good nutrition news beyond fruits and vegetables, too, according to a study from the American Frozen Food Institute. A dietitian analyzed a one-week menu plan consisting almost entirely of frozen foods, and found that the plan met most dietary recommendations for adult women, including for key nutrients such as fber, calcium and potassium, which many Americans fall short on. Additionally, frozen foods can help melt away pounds, according to a scientifc review by the Academy of Nutrition and Dietetics Evidence Analysis Library. Te review showed that single-serving portion-sized meals such as pre-packaged bowls,


| Progressive Grocer | Ahead of What’s Next | February 2016

soups and frozen entrées, helped adults control portions, trim calories and lose weight as part of a weight management program.

Satisfying Health Seekers Today’s supermarkets are stocked with frozen foods that meet the demands of shoppers seeking certain healthful attributes. Tey’ll fnd a wide range of organic, gluten-free and vegetarian options, as well as those positioned as “natural” or made with “real” ingredients. Many products feature sought-after ingredients and favors like ancient grains, edamame (soybeans), curry, sriracha and ginger, to name a few. And the preservative-adverse have an ally in the frozen aisle, since freezing is a way to preserve foods, so some frozen products contain few or no added preservatives. Of course, dietitians have long recommended some frozen foods as a convenient way to meet nutrition recommendations and get a balanced meal on the table fast (hello, frozen veggies). But today’s options make that easier than ever. For instance, frozen steel-cut oatmeal and brown rice put these longcooking whole grains within easy reach of the busiest family. Plain frozen legumes like kidney beans ofer protein, fber and other nutrients without the timeintense prep of cooking dry beans from scratch and without the sodium content of many canned versions. Frozen foods also appeal to those concerned about food waste, since frozen products can maintain quality during long storage periods and shoppers can use just the amount they need. Tere’s a lot to love about today’s crop of frozen foods. Look to your retail dietitian to craft engaging messaging and programs that promote health inside the freezer case. PG Registered dietitian Diane Quagliani, MBA, RDN, LDN, specializes in nutrition communications for consumer and health professional audiences. She has assisted national retailers and CPGs with nutrition strategy, web content development, trade show exhibiting, and the creation and implementation of shelf tag programs.

HOW WE’RE CHANGING THE YOGURT CATEGORY Let’s start with some facts: Yogurt Smoothies are growing like crazy, at +10.5%*, even outpacing their spoonable cousins. LALA is showing great momentum, with almost 22% sales growth versus last year*. We’re also expecting accelerated sales with new flavors and better distribution. And we are supporting these efforts with a media campaign in early 2016, with national TV, digital and social efforts, achieving over 4 billion impressions. We know shoppers are on the move more than ever and our campaign is about just that. #YOGURTING is that moment when you’re drinking a yogurt smoothie at the same time you’re doing one of the million things life brings your way every day. Simple, right? By turning yogurt into a verb, a movement has been created. Join us. Stock your store.

*Source: IRI, MULO 52 Weeks Ending 11/1/15


Associate Development

The Best Store Managers

Can Get Better Learning how to write and implement goals is key for personal — and store — development.


By Joan Driggs

hat if the best and brightest store managers gathered together to form an ongoing share group committed to overcoming shared obstacles? Tat’s the goal of the Professional Store Manager Leadership Forum, the brainchild of Harold Lloyd, principal of Harold Lloyd Presents, a Virginia Beach, Va.-based retail consultancy. Lloyd facilitated his second Professional Store Manager Leadership Forum in New Orleans last December. Some 25 banners selected their best store managers to attend what is intended as an ongoing, evolutionary share group tasked with improving not just their stores, but also their banners and the industry. Together with the Retail Feedback Group, Lloyd has surveyed thousands of store managers and compiled fndings that chronicle their daily struggles. But digging a little deeper led Lloyd to see that the issues among the happiest and SMARRTEST most successful store managers difered dramatically from the great majority of Associates respondents who were less satisfed and SMARRTEST Goals: less successful in their positions. Strip away the inefcient equipment Specific and a lack of respect from the boss identiMeasurable fed by the majority of managers nationAction Steps wide, and some fundamental industry Realistic challenges emerge that plague even the most advanced companies: talent recruitRelevant ment and employee engagement.

Timed Ethical Share the goals Type the goals: Commit

Recruitment Evaluation Over the course of innumerable store tours, Lloyd has made note of the “appalling” approach to in-store to the goal in writing recruitment practices. Customer service representatives don’t have a good record of vetting candidates with respect and enthusiasm. Often, candidates are directed to web portals that aren’t accessible in-store.


| Progressive Grocer | Ahead of What’s Next | February 2016

Employee engagement sufers from the same lack of coordination and attention. While complex labor laws may often hamper an associate’s ability to leap at new opportunities, learning new skills is not only one of the best ways of engaging employees, it also ensures task coverage. Lloyd recommends continual training, ensuring that several associates can manage all department tasks. “It’s job enrichment, and it’s company insurance,” he says. In addition to the two items mentioned above, a third issue emerged, not from a manager survey, but through Lloyd’s observation: goal writing. “It’s not unlike mapping your trip to the Golden Gate Bridge,” he explains. “You know to go west, but it’s not a straight line, so you have to be specifc about the steps that will get you there.” People can’t envision those steps, according to Lloyd, because they don’t take the time to think them through. “Te boss isn’t going to respond to an of-the-cuf objective,” he says. “Managers need to explain how they’re going to achieve the goal. Put them in writing, share them, commit to them. Tat’s how you make them real.” In addition, goals must be relevant to the store and the banner. Ultimately, the information — and the wins — will be shared with other store managers. “I’d like to elevate the position of store manager,” asserts Lloyd. “It’s an honorable career. Tese are people running a business.” PG

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Profile in Progress

s ’ e g d i r F Dare to lend its name The first supermarket ge ha s formed a smar t-frid te Ri op Sh , ce ian pl ap apter to an IoT marks a brave new ch pilot partnership that un ocer y battlegro d. in an ever-changing gr By Jim Dudlicek and


n an era where customization and personalization are the operative words in food retailing, the challenge to build closer connections with shoppers has never been greater. Ubiquitous internet connectivity is driving radical transformation of a retail world whose epicenter of consumer intelligence, long entrenched in the front end and back ofce, has given rise to a new ecosystem of data derived from interconnected devices, many of which enable consumers to shop for just about anything without ever entering a store. Now it’s possible for folks not only to shop for groceries without leaving their


Meg Major

kitchens, but also for their refrigerators to make up the shopping lists. “We live in a hyperconnected world, where every device, from the phone to the fridge, is becoming connected to the internet,” says Betty DeVita, chief commercial ofcer of Purchase, N.Y.-based MasterCard Labs, a partner with Samsung in the development of its Family Hub refrigerator, which launched at the recent annual Consumer Electronics Show in Las Vegas (see related sidebar on page 28). Tis so-called “smart fridge” is equipped with the Grocer ies by Master Card app, which, according to DeVita, “demonstrates a signifcant enhancement to the Smart Home environment by bringing consumers a simple and convenient way to

| Progressive Grocer | Ahead of What’s Next | February 2016

In-Store, Online Cake Ordering Kiosk The custom QR code on the header card gives consumers access to custom cake ordering anytime, anywhere Or orders can be placed online in your bakery

With THE MAGIC OF CAKES® KIOSK SOFTWARE, your bakery customers can order custom cakes in-store, from their smart phones, tablets, or at home.

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Profile in Progress

CoMMunAl KitCHEn A 21.5” HD lCD resolution screen on Samsung’s Family Hub refrigerator serves as a digital family command center that allows household members to post, share and update calendars, pin photos and leave notes via smartphones.

shop for groceries directly from their kitchen.” Te Family Hub promises to be a game-changer for traditional grocery retailers, in particular Keasby, N.J.-based Wakefern Food Corp., which has been at the forefront of the industry with its popular online delivery and click-and-collect services. Te Northeastern supermarket cooperative, whose members operate 250 ShopRite supermarkets throughout New Jersey, New York, Pennsylvania, Connecticut, Delaware and Maryland, has teamed up with MasterCard to integrate its popular online grocery shopping service, ShopRite from Home, with Groceries by MasterCard, which comes preloaded in the new Samsung Family Hub refrigerator and allows consumers to order directly from the fridge using a built-in screen.

go using the device most convenient to them, with the highest level of security. “Multiple members of the family can add to the cart and build a single cart over the week, and fnal approval and submission of the cart is secured through a four-digit PIN to allow more control and avoid ordering duplicate items,” DeVita explains. “Virtual-aisle shopping technology allows consumers to search for their favorite brands across multiple grocers. Since the app directly connects grocers, consumers are able to access deals and coupons, and there is no markup on delivery charges.” Te family cart is intelligent and learns from shopping habits, and MasterCard is continuing to work with partners to create simple and convenient experiences for cardholders. “Consumers appreciate the convenience, and merchants value having another way to engage with customers and build their brands,” DeVita observes.

use the appliance’s integrated tablet to order groceries from the comfort of their own kitchens by scheduling in-store pickups or at-home delivery with a few simple taps on the Samsung Family Hub refrigerator. Using the Groceries app’s secure, easy-to-navigate interface, customers also have the ability to add products to a ShopRite shopping basket and pay online. Items are added to a cart and paid for in a simple, single checkout experience that accepts any U.S.issued credit and debit cards. Orders are delivered directly by the merchants and aren’t dependent on a third-party or concierge service, making shopping more efcient. DeVita notes that features such as cameras within the fridge and a companion mobile app will allow consumers to view contents and shop on the

Seamless Convenience Groceries by MasterCard was developed in a partnership between MasterCard Labs and Samsung. At launch, consumers will be able to shop and select their needed items and favorite brands from leading online grocer and key integration partner FreshDirect, as well as from ShopRite. MasterCard has also developed a companion mobile app for Groceries, which allows multiple members of a family to add to a single cart from a device of their choice. At home, consumers can use the mobile app to scan bar codes on products for easy additions to the online shopping cart. “Just as Family Hub changes the way we interact with our fridge, the new Groceries app will change how consumers shop,” says John Herrington, SVP

Just as Family Hub changes the way we interact with our fridge, the new Groceries app will change how Cool Comfort consumers Te fridge is readying for its retail debut this spring, shop.” after which time ShopRite customers will be able to —John Herrington, SVP/GM of home appliances, Samsung Electronics America


| Progressive Grocer | Ahead of What’s Next | February 2016

and GM of home appliances for Ridgefeld Park, N.J.based Samsung Electronics America. Aside from ShopRite, Groceries by MasterCard is creating a new channel of consumer engagement for fellow online launch partners FreshDirect and MyWebGrocer, whose respective executives are equally pumped about the prospects for seamless consumer convenience. “Since launch, FreshDirect has been on a mission to get consumers great, fresh food with less friction,” says Jodi Kahn, chief consumer ofcer at the Long Island City, N.Y.-based e-grocer. “Tis new technology speaks directly to that mission, giving consumers a new, seamless way to shop for groceries right from their own kitchen.” Commerce-enabled devices like the Family Hub fridge, adds Eric Healy, president of Winooski, Vt.-based MyWebGrocer, “represent an unprecedented opportunity for our customers, because it puts them right where the consumer path to purchase begins: in the kitchen.” Moreover, Healy notes, the platform provides great opportunities to “leverage the open, API-centric capabilities of our Digital Experience Platform … with MasterCard, and enable grocers and CPG brands to capitalize on the way in which the Internet of Tings (IoT) revolution will transform the grocery shopping experience.” As the rollout continues in 2016, additional grocers will be added to the Groceries app through MasterCard’s partnership with MyWebGrocer, which provides e-commerce and digital marketing solutions for more than 130 grocers across the globe. “As with a lot of technology, in its early days there will be eager adopters and those that question the merits of the innovation,” says Barry Clogan, MyWebGrocer’s SVP of business consulting services. “However, the IoT has amazing potential and will continue to be a growth area that inspires changing lifestyles and consumer behavior. Initially, the entry price points [$4,000] seem prohibitive,” he acknowledges, but anticipates that it won’t be long before “these innovations are more widely available, and at prices that will drive customer adoption” from a want to a need.

May Crowning Te refrigerator, which will be tested in ShopRite’s main trading area in greater New York, is scheduled to roll out to the market this coming May. “Te game-changer, I believe, is about helping our customers get their ShopRite groceries through a variety of methods,” says Donna Zambo, Wakefern’s director of digital commerce and innovation. “We see it as our mission to allow them to shop on their terms — anywhere, anytime — and we want to provide as many opportunities as possible to allow them to do that.” Wakefern already ofers a ShopRite mobile app, the previously mentioned ShopRite from Home click-andcollect service and ShopRite Delivers. “We are committed to providing the best service online and in-store. It’s not an either-or [brick-and-mortar or online] — it’s about both,” Zambo notes. “It’s about overall growth and providing a great shopping experience in-store


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and online. Many of our customers do both in-store and online shopping, and it’s all about the personal service and experience that we ofer across both platforms that makes us successful.” DeVita cites Cisco Systems research indicating that there will be 50 billion connected devices by 2020, “and this connectivity is quickly changing the way people transact,” she afrms. “Our focus for 2016 is to frst expand the number of merchants on the platform, giving the consumer incredible choice in shopping.” Troughout 2016, MasterCard Labs will also be

adding more product features, including naturallanguage voice commands, fridge-camera integration, merchant couponing and loyalty programs, and video integration.

Perks of Being First “Te Family Hub isn’t a silver bullet — yet — but it serves to illustrate that grocery retailers need to provide solutions that enable consumers to access their online stores directly from the kitchen, if they are to compete with e-commerce grocery pure-plays

The Convenience Economy Comes of Age Among the many transformations on the retail landscape in the past year, perhaps none was more profound than the proliferation of the “convenience economy,” in which everything is at the consumer’s disposal at the click of a button, according to Chris Bryson, CEO of Toronto-based Unata, a leading omnicommerce solutions provider. “2015 was the year when UberX went from a relatively smaller, unknown player to a tidal force driving change across every sector,” affirms Bryson, adding, “We’re now at a point where new business ideas are often described as ‘Uber for ______.’” The convenience economy’s biggest shift, he continues, “came when major players like Starbucks started embracing it with their Order Ahead mobile app,” which has in turn Chris Bryson, CEO, Unata enabled “the widespread adoption of this kind of immediate customer transaction, and reinforced the need for quick and convenient service on a daily basis,” and with it, a huge shift in consumer expectations across all sectors. As a result, retailers of all stripes “are all of a sudden playing catchup, figuring out how they can incorporate real-time, on-demand transactions into their current strategies,” notes Bryson, who founded Unata in 2011. The company’s current roster of grocery clients includes Longo’s, Grocery Gateway, Lowes Foods, Lunds and Byerlys, and Raley’s, among others. When asked to elaborate on some of the most striking examples of the convenience economy now catching his eye, and which are the most important, Bryson ticks off a shortlist of standouts, including: UberX/UberEATS: “Consumers don’t have to call to order their car/food, take out their wallets to pay, or wait very long for their car/food to arrive. They can watch the driver travel and arrive live on a map, with the ability to communicate with their driver at the click of a button.”


Starbucks: “The Order Ahead app is simple and easy to use, and saves the customer minutes on a daily basis — which becomes especially valuable on rushed mornings. They are reinforcing this type of customer experience on a daily basis.” Ritual: “This is a Toronto-based app — currently expanding in the U.S. — that lets consumers order their lunch ahead from a variety of restaurants near their location. The app notifies the consumer exactly when they should leave their current location so that they arrive at the restaurant precisely when the food will be ready for pickup, ensuring the food remains as hot and fresh as possible for them. Ritual is a simple and clean user experience that lets customers order food in a couple of clicks and saves them five to 10 minutes a day of waiting time.” Amazon Echo and Dash with Prime: “With both Amazon Echo and Dash, consumers don’t have to write a shopping list, go to their computers or even pull out their phones to make an order, or take out their wallets to pay. With the Dash buttons, they can literally order at the click of one button, and with Echo, Amazon has taken the click out entirely. It’s literally the easiest possible way for consumers to online shop. Combined with Amazon Prime, consumers don’t have to wait long to get the things that they’ve ordered, revolutionizing the meaning of convenience in online shopping.” While it’s still unclear what the shopper of the future will find the most convenient way to shop for groceries, Bryson says: “The convenience economy so far tells us that the fewer clicks needed, the more adoption there will be, which is why we have our eye on Amazon Echo. … We’ve seen how quickly Uber has changed the landscape, and we expect it to continue to change just as quickly in ways we don’t yet know over the next few years. Retailers need to focus on setting up their systems so they can easily flex, adapt, iterate and connect with new systems.”

| Progressive Grocer | Ahead of What’s Next | February 2016

from Amazon down,” asserts Supriya Chaudhury, CMO of Boston-based online analytics provider Clavis Insight. “Tese solutions will include devices similar to the Amazon Dash scanner as well as easy-to-use mobile and tablet apps, and partnerships with the likes of Samsung for this emerging class of in-home technology.” Looking ahead, Wakefern’s Zambo is pleased about the retailer co-op’s pioneering role in the promising platform. “It’s good to be a frst adopter on technology, because that’s how you grow loyalty and develop good products,” she says, despite the fact that it’s admittedly difcult to predict what the exact impact will be on the future shopping landscape. “We know digital is a huge part of this new world. We recognized that more than a decade ago, when we began ofering online services and integrating digital into the ShopRite shopping experience,” Zambo continues. “Online customers now represent one of the fastest-growing segments of our business, and service is really the key [to why] we’ve been so successful. We rely heavily on our knowledge as grocers — the supermarket business is in our DNA — and we’ve taken that knowledge and leveraged it on the digital side.” “e-Commerce is an attempt to make grocery shopping more convenient, and the last decade has seen a general push toward that,” Clogan concurs. “Whether it is the increase in convenience stores’ locations, the proliferation of grocery items in other formats (e.g., drug stores) or the provision of tools that let people order their groceries whenever or wherever, this technology is part of that general trend. Tis is a case of evolution rather than revolution.” Te Family Hub refrigerator, according to Clogan, “brings the battleground between traditional retailers and pure-play retailers into the consumer’s kitchen. It doesn’t give traditional retailers an advantage, as pure-play retailers are doing similar things — it merely allows traditional retailers to compete.” Of course, it ultimately depends on the rate of adoption by consumers. “Tis technology is yet another way to embed a retailer into the daily life of a consumer, so grocery retailers who adopt this technology can get frst-mover advantage over other grocery retailers and Amazon,” Clogan says. “To some degree, this product competes with Amazon’s Dash product, which gets Amazon into people’s kitchens and pantries. However, it is important to note that Samsung plans to integrate with Amazon’s Alexa [a cloud-connected AI assistant], so it’s a fair assumption that Amazon Fresh integration can’t be far behind.” Comparing the two technologies, Chaudhury notes that while “the potential benefts of the Amazon Dash button [are] brand advertising, instant reordering and captive future purchases,” consumers “could be skeptical about the lack of control in their purchase process, and fear trading convenience for higher pricing, given Amazon’s dynamic pricing models.” She continues: “Family Hub appears to deliver the convenience of push-button reordering without the same concerns of brand monopoly and, perhaps in the future, retailer monopoly as the app expands to cover more retailers in more markets.”


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GeT smarT The Family Hub partnership heralds a revolutionary collaboration that straddles the Internet of Things and grocery e-commerce.

This new technology speaks directly to that mission, giving consumers a new, seamless way to shop for groceries right from their own kitchen.” —Jodi Kahn, chief consumer officer, FreshDirect

Wake-up Call Clogan notes that Samsung is looking into the possibility of programming Alexa directly into the fridge, “to give your kitchen the full run of functionality that you’d get with the Amazon Echo smart speaker. You’d say ‘Alexa’ to wake the fridge up, then ask it to stream some music, set a kitchen timer or add tomatoes to your shopping list.” He adds that Samsung had indicated its intention to have Alexa functionality ready to go for the refrigerator’s U.S. launch this spring, “but after a bit of backpedaling, they’re now classifying it as a possibility for further down the road. It’d be a shame if it didn’t happen — piggybacking on Alexa’s popularity would be a clever way to boost this refrigerator’s appeal. With Amazon’s open approach to the software that powers its voice-activated AI, it should be possible for Samsung to add it into the fridge with just a few lines of code.” As the new technology makes inroads, Clogan expects a minor dip in sales, due to current options like online ordering for delivery or click-and-collect. “By knowing exactly what is in your fridge at any given moment, digital shoppers may skip impulse purchases that form an important part of grocery retailers’ sales,” he says. “However, our data suggests that digital shoppers spend more per shopping trip than traditional shoppers, so these smart fridges will certainly contribute to that trend. Te fridge’s ability to send consumers personalized ofers based on their shopping history — and what’s already in their fridge — will ofset any cannibalization. In the longer term, this may help add incremental growth,” he notes, adding that there might still initially “be a slight cannibalization, as shoppers will have a choice between devices — mobile phones, tablets, fridge or desktop.” Retailers that are early adopters will have another way to reach their consumers in a highly personalized way. “Tey will be able to communicate with their customers by alerting them to items in their fridge that are on sale and sending special ofers to these presumably afuent customers, thereby deepening customer loyalty to their particular store,” notes Clogan. “Unlike email, which can end up in a spam folder, the retailers will have the ability to customize ofers and customer communication in a very unique way.” Purpose-driven Hub As the rollout ramps up, DeVita says additional grocers will be added to the Groceries app through


| Progressive Grocer | Ahead of What’s Next | February 2016

MasterCard’s partnership with MyWebGrocer, whose digital commerce solutions are present in more than 10,000 retail stores and used by 500-plus major consumer packaged goods brands. “Looking ahead, we continuously seek and evaluate new partnerships that enable us to innovate in order to create new benefts for our stakeholders,” she says. “MasterCard may explore other joint development opportunities with other partners.” With Family Hub entering the market, what could the grocery shopping experience look like a year, or even fve years, from now? “Tis technology heralds the frst signs of collaboration between the ever-popular IoT and grocery e-commerce,” afrms Clogan. “Over the coming years, we will see the profusion of grocery e-commerce-enabled devices throughout the home and ofce, including watches and other wearables. Not all of these devices will succeed, but between the IoT and development in areas such as 3D printing and artifcial intelligence, the future appears to be much more consumer-centric and convenient.” As connected homes become more pervasive and as the price of smart appliances continues to drop, Clogan believes more consumers will adopt these types of consumer durables, and shopping digitally, whether from a phone, tablet, desktop or refrigerator, “will become the norm,” he predicts. From a supply chain perspective, the technology should allow retailers to become more proftable and efcient. “With these types of smart appliances, they can begin to predict the shopping habits of the digitally enabled customers and manage their inventory more efectively, with fewer out-of-stocks,” he explains, citing the rapid decline in the price of oil, which should also allow grocers to run their operations more proftably. Te mandate to build closer connections with shoppers will continue to evolve, says Sylvain Perrier, president and CEO of Toronto-based Mercatus Technologies Inc., driven largely by best-in-class retailers “engaging shoppers in more meaningful, personalized and contextualized conversations through all consumer touchpoints [via] implicit and explicit data sources and interactions.”









105 118







108 118

100 Source: IRI US PANEL, 52 Weeks Ending 10/5/2014 SM

©2015 CSC Brands LP


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The gamechanger, I believe, is about helping our customers get their ShopRite groceries through a variety of methods.” —Donna Zambo, director of digital commerce and innovation, Wakefern Food Corp.

(Read Perrier’s further thoughts on the subject in his Digital Dialogue column on page 117.) Foremost to this progression, according Perrier, are mobile applications, which “are at the heart of most consumer micro-interactions and continue to drive success for many retailers. Tey are well poised to link both the online click and instore physical interaction. Grocery retailers should focus on enabling their content and system platforms to be accessible and tailored for mobile, in-store and in-home consumer-facing solutions that will enable rich and personalized interactions.” Retail trading partners have a host of untapped opportunities that remain to be unlocked as the rapidly evolving landscape continues to come into view, according to Perrier, who ofers caution-

ary parting words. “Te dawn of the smartphone revolution is over. In fact, we have reached mobile saturation in North America, [where] we now have access to shoppers at a moment’s notice and can engage with them privately and socially. Te next big step,” he continues, “will be for retailers and supplier partners to learn how to deliver meaningful and purposeful content through personalization and contextualization.” PG

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Front End Report

The Future of

Front End Innovations promise to revitalize the section. By Bridget Goldschmidt


n its present state, the average supermarket front end is overdue for a makeover. “Today, the front end continues to serve a transactional role for both retailers and shoppers, and frankly very little innovation has occurred in this space,” notes Michael Taylor, president, North America private brand at Stamford, Conn.-based Daymon Worldwide. “For retailers, it’s the last point of contact, and the last chance to sell something to the shopper. Tis is why we typically fnd impulse or convenience items like batteries or snacks at checkout. “Tis area of the store doesn’t currently create a meaningful consumer engagement to drive more than just impulse purchases. For the shopper, this is the point in their shopping trip where they want to move quickly to pay for their purchases,


| Progressive Grocer | Ahead of What’s Next | February 2016

and therefore they’re not as engaged as they are in other areas of the store.” To address this problem, grocers will have to innovate. “Retailers have an opportunity to create new, diferentiating experiences for shoppers through more engaging and interactive merchandising,” observes Taylor. “Surprising them with unexpected items in unexpected places or in unexpected ways will drive more impulse purchases and profts, and make a fnal important connection to the store banner.” His recommendations take the section out of its long-established comfort zone. “Fresh/foodservice is clearly a huge opportunity in flling immediate needs like ‘what’s for dinner,’” says Taylor. “We also suggest moving from the standard assortment of gum and candy to instead

provide specialty items like premium indulgences or healthy snack options to surprise and inspire shoppers. Another idea is to use the space to merchandise the items shoppers frequently forget, such as birthday candles, greeting cards or pet treats, or to remind them about special occasions. Both of these ideas would reward a shopper by saving them another trip to the store.”

Keeping Candy Dandy Despite such advice, it doesn’t seem that candy and gum are ceding space in most front ends any time soon, so the trick will be growing category sales in the section — however the section is defned. “At Te Hershey Co., we understand that unplanned purchases can occur anywhere there is a transaction point, whether in a traditional store, online or mobile,” asserts Bethany Bauer, senior manager, Hershey Paypoint Experiences at the Pennsylvania-based company, adding that alternative pay points such as self-checkouts, grocery pickup, deli and prescription are growing the fastest. “Te Hershey Paypoint team is working to develop fexible merchandising solutions for the new methods of conducting the transaction.” Tese include a suite of tools to analyze each retailer’s front end performance in relation to category space allocation, planogram efciencies and merchandising best practices. Among the company’s front end initiatives are several click-and-collect merchandising tests expected to be in place by the end of the frst quarter of 2016, and the Safeway Candy Zone, which has resulted in double-digit

sales growth for Candy Zone items, and strong sales growth for the entire candy, mint and gum category. “Retailers must consider fexible racking solutions (i.e., nonwelded magazine pockets) to ensure retailers can react to category shifts, allow for new categories, pack types and innovation,” urges Bauer. Hackettstown, N.J.-based Mars Chocolate North America and one of its sister companies, Chicago-based Wrigley, are pursuing a similar path, addressing the evolving checkout process by designating the physical areas where shoppers pay for their goods and services as transaction zones. “Our goal is to help retailers drive sales growth within the diferent transaction zones by ensuring the right category space allocation and item assortment, in order to increase sales of impulse items to more shoppers,” explains Tifany Menyhart, Wrigley’s director category management. For instance, Mars and Wrigley found that merchandising gum and mints over the belt on the left side of the queue increases total front end sales, due to their high impulsivity and low decision time, while magazines’ high impulsivity but much longer decision time mean they should be merchandised further away from the cashier. The companies further note that retailers can encourage multiple impulse purchases on the right side of the queue by merchandising complementary categories in the same need

Retailers have an opportunity to create new, differentiating experiences for shoppers through more engaging and interactive merchandising.” —Michael Taylor, Daymon Worldwide

February 2016 | |



Front End Report

state adjacent to each other. As an example of this, nonchocolate confections and chocolate can be merchandised next to beverages due to their high impulsivity and low decision time, as well as high overlap in purchase. Similarly, since more than 90 percent of beverage shoppers also buy salty snacks, the latter should be merchandised above the cooler to take advantage of this.

Offering produce in some checkout lanes doesn’t mean doing away with other items in other lanes. … Because it’s not an all-or-nothing proposition, chains can experiment.” —Kathy Means, Produce Marketing Association

Bubbling Up As noted above, soft drinks are another integral element of the front end. “In the case of beverages, shoppers are looking for or compulsively want quick and easy solutions at the end of their trip,” asserts Ron Hughes, director of shopper experience innovation at Te Coca-Cola Co., in Atlanta. “We strive to provide that convenience and are committed to providing shoppers with an experience that ofers them unequaled ‘ice-cold’ refreshment. We are also focusing on providing a delightful shopping experience by incorporating new and emerging technology, sensory experiences, and compelling call-to-action messaging into our solutions.” To maintain the category’s fzz, “Te Coca-Cola Co. is approaching the front end through an omnichannel lens, making sure we develop robust front end landscape insights that are relevant to all categories and shoppers,” says Hughes. “We are studying how the front end landscape will evolve over the next three to seven years, and the role beverages, other traditional power categories and new emerging categories can play in helping customers grow sales and profts.” Further, in common with candy companies, Coke is looking to impulse purchases beyond the front end. “We are also developing strategies for how retailers can leverage and better understand opportunities brought about by alternative checkout methods and the evolving checkout landscape,” adds Hughes. “We are looking at new insights on shopper attitudes and buying behavior relative to front end checkout and total-store checkout opportunities.” A Better-for-you Boost Doubtless coming as no surprise to Daymon’s Taylor, healthier items at the front end are much in the news of late. While this article was being written, Aldi’s and Target’s eforts in this direction were grabbing headlines. But what does the rollout of such a program actually entail? “Last year, around National Nutrition Month in March, I began pilot-testing more nutritious oferings at two checkout lanes,” recounts Elisabeth D’Alto, retail dietitian at ShopRite of Timonium, in Lutherville-Timonium, Md. “Te pilot test came


| Progressive Grocer | Ahead of What’s Next | February 2016

about after talking with shoppers and store associates during tours and nutrition consultations. It was apparent that there was a need for better-for-you options on the front end checkout lanes. I’m encouraged by the positive feedback we’ve received on the program over the past year, and these two lanes now have become a best practice for our store.” Although the pilot was ultimately successful, getting to that point wasn’t a completely smooth process. “When I was initially selecting the products to be merchandised on the front end, it did take some trial and error at frst to fgure out which products worked the best,” admits D’Alto. “We featured an end cap cooler that included plain bottled water, unsweetened iced teas, coconut water, 100 percent juices and low-fat milk. I also wanted to make sure that we were sensitive to customers’ dietary concerns, so we ofered a variety of low-sodium, reduced-sugar, low-fat, gluten-free and dairy-free options.” Another issue was making sure shoppers knew about the new oferings. “Sometimes customers can be [so] bombarded with all the messaging and signage in a store that it’s hard to set a program like this apart from others,” admits D’Alto. “However, with that said, this is a program that creates a point of diferentiation for us compared to other retailers in our market. Another advantage is that we have a registered dietitian like myself on staf to help drive its success and ofer free nutrition services to our customers.” Te program’s success means that “ShopRite will soon be ushering in an initiative that places betterfor-you snacking items as an available option in the checkout lane of nearly all of our stores,” according to D’Alto. “ShopRite also plans to add better-foryou beverage choices in coolers in most of its stores. Te complete rollout is expected to take about a year, and will start in mid-2016.” CPG companies are also aware of growing consumer interest in healthier items, and planning accordingly at the front end. As an example, Mars and Wrigley note that the appropriate “categories should be evaluated for product mix that satisfes growing needs for better-for-you snacking and beverage.”

Fresh Ideas Hand in hand with the push for healthier products at checkout is the advent of more perimeter items merchandised at the front end. “Having ‘healthy’ checkouts, including those that ofer fruits/vegetables, is defnitely a topic of conversation,” afrms Kathy Means, VP of industry relations at the Newark, Del.-based Produce Marketing Association. “Tough there’s a long way to go, we are seeing movement.” While much of this worldwide movement is occurring in the convenience store sector, Raley’s and Target are among the grocers testing this merchandising format. Means believes that produce’s presence at the front end “is likely to increase,” but adds: “It’s important to note that ofering produce in some checkout lanes doesn’t mean doing away with other items in other lanes. Consumers looking to grab something at the last minute can fnd what they want, whether that’s produce or other foods or magazines or razor blades. Because it’s not an all-or-nothing proposition, chains can experiment.” Fruits and veggies aren’t the only perishable products making their way to the front end, however. Cindy Sorensen, VP business development at the Midwest Dairy Association, in St. Paul,

Minn., notes that “dairy products are well positioned to help retailers capture more of the quick-trip shopper experience that they are losing to other channels of trade. Te greatest opportunity for a traditional grocer is to more conveniently locate those items in the store.” To boost consumption of milk and other dairy products, Sorensen suggests grab-and-go coolers “at the front entry of the store [containing] those items that are most frequently shopped for quick trips: milk, juice, eggs, cheese and butter…. and we recommend a display of bread and bananas also be located in close proximity.” As part of a better-for-you front end assortment, Sorensen points out that “[d]airy products such as single-serve milk, cheese sticks and yogurt lend themselves well to being included on a front end fxture, along with other healthy snack options such as granola bars and fresh fruit,” citing Hy-Vee’s Blue Zone checkouts as a particularly noteworthy example of this form of merchandising. PG For more about front end trends, visit

Coming in the March 2016 issue of

Part 1 of Mercatus Technologies’ Educational Series

Operationalizing eCommerce

Dairy products such as singleserve milk, cheese sticks and yogurt lend themselves well to being included on a front end fixture.” —Cindy Sorensen, Midwest Dairy Association


Breakfast Cereal


Progression The morning staple aims for continued relevance. By Bridget Goldschmidt

Consumers are looking for cleaner, less sugary foods. Granola fits that bill.” —Aaron Anker, GrandyOats



ereal has long been a breakfast favorite, but the category has stalled of late. According to Schaumburg, Ill.-based Nielsen, overall cereal sales were down 2.2 percent for the 52 weeks ended Nov. 21, 2015, with the readyto-eat segment seeing a 3 percent sales decline. Even though “we all know that cereal has had a tough couple [of] years … the reality is this: Cold-cereal penetration in the U.S. still is hovering at about 90 percent,” said Craig Bahner, president, U.S. morning foods at Battle Creek, Mich.-based

| Progressive Grocer | Ahead of What’s Next | February 2016

Kellogg Co., during an analyst day presentation last November. “Tose 90 percent of households buy on average nearly 21 boxes of cereal per year. … Tink about what can happen if we can get that consumer to buy just one more box of cereal.” Bahner noted that the company’s core cereal business — comprising Special K, Frosted MiniWheats, Raisin Bran, Rice Krispies, Frosted Flakes and Froot Loops — was up, thanks to Kellogg’s eforts to drive category growth. Tis strategy includes product innovation, particularly in relation to Special K, which he described as “our biggest and most important cereal

It’s about time someone gave the status quo the heave-ho.

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We believe it’s our responsibility as the market leaders to help our retail partners think about better ways to drive growth in the category.” —Craig Bahner, Kellogg Co.

Breakfast Cereal

brand.” Special K Red Berries — which Bahner quipped now has “you guessed it, more red berries” — has proved a success. “It’s stabilizing and driving our Special K business back to growth,” he afrmed. Tis year, Kellogg will launch Special K Nourish, which Bahner described as containing “ingredients like quinoa and almonds and real fruit and coconut,” going on to note that “we’re investing to drive high levels of awareness and trial behind this initiative and drive our Special K business.” Additional Kellogg cereal innovations include Mini-Wheats Harvest Delights, which, in Bahner’s words, “starts with a very basic shredded wheat biscuit” topped with “real fruit bits [and] an amazingly sweet glaze”; Raisin Bran Crunch, now with more of the product’s signature crunchy clusters; and, perhaps most intriguingly, Kellogg’s To Go Breakfast Mix resealable single-serve pouches, a product made to be eaten without milk and featuring pieces larger than those of traditional cereal for what the company calls “optimal fnger-to-mouth munching,” in a package designed to ft in a car’s cup holder. Kellogg isn’t the only cold-cereal giant that’s busy innovating. Nature Valley, a brand of Minneapolis-based General Mills, has launched three new cereals — Baked Oat Bites, Honey Oat Clusters and Chocolate Oat Clusters — each containing at least 10 grams of protein when eaten with milk, and all touted as good sources of whole grain and fber. Te company has also undertaken to remove all artifcial colors and favors from its cereals by 2017,

and recently issued an update on its goal to reduce sodium by 20 percent across 10 key retail product categories by the end of 2015. As of December, it had reduced sodium in its cereals by 18 percent, which although falling slightly short of the goal, still represented “signifcant progress,” according to General Mills. Further product moves from the company include introducing fve gluten-free varieties of its iconic Cheerios brand, to take advantage of the burgeoning free-from market. Although oats, from which Cheerios is made, are naturally gluten-free, “General Mills made big investments to remove the traces of wheat, rye and barley that typically came in contact with the brand’s whole-oat supply,” according to Rockville, Md.-based Packaged Facts. In late 2015, David Sprinkle, research director for the market intelligence frm, observed, “Even excluding sales of [the frst mainstream gluten-free cereal] General Mills’ Chex, we estimate that sales of gluten-free cereal increased 18 percent between 2013 and 2014, to reach $38 million last year.” Also catering to the gluten-free crowd is East Hartford, Conn.-based Bakery On Main, whose Bunches of Crunches is described by founder and President Michael Smulders as “a chocolate superfood ‘grain-ola’ cereal that is packed with amazing favor and superfoods like cacao and chia.” Te ready-to-eat cereal line comes in Dark Chocolate Sea Salt with Chia and Coconut Cacao varieties. According to Smulders, Bakery On Main’s gluten-free cereals “address the consumer’s desire for great taste, clean ingredients and trusted products.”

Some Like it Hot Te hot-cereal segment, which has enjoyed a recent upsurge in popularity, saw its sales dip by 0.7 percent, according to Nielsen for the 52 weeks ended Nov. 21, 2015, most likely as a result of so many new products fooding the market. Smulders notes that “the increased interest in hot cereal and portable breakfast options has created a decline in traditional boxed cereal.” Meeting both of those needs is the company’s


| Progressive Grocer | Ahead of What’s Next | February 2016


Breakfast Cereal

instant-oatmeal line, which “combines certifed gluten-free oats with ancient grains chia, fax, quinoa and amaranth, making it a good source of protein, fber and omega-3,” he notes. “Te new Variety Pack ofers two packets each of our Maple Multigrain Mufn, Strawberry Shortcake and Apple Pie Instant Oatmeal favors.” Additionally, for those who like their oatmeal old-school — that is, without ancient grains or other trendy added ingredients— the company ofers the Happy Oats line, which comes in Steel Cut, Rolled and Quick Oats varieties, all packaged in 24-ounce vertical bags with “an ‘inno-lok’ seal that provides a high level of convenience to the consumer while displaying the product’s information in a clear yet engaging manner,” says Smulders. “Tese oats are monitored by a third-party certifer from farm to table, showing that they can be trusted while also providing the perfect texture and taste.” On the mainstream oatmeal front, Quaker Oats, a Chicago-based unit of PepsiCo, not only recently

d i s p l ay r aC k - 4 8 ” x 3 6 ” x 12 ” ( 2 )

marked the 100th anniversary of its familiar canister, but also continues to launch new products. Last month saw the nationwide rollout of Quaker Gluten Free Oatmeal in three varieties: Quaker Quick 1-Minute Standard Oats and single-serve pouches of Quaker Instant Oatmeal in Original and Maple & Brown Sugar favors.

Granola Growth While hot- and cold-cereal sales saw sales decreases for the 52 weeks ended Nov. 21, 2015, Nielsen found that granolas and natural-type products

H a l f s i z e d i s p l ay - 4 8 ” x 24 ” x 8 ”

Build impressive displays GraB customers’ attention sell product faster use your prime space Best easy to use and stock for less laBor

Booth #1216

feBruary 28th - march 2nd d i s p l ay r aC k - 4 8 ” x 3 6 ” x 12 ”

C a l l 816 813 3 3 3 7 w w w . f o r t e p r o d u Cts o l u t i o n s . Co m

experienced a substantial 8.3 percent uptick in sales during the same period. Noting that “most of the [cereal] category is overly processed, and it has a lot of sugar and minimal nutrition,” Aaron Anker, “chief granola ofcer” and coowner of Brownfeld, Maine-based organic granola and hot-cereal maker GrandyOats, asserts: “Consumers are looking for cleaner, less sugary foods. Granola fts that bill, and often ofers fber and protein, too. Nuts and antioxidants remain in demand and are added components consumers look for.” Te company’s newest products are Family Value Size Honey Nut Granola and Vegan Vanilla Almond varieties in 48-ounce packages, and 13-ounce Coconut + Fruit and Wild Blueberry SKUs. “Partnering with like-minded farmers and producers in product development … helps maintain a commitment to shared values, with emphasis on a short, clean list of ingredients,” observes Anker. “Sourcing locally whenever possible and making small batches by hand also make a huge diference.” For its part, General Mills has bolstered its presence in the segment with Cascadian Farm’s Farm Stand Harvest granola in four favors, including Cranberry Maple Wild Rice, which is available exclusively at Target, and Nature Valley Granola Crunch in Oats & Honey and Cinnamon varieties.

Fundamentals of Selling When it comes to marketing, Kellogg focuses on the “need to create shopping experiences that inspire consumers to go down that aisle and pick up that cereal and put it in their basket,” as Bahner noted at the company’s analyst day last November. “Tat starts with getting the fundamentals right. Te three fundamentals … are perfect shelf, account plan efectiveness and win at retail.” According to Bahner, “Perfect shelf is about having the right brands, the right products, the right foods, in the right spot on the shelf, when the consumer wants it, and when the shopper goes down that aisle, so they can fnd exactly what they’re looking for. Trough some very strong category management work and through managing our assortment, we’re seeing our base SKU velocities grow, meaning our shelf assortment is being much more productive and generating more sales.” He explained account plan effectiveness as “a measure of both the efciency and the efectiveness of the trade spending that

we put out in the marketplace. We’ve done a lot of work to make sure we’re getting the best bang for our buck, the best ROIs.” Te third fundamental involves “getting those Kellogg sales reps back in the stores at the point of sale, and winning in each and every retail location,” explained Bahner, adding that the company was “up to 57 percent of our volume being covered by Kellogg sales reps. [As a result,] we’re seeing our share of display up 5 percent in 2015 versus 2014.” Further, “we believe it’s our responsibility as the market leaders to help our customers, our retail partners, think about better ways to drive growth in the category,” he asserted. “So we set our aisle up in an age fow with kids, all family, adults. We’ve got this now in 40 percent of our ACV, and we’re seeing a 200-basis-point increase in category sales growth in stores that have the age fow set versus stores that have the traditional manufacturer set. … We’ve [also] created a dedicated on-the-go set that is now in 54 percent of ACV, and we’re seeing that drive our cereal-in-a-cup line up 10.5 percent, indicating that we’re better meeting the shopper’s need for that portable occasion and that immediate-consumption need.” Over at Bakery On Main, “[w]e focus our promotional eforts on getting people to taste our products, because when they do, they become fans,” says Smulders, adding: “We know that whether a person lives a gluten-free lifestyle or not, they still eat and enjoy our products because they love the taste. So our products need to be visible in a location that makes sense to the natural products consumer. Whether in a shipper or of-the-shelf display, the merchandising that works best for [our] cereal is located in the natural cereal set, where the consumer expects to fnd us.” Another alternative is to take your product on a trip — or several. “2015 was a big year on the road for GrandyOats,” observes Anker. “Te GrandyOats team drove the OatsWagon, an Oatifed Ford Transit Eco Boost, up and down the Northeast on more than 40 granola tours. … Te OatsWagon stopped at a wide variety of demos, events and trade shows that support small businesses and handmade products. From Montreal to Baltimore, the GrandyOats team threw out peace signs and free high-fves along the way. Tere was true consumer engagement, with plenty of smiles and social media from the road.” Grocers can also do their bit to raise the profle of better-for-you cereal oferings like GrandyOats. As Anker put it, “Retailers can help by calling out cleaner products and emphasizing education and encouraging label reading.” PG

Whether a person lives a gluten-free lifestyle or not, they still eat and enjoy our products because they love the taste.” —Michael Smulders, Bakery On Main

February 2016 | |


A profit powerhouse you can’t afford to ignore

Outdo Ordinary



any retailers are missing out on the tremendous value that specialty cheese shoppers bring to the market, with more than three quarters of a billion dollars in sales lost every year1 as dissatisfied specialty cheese shoppers walk out their supermarket doors. ADVERTORIAL

A party staple, an indulgent treat and the heart of cuisines from Mexico to the Mediterranean, cheese is one of the most frequently purchased items in the grocery store, with 2 in 5 consumers buying some type of cheese at least once a week.2 And even though most of those purchases are of the nonpremium variety,3 shoppers who do buy higher-end cheese spend signifcantly more on cheese in an average month ($22.62) than those who stick to nonspecialty cheese ($18.29).4 The result: a $16 billion natural and specialty cheese market, projected to grow by a compound annual growth rate of 4 percent between 2014 and 2018.5


But specialty cheese is more than just a proftable category. A great specialty cheese department can boost shopper perceptions of store quality and experience and help retailers stand out from competitors. Yet many large retailers tend to give short shrift to the department, falling behind on the selection, ambience and customer service that cheese lovers want. These retailers not only lose out on some serious cheddar, but they’re missing a major opportunity to add a premium sheen to the whole store. To help you understand this critical category, let’s take a look at: How consumers define and shop for specialty cheese How the specialty cheese department shapes perception of the store overall The kinds of actionable strategies that can improve retail specialty cheese departments and shoppers’ cheese shopping experiences in general

Defining premium cheese First and foremost, what does it mean for a cheese to be “specialty” or “premium”? When asked to defne the concepts in general terms,

Consumers say premium foods are: superior quality often rare and/or hard to find priced higher than nonpremium products

Frequently identified premium items: Cheese Produce Wine/beer Meat ADVERTORIAL

Seafood Bread Chocolate Source: Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015

consumers primarily cite characteristics like quality, rarity and price.6 These traits translate to the cheese category too, but because specialty cheese is so strongly associated with luxury and indulgence—like wine, cheese is one of the most frequently identifed premium products7—a number of additional characteristics also shape premium cheese perceptions. Paradoxically, premium cheese is defned both in terms of centuries-old tradition and forward-thinking innovation. The most popular specialty cheeses in the United States tend to be classic varieties, such as asiago, aged cheddar, colby, farmer’s, feta, gorgonzola, gouda, fontina, Hispanic favors, limburger, parmesan and romano. But new and niche varieties are also key to the category. That’s because consumer palates are becoming increasingly sophisticated, boosting demand for aged and artisanal selections that incorporate favorful add-ins such as savory spices, nuts or dried fruit.8


“Premium is a state of mind.” —Carbonview specialty cheese consumer survey respondent, November 2015

Consequently, the specialty cheese category is incredibly dynamic, a mix of old favorites and unexpected innovations. This can make fnding the right camembert or blue cheese an exciting but also somewhat daunting experience for consumers. And while some shoppers enter the cheese department with specifc varieties already on their lists, the majority take a more open-ended approach to their purchases. That doesn’t make them any less discriminating, though. Specialty cheese shoppers, no matter what’s on their shopping list, come to the store with high expectations—and a high willingness to walk away if they can’t fnd the cheese that fts their needs.

How consumers shop for specialty cheese Specialty cheese shoppers are a picky and particular bunch, and their discerning approach starts at the store level. Instead of remaining loyal to a single retailer, these consumers regularly shop at a mix of retail food stores, including mass, club, and specialty or natural foods stores.9 But their choice of store on any particular outing often

The cheese


“makes me feel better” about the store I am shopping in.


I would be

more satisfied with my primary grocery store if it offered a

greater variety of premium cheeses.


The types of products

sold in my grocery store’s cheese department have a major impact on my overall perception of the grocery store’s quality.


Source: Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015



depends on whether cheese is on the shopping list. That’s because premium cheese is a trip driver, described as a foundational component of the shopping trip.10 It tends to be a planned purchase—the specialty cheese shopper often has a specifc event or meal on the horizon and wants to curate a great cheese plate—but not always to the level of brand or variety. Among consumers who purchased a specialty cheese in the past month, just 1 in 3 knew exactly what variety and brand they wanted before entering the store. The rest either knew what variety they wanted (e.g., asiago or gouda) but were open to different brands, or else knew they wanted some type of specialty cheese but hadn’t settled on a variety or brand.11 But even when specialty cheese shoppers don’t know what type of cheese they’ll leave with, they know where in the store to look for premium cheeses. The majority head straight for the specialty cheese department.12 And though some shoppers—roughly 2 in 5—look for cheese in more than one department, the specialty cheese department is most successful at converting shopping into purchasing,13 which is one excellent reason to invest in the department.

98% of specialty cheese shoppers purchase other items when they buy premium cheese: 67%


60% 57%

Meat Milk


Bread from the bakery section Crackers Juice/soda/beverage Cereal/rice/pasta/other dry goods

44% 42% 41%

Source: Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Grocers have much more to gain from a great specialty cheese space, however. Shoppers consider the cheese department one of the most important areas in the grocery store,14 and a well-curated specialty cheese department can give the whole store a higher-end aura: Sixty-four percent of specialty cheese shoppers say it has a major impact on their perception of a store, 72 percent say it makes them feel better about the store they’re shopping in, and 70 percent say they would think more highly of their primary store if it offered a selection of cheeses comparable to those at specialty stores.15 Clearly, specialty cheese can have a huge impact on both sales and store image.

Missing the mark—and missing out on sales When asked to rate their primary grocery retailer, specialty cheese shoppers feel relatively satisfed but not exactly exuberant. This is true at the whole-store level: Just 1 in 3 feel their primary retailer offers a “special shopping” experience, while only 1 in 4 describe their retailer as innovative, and 1 in 5 consider the store exciting.16 The same lack of enthusiasm extends to the cheese department. The majority of premium cheese shoppers say their primary grocery store is “just meeting expectations” when it comes to their gouda, camembert and brie.17


“In regular stores they have very generic standard products that you see everywhere. It is simply a bit boring.” —Carbonview specialty cheese consumer survey respondent, November 2015

That may be enough to win over shoppers with only enough time to grab whatever’s available during a bigger grocery run, but it won’t fy with those devoted to curating a choice cheese plate. Indeed, many specialty cheese shoppers consider the purchase too important to base on convenience alone. In fact, 3 in 5 specialty cheese consumers are willing to deviate from their usual grocery retailer to fnd the right variety, especially when premium cheese is the primary trip driver.18 Among those who do visit their primary retailer frst, 1 in 3 are willing to leave empty-handed and look elsewhere if they don’t fnd the right cheese.19

$92 Basket size for consumers who

purchase specialty cheese


Basket size for average


Source: International Dairy-Deli-Bakery Association/Nielsen Perishables Group, “Total Store Connectivity: Revealing New Pathways to Win – Specialty Cheese,” 2015



“The sensorial experience is a crucial part of visiting a premium store.” —Carbonview specialty cheese consumer survey respondent, November 2015

That’s another big reason retailers can proft from investing in a great specialty cheese department: Those who don’t risk losing store traffc—and serious dollars—to competitors. To wit: Sixteen percent of premium cheese shoppers actually did go to an alternative retailer to make their last premium cheese purchase, adding up to roughly $752 million in lost sales.20 And that doesn’t even include lost sales of co-purchased items, which tend to include other premium fare such as wine or crackers. In order to reclaim lost sales and reignite shopper enthusiasm, retailers will need to up the ante by investing in new varieties, new types of customer service and a whole new kind of shopping experience.

How retailers can improve the specialty cheese department Building a better specialty cheese department starts with listening to those who love (and buy) premium cheese most often. So what exactly do specialty cheese shoppers want from their primary retailer? Turns out they have plenty of suggestions. First, cheese lovers want more varieties from which to choose. When consumers were asked how their primary grocery store could improve the specialty cheese department, their top recommendation was stocking unique cheeses not found in most stores (51 percent), followed by offering an increased selection of premium cheeses (45 percent). In other words, selection matters, and it matters in terms of both quality and quantity. ADVERTORIAL

A wide range of options can be overwhelming, however. Retailers should keep their selections thoughtful and well-curated, perhaps highlighting reasons for stocking a new cheese or noting which varieties are staff favorites. Free samples are another important way to help specialty cheese shoppers winnow the selection. Specialty cheese shoppers say they want to see primary retailers offer more sampling opportunities, in part because sampling serves as a “test run” before the shopper commits but also because it adds an element of fun and experimentation to the shopping experience. While sampling is a key step in helping customers fnd the right variety of specialty cheese, shoppers are looking for even more ways to learn, explore and engage at their primary store. To begin with, specialty cheese shoppers say they would like to see knowledgeable staff in their retailer’s cheese department, noting that lack of on-site expertise is one of the biggest ways primary retailers fall short compared with specialty retailers.21 Primary retailers are also missing promotional opportunities to educate shoppers. Compared with specialty cheese purveyors, primary retailers get low marks for offering information related to favor profles, suggested pairings and other crucial cheese details.22 So while staff can certainly help bridge the knowledge gap, retailers can also offer printed guides, scannable QR codes and other educational material that informs and empowers specialty cheese shoppers to make the best purchases. Education will be especially key to engaging those who don’t currently buy much specialty cheese. The average U.S. household spends just $33 per year on premium cheese (category sales come primarily from the core specialty cheese consumers),23 suggesting many Americans purchase premium fare only once or twice a year. The knowledge gap may well be to blame—artisanal cheese can be intimidating, after all—which means these consumers may be more open to trying a higher-end stilton or brie if they know what it tastes like, how to use it, and what to pair it with. Still, in order to compete with specialty stores, retailers must offer more than just selection and information. Specialty cheese shoppers want to be excited and delighted. They’re looking for a unique experience that helps them feel good not only about their purchase but about the entire shopping occasion. Retailers can consider many different ways to redefne the specialty cheese section. A good start is amping up the ambience with sensorial, boutique-like fourishes such as carpeted fooring or dimmed lighting, perhaps even setting the specialty cheese department off as a store-within-a-store. Retailers could also consider offering special events such as wine and cheese nights, cheese-cen-


Wisconsin specialty cheeses Cheese lovers tend to pay close attention to origin, tracing a product’s manufacturing from udder to curd to curing room. And which geographic location are consumers most excited to see stamped on the final product? Wisconsin. One in 5 consumers prefer cheese made in America’s Dairyland,24 and nearly all cheese shoppers (90 percent) are open to purchasing Wisconsin-made cheese, far more than would consider buying cheese from any other origin.25 Cheese shoppers say they look for the Wisconsin stamp on the label because they believe cheese made there has a better flavor, consistently tastes great and comes from a place naturally perfect for making cheese.26 The state produces more than 600 varieties of cheese, including more than 70 varieties created in Wisconsin.27


tric cooking classes or feld trips to a local dairy farm. Whatever tack a retailer takes, the focus should be on helping customers think of buying specialty cheese as an experience—not an errand.


Whether arranged on a party platter, worked into a well-loved recipe or enjoyed as a savory indulgence at the end of a long day, specialty cheese holds an important place in consumers’ hearts. And retailers should give the category just as much love and attention. By cultivating a well-staffed, well-stocked and well-curated specialty cheese department, retailers can gain customer loyalty and boost sales while bolstering customer perceptions of the store as a whole. Investing in a great specialty cheese department just makes sense—no matter how you slice it. WMMB Outdo Ordinary


The Wisconsin Milk Marketing Board The Wisconsin Milk Marketing Board (WMMB) is a nonprofit organization funded entirely by Wisconsin’s dairy farm families. WMMB has a comprehensive array of promotional resources, programs and merchandising tools that touch every link in the state and national food marketing chain. Year-round seasonal cheese promotion and merchandising programs feature in-store point-of-sale materials, recipes, advertising and in-store demonstrations that help grocery stores build excitement and sales for Wisconsin cheese.

Contact: Wisconsin Milk Marketing Board, Inc. Kirk Scott, Director of Retail Programs 8418 Excelsior Drive Madison, Wisconsin 53717 (608) 836-8820


Footnotes 1

Wisconsin Milk Marketing Board/Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Wisconsin Milk Marketing Board, April 2015


Packaged Facts, March 2014


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Packaged Facts, March 2014


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Wisconsin Milk Marketing Board, April 2015


Wisconsin Milk Marketing Board, April 2015


Wisconsin Milk Marketing Board, April 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Wisconsin Milk Marketing Board/Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


Carbonview, “Consumer insights: Impact of premium cheese in grocery,” November 2015


IRI custom Wisconsin Milk Marketing Board cheese sales database; 2015 Consumer & Shopper Insights Advantage panel data


Wisconsin Milk Marketing Board, April 2015


Wisconsin Milk Marketing Board, April 2015


Wisconsin Milk Marketing Board, April 2015


Wisconsin Milk Marketing Board, 2016

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Breakfast Appetizers/snacks entrées side dishes desserts new Products

Cold War Manufacturers innovate to deliver on convenience and taste, as grocers reinvigorate the freezer aisle. By Lynn Petrak



f TV dinners defned one era of frozen food consumption, today’s version might be called the “iMeal.” Just as technology has changed over the years to deliver a more personal experience, so too, has the way shoppers choose, buy and prepare frozen foods from their local grocer. A quick scan of

the retail freezer case shows that there are frozen food solutions for all kinds of preferences, with choices for every daypart, and foods that are indulgent, healthy, organic/natural, gluten-free, boldly favored, globally inspired and kid-friendly, among other attributes. Accordingly, the pace of new product development, product line overhauls and even new brand startups has picked up in recent years as manufacturers and grocers

| Progressive Grocer | Ahead of What’s Next | February 2016

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Sea Best brings a simple solution to enjoying seafood, with its convenient all-in-one bag of favorites. A select combination of Shrimp, Snow Crab & Mussels delivers all of the best tastes from the sea! With an easy one-pot preparation, seafood lovers can celebrate the new convenience of great seafood! Visit us @ booth #1133 Seafood Expo North America

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Product innovation and development in the freezer aisle over the past few years has been truly unprecedented, and consumers have taken notice.” —Julie Henderson, National Frozen & Refrigerated Foods Association


seek to reinvigorate the mature frozen food aisle, which has posted fat or declining sales in an era of strong competition from foodservice and from within a supermarket’s own prepared food area/ hot-food bar. A cornerstone of this reinvigoration, in both product mix and merchandising, is the move to provide true and often tailored meal solutions. “Convenience and quality are two of the top trends infuencing the frozen category. Consumers have increasingly hectic lifestyles and want quick, highquality meals that they are proud to serve their family. Frozen meals ofer the perfect solution, and consumers continue to take notice and appreciate all of the recent innovations that help frozen meal solutions to even better meet their needs,” observes David Koehler, associate brand manager for the Healthy Choice brand from Omaha, Neb.-based ConAgra Foods. Other manufacturers echo the dual mantras of convenience and quality, and note that frozen foods, by their very nature, are a solution to both issues. “Families have increasingly hectic lives, and because of that, they are continually looking for easy and quick meal solutions without compromising on quality or favor. Freezing food is an incredible way to preserve it at the highest level of freshness and ensure that it retains its nutrients,” afrms Dimitrios Smyrnios, CEO of Te Schwan Food Co., based in Marshall, Minn. Julie Henderson, VP of communications for the National Frozen & Refrigerated Foods Association (NFRA), in Harrisburg, Pa., says that the diversifed marketplace refects the potential of this category among time-crunched, quality-seeking shoppers. “Product innovation and development in the freezer aisle over the past few years has been truly unprecedented, and consumers have taken notice,” she observes, adding that the range of oferings underscores the category’s dynamism. “Brands like Luvo and Evol are new to the scene and serve as examples of the direction we are seeing the freezer aisle headed [in], and brands like Kellogg’s continue to explore and implement new sustainable processes, packaging and more.” Adrienne Seiling, VP of communications for the American Frozen Foods Institute (AFFI), in McLean, Va., likewise zeroes in on the assortment that’s leading to a potentially diferent type of cat-

| Progressive Grocer | Ahead of What’s Next | February 2016

egory management for frozen. “Today’s frozen food aisle ofers consumers a more diverse selection of vegetables, fruits and prepared meals than ever before,” Seiling says. “Frozen foods are often lower in cost per serving and have a much greater shelf life than refrigerated foods, by their very nature. Frozen fruits and vegetables can also be more easily portioned and stored for later use, which reduces spoilage and food waste, further increasing consumer value.”

Frozen Figures Market research confrms the eclectic, consumerdriven nature of the grocery frozen food section. A 2015 report on the category from Rockville, Md.based Packaged Facts projected that the outlook for frozen foods is “encouraging” after several years of sluggish sales and challenges, predicting that sales of frozen foods (counting entrées, pizzas, sides and snacks/appetizers, but not desserts) will reach $23 billion by 2019, a full $1 billion more than in 2014. A deeper dive into the frozen food sector reveals that some categories are now comfortably in the black, while others are only slightly in the red. According to data from Chicago-based Information Resources Inc. (IRI), sales of frozen entrées reached $8.6 billion for the last 52 weeks ending Dec. 27, 2015, a modest decrease of 0.57 percent from the previous time period. During the same period, sales of frozen sides climbed more than 24 percent, frozen breakfast foods increased 2.23 percent and frozen appetizers edged up more than 1.9 percent. Frozen desserts, meanwhile, dipped 1.82 percent. Still, the fact that entrées remain an area of focus and innovation, yet overall sales of those items remain fat, supports the point that there are opportunities to educate consumers about the benefts of frozen foods. To that end, industry organizations are working on various educational programs. NFRA, for

Here’s why retailers nationwide are sweet on

According to IRI data ending July 12, 2015: • • • •

Leading brand for frozen cream puffs and éclairs Largest U.S. producer of premium European desserts Aggressive coupon marketing and trade promotions New flavors and website

Join us today at

• Mini éclair is the number one frozen dessert sweet treat • Three products are in the top 10 SKUs

For samples and sales information, please contact: Delizza Patisserie • 252-442-0270 • 6610 Corporation Parkway, Battleboro, NC

that messaging in regard to better-for-you products is crucial, given shoppers’ understanding of those items. “Consumers are becoming smarter and more educated as to what is considered a ‘healthier’ option in the frozen food aisle, by comparing quality standards found in other grocery aisles, such as natural/organic, non-GMO, vegan and clean-ingredient profles. Consumers now expect the same level of attribution from the frozen aisle [that] they’ve come to expect in other categories throughout the store,” he says.

Convenience has always been one of the biggest benefits of frozen food, and we don’t see that changing. What we would like to see is frozen food develop a stronger perception with consumers for healthy and flavorful meals.” —Scott Corey, Kahiki Foods Inc.


example, continues its Real Food. Frozen marketing campaign aimed at generating excitement about frozen foods. According to the association’s 2015 annual benchmark study, frozen food discussion increased overall by nearly 250 percent, with convenience and nutrition emerging as prominent themes, notes Henderson. For National Frozen Food Month in March, she says that NFRA will focus on content that showcases the convenience, quality and variety of real foods in the freezer aisle, with topics to include eliminating food waste, reinventing kitchen preparation with food “hacks,” going beyond the recipe with a meal assembly concept and addressing a nation of snackers. AFFI, meanwhile, is building on its consumer education and program campaign, Frozen. How Fresh Stays Fresh, to share the message about the freshness and quality of frozen foods. Launched in 2014, the campaign engages consumers through national television, digital and print advertising; online engagement; infuencer outreach; and in-store and out-ofstore retail promotion activities. More recently, the institute released a white paper showing that a weekly menu consisting primarily of frozen foods meets the 2015 Dietary Guidelines for Americans. Meanwhile, manufacturers, especially those in categories with potential and demonstrated growth, also are working to get the word out about the quality and locked-in freshness of frozen foods. “Convenience has always been one of the biggest benefts of frozen food, and we don’t see that changing. What we would like to see is frozen food develop a stronger perception with consumers for healthy and favorful meals,” remarks Scott Corey, director of marketing, innovation and R&D for Kahiki Foods Inc., in Columbus, Ohio. Jason Jackowiak, natural product research expert for SPINS, a Chicago-based provider of retail consumer insights, analytics and consulting for the natural, organic and specialty products industry, concurs

| Progressive Grocer | Ahead of What’s Next | February 2016

Natural Evolution Oferings from brands like Kahiki are widening as the subcategory of healthy frozen foods grows to encompass organic, natural, gluten-free and other types of better-for-you or diet-related meal solutions. According to recent information from SPINS, sales of natural/specialty frozen and refrigerated meats, poultry and seafood increased 18.8 percent for the last 52-week period ending Dec. 27, 2015. Natural/specialty frozen breakfast foods rose 12.9 percent; natural/specialty frozen fruits and vegetables climbed 20.1 percent; natural/specialty frozen appetizers/snacks went up 26.1 percent; and natural/specialty frozen lunch and dinner entrées moved up 14.6 percent. Industry observers agree that these types of products represent a bright spot, both in terms of product innovation and of the success of smaller or niche manufacturers. “Natural and organic will have tremendous growth — it can easily double in the next seven to 10 years,” says Burt Flickinger, managing partner of New York-based Strategic Resource Group. Adds AFFI’s Seiling, “Sales of organic appear to be on the rise, due to their perceived healthfulness, which has played a large part in attracting younger and more health-conscious consumers also seeking the convenience of frozen products.” Top frozen food companies have taken notice and acted on marketplace interest in natural and organic frozen foods. Last year, for example, ConAgra acquired Blake’s All Natural Foods, a growing family-owned company specializing in organic and natural frozen meals such as casseroles, pasta dishes and pot pies. As part of the clamor for natural and organic items, shoppers have shown a desire for fewer or more recognizable ingredients. “Consumers are looking for options with improved nutritional profles and simplifed ingredient statements,” says Koehler, of ConAgra’s Healthy Choice brand, which recently introduced a line of Simply Café Steamers made with 100 percent natural chicken or meatballs and no artifcial ingredients. Schwan’s is another example of a company that has heeded that trend, announcing last fall that it was eliminating four ingredient groups. “Consum-

A typical supermarket shopper passes about 500 to 800 items per minute. It’s easy to understand that one of the ways to get that shopper to notice your product is through effective packaging.” —Rachel Cullen, Ruiz Foods


ers are increasingly focused on providing foods to their families containing ingredients familiar to them. Meeting their expectations on this front has become table stakes for the food industry. We have been working on simplifying ingredients for several years, so we are in a very good position to deliver on consumer expectations,” explains Stacey Fowler Meittunen, Schwan’s SVP innovation and development. Meittunen also cites continued interest in gluten-free frozen foods. “Te glutenfree pizza category continues to grow, as gluten-free oferings have been found to be highly incremental — 64 percent incremental to the pizza category and 24 percent incremental to stores,” she notes, pointing out that Schwan’s added two single-serve glutenfree varieties to its Freschetta line last year. In addition to product development, there has been a focus on packaging to help refresh frozen foods and educate consumers about the quality of frozen items. “A typical supermarket shopper passes about 500 to 800 items per minute. It’s easy to understand that one of the ways to get that shopper to notice your product is through efective packaging,” asserts Rachel Cullen, president and CEO of Ruiz Foods, in Dinuba, Calif. “It’s Marketing 101 — packaging serves to communicate quality, convenience, afordability. It’s how a manufacturer communicates directly to the consumer during the time of purchase.”

On the Case of Category Management In addition to carrying a greater and more eyecatching assortment of products, grocers should make it easier for consumers to fnd meal solutions in the frozen food aisle, advise some industry experts. “Instead of looking at frozen food equipment as an expense, retailer CEOs and chief merchandising ofcers need to get involved in adding frozen food equipment as an investment to proftably drive sales and increase consumer loyalty and continuity,” suggests Flickinger. As greater innovation changes the face of the freezer case, Flickinger says that retailers can attract consumers to that part of the store in other ways. “Leading frozen food companies and retailers can invest capital to put new equipment in the front end of the store, as well as other locations and departments, to create an opportunity to cross-merchandise,” he notes. Some manufacturers are already working to

| Progressive Grocer | Ahead of What’s Next | February 2016

cross-promote their frozen oferings with other grocery products, especially those companies that have other brands in their portfolios. “We’ve done a lot of work-around occasions and dinner to better understand what goes together. Our goal is to help our customers create solutions for consumers,” explains Matt Stejskal, brand manager for the Marie Callender’s line from ConAgra. Among other things, according to Stejskal, ConAgra has suggested pairing Marie Callender’s lasagna with Alexia brand garlic bread or a salad, to make a meal. “Tey are then buying solutions, not items,” he notes. In another example, the company “recently paired Marie Callender’s [pies] from the frozen department with Reddi-wip,” he remarks. “It’s a great example of us reaching across diferent departments to create a customer solution that wouldn’t have existed in solely one department or the other.” NFRA’s Henderson says that such eforts are another way that frozen foods help can lift store sales. “Te freezer aisle has a lot of opportunity for expanding category management by pairing frozen items with other foods and beverages in the store. To this end, the concept of meal assembly using frozen ingredients and full meals is one that NFRA has brought into a majority of its content development and outreach,” she explains. “By starting in the freezer aisle, consumers can create easy, delicious full meals in a fash.” One of NFRA’s Cool Food Panel bloggers, for instance, showed how to make a simple meal by using frozen pizza, frozen cubed butternut squash, shredded cheese and fresh sage to create a Harvest Appetizer Pizza. PG For more frozen food insights, visit

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tarting with the earliest daypart, demand for a convenient breakfast via frozen foods is awakening. According to data from Chicagobased IRI for the last 52 weeks ending Dec. 27, 2015, overall sales of frozen breakfast foods reached $3.02 billion, a 2.23 percent increase from the same time last year. Within the category, manufacturers and retailers are providing breakfast meal solutions to on-the-go and time-strapped consumers through hand-held breakfasts. IRI found that hand-held breakfast sales increased 3.78 percent to nearly $1.5 billion in the past year. According to Chicago-based Mintel’s 2015 report on frozen breakfasts, the frozen breakfast hand-held segment grew to $1.1 billion in 2015, from $642 million in 2010, and is pegged to rise to $1.5 billion by 2020. Te report also noted that consumers largely believe that the taste of retail frozen hand-held breakfasts are comparable to that of hand-held breakfasts ofered by restaurants. Breakfast entrées have shown growth, too, up 2.99 percent from last year, for a 52-week total of more than $598 million, according to IRI. Winners in that segment, as identifed by the market research frm, include Hillshire Brands, posting a 15.88 percent gain in sales, and Kellogg’s, with a 14.96 percent increase. Elsewhere, frozen breakfast is taking other forms. For example, Jimmy Dean, a brand of Springdale, Ark.-based Tyson Foods, recently added a bacon-egg-and-cheese breakfast fatbread, with a croissant-style fatbread individually wrapped with a crisping tray. As for traditional frozen breakfast items, even plain toaster wafes are getting a makeover. Te venerable Eggo brand from Battle Creek, Mich.based Kellogg Co. recently unveiled new Oats and Berries Wafes, made with steel-cut oats and berries and no artifcial favors or colors. PG


The Great Grazing Nation


ith more consumers grazing — Chicago-based Mintel reports that 94 percent of Americans snack at least once a day, and more than half snack two to three times a day — grocers can tout the snacking options in their frozen food cases. In a 2015 report, Mintel found that although the potential is there for frozen snacks, the competition for shoppers’ snack dollars is strong. “While consumers are moving toward more frequent snacking occasions, they are also increasingly demanding snack options that require essentially no preparation or cleanup,” the reported noted. To bolster frozen foods as snacks, brands can position their products as solutions for grazing occasions. “Consumers are not just looking for frozen meal solutions, but also frozen options that will solve snacking occasions,” points out Stacey Fowler Meittunen, SVP innovation and development at Te Schwan Food Co., in Marshall, Minn., who notes that the company’s Pagoda brand, the fastest-growing brand in the Asian snack category, features snacks made with real, favorful ingredients. Such natural ingredients are likely the wave of the future in the segment, too. “Future growth for the category could stem from manufacturers’ eforts to meet demands for lower levels of fat, calories and sodium, as well as products that are less processed and which utilize natural ingredients,” the Mintel report observes. PG AdvertoriAl

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made with Non-GMO ingredients. Our specialty is the creation of nutritionally superior offerings, including those made with lower sodium, fat and calories – and foods with higher amounts of protein and/or fber. Some of our private label offerings include products made with ancient grains, sprouted grains and whole grains. For customers interested in products made with organic sprouted ancient grains, we offer pizza crusts and various baked items made with organic sprouted wheat four, organic sprouted quinoa four and organic sprouted millet four options. Our company makes high quality products for private label customers operating in retail and foodservice. If you’re company is interested in selling USDA Certifed Organic products, contact Amy Lotker (Owner) at

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The Main Event


s grocers deliver convenience to busy shoppers who have plenty of other choices for entrées, one way to diversify sales is to ensure that the freezer case isn’t as stone cold as the frozen items in it. Product innovation is a major way to entice shoppers as they walk down the frozen food aisle. In tandem with attractive packaging, new products that lend something diferent to the traditional concept of frozen entrées can spur sales. Te interpretation of “something diferent” in frozen entrées increasingly includes natural, organic, allergenfree and other better-for-you items from brands like Amy’s Kitchen, Evol, Kashi and Cedarlane Natural Foods. According to Chicago-based Mintel’s’ “Global Food & Drink Report 2016,” such items ft the bill when it comes to the current consumer mindset: among other things, the Mintel report found that consumers are looking for “less processed” food and are intrigued by information on product origin, ingredients or inspiration. New York-based retail analyst Burt Flickinger afrms the signifcance of natural/organic entrées from a demographic perspective, noting that classic frozen entrées are typically consumed by consumers between the ages of 45 and 74. “Te demographic for natural and organic frozen entrées would be 16 to 35, and that’s the customer that traditional supermarket chains don’t see as much,” he points out.


Moving to more personalized meals from vintage TV dinners, some entrées are designed to be used in customized ways. Te Banquet line, from Omaha, Neb.-based ConAgra Foods, includes a new series of Meal Starters, including Taco Night and Sloppy Joe Night varieties. For sloppy joes, users just microwave the appropriate Meal Starter according to the package directions and divide the mixture among buns. Meanwhile, it’s not quite a “if you can’t beat ‘em, join ‘em” philosophy, but there’s a continued efort to capitalize on consumers’ taste for dining away from home, with frozen entrées co-branded with fast-casual restaurants like TGI Fridays, Marie Callender’s and Chili’s. P.F. Chang’s Home menu from ConAgra is another example. “Consumers want an experience that is relevant to them — whether it’s enjoying their favorite meals or discovering new ones,” says Brand Manager Derek Wong, citing new items like P.F. Chang’s Skillet Meals, all-protein meals prepared just like in the brand’s restaurants. Flavor is another way to diferentiate frozen entrées. As the Mintel Global Trends report shows, consumers are ratcheting up their tastes and expectations, seeking out ethnic fare, bold or spicy foods, and other exotic favors. Examples of the infuence of new favors in frozen entrées abound in the freezer case, where one can fnd Jamaican beef patties, breaded eggplant slices and chicken

| Progressive Grocer | Ahead of What’s Next | February 2016

Meat, Sophie’s Kitchen and Miracle Foods Global have satay, among many other options. taken plant-based and vegan options by storm. Tese At Columbus, Ohio-based Kahiki Foods Inc., Direcare tied to convenience to the ‘newer’ vegan consumers, tor of Marketing, Innovation and R&D Scott Corey says already challenged with creating meals from scratch,” that interest in ethnic foods, especially Asian cuisines, is says Jason Jackowiack, natural product research expert still on the rise. “Te growth in Asian immigration and for SPINS, a Chicago-based provider of retail consumer restaurants is leading to more interest in Asian favors. insights, analytics and consulting for the natural, orLast year, sales of Asian branded frozen food products ganic and specialty products industry. PG increased 9 percent, while the overall frozen meals category was fat,” he points out, noting that in the past year, Kahiki has introduced 11 items, including a line of Bowl & Roll single-serve entrées and a line of Yum Yum Stix in a hand-held format. Ramping up favor is done in Straight and narrow. A new aisle-warming solution other ways, too. Schwan’s, for example, partnered with a group for nagging cold aisle complaints. of chefs last year in a new program called the Schwan’s Chef Collective. “Our goal is to engage a select group of innovative culinary experts who share our passion for creatEC m ing and celebrating great food and o opt tor positively impact the way people eat. ion By doing this, we hope to establish and showcase credibility in food and demonstrate our culinary commitment to excellence,” explains Dimitrios Smyrnios, CEO of Te Schwan Food Co., in Marshall, Minn. Meanwhile, vegan frozen entrées are also more numerous than they were even a few years ago. “Beyond

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Side Dishes

Side Show


f almost all Americans are snacking, a lot of them are apparently eating side dishes, too. In its 52-week tracking period ending Dec. 27, 2015, Chicago-based IRI found that sales of frozen side dishes rose more than 24 percent, for a total of more than $472 million. Across the side dish subcategory, IRI found gains among many brands, including Nestlé USA (20.8 percent), Birds Eye Foods (67.5 percent) and General Mills (30.5 percent). Frozen sides include ubiquitous products like fries and vegetables, but even within those mature segments, new products and innovations lend a new look and taste to frozen oferings. Well-established brands like Green Giant and Birds Eye are continuing to add items, including Green Giant’s new Fire Roasted vegetable blends and Birds Eye’s new protein blends. PG

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Frozen Desserts

Best for Last


hese days, shoppers are looking at a greater variety of SKUs in the dessert area of the frozen food aisle. Like other parts of the frozen section, it’s not a vanilla world anymore, even if vanilla remains a top-selling ice cream favor. When it comes to ice cream, grocers are diversifying their dessert oferings with diferent types of frozen dairy treats, including custards, gelato, yogurt and even kefr. Within each of those subcategories, shoppers can fnd something for their palates, whether their goal is indulgence, as with items like Häagen-Dazs’ new Artisan line of ice creams, or experimentation, as with Purple Door super-premium ice cream in a whiskey variety. Nondairy frozen desserts are also fnding case space, thanks to items from such brands as Arctic Zero, Brewla and Nana’s Crème. As with ice cream, favors are running the proverbial gamut in this nondairy segment. “Innovation in the nondairy dessert subcategories seems constant. Evolving dairy-free options are on the rise, with bases of cashew, banana and even avocado now making the list of featured ingredients; soy-free options are becoming more appealing,” says Brittany Blumer, natural product research expert at SPINS, a Chicago-based provider of retail consumer insights, analytics and consulting for the natural, organic and specialty products industry. As in other categories — and even with the ongoing taste for indulgent desserts — consumers have expressed

interest in healthier desserts. According to David Koehler, associate brand manager for the Healthy Choice brand from Omaha, Neb.-based ConAgra Foods, Healthy Choice just launched a fudge bar and smoothie bars made with natural ingredients. “Tey’re all 80 calories or less and contain fve or seven real ingredients,” he notes, “most of which you have in your kitchen at home: skim milk, cane sugar, cream, natural cocoa and real fruit.” PG

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New Product Showcase 1 Beretta Farms has added chicken strips to its line of frozen entrées. Made with white meat sliced from whole chicken breasts, the strips are free from any preservatives, artificial colors or flavors. Bertolli Skillet Meals have expanded to include Chicken Carbonara and Three Cheese Tortellini with Bacon varieties. 2 Birds Eye has introduced a Steamfresh Full Flavor line of protein blends, consisting of Barbecue Sweet Corn, Ranch Broccoli, Teriyaki Broccoli, Buffalo Cauliflower, Sour Cream & Onion Potatoes, Wasabi Peas, Fiesta Lime Corn, and Sweet Chili Carrots. 3 Bob Evans has come out with a Sausage Biscuit Sandwich in a convenient single-serve package, ready to heat and eat. 4 Schwan’s Edwards brand introduced Triple Coconut Crème and Vanilla Caramel Crème pies. Grainful, which transforms natural steel-cut oats into quick lunch and dinner options, has developed a line of frozen Steel Cut Sides. 5 Healthy Choice Simply Café Steamers are made with 100 percent natural chicken or meatballs and no artificial ingredients. Kahiki Foods Inc. has rolled out a line of Bowl & Roll single-serve entrées that include an Asian meal in a bowl served with an egg roll. Also new is a line of Yum Yum Stix.



6 Luvo Inc. has rolled out such items as Luvo Chicken & Harissa Chickpeas and Chicken Chorizo Chili. Marie Callender’s Pot Pies have introduced two additional products: Chili Pot Pie and Broccoli Cheddar & Potato Pot Pie.


Marie Callender’s Frozen Desserts now include Pumpkin Pecan Streusel and, in California, Claim Jumper Pecan Pie.


Michael Angelo’s is now offering a line of frozen seafood entrées with such varieties as Seafood Primavera, Shrimp & Kale Piccata, and Shrimp Scampi.


7 P.F. Chang’s New Skillet Meals, all-protein meals the way the P.F. Chang’s restaurant makes them, are available in Signature Spicy Chicken and Honey Chicken varieties. 8 Ruiz Food Products Inc. added Beef, Bean and Cheese Chimichangas; Taco Beef Burritos; and a Signature Chicken and Jack Cheese Quesadilla to its El Monterey line. The Schwan Food Co. will revitalize its Red Baron Thin & Crispy offering in 2016 with both a packaging refresh and new flavors, including BBQ Style Chicken and Bacon Lovers Red Baron.



Tyson Foods has rolled out the Tyson Better for You Breaded Chicken line, made with 100 percent natural ingredients and featuring six frozen items. Among the varieties are Lightly Breaded Italian Strips and Whole Grain Fillets. PG

| Progressive Grocer | Ahead of What’s Next | February 2016





Talking with…

Brad Moran

Founder & Chief Digital Offcer, NoQ Commerce

Progressive Grocer: Why is it so important for independent retailers to go online? Brad Moran: Every retailer is aware of the booming online statistics and predictions, but in my opinion all this tells us is the effect and not the cause. Understanding the underlying cause of the consumer shift to online will not only give retailers a sense of why they need it, but what their entire business strategy needs to look like over the next three years. E-commerce is not a strategy as such, it is purely a channel or a consumer touch point, just like the store itself, their current website, even their circulars, and launching an e-commerce system will do virtually nothing to their business if it doesn’t bring value to the customer. For most retailers, value is largely attributed to cost, when in fact there are two other equally important elements that drive value—Convenience and Experience. Consumer behavior has evolved much more quickly than most anticipated and long term, Independents will simply not survive if they try to compete on cost. To remain competitive in a highly commoditized market, Independents need to provide better experiences and better levels of convenience than their competitors. A quality online solution is a good start to this evolution in strategy. PG: What are the biggest barriers to getting a grocery business online? BM: In my opinion, the two biggest issues we see are under-capitalization and an un-educated vendor selection criteria. Many retailers see e-commerce as just “another thing” they have to do and more often than not they do not spend enough, nor

focus the right resources on it to make it work. Under-capitalization generates poor results in the initial stages of launch, which then creates further despondency at the management level and leads to even less capitalization long term. The other area where retailers struggle, through no fault of their own, is understanding what a good online solution looks like. What makes it even harder for them is the fact that they have no time, the market is full of feeting start-ups all saying the same things and they have no independent experts or successful established players to turn to. Retailers must refrain from putting the cart before the horse and get the basics right frst. Before worrying about things like big data and personalization, they need to focus on adopting an e-commerce solution that provides the key elements they actually need, such as a responsive website with credit card facilities and a native mobile app, as well as a fulfllment application that provides greater levels of effciency and detailed analytics on costs. PG: What do you think the common mistakes retailers make are? BM: The most common mistake is the failure to focus on making their system proftable. This is largely attributed to fulfllment and the lack of data that they possess about their processes. To say you cannot make money online is totally incorrect. Making proft is quite a simple equation—you charge more than it costs you to fulfll. While that statement seems obvious, there are two issues Independents have currently: a large proportion of them do not have streamlined picking processes and, even the ones doing it well, do not measure the process. At a three percent operating margin, retailers have just 18 minutes to fulfll an average ($100) online order and for every additional $1 online surcharge they buy six minutes of picking time. If their margins and their process cost do not line up, then retailers need to change one, or both. February 2016 | |


State of the Deli: The typical prepared foods shopper may look different from the past. With more and more demands on people, shopping habits and lifestyles have changed. So what does that mean for your deli shopper? According to Eric LeBlanc, director of marketing for deli and bakery at Tyson Foods, Inc. — “ Tyson Foods’ research has determined there are two main categories of deli shoppers: Impromptu Diners and Balancer Parents. While they differ in many ways, they have similarities with specific influencers. They are both pressed for time, they’re looking for convenient solutions, they generally have a desire for flavorful options and they want to make everybody happy at the dinner table. They’ll also stop shopping for a period of time if they experience problems in the deli.”

Tyson Foods' Attitudes and Usages and Consequences of Failure studies both utilized a large sample size in multiple settings, to identify these two groups of deli shoppers, as well as their shopping habits. Surveys were specific to deli shoppers and information was viewed with the objective of developing a better understanding of who fits into the highest deli shopping segments as well as how to optimize the deli experience for those shoppers.

Common Ground Both Balancer Parents and Impromptu Diners say taste is their number one influencer and agree that price is not a top factor in their decision making, especially if the purchase saves them time. Generally speaking, health is less of a concern, although Balancer Parents care a little more. Buzzwords like “gluten free” are not likely to resonate with either group over freshness, quality and taste. The influence of children is key for both segments, and both are likely to change their shopping habits if they experience a problem in the deli.

• Taste is the number one factor. • Price is not a top factor to either of your key segments. In fact, both are willing to pay more if it saves them time. • Health is less of a concern to either segment over freshness, quality and taste. • Children are a key influencer for both segments.

Sources: Tyson A&U Study, 2014; Tyson Consequences of Failure Study, 2015 ©2016 Tyson Foods, Inc. Tyson is a registered trademark of Tyson Foods, Inc.

Meet Your Primary Shoppers The Impromptu Diner The average Impromptu Diner is male, around age 35. About half are married and most live in an urban environment. Most (77%) are influenced by their kids (under 5), so tasty meals are more appealing than healthy meals. Being non-planners, they are the most likely segment to decide what to eat once they are hungry (42%), therefore, they often shop for prepared foods and are most likely to buy at full price. They are frequent shoppers, as long as they can get in and out of the store quickly. Their choices will include QSR and pizza as well as deli.

The Retail Challenge with Impromptu Diners Impromptu Diners report judging their grocery retailer experiences as neutral; however, they notice more problems than anyone else in stores and are the most likely segment to stop shopping the deli, at least for a period of time, due to staffing, general or product issues. In fact, 47-79% report they predict they will change their shopping behavior in the next three months due to negative issues they experience in the deli. It’s very important for deli teams to determine how not to upset Impromptu Diners and to find quick recovery methods when they do. To satisfy this segment, promote flavorful options, making sure staff is knowledgeable about the products, and provide child-friendly options as well.

• 47-79% report they predict they will change their shopping behavior in the next three months due to negative issues they experience in the deli • Most likely to be influenced by kids under age 5 (77%) • They are not meal planners the most likely segment to decide what to eat once they’re hungry (42%)

The Balancer Parent The typical Balancer Parent might have previously been the mom of the family, but this group is now evenly populated with men and women. Most are married, about half have children, and the average age is 41. They’re busy, with a family-focused schedule. While they often plan weekday meals, they like to use deli with its homemade-type options as a break from cooking and a timesaver.

The Retail Challenge with Balancer Parents Balancer Parents consider themselves planners but 45% wait until the day of, which makes for a stressful activity. These are your shoppers who walk up and down every aisle. They are influenced by their children and/or significant others in meal purchases. While this segment generally seems to be easy to please, and most are likely to recommend their retailer (71%), this drops significantly (22.8 points) when they experience a product issue in the deli. 17-28% report they will change their shopping behavior in the next three months due to negative issues they experience in the deli. It’s important for deli managers to recognize problems and prevent mistakes that might upset Balancer Parents. Teams should focus on the Balancer Parent’s desire for healthier foods, convenience when they need a helping hand, and pleasing their kids.

47-79%report reportthey theywill predict ••17-28% change theyshopping will change their shoptheir behavior in ping behavior in the next the next three months due three months duethey to negative to negative issues experience the deli in the issues theyin experience deli. ••Most Mostlikely likelyto torecommend be influenced their retailer (71%); drops by kids under age this 5 (77%) significantly (22.8 points) when they experience a product issue in the deli • 66% walk up and down every aisle of your store

Get to the right place. At the right pace. Tyson Deli / Bakery.


This is th Note: es of a thre econd series in e-part ves the chall tigating en opportu ges and nit superma ies of rket deli program s.

The Deli Looks Ahead Questions abound as the section preps for its next iteration. By Kathy Hayden

InnovatIon aHead Kiosk ordering, apps, customized food preparation, curbside delivery and home delivery are a few of the innovative approaches retailers are currently utilizing to build memorable and differentiated deli and fresh prepared food experiences.

I 72

f you don’t know where you’re going, how do you get there? Tat question may seem like a philosophical riddle or a Yogi Berra quote, but in the ever-evolving supermarket industry, it’s a matter of business survival and growth. In October 2015, Tyson Foods’ “Tink Tank: Te Deli of the Future” assembled food industry experts with retail, res-

taurant and marketing expertise to examine the best and brightest examples of grocery prepared food programs and discuss how to use the industry’s strengths to take giant leaps — not baby steps — into the future. “It’s one thing to look at trends and to study the recent past for sales patterns, but our industry struggles with a forwardlooking point of view,” explains Eric Le Blanc, director of marketing, deli/bakery at Springdale, Ark.-based Tyson. “We need to get beyond the usual inside-the-industry spitballing.”

| Progressive Grocer | Ahead of What’s Next | February 2016

Illustrations by Michael Werner












+199% +285% LAGER


CONTACT YOUR SALES REPRESENTATIVE TODAY! 1. Source: Guestmetrics October 2014.


VIsuaL NoTEs Business illustrator Mike Werner captures Tyson Foods’ Think Tank participants’ input on key elements retailers should consider when building out their deli programs.

We need to know what we are doing well and extend that Where to Invest? to the next Whether planning a fast-food menu or keeping great idea.” a freezer case flled, everyone in the foodservice —Eric Le Blanc, Tyson Foods


industry has to consider one of consumers’ basic needs, and that’s fguring out what’s for dinner. Te “four o’clock crisis” is real, and the answer encom-

| Progressive Grocer | Ahead of What’s Next | February 2016

passes more than just food, it also involves convenience, solutions, inspiration and a whole lot more. “Convenience” in particular can be seen as a magic word, but Le Blanc points out that it doesn’t mean the same thing in retail as it does in quickservice restaurants or even convenience stores.

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MoBile Meals Food trucks extend a retailer’s brand beyond the traditional store, and consumers get a focused taste of retailer offerings.

Fast food will always own the drive-through; that’s its convenience. In retail, convenience means being able to buy dinner and make other purchases at the same place one can buy prepared meal options. “Currently, we treat these conveniences as equal,

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but they are not,” Le Blanc says. “We need to take greater advantage of retail conveniences. We need to know what we are doing well and extend that to the next great idea.” More retail convenience might mean more delivery, more help with meal planning or more speed-scratch, but in many cases, convenience needs reach beyond the store. “Tink Tank attendees agreed that the restaurant industry does a better job with the pre-selling. So, is this where grocery stores need to make a greater investment?” asks Joan Driggs, editorial director of Progressive Grocer and Tink Tank participant. “Do grocery stores, and especially grocerants, need to keep up with the cross-media onslaught of restaurant ads? Or do we need to be more social media savvy and reach out with daily menus, food photos and meal ideas?” Pre-selling, or reaching outside the store, might also mean adding more technologies that allow shoppers to pre-order via smartphone apps and opt for home delivery or quick, curbside pickup. Some worry that these advancements could come at the cost of in-store visits, notes Jeremy Johnson, director of education at the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA). In this case, the challenge is maintaining all sides of the business, both the digital and the brick-and-mortar.

Beyond the Brown If the industry wants to ensure that the answer to what’s for dinner lies in the prepared foods from the deli section, Le Blanc observes that the industry needs to get beyond the “brown food syndrome” in people’s minds. Most prepared food programs ofer far more than food from the fryer and the rotisserie, but the image of those types of oferings remains. To move prepared foods to the next level, does the investment need to be in cooking and preparation platforms? “How else should we be cooking in these settings? What is the capacity beyond the rotisserie and the fryer?” Le Blanc asks. For an industry that can take years just to change the favor profle of rotisserie chicken, a total equipment reset can seem daunting and may not be the answer. A chef can look at the typical prepared food model and not see

sense-sation enhancing the physical experience with sights, sounds, visuals and aromas will enhance a retailer’s fresh prepared food offerings.

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| Progressive Grocer | Ahead of What’s Next | February 2016

restrictions, but instead how to be creative within a confned space, as food truck purveyors have proved. “You don’t need to have elaborate kitchens to push out really good food. Some of the best restaurants have tiny kitchens,” notes Johnson. “If you want to look at what the industry does well, we can look at rotisserie chicken. Supermarkets own rotisserie chicken, and you can do a lot with them, but customers want help. I can’t tell you how many times I’ve seen a person walking around with a chicken, clearly trying to fgure out what else to buy for a full meal. Tis is where shoppers need help.” Le Blanc makes a similar point, noting that Charlie Baggs — chairman and executive chef of Chicago-based Charlie Baggs Culinary Innovation, a Tink Tank participant — “can take a single rotisserie chicken and make 10 diferent dishes, all with on-trend favors. Tat’s what customers need to see.”

Serving the Way Forward “Te way forward has a lot to do with more culinary expertise, and that could mean hiring more chefs, some trained cooks and just some foodies. We need to make the retail setting attractive to chefs and to the foodie crowd,” Johnson says.

“What if everyone in the store just loved food?” he goes on to ask. “What if the person ringing you out is really enthusiastic about the sauce you are buying and has a recommendation for using it? You feel that in your shopping experience. We need to convey that foodie experience.” Le Blanc also sees great value in investing in more culinary expertise that can shop the store, see what’s about to go out, look at where there’s trim, and create soups and casseroles based on in-store resources. Such expertise may be hard to scale up, he notes, but good hiring needs to be about quality, and not quantity in more associates. “Our studies don’t show a direct correlation between more staf and more sales,” says Le Blanc, “but skilled staf that can cook and help customers with meal planning and food suggestions is a diferent story.” If the future lies in reframing the labor model, it might mean more culinary training, more service expertise, more curation of the shelves and more concierge-like treatment of customers, as a recent IDDBA report explored. “What if the answer is giving store staf the freedom to be creative?” Driggs asks. “What does that look like?”

The retail setting should be attractive to chefs and to the foodie crowd. What if everyone in the store just loved food?” —Jeremy Johnson, IDDBA

Pompeian pours on the support through 2016! Support for the Pompeian brand will only increase in 2016. Our TV commercial will reach more consumers and will be heavily supported by a print and digital campaign as well as a strong public relations program.

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CuRation trained, engaged staff are the solution for shoppers in need of help and ideas. Retailers need to think beyond transactions to relationships.

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How to Renovate Building a food-centric service culture is one way forward, but another way is to take an experiential view. What if dinner is something completely diferent for each member of a family of four? Does the grocery store of the future look more like a food court than a retail space? If so, what does the rest of the store look like? How does a food court co-exist with retail aisles? Are the aisles replaced by display kiosks and merchandising that inspires meal ideas? Are complete remodels in order? How do we bring the best restaurant experiences together with the best retail experiences, for a new hybrid? “More prepared food would need more cash-out kiosks, for starters,” Johnson stresses. “If we want to attract a lunch crowd to prepared food, we can’t expect people to park a car a few blocks away, walk to the back corner of a huge store, try to get a sandwich and then walk all the way to the front to pay.” Furthermore, if grocerants are going to do more made-to-order options, what will it take to add Chipotle- or Potbelly-inspired menu construction, where customers pick the components of their meals from curated lists of ingredients while moving quickly through a line? Johnson notes that this scenario also looks best when supported by skilled, food-loving staf. Like all good meetings of the minds, Tyson’s Tink Tank might have arrived at more questions than answers, but the biggest theme to emerge was skilled staf. “Our industry is great at moving boxes around. We make money on ‘the buy,’” Johnson points out. Te future will mean making money on the sell. PG


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2016 Retail Meat Report

Meat’s Rare Moment

After a stretch of declining sales, retail execs forecast juicer times ahead. Analysis by Bruce Horovitz | Research By Debra Chanil


meat department sales declines in the coming year. espite a federal panel’s calls for Indeed, nary a one of the meat department executives consumers to eat less of it, meat polled in this year’s study — which comprises the views of still matters to the majority of national, regional and independent retail meat executives Americans. from around the nation — predicted a decline in meat Sure, meat continued to take sales in 2016. Tis was despite the fact that meat sales its share of lumps in 2015, fell among approximately one in 10 retailers surthanks largely to high veyed most recently, and for one in four in 2014. retail prices and heightened consumer As the only study of its kind nationally, interest in nonmeat options. But the Editor’s N ote: PG’s exclusive retailer-driven meat departpeople in perhaps the best position to Progress ive Gro ment research was amassed from a national ponder the retail meat sales climate in companio cer’s n cross-section of retail meat executives in the upcoming 11 months foresee better Retail Se afoo response to an annual survey felded in late days ahead. In fact, for the frst time will appe d Review a 2015. Te annual benchmark survey covers ever, retailers responding to Progressive March 2 r in the 016 issue the breadth of industry trend indicators, Grocer’s 2016 Retail Meat Review were . ranging from same-store sales to category unanimous in forecasting no anticipated


| Progressive Grocer | Ahead of What’s Next | February 2016


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2016 Retail Meat Report

meat dePartment sales Performance 12 Months Ending Nov. 30, 2015


43.8% 46.3% 10.0%


Projected for total 2016

53.6% 46.4%




stayed the same

stay the same

net change: 3.5%

net change: 4.0% Source: Progressive Grocer Market Research, 2016

performance to the latest promotions. Te key question: Is the somewhat upbeat outlook a case of misplaced optimism for 2016, or does the meat department have reason to feel even a smidgen of confdence?

Answer: Perhaps a bit of both. Consider that 46 percent of meat executives said meat sales would increase in 2016, yet the remaining 54 percent projected that meat sales would stay the same. For an

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| Progressive Grocer | Ahead of What’s Next | February 2016

conSumer demand




In the past year, here’s how consumer demand has changed: Smaller PortionS/Pack SizeS Value-Priced (ground, flat steaks, etc.) Free-From ProductS (antibiotic-Free, Hormone-Free, mSG-Free, additiVe-Free, etc.) GraSS-Fed beeF Premium-brand beeF orGanic meatS Value-added ProductS (marinated, kabobS, Gourmet burGerS, loaVeS, meatballS, etc.) locally raiSed meat alternatiVe ProteinS (e.G., biSon, VeniSon, oStricH)

Stayed tHe Same

68.2% 59.1 58.5 52.6 444447.6 47.5 43.2 34.1 23.1

0.0% 9.1 14.6 10.5 11.9 17.5 18.2 19.5 23.1

31.8% 31.8 26.8 36.8 40.5 35.0 38.6 46.3 53.8

Source: Progressive Grocer Market Research, 2016

industry that’s taken it somewhat on the chin, following a spate of higher wholesale prices, either scenario would be widely viewed as a positive. But beware: Consumer eating habits — particularly around meat — are steadily evolving, as evidenced by retailers’ broadly projecting continuing higher sales of smaller, less expensive and perceived-as-better-for-you options. In other words, make your meat oferings more convenient,

cheaper and what consumers consider healthier in 2016, or shoppers may look the other way. In terms of key consumer segments, convenience-seeking Millennials seem to want it all in the meat department. In 2015, consumer demand for smaller portions of meat took a front seat to just about every other trend in the department. Not a single retailer surveyed by PG said the demand for smaller portions was decreasing. Rather, some 68.2 percent

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EffEctivEnEss of Promotional activitiEs

2016 Retail Meat Report

Rated on a scale of 1-6, where 6=extremely serious

tEmPorarY PricE rEductions Product dEmos/samPling EvEnts flash salEs Point-of-PurchasE information Bogos cross-Promotion within thE storE social mEdia dirEct mail onlinE markEting mix-and-match BundlEs (i.e., four for $20)


YEar ago

4.71 4.57 4.52 4.48 4.44 4.39 4.29 4.18 4.13 4.08

3.28 5.13 3.58 4.03 2.78 3.83 5.10 3.53 3.13 2.60

Source: Progressive Grocer Market Research, 2016

said smaller pack sizes were on the increase, while 31.8 percent said it was the same as the year before. Te smaller portions are the result of two evolving trends. For one, some folks aren’t ready to give up meat, but are simply trying to eat less of it, so they’re purchasing smaller portions. At the same time, aging Baby Boomers tend to eat less of everything — including meat — and often prefer to purchase it in smaller amounts. And let’s not forget about the sticker-shock reactions to historically high meat prices that set the tone for much of

2015, which found fnancially pinched consumers seeking value-priced meat. To that end, some 59.1 percent of retail meat panelists reported that shopper demand for value meat increased in 2015, while 31.8 percent reported status quo results. Only 9.1 percent of retailers said that value-priced meat demand dropped last year. But perhaps the fastest-growing category of meat eaters is the consumer whose chief concern is perceived safety and improved nutrition. In a world where even fast-food


Godshall’s Quality Meats Expands Private Label Offerings GQM, Serving specialty meat needs since 1945, led the trend to healthier real meat real wood smoked turkey bacon. In recent years, Godshall’s built on that success with a wide array of delicious specialties with the options and clean label claims that consumers request. That history has provided GQM with positioning to serve another industry trend: Private Label. “As a simple matter of demand, store brands have become the fastest way to achieve growth” explains President Mark Godshall. “The old stigma of the “home brand” being something inferior or less favorful is really in the rear view, the private label offering have become a marquee to retain loyalty: which is what Godshall’s brings to the table in these partnerships with retailers.” “If we cant make it better, if it’s out of our wheelhouse, we wont do it. That said, from bacons to sausages, from deli meat to snacks and jerkies, GQM has a pretty big wheelhouse.” And Godshall isn’t sitting still on favor, either. “Our forays into new spice and favor profles has been pretty exciting. Consumers are searching for international and exotic tastes. Eastern and Western Asia, Central and South America, even North Africa, all are now cuisines that have contributed to the


American dinner table. You could say we’re painting with a much bigger palette!” But all this talk of far away spices brings Mark Godshall back home. “Branded, though, is still our frst choice. My career has been devoted to earning a recognition of consistency and quality for the brand my family built. We serve families from coast to coast and remain a family business, guided by those core principals.” Godshall says from his offce in the converted farmhouse where he was born. “I’d like to think that’s our secret ingredient.”

| Progressive Grocer | Ahead of What’s Next | February 2016

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2016 Retail Meat Report

kingpin McDonald’s recently boasted of plans to sell antibiotic-free chicken, supermarket chains fnd themselves under the very same pressure. Tat’s why 58.5 percent of meat executives said they saw increased consumer demand in 2015 for meat that was free of antibiotics, hormones, MSG and additives. Tat compares with the 26.8 percent who said demand for these better-for-you meats was the same, while only 14.6 percent said that sales of these meats — which are often pricier — were down last year. Meat producers are keenly aware of this, and misperceptions are driving some to address the issue head-on. Indeed, with nearly 80 percent of Americans mistakenly believing that chicken contains added hormones or steroids, according to a recent survey commissioned by the

Percent of total Meat offering froM case-ready Products Percent of offering

0% 1-25 26-50 51-75 76-99 100

Percent of resPondents

6.9% 30.6 25.0 23.6 5.6 8.3

Source: Progressive Grocer Market Research, 2016

National Chicken Council, the Washington, D.C.-based industry trade group is on a mission to hammer home the fact that no chicken sold or raised in the United States is given hormones or steroids. “We know it’s on us, as an industry, to do a better job of providing more information of how our food gets from farm to table,” says Tom Super, a spokesman for the National Chicken Council. Ten there’s the ongoing national obsession with all things organic.


2016 Retail Meat Report When even Walmart is now selling the kinds of products long associated with Whole Foods Market, it makes sense that organic meats are on the rise, in tandem with the category’s overall growth. Nearly half of all meat sellers surveyed — some 47.5 percent — said demand for pricier organic proteins increased last year, alongside another 35 percent who said that sales remained the same. Meanwhile, fewer than one-ffth of retailers —17.5 percent — said that organic meat sales decreased. Consumers short on time, but long on the need to quickly feed their families, are increasingly rewarding retail meat departments that play up value. Some 43 percent of executives surveyed said the value-added category, which includes oferings like kabobs and marinated meats, enjoyed

Meat DepartMent Category perforManCe Total U.S., 52 Weeks Ending Oct. 31, 2015


Fresh Meat Beef Chicken Pork Turkey Lamb Fowl and Exotics Veal Fully Cooked Meat Chicken Other Meat Pork Vegetables/Stuffing Beef Turkey Stir-fry/Fajita Strips Lamb Other Ground Meat Breakfast Sausage Other Grinds Other Patties Other Meat Meat Substitutes Condiments/Spreads Other Miscellaneous Meat Items Marinades, Sauces and Seasonings Processed Meat Processed Lunch Meat Bacon Dinner Sausages Franks Packaged Meals Hams Processed Turkey

Dollars per Store/Week

Dollars per Store/Week Percent Change vs. Year Ago

Volume per Store/Week Percent Change vs. Year Ago

Volume Percent on Promotion

Volume Percent on Promotion Change vs. Year Ago

Average Retail Price

Average Retail Price Percent Change vs. Year Ago

$19,898 10,166 5,455 2,176 299 144 61

5.5% 2.3 2.5 5.2 6.7 2.1 -4.5

-5.6% -0.1 6.7 1.8 2.3 -2.3 -16.6

21.7% 23.8 32.1 36.8 21.8 18.5 15.7

-2.4% -1.2 -0.2 -3.3 -2.5 -0.2 -0.5

$5.26 2.29 2.92 2.09 7.42 3.41 8.22

11.8% 2.4 -4.0 3.3 4.3 4.5 14.5

$1,874 854 383 322 291 115 83 2

4.0% 4.3 0.5 4.2 -11.7 0.7 5.8 2.6

2.1% 3.6 -3.1 0.1 -20.0 -2.2 -6.6 1.2

18.9% 15.4 23.6 30.8 15.6 22.3 15.6 19.1

-2.5% -0.4 -3.8 -1.3 -2.3 -0.4 -5.3 0.2

$3.88 3.21 5.51 3.03 6.17 3.61 7.22 4.22

1.9% 0.6 3.8 4.0 10.4 2.9 13.3 1.5

$1,549 94 1

1.8% 41.5 -10.5

0.5% 35.7 27.5

25.3% 26.9 20.6

1.1% -2.5 0.0

$3.33 6.08 5.92

1.3% 4.3 -29.9

$308 191 178 22

1.9% 3.2 6.9 -3.6

0.0% 0.2 -4.0 -10.9

25.1% 20.6 24.9 27.5

-1.2% -4.0 -3.5 -3.3

$4.11 3.24 5.47 2.46

1.9% 3.0 11.3 8.2

$4,433 3,402 2,705 2,343 1,761 1,463 14

2.9% -2.1 4.6 0.9 6.2 5.6 -3.3

-3.6% 5.2 3.4 -3.9 7.8 -1.1 -5.5

15.0% 29.5 22.5 23.1 19.1 42.4 9.2

-2.8% 1.0 0.0 -1.6 -0.3 -1.0 -1.7

$4.60 4.59 3.88 3.09 2.14 2.65 3.68

6.8% -7.0 1.2 5.0 -1.5 6.8 2.3

Source: Nielsen Perishables Group®


| Progressive Grocer | Ahead of What’s Next | February 2016

a jump in sales, while only 18.2 percent of retailers reported decreases in value-added meats, which typically cost more. In other meat sales trends, 34 percent of retailers reported an increase in locally raised meats during the past 12 months, while sales of alternative proteins like bison, venison and ostrich posted negligible comparable growth. As consumers became more acutely aware of high meat prices during 2015, retail category executives didn’t have to be all that inventive when seeking to sell more product. To that end, price cuts ruled the roost as the single best way to move meat of the shelf in 2015, with temporary price reductions (TPRs) topping the list. A close second was another consumer favorite: product sampling/ demos, followed by “fash” sales events. Among the less efective ways meat executives cited to promote meat sales in 2015 were direct mail, online promos and, yes, social media — but bear in mind that these options scored just slightly lower than the preferred methods noted above. Another way to stand out: Tell customers all about your special services. More than nine in 10 meat executives said they did just that, according to the PG meat survey, underscoring that it’s more important than ever for meat departments to broadcast to customers that they can have their fresh meat any way they want it. Retail meat execs also said there was almost nothing they wouldn’t do to try to stand out from the competition. Many said they promoted custom cuts to order. Others promoted in-store grinding of meat. Some said they educated customers on their meat preparation processes and even regularly made menu suggestions. Te skyrocketing price of beef was cited by most store meat ofcials as their biggest headache, but there were plenty of others, too. In an age when foodborne disease outbreaks can rapidly go viral, meat department executives surveyed said they had plenty to worry about in this regard. “Bad media coverage of health and safety issues” was cited as the single biggest issue of one meat executive responding to the retail meat survey. Te growing number of timestrapped consumers eating their meals out instead of in was cited as a major problem by another meat retailer, while yet another executive noted the

aging population — which was afecting not only his meat sales, but also his ability to pull together a viable workforce. Moreover, the very notion of getting shoppers to purchase whole cuts from the retail meat department and then prepare a meal at home was challenging for many meat managers. Too many customers sufered from “a lack of time to cook meals,” lamented one supermarket executive in this year’s retail meat survey. PG

Fresh Food




Sales of organic produce continue to climb, as consumers spend more than $13 billion on fruits and veggies. By Jennifer Strailey


he health-and-wellness trend is here to stay, and in tandem with this new and improved American lifestyle, a burgeoning market for fresh organic fruits and vegetables has taken hold. Sales of organic produce continue to grow at a double-digit clip, with no sign of a slowdown. According to the Organic Trade Association’s (OTA) 2015 Organic Industry Survey, in 2014 the organic fruit and vegetable market remained the No. 1 category in organic food, growing by 12 percent to just more than $13 billion in sales. Organics now account for 12 percent of the fruits and vegetables sold in the United States, with


| Progressive Grocer | Ahead of What’s Next | February 2016

the produce department at the heart of the action. According to Washington, D.C.-based OTA, fresh organic produce accounted for 91 percent of organic fruit and vegetable sales in 2014. “Our data suggest that consumers are always increasingly looking for healthier foods as part of the overall shift to wellness,” says OTA CEO and Executive Director Laura Batcha. “Our surveys also show that consumers increasingly associate the foods they eat with overall health and wellness.” Batcha believes that this connection between food and health is why the produce category has always been — and remains — the largest organic market. Organic produce now accounts for nearly 40 percent of the entire organic sector. As to why the organic



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Fresh Food

Many of the hottest trends in produce originated in organic and went on to have a huge impact on produce as a whole.” —Laura Batcha, Organic Trade Association


foothold is deeper in fresh produce than other categories, Batcha says: “Te consumer makes the connection to the farm when they buy a whole fruit or vegetable. Sometimes they forget, if it’s a cracker or even a beverage, but when they’re eating a fresh fruit or vegetable, there’s no mistaking the source, and they consider the impact of their choice.” Increased availability and accessibility are further fueling sales of organic produce. “Tere’s widespread opportunity to be a participant in organic produce, from natural grocers to mainstream supermarkets to big-box stores to farmers’ markets,” she observes. “In addition, the competitive pricing of items like organic carrots, spinach and apples in some of these stores make organic produce very accessible to the consumer.” Innovative suppliers of organic produce also play a critical role in driving demand. “Many of the hottest trends in produce originated in organic and went on to have a huge impact on produce as a whole,” asserts Batcha, pointing to current super-sellers like kale, bagged salads and dark leafy greens. “Over half of the U.S. kale market is organic,” she notes. “Kale was organic before it was hot in the mainstream.”

The Organic Shopper Who is the organic shopper? Te answer, while ever-evolving, is contained in some of the most interesting data to emerge from OTA’s surveys, according to Batcha. “Every year, the organic consumer is becoming more diverse in terms of age, income and background,” she explains. “Te organic consumer very closely mirrors the current trends for the U.S. Te number of Hispanic households shopping organic is up to 16 percent, from just 7 percent four years ago. Tere’s also been a strong increase in African-American consumers choosing organics — doubling over the last few years. “Te organic buyer is stronger in both diversity and Millennial participation, which really bodes well for the industry,” adds Batcha. “It’s where we are now, and where we are going.” Batcha predicts that we’ll also see more home delivery of organic fruits, vegetables and produce as a whole in the coming years. “Organic homecooking kits, whether delivered or picked up at the store, are a business opportunity for organics,” she says.

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| Progressive Grocer | Ahead of What’s Next | February 2016

Leading Categories and Up-and-comers While sales of organics continue to grow throughout the store, the recently released “FreshFacts on Retail Q3 2015,” from the United Fresh Produce Association and Nielsen Perishables Group, notes that “organic fruits and vegetables experienced particularly rapid growth, increasing dollar sales 15.9 percent vs. Q3 2014.” Consumers are becoming spoiled for choice, with FreshFacts reporting a 19 percent increase in the number of organic produce items carried in stores in 2015. What’s more, despite the higher price points (often 50 percent higher than conventional counterparts), all top organic commodities increased dollar and volume sales versus the same period last year, according to the report.



Fresh Food

While produce overall has the deepest organic penetration of other food categories, greens/salads has an even deeper organic penetration.” —Samantha Cabaluna, Earthbound Farm


Greens Organic shoppers love their greens. Packaged salads are the No. 1-selling item among organic commodities, and lettuce also makes FreshFacts’ top-10 list for Q3. According to OTA, 25 percent of the market for packaged salads is organic. “While produce overall has the deepest organic penetration of other food categories, greens/salads has an even deeper organic penetration,” says Samantha Cabaluna, managing director for Earthbound Farm brand communications. “I think you can attribute that to the simple fact of accessibility. Nearly every supermarket carries organic greens, and the price premium is very small — 10 percent to 20 percent — in comparison to the premiums in other categories.” Te largest organic produce brand in the country, Earthbound Farm, part of the WhiteWave Foods Co., continues to innovate with greens. Te San Juan Bautista, Calif.-based company recently introduced a

Flavor Blends line that includes Spicy Spinach and Sweet Kale varieties, each with a distinct favor profle designed to create on-trend excitement. “Gone are the days when Italian favors were the height of exotic tastes, and spice was reserved for Mexican food,” afrms Cabaluna. “Today, favors from far-fung corners of the globe are popular. Chefs and foodies are gravitating toward smoke, hot spice and fermented favors to name a few, and they’re mixing ethnic food traditions to invent surprising new favor experiences.”

Apples Making the Q3 2015 list at No. 7, apples are among the top-10 organic commodities continuing to increase in sales and volume, according to FreshFacts. Stemilt Growers, of Wenatchee, Wash., which recently revamped its Artisan Organics brand logo, began its organic journey in 1989, and continues to innovate each year. Today, the company is a lead-

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Fresh Food


ing producer of organic apples, pears, cherries and summer fruits, and its entire crop of peaches and nectarines is grown and certifed organic. Currently, more than 20 percent of Stemilt’s entire fruit production is organic, with many acres in a three-year transition phase to organics. “Organics are growing right now, especially in the apple category, and Stemilt is leading that charge,” says Communications Manager Brianna Shales, who predicts the strongest growth in Stemilt’s organic Honeycrisp, Fuji, Pink Lady and Pinata apples. In other apple news, the company has expanded its Fresh Blenders apples for juicing/blending and Lil Snappers kid-sized fruits with organic options. “We know that parents want more organic produce for their families, and so we are responding to that demand with a complete line of 3-pound organic Lil Snappers bags,” notes Shales. “It’s a great way for retailers to promote kid-sized fruit to parents, as well as their organic category.”

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| Progressive Grocer | Ahead of What’s Next | February 2016

Bananas Another list maker, bananas were among the top-10 organic commodities for dollar and volume sales in Q3 2015, according to FreshFacts. Te largest grower and distributor of fresh organic bananas and pineapples, Te Dole Food Co., in Westlake Village, Calif., sources fruit from fve Latin American countries through Dole Fresh Fruit International Ltd. “Te organic category for bananas and pineapples has seen enormous growth in recent years, and continues trending high for the future,” says William Goldfeld, director, corporate communications. “Dole is investing heavily in this area, with new farms and operations to meet this exploding consumer demand. “I think the No. 1 reason for the growth is that shoppers want a choice,” Goldfeld continues. “Overall, the population today is increasingly foodconscious and aware, and simply wants options in their eating.” Citrus Retail sales of organic citrus in the United States were up 14 percent in 2015, according to Chicago-based IRI Worldwide Data.

Tis means that organic citrus is growing nearly three times as fast as conventional citrus, notes Joan Wickham, manager of advertising and public relations for Valencia, Calif.-based Sunkist. “Consumers are broadening their food choices, and we’re seeing that in the growth of organics,” says Wickham. “With more acreage coming into production, Sunkist has a growing supply of organics to meet this increasing demand.” Sunkist’s portfolio of organics includes navel, Cara Cara navel and Valencia oranges; mandarins; minneolas; grapefruit; lemons; and limes.

Corn Te organic corn shortage in the United States is due largely to the fact that 90 percent of corn in this country is bioengineered. As such, organic corn is one of the nation’s top imported foods. While the majority of organic corn is needed to produce organic processed foods and feed certifed-organic livestock, consumer attention is being drawn to the category like never before. On the fresh produce side, the Branch: A Family of Farms grower, packer and shipper of sweet corn, based in South Bay, Fla., is now ofering an

organic bicolor corn variety. “Consumers are seeking more organic and natural products, and our addition of organic corn will help meet that demand as we further grow our organic oferings,” says Brett Bergmann, president of Branch. “We have been selling it initially in the Southeast, and are looking to expand further out.”

The Future of Organic While organic acreage overall appears fat, Batcha says the one area of growth is in fresh fruits and vegetables. Te majority of U.S. supply is currently produced in California, but OTA sees opportunity for expansion beyond the Golden State. “Increasingly, other countries are looking to the U.S. as a source of organic fresh fruits and vegetables,” notes Batcha. In the near future, the biggest challenge for organic produce will be to keep up with demand, she predicts: “Geographical diversifcation of the production base and innovation to manage invasive pests and diseases are going to be important issues for the industry moving forward.” PG

The organic category for bananas and pineapples has seen enormous growth in recent years, and continues trending high for the future.” —William Goldfield, Dole





























February 2016 | |


Fresh Food


Organic Potato Production on the Rise

as part of the growing trend for fresh foods [made] fast by today’s on-the-go consumers,” reveals Lindner.

As demand for organic produce increases across the board, growers have significantly stepped up their cultivation of organic potatoes. “We are seeing more organic potato production,” notes Sarah Reece of the Denver-based United States Potato Board (USPB), pointing to the latest data, which show that organic potato production grew 49 percent from 2011 to 2014. “When looking at the most recent sales data for the 52 weeks ending Nov. 21, 2015, organic potatoes currently make up 1.7 percent of the category,” continues Reece. “While organic potatoes do make up a small share of the category, organic potato volume increased by 27.9 percent compared to year-ago sales.” Meanwhile, conventional potatoes decreased by 2.8 percent compared with a year ago. A number of conventional potato producers have launched organic lines in recent years. One of these was Potandon Produce, in Idaho Falls, Idaho, which last year introduced a line of Organic Red Potatoes, Golden Potatoes and Russet Potatoes. “We have experienced organic potato growth from a sales perspective at Potandon over the last six years,” says Ralph J. Schwartz, VP of sales, marketing and innovation. “That steady growth was the main reason for our launching the Potandon Produce brand of organics.” Wada Farms, also in Idaho Falls, recently rolled out a line of Organic Idaho gold, red and russet portatoes available in 3- and 5-pound bags and 50-pound cartons. What’s more, the supplier’s Organic Idaho Potato Tater Made eco-friendly bags are made in part from spuds — as much as 25 percent. Alsum Farms & Produce, in Friesland, Wis., started its organics program in the early 2000s, and has watched it grow ever since. The program has nearly doubled in both sales and volume since 2014 alone. “Demand is on the rise for organic potatoes,” asserts Alsum’s Christine Lindner. “Consumers are becoming increasingly aware and health-conscious, which is driving demand for organic potatoes. Potato growers across the country are realizing it and increasing their acreage.” Alsum’s organic line currently consists of 3- and 5-pound bags and 50-pound cartons of organic russet, red and gold potato varieties. “In the future, we do look to explore introducing microwave-ready organic potatoes with seasoning and olive oil

The time is right to merchandise organic and all varieties of potatoes, according to the trendspotters at Frieda’s Specialty Produce, in Los Alamitos, Calif. The company’s list of top produce department trends for 2016 includes “The Return of Potatoes and Good Carbs,” singling out sweet potatoes, including its Organic Stokes Purple Sweet Potato variety, for particularly spectacular growth. Frieda’s notes, “Aside from its unique bold color, the Stokes Purple Sweet Potato differs from other sweet potatoes and yams in its flavor and texture, offering a favorably drier, denser, and richer taste with well-balanced sweetness.” According to the USPB, all types of purple potatoes increased by more than 11 percent in volume and more than 10 percent in dollars in the past year. Sales and volume are additionally up for yellow potatoes, the board notes. “We are also seeing a consistent increase in the petite potato category,” observes Reece.


Specialty Spuds

Tater Training

To help retailers boost fresh potato sales, the USPB has developed five short training videos. “The Fresh Potato Associate Training Modules ensure produce associates are armed with the information they need to get the most out of the potato category,” explains Reece. “Knowledgeable produce associates serve as valuable allies to educate and motivate shoppers, helping increase sales.” The modules cover harvest and packaging, storage and handling, potato varieties, nutrition, and marketing strategies. Each video is followed by a quiz. The free videos are available at or

Potato Lover’s Month

February is Potato Lover’s Month, and this year the Idaho Potato Commission (IPC), in Eagle, Idaho, is offering the largest amount of prize money ever for its annual Potato Lover’s Month Retail Display Contest. The competition, which kicked off in mid-January and will run through mid-March, is expected to attract a recordbreaking 5,000-plus retailers vying for the new $2,000 top award, along with nine other award levels. This year’s contest features Country Crock Original buttery spread and Hormel Real Bacon Bits as partners in the IPC promotion. In addition, retailers can access clip art and recipes at

| Progressive Grocer | Ahead of What’s Next | February 2016

Fresh Food

Produce Category Spotlight

They’ll Drink

to That

Today’s fresh juices offer nutrition-packed enjoyment for consumers on the go. By Jennifer Strailey


he trend in fresh juices is simple: Ofer the greatest nutritional value possible through minimally processed ingredients that are blended so beautifully that people want to drink them every day. Well, they may not be simple to produce, but they’re certainly easy for the health-conscious consumer to enjoy. “People are constantly looking for ways to get more fruits and vegetables in their diets,” notes Lauren Castillon of Bolthouse Farms, in Bakersfeld, Calif., a division of Camden, N.J.-based Campbell Fresh. “Fresh juice is such a convenient way to add nutrients to your diet — just throw a bottle in your purse or in your car. But the juice has to taste great. People want something they are going to enjoy.”


| Progressive Grocer | Ahead of What’s Next | February 2016

With fresh juices, quality is as important as favor to the discerning shoppers who purchase them. Bolthouse President and General Manager Scott LaPorta reports that super-premium juices are up 16 percent, while ultra-premium varieties are growing at 81 percent annually. Last year, Bolthouse launched 1915, a line of ultra-premium, HPP (high-pressure processing) cold-pressed organic juices in fve varieties. Te 12-ounce juices, which retail for a suggested $4.49, feature nutrient-dense ingredients such as romaine lettuce, carrots, beets, pineapple and blueberries.

Nutritious Knockouts “Consumers want juices with functionality. Tey look for juices that ofer fruit and vegetable nutrition, vitamins and minerals, as well as proteins and

probiotics,” asserts Castillon, who also sees a trend in more innovative blends entering the market. Bolthouse’s best-selling beverage is Green Goodness, a fruit juice smoothie blend of 15 ingredients, including apple, mango, kiwi and spinach. Te brand plans to introduce new beverages in the spring, which Castillon says will refect the “core consumer trends dominating the market: taste, functionality, added vitamins, proteins and minerals, as well as unique blends that consumers might not experiment with on their own.” Sanja Gould, director of communications for Seattle-based Starbucks, which acquired the Evolution Fresh juice company in 2011, also sees taste and functionality resonating with consumers. “Customers within the fresh juice category have always placed a high importance on taste, and are now more conscious of the nutritional value in the beverages they’re consuming,” she says. “Tis emphasis on taste and nutrition together has contributed to the rise in consumption of cold-pressed, high-pressure processed juice.” “Awareness and consumption of fresh juices has seen a sharp increase,” continues Gould. “Specifcally, super-premium green juice is greatly outpacing the growth of the $1.6 billion super-premium juice category as a whole, according to IRI.” Recently, Evolution Fresh, which uses HPP to help retain favors and nutrients in its juices, expanded distribution to more than 1,300 Starbucks retail locations across Canada. “Tis launch marks the frst foray into the Canadian market for Evolution Fresh and demonstrates continued business momentum, building on the more than 15,000 points of distribution in the United States, including grocery, natural channel and Starbucks retail locations,” says Gould. Evolution Fresh’s newest products in its coldpressed juice line — Organic Coconut Matcha and Organic Citrus Matcha — were created with the demand for great-tasting nutrition in mind. Antioxidant-rich matcha is a type of green tea that’s dried and ground into a fne powder. “When seeking inspiration for these two innovations, we were excited to see a swell of customer interest in matcha, and we knew that Evolution Fresh could deliver matcha in a way that is both approachable and convenient by combining it with cold-pressed, high-pressure processed fruit and vegetable juice,” notes Gould. In common with Castillon, she predicts that the fresh juice category will continue to innovate. “Moving forward, we expect to see more creative combinations within the fresh juice category, including innovations that favor palates more accustomed to vegetables and spices, and ofer a simple, healthy way to improve health and wellness.”

Very Veggie While there are scores of consumers who crave fresh juices with fruit-forward favors, Kellen Stailey, national merchandising director for Grimmway Farms, in Bakersfeld, Calif., sees greens driving the category. “Tere’s more and more growth in fresh juice products that include vegetables,” says Stailey, who notes that Grimmway’s True Organic Bunched Greens juice is its No. 1 seller. Kaleifornia, which she describes as having a distintive kale taste, is its second-best seller. It’s also one of four new favors that Grimmway added to its True Organic line in late fall 2015. “People are gravitating to green, and kale is still ringing the consumer’s bell,” says Stailey, noting, “We’re also seeing the use of more interesting vegetables and root vegetables, as well as more of a drive with organic in the fresh juice category.” Convenient, nutritious and delicious fresh juices are certainly ticking all the boxes for consumers. But Stailey believes that product placement has been equally important to the success of the category. “I think a lot of it has to do with placement in the store,” she says. “Many high-trafc areas are dedicated to juices. We see them in the produce department, grab-and-go, on end caps and by the cash registers. Supermarkets are dedicating fresh juices to key points of sale within the retail landscape, and shoppers can’t miss seeing them.” Simplifying Sipping With the surge in innovation and product introductions, today’s fresh juice category, while dynamic, can be confusing to consumers. “It’s becoming difcult for the consumer to navigate through the fresh juice section,” says Natalie Sexton, director of marketing for Natalie’s Orchid Island Juice Co., in Fort Pierce, Fla. “It’s hard for them to determine which brands are making real, authentic juice, especially with the lack of understanding of terms like ‘HPP,’ ‘cold-pressed’ and ‘fash pasteurization.’ Unfortunately, the FDA has not regulated all

This emphasis on taste and nutrition together has contributed to the rise in consumption of coldpressed, high-pressure processed juice.” —Sanja Gould, Starbucks/ Evolution Fresh

February 2016 | |


Fresh Food

People are gravitating to green, and kale is still ringing the consumer’s bell.” —Kellen Stailey, Grimmway Farms

Produce Category Spotlight

the terms being used in the juice category. Tere is a comment period currently where the FDA is asking for input on regulating the word ‘natural.’” Natalie’s uses a process called gourmet pasteurization to retain the nutrients and squeezedfresh authenticity of its juice. Te juices are pasteurized for the minimum amount of time allowed by government standards, which Sexton says is 163 degrees Fahrenheit for only six seconds. “Our philosophy is to minimally process juice for food safety regulations while using only whole fruit and vegetables, or fruit and vegetable purées,” asserts Sexton. “Juice shouldn’t be complicated — the only ingredients should be what is in the name on the label.” Te company’s two newest juice varieties, Orange Beet and Tomato, refect this philosophy. Natalie’s Squeezed Fresh Tomato Juice is unlike any other available ultra-processed tomato

juice with which the majority of consumers are familiar. The juice is made from just two ingredients: tomatoes and lemon juice. “Consumers can’t believe how light and refreshing our tomato juice is, because they’re used to a heavy, ultra-processed tomato drink,” explains Sexton, who believes that consumer sampling is essential with Natalie’s products, and has also encouraged chefs and bartenders to make use of the tomato juice. With no preservatives, Natalie’s juices have a shelf life of 26 or 30 days, depending on the variety. “Our juice has a short shelf life — like produce, which is a good thing,” says Sexton. Natalie’s is currently considering several new juices for introduction later this year. “Consumers have never been more vocal about what they want,” says Sexton. “Tey want fresher juices with high nutritional value, and they’re willing to spend money on their health.” PG

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Health, Beauty & Wellness



The newest generation of products targets particular conditions.


By Barbara Sax

ncreasing health care costs, coupled with rising consumer health awareness, are buoying the supplement category. While retail shelves are packed with supplements aimed at general health and single-vitamin products, there has been a trend toward more targeted formulations positioned to ofer the benefts of particular health concerns. Supplements positioned as products that aid digestion; eye, joint or heart health; and the immune system have gained share, according to research from London-based Euromonitor.


| Progressive Grocer | Ahead of What’s Next | February 2016

Retailers are responding with sections of the vitamin/supplement aisle targeted to specifc conditions. “Most retailers are no longer brand-blocking,” afrms Guy Burgstahler, VP of marketing at Palm Beach Gardens, Fla.-based Garden of Life. “Instead, they are merchandising by product category, then product type or condition.” Grouping products by category is an optimal way to help consumers shop selections, says Marci van der Meulen, national sales manager for the retail division of Watsonville, Calif.-based Nordic Naturals. “Most of the time, consumers enter the


Health, Beauty & Wellness

supplement aisles looking for a key condition, such as heart health, brain health/cognition, mood, immunity, digestion, etc.,” she notes. “By merchandising products in a condition-specifc way, it enables customers to more quickly and easily fnd products to meet their needs.”

Merchandising products in a conditionspecific way enables customers to more quickly and easily find products to meet their needs.” —Marci van der Meulen, Nordic Naturals

Easier to Digest Fiber, probiotic supplements and protein supplements continued to register strong double-digit current-value growth in 2015, according to Euromonitor. Demand for probiotics has been on an upswing: One recent study showed that 19 percent of U.S. respondents with digestive concerns said they used probiotics in one form or another. Signifcantly, 7 percent of the consumers without digestive problems also reported taking probiotics. Manufacturers continue to introduce new products, and retailers such as Whole Foods Market, Wegmans Food Markets and Fairway are giving a signifcant amount of shelf space to digestive-health products, as well as featuring them in refrigerated end caps. Garden of Life, maker of certifed organic and non-GMO Project Verifed nutrition products, recently introduced Dr. Formulated Probiotics, Enzymes and Fiber in collaboration with medical doctor, author and human-microbiome expert David Perlmutter. Whole Foods carries Garden of Life probiotics for adults and children. Euromonitor analysts note that while “claims for probiotics have been closely regulated, the enthusiastic media has helped to spread the word, and consumer awareness and interest in probiotics is booming,” with probiotic supplements linked not only to improved digestive health, but also to heart health, mood improvements and upperrespiratory health.

For the Kids Pediatric supplements represent $573 million of the $26 billion vitamin market, according to London-based Euromonitor. University of California-Davis Children’s Hospital research suggests that one-third of U.S. children take some sort of daily vitamin. Research from Chicago-based Mintel shows that 15 new children’s vitamins/supplements were introduced in 2015. No doubt about it: Vitamins and supplements for kids are big business. “A lot of the growth we’ve seen has been in the children’s segment,” affirms Alene Johnson, director of education at Ferndale, Wash.-based vitamin and supplement maker Barlean’s.


Joint Action Joint health remains a key segment of the supplement category. A recent study by joint health supplement manufacturer Osteo Bi-Flex found that nearly seven in 10 Americans older than 34 experience occasional joint stifness or other concerns. Te survey also found that 62 percent of Gen Xers, who are now in their late 30s and 40s, are concerned about their joints. New York-based Osteo Bi-Flex recently introduced Osteo Bi-Flex Ease, a daily minitab for joint comfort. “What sets Osteo Bi-Flex Ease apart from other Osteo Bi-Flex products is the small capsule size,” explains Brand Manager Albert So. “Ease capsules are 80 percent smaller than Osteo Bi-Flex One Per Day tablets, and they contain a unique ingredient, UC-II collagen, to help support joint health.” Emerging ingredients, such as eggshell membrane, frankincense and methylsulfonylmethane (MSM), should play a bigger part in the category over the next few years. In a crowded category, Osteo Bi-Flex Ease’s package was designed to draw attention to key benefts and features through a die-cut window that allows the consumer to see the product’s smaller tablet size. “As the market leader, we are looking to break through the clutter and connect with consumers in diferent, authentic ways,” adds So. “We believe our new Made to Move ad campaign will help demonstrate what Osteo Bi-Flex can do for consumers to add to their day-to-day quality of life.” Do One’s Heart Good Since cardiovascular disease remains a leading cause of death in the United States, heart-health supplements represent a signifcant portion of category sales. Omega-3 has been a key ingredient in these supplements, although vitamin K 2 and others are now showing up in such products. Tis past sum-

“Savvy parents know that their kids don’t always get the nutrients they need from the food they eat, and are looking for an easy way to provide them with those nutrients.” New formulations, such as gummies and emulsifications, are growing the segment, and organic and natural products are also an important force. “Preference for gummies is at 29 percent, up from 15 percent in 2011,” says Maryellen Molyneaux, president of the Natural Marketing Institute, in Harleysville, Pa. “Over one in 10 of all supplement users have used a children’s multigummy in the past six months, and 30 percent of parents with kids in the households have used one.” Barlean’s uses an emulsification technique for its liquid Omega Swirl formulations, which come in nine flavors, while Watsonville, Calif.-based Nordic Naturals recently launched a liquid fish oil emulsion with a creamy consistency that

| Progressive Grocer | Ahead of What’s Next | February 2016

mer, Doctor’s Best, a Coromega brand, added two new heart-health supplements, Artery Prime with MenaQ7 and Heart Prime with KD-PUR EPA, to its dietary supplement line. Omega-3 is increasingly being used by other consumers. “In the last two years, we’ve seen a lot of growth in fsh oil use among athletes for treating muscle recovery and children on the autism spectrum,” says Andrew Aussie, EVP of Carlsbad, Calif.-based Coromega. Te company recently updated the packaging of its Tiger Fish Oil to include information on its partnership with Generation Rescue, a Sherman Oaks, Calif.-based organization that provides information and treatment assistance to families afected by autism spectrum disorders. “Te sports category has exploded in the last few years,” adds Nordic Naturals’ van der Meulen. “Athletes want to buy quality supplements to address endurance, injury, weight, stamina and recovery.” Nordic Naturals recently launched a line of products formulated with the company’s new ultra-concentrated omega-3 oil.

Healthy Trends According to Coromega’s Aussie, there’s been a spike in consumers using omega-3 supplements to treat eye health, a growing category. While the segment is dominated by Bausch & Lomb’s Occuvite and Alcon’s ICaps, smaller brands are also making inroads in the segment, where ingredients such as lutein and zeaxanthin are important. Barlean’s recently introduced an Eye Remedy liquid swirl in Tangerine Smoothie favor. “Tere’s es

growing awareness of the damage that blue light can do to the retina, and an ongoing interest in preventative eye health among aging consumers concerned about macular degeneration is boosting the category,” says Alene Johnson, director of education at the Ferndale, Wash.-based company. Supplements for cognitive brain health are also a fast-growing segment. Despite limited research to support supplements for cognitive health, products aimed at fghting a gamut of ills, from memory loss to depression, have been gaining ground in the segment. Aging consumers aren’t the only ones being targeted by vitamin and supplement manufacturers. Euromonitor’s report shows that young Millennials, raised by health-conscious Baby Boomers, are also open to nutritional supplements and alternative health. Accordingly, San Francisco-based Olly Public Beneft Corp. has launched gummy vitamins and dietary supplements marketed specifcally to Millennials. Employing attractive packaging designs and simple labeling, the products come in fruity favors meant to appeal to younger consumers. Since price is important in the category, couponing and promotions are a big part of most retailers’ strategies, as in the case of Redwood City, Calif.based Biocodex, which recently rolled out shelf couponing in supermarkets for its Floristor probiotic supplement. For his part, Burgstahler notes that that Garden of Life ofers couponing, BOGOs and gift-with-purchase as incentives for consumers. “Couponing is a factor, especially with new customers,” agrees van der Meulen. “Coupons at shelf work well to bring attention to a brand or to prompt an immediate sale in the store.” PG

comes in a Paradise Punch flavor. “We continue to innovate, particularly with children’s products, which continue to grow and in some areas outpace growth of adult supplements,” s,” notes Marci van der Meulen, national sales manager ger of the retail division of Nordic Naturals, which also manufactures Nordic Berries multivitamins. “Delivery systems are important, and the gummyy category continues to grow. Because children can n be finicky, parents need to know that their child will like the taste of a vitamin or find it easy to swallow, w, and will therefore enjoy taking it.” Probiotics are another growing part of the kids’ vitamin/ i min/ supplement segment. Whole Foods carries Cromwell, Conn.based Culturelle’s powder packets and chewable probiotics, as well as Garden of Life’s Raw Probiotics for Kids. New ad-

We are looking to break through the clutter and connect with consumers in different, authentic ways.” —Albert So, Osteo Bi-Flex

ditions to the segment include Phoenix-based Esditio sent Source’s TriActive Biotics Junior, billed as the sential first microencapsulated probiotics for children, and another kids’ probiotic from Palm Beach Gardens, anot Fla.-based Garden of Life, marketed under its Dr. Fla.Formulated line. Form Parents are also increasingly looking for suppleP ments with sustainable, environmentally friendly, men natural and organic claims. “Many are even willing natu to pay p a premium to ensure they are getting unadulterated ingredients,” observes Molyneaux. adu Unsurprisingly, licensing is a big part of U children’s vitamins. Bohemia, N.Y.-based NatureSmart childr is appealing to kids across the category with licenses including “Star Wars,” Marvel, and Disney’s “Frozen” and Doc McStuffins characters.

February 2016 | |



Tobacco Alternatives



Electronic cigarettes set out to overtake their traditional counterparts. By Barbara Sax

Ultimately, the growth in 2016 will come from products that are engineered toward customer satisfaction, by those brands that have the pulse of the adult smoker.” —John Wardley, Fontem Ventures

110 |


fter promising growth, sales of electronic cigarettes have fattened. As consumers gravitate to vape shops for more premium vaping experiences, mass-market sales of electronic cigarettes have sufered. Sales of electronic cigarettes at supermarkets were $16 million for the 52-week period ending Nov. 28, 2015, according to data from Chicago-based IRI, a 2 percent dip from last year’s sales. Te convenience store channel generates the greatest sales in the category among all mass-market outlets, with supermarkets garnering about 5 percent of category sales, IRI notes. To combat the sales slip, manufacturers have stepped up promotions on products. San Francisco-based Wells Fargo Securities reports that continued heavy promotions of both RJ Reynolds’ Vuse and Altria’s MarkTen brands in the c-store channel elevated unit momentum this past year, but at the expense of dollar sales. Wells Fargo research also suggests that some new, improved versions of products already on the market may cannibalize sales of existing products if those products fail

Progressive Grocer | Ahead of What’s Next | February 2016


Our fruit-based and sweet or dessert-type flavors are outpacing our tobacco and menthol flavors by a large margin.” —Todd Millard, Ballantyne Brands


Tobacco Alternatives

to introduce new users to the market. Still, many analysts are optimistic about the long-term consumption potential of electronic cigarettes, which they believe could surpass traditional combustible cigarettes by 2025. Te category’s strength going forward will be dependent on improved technology of second- and third-generation products that are starting to hit the market as the category’s focus shifts from rechargeable kits to higher-performance cartridges.

Present and Future Innovations “Frequent product innovation is crucial to driving adoption rates,” afrms Jan Verleur, CEO of Miami Beach, Fla.-based e-cigarette manufacturer V2. “Te fact that open-system vaporizers (OSVs) ofcially overtook disposables in 2014 suggests that consumers are already leaning

| Progressive Grocer | Ahead of What’s Next | February 2016

toward more sophisticated vapor devices.” According to Verleur, technological innovations like customizable vapor strengths, longer battery life and the ability to taper down nicotine levels have attracted consumers to OSVs. “As technology continues to improve, we’ll see an even greater share of users switching to OSVs in 2016,” he adds. Todd Millard, COO of Monroe, N.C.-based Ballantyne Brands, maker of the Mistic and Haus brands, notes that while consumers may start with refll “cig-alike” products, or pen-style lower-end vaporizers or open systems, they often upgrade to a better-performing mechanical device, or “mod.” Sarah Richardson, spokeswoman for Pax Labs’ Juul brand, says the category’s key limitation so far has been the inability of e-cigarettes, especially cig-alikes, to replicate the satisfaction profle of a traditional cigarette. “Juul takes that challenge head-on,” she asserts. “Te result is an e-cig that reliably ‘works’ for pack-a-day smokers, and can go head-to-head with cigarettes. Juul is now the fastest-growing top-10 vapor brand in the c-store category, indicating the potential for this category to grow as more smokers choose to vape.” San Francisco-based Pax recently received a U.S. patent for the nicotine salt e-liquid formulation used in its landmark Juul e-cigarette. Unlike other products in the e-liquid space, Juul uses nicotine salts found in leaf tobacco, rather than freebase nicotine, as its core ingredient. Juul e-cigs hit the market in June 2015 in four cartridge favors: tabaac, miint, fruut, and bruulé. A starter kit, which includes a device, one of each Juul pod favors and a USB charger, retails for $49.99; Juul pod

4-pack reflls retail for $15.99 each. Last year, Richmond, Va.-based Altria introduced MarkTen XL, a larger-format version of the MarkTen, with a broader range of favors and better battery life. Te company also extended its Green Smoke e-vapor products into a number of markets. Blu Plus+ and Logic Pro introduced similar trade-ups in 2014. Blu Plus+ features a longer battery life and enhanced vapor production and favor delivery. “Blu Plus+ uses the latest technology to provide an easy, satisfying transition for adults in search of a viable alternative to traditional cigarettes,” says John Wardley, chief marketing ofcer of Charlotte, N.C.based Fontem Ventures, parent company of Blu. “Ultimately, the growth in 2016 will come from products that are engineered toward customer satisfaction, by those brands that have the pulse of the adult smoker.” RJ Reynolds continues to expand its Vuse brand, which achieved national distribution in 2015. Te Winston-Salem, N.C.-based company added colors and styles in some key states and spent heavily last year to increase brand awareness and trial of Vuse. Trial has been strong for the brand, driven by heavy couponing. Reynolds is also focused on building brand awareness for its new Revo heat-not-burn (HNB) technology. Te company is positioning Revo as a bridge product from combustible cigarettes to vaping. Revo has a carbon tip that, when lighted, heats the tobacco rather than burning it, so that the cigarette releases a tobacco-favored vapor rather than traditional cigarette smoke.

Elevating the Experience Other companies are focused on bringing an elevated vape-shop experience to mass-market consumers through new and improved products. In December, Ballantyne added two favor profles to its Haus Craft Collection, a line of high-end vaping hardware and premium vaping liquids, or “vape juice.” Mistic and Haus are sold in the mass market, while its Unbroken is a vape shop-specifc line. Te Craft Collection aims to enable mass-market consumers to enjoy a vape-shop product. Te two new favors, Shadow Cut and Dark Ice, bring the Haus Craft Collection up to fve e-liquid favors. Te brand’s mod-style starter kit contains a sub-ohm tank and coils, similar to products that are currently available only in vape

shops and on the internet. “Te majority of the volume is going through vape shops,” observes Millard. “We saw this trend change in early 2015, and that is why we developed our Haus Craft Collection line, which is a high-end mod and hardware ofering with premium vape juices.” Millard sees consumers gravitating away from traditional tobacco and menthol favors toward more nontraditional varieties. “Our fruit-based and sweet or dessert-type favors are outpacing our tobacco and menthol favors by a large margin,” he points out. In a striking example of this trend, boutique e-juice company Coastal Cloud’s premium breakfast-cereal favor won “Best in Show” at the fourth annual Vape Summit last October. GreenSmartLiving recently introduced a nicotine-free, cannabidiol-based e-liquid, but the Salt Lake City-based company is also committed to the disposable business. “Tis category will mature, but there will always [be a] trend towards convenience, which I see in the disposable category,” says company spokesman Andrew Middleton. This category

In With Both Feet Merchandising the category can be a challenge for retailers, since product must be kept behind the counter. V2’s Verleur believes the challenge goes beyond fxtures. “Te category requires commitment to a strategy to clearly diferentiate e-cigarettes — micro-cigs or OSVs — from other tobacco products,” he says. Te nonverbal “point to the pack” mode of shopping “simply doesn’t work for e-cigarettes, because most people don’t know what to point to,” continues Verleur. “Tey need to see the product up close. Tey need to read packaging, or at least the POP material. And they need to fnd a way to have their questions answered. If these conditions aren’t met, the vast majority of consumers will simply stick with inertia, which, more times than not, means the purchase of a combustible.” Ballantyne’s Millard thinks there’s room for improvement in the way the grocery channel merchandises the category. “While we understand it is difcult to properly merchandise in the grocery channel due to space constraints and location, there is also a lack of dedication to the category, meaning, grocery retailers are playing in this category with a one-foot-in-and-onefoot-out approach,” he asserts. “If you are going to be in the category, be in it wholeheartedly.” PG

will mature, but there will always [be a] trend towards convenience, which I see in the disposable category.” —Andrew Middleton, GreenSmartLiving

February 2016 | |



Price Optimization

What is the Price of

Customer Loyalty? Keep shoppers coming back. By John Karolefski

If loyalty really matters to a grocer, consistent, rational pricing strategies must be maintained.” —Jim Sills, Clear Demand



he risk of losing customers must keep grocers up at night. So how do they avoid that scenario? Tere are many ways to maintain customer loyalty, but experts say consistent and transparent pricing may be the most important. Moreover, getting the price right across all products all the time is a key ingredient in strengthening shopper loyalty. Te trick is to do so proftably. “Today’s grocery retailers have a unique opportunity to leverage price management and optimization tools to make the most proftable decisions,” explains Cindy Kim, VP global marketing for Revionics, an Austin, Texas-based provider of price optimization solutions. “But the advantage is being able to tap into the vast amounts of market,

| Progressive Grocer | Ahead of What’s Next | February 2016

competitive and customer data to efectively manage and execute those pricing decisions without killing their margins.” According to Kim, intelligent data can provide a lot of value in terms of the types of assortments by stores, demand, sensitivity to price, and shopper purchasing behavior and preferences, as well as understanding how competitors are pricing, which can afect the shopper at the product level. Jim Sills, president and CEO of Scottsdale, Ariz.-based software and services provider Clear Demand, agrees, adding that customer loyalty is driven by price and experience. “It’s a service equation that has to be informed by using pricing intelligence, which ensures an interconnected and consistent shopping experience,” notes Sills. “You must have rational line structures

automated with a rules engine, which ensures products are priced rationally — that is, not in a way that forces shoppers to trade down because the gap between brands is too large. If loyalty really matters to a grocer, consistent, rational pricing strategies must be maintained.”

Knowledge is Power What also must be maintained is a better understanding of shopper behavior than the competition’s, asserts Guru Hariharan, CEO of Mountain View, Calif.-based Boomerang Commerce, a company that advises retailers on how to make smart pricing decisions to boost profts. What’s more, he adds, grocers need recommendations based on knowing where to hold prices, even when a rival drops its own prices. “Tat’s vital — that balance of knowing what price diferential your customer will allow before starting a decision process that takes them elsewhere,” says Hariharan. “Hence the need for technology platforms that are fast and easy to use. If your competitor changes prices at lunchtime, you know the recommendation and act on it — not just for individual products, but across interrelated products.” Todd Michaud, global VP and GM of NCR global enterprise, merchandising and supply chain solutions at Duluth, Ga.-based NCR, focuses on the link between pricing and the ability of grocers to give customers personalized ofers based on their shopping histories and preferences,

which he believes is the key to efective loyalty programs. Michaud contends that grocers must understand customer shopping data, interpret them and act upon them to deliver the right price or promotion to drive behavior. He adds that price management systems also must integrate into loyalty systems to consume special pricing and ofers, managing the related complexities, to ensure proper price execution. Increasingly important in an omnichannel world is “that a customer’s purchase history considers purchases across all channels, not just online or in store,” says Michaud.

Something of Value Experts additionally point to shoppers’ desire for value as a key to the link between price management and customer loyalty. Tis is important regardless of the price sensitivity of various customer segments. “All customers are cognizant of value,” explains Alan Lipson, global retail and CPG marketing manager at SAS, a Cary, N.C.-based provider of business analytics software and services. “Pricing plays a key role in the communication of a grocer’s value proposition. It is important for grocers to understand which products need to be priced appropriately to communicate their value to various customer segments. Customers will not be loyal to a grocer that does not provide value, regardless of how the value is defned.”

If your competitor changes prices at lunchtime, you know the recommendation and act on it.” —Guru Hariharan, Boomerang Commerce

February 2016 | |


Technology Price Optimization

Customers will not be loyal to a grocer that does not provide value, regardless of how the value is defined.” —Alan Lipson, SAS

Mark Kelso, president of St. Louis-based consultancy Price Revolution, agrees that a properly crafted price management program will improve the shopping experience by creating a value proposition. “Price management is the glue that merges each component of the marketing mix — product assortment, promotion and the merchandising message — into one cohesive ofering, improving the overall value as perceived by the grocer’s customers,” he notes. According to research by New York-based McKinsey & Co., this search for value prompts most shoppers to check online for prices of sensitive items. Terefore, it makes sense for pricing to be more transparent and dynamic. “Most consumers do this before, during or after the sale, not because they are switching to another grocer during that trip, but because they want to know what kind of deal they are getting,” says Channie Mize, general manager for the retail sector at Periscope, a McKinsey Solution. Tis impacts how consumers feel emotionally about a grocer. “For example,” Mize goes on to say, “if they see a grocer has priced something very high

Keys to Effective Price Promotion The keys to an effective pricing or promotional program are simple in concept yet difficult in execution, according to Mark Kelso, president of St. Louis-based consultancy Price Revolution. “An appropriate price and promotional process should bridge the retailer’s goals of profitable growth [and] customers’ need for value,” he says. “Without satisfying both sides of the equation, price management will fail.” Kelso lists three elements of effective price promotion: Start by identifying the retailer’s goals that should be developed by individual price zones. Appropriately developed price zones combine like customers based on their buying behaviors. Establish and test strategies to ensure the attainment of both the retailer’s goals and customers’ needs. Remember that the process of strategy development is an ongoing practice. As customer buying behaviors evolve, strategies should be course-corrected. “Done properly,” Kelso sums up, “the retailer and customer both win.” —John Karolefski


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— and higher than their competitors — it can negatively impact both customer loyalty and frequency if that happens too often. Tis makes gaining competitive intelligence and pricing appropriately more important than ever.”

Smart Moves Te best retailers have smart technology providing them with tons of data and analytics to help them steer buying behaviors, according to Greg Wank, practice leader of the Food & Beverage Services Group at Anchin, Block & Anchin, an accounting and professional services frm based in New York. Te information shows them the trends on which their customers base purchases of staple items in store. Grocers use that information to ofer highly competitive pricing on those items to build customer loyalty and draw shoppers back to their stores. “Te grocers leverage that loyalty by ofering non-staple [items] at better proft margins, which the consumer gladly purchases because of the savings they are getting on their staples,” he explains. While price is a big factor, it’s not the only infuencer of loyalty. Pricing executives also point to quality, assortment, digital and physical presentation, store aesthetics, checkout time, and anything that creates annoyance for the shopper. “Any grocer that has been successful competing against Walmart understands a great deal about diferentiated assortment, promotions and how to compete in the brick-and-mortar world,” says Boomerang’s Hariharan. “Now that they face new challenges with the introduction of digital channel competitors, the established grocers need new technology to manage pricing on a large scale and in near real time. Online competition is diferent; the digital channel is not just another store. It would be a big mistake to think so.” PG

The value is the ability to create “stickiness” with shoppers to increase loyalty and generate additional revenue.

Digital Dialogue

By Sylvain Perrier

Personalization Deconstructed Does personalization as we know it deliver value for grocery?


he grocery business is an intricate arena. Not all retail trends are easy to adopt or can deliver value in the context of grocery. Regional grocers want to adopt technologies that don’t just generate revenue today, but are also long-term investments for the future.

An Evolving Trend A shopper walking into a store is informed via smartphone of items on sale linked to her preferences and purchase behavior. Her coupons automatically organize by the aisle she’s in. Tis may sound like personalization, but what’s really happening here is contextualization within the domain of personalization. To understand the diference, let’s step back to the mid-2000s: Smartphone technology was taking of — BlackBerry was in its heyday, and Steve Jobs was at San Francisco’s Moscone Center announcing the frst iPhone, generating a bit of fanfare, if not outright hysteria. Te launch also created an opportunity for retailers to reach consumers anytime, anywhere, and so a great idea was born: tailoring marketing outreach based on preferences shoppers have shared. As a result, along came a series of buzzwords still known today, including the scary-sounding “Big Data” — large datasets that can be analyzed to reveal trends. Personalization Meets Contextualization Personalization took marketing to the next level. It involved looking at data points, such as shopper demographics, transactions and behavior; analyzing these; and dynamically delivering results in near real time through web, mobile, social media and email. An example is leveraging loyalty and transactional data, and running a query across the system for names of consumers who’ve bought a specifc product across locations. Te retailer would then prescribe what, when and how to market dynamic content through various channels. More data points mean more opportunities to spot patterns and ofer personalization.

Now we’re moving into the age of contextualization — bringing situational data, such as time, location and device being used, into the realm of personalization. Google demonstrates this: You’ve landed for a connecting fight at Chicago’s O’Hare Airport. Suddenly, your mobile device alerts you that you’ve missed your fight, but it has booked you on the next one. Tat’s contextualized — in the moment, while it’s happening — and it’s personalized — happening to you as an individual. Merging personalization with contextualization is a powerful and truly immersive user experience providing a far greater chance of purchasing. Te value is the ability to create “stickiness” with shoppers to increase loyalty and generate additional revenue. Should a grocer consider contextualized personalization? Retail technologies ofered by other retailers such as Amazon and Staples have led consumers to expect advanced personalized interactions. Household spend on groceries isn’t increasing, and the sheer number of competitors means fghting for percentage of the basket. So certainly today, advanced personalization is becoming grocery retail table stakes.

Key Factors Data fuels personalization through data sets such as customer data, active digital channels, product data and transactional data, and access to an alogrithm. Probably most important is to have in place a system — call it a calculation engine — that goes through the data sets to seek out and correlate patterns. Tis then allows the ability to prescribe recommendations for messages delivered though various channels, to deliver results. Contextualized personalization in grocery, if done right, can mean additional revenue, greater basket size, better margins and — equally as important as those other results— increased, lasting shopper loyalty. PG Sylvain Perrier is president and CEO of Mercatus Technologies, a Toronto-based enterprise-grade software company specializing in digital solutions for North American grocery.

February 2016 | |



Supply Chain

Safety First

Retailers’ FSMA preparations are strengthening supply chain visibility and collaborative business planning. By Jenny McTaggart


Food Marketing Institute (FMI), in Washington, D.C. critical supply chain issue is engrossing “And with the U.S. Food and Drug Administration’s release every food retailer in the United States, of the most infuential food safety regulations in 70 years, regardless of where their stores are food retailers have reassessed their food safety plans and located, what type of customers they’re directed new resources, talent and strategies for compliance.” serving or what they’re charging for a Underscoring the signifcance of FSMA, Tesmar and gallon of milk: Tat issue is food safety. other leaders will be on hand this month to discuss the Tanks in part to the sweeping, potentially culturelegislation during the industry’s Trading Partner Alliance changing legislation coming from the Food Safety Supply Chain Conference. Te annual show, being held this Modernization Act (FSMA), along with consumers’ year in New Orleans, is organized by FMI growing taste for produce and other and the Grocery Manufacturers Association. better-for-you fresh food, mom-and-pop “We are invested retailers and national chains alike are paying more attention than ever to the Food Safety ‘Deeply Rooted’ in smart safety of their perishable products. at Wegmans technologies that Meanwhile, with the unprecedented Another company that will be presenting will help companies number of health scares that bedeviled on the topic of food safety at the conference streamline data and popular Tex-Mex restaurant chain Chipotle is Rochester, N.Y.-based Wegmans Food ensure the most in one year (2015), all executives in the food Markets. Wegmans has been at the forefront fastidious ways to business are closely studying the best ways of food safety eforts since long before talk create compliance to handle such crises and, more importantly, of FSMA, so the company is in a good place checks and how to prevent them in the frst place. to help educate others in the industry. balances all along Truth be told, it seems virtually impos“Food safety is deeply rooted within all the supply chain.” sible to eliminate all food safety outbreaks, aspects of our supply chain,” Mary Ellen but that won’t stop retailers from doing Burris, Wegmans’ SVP of consumer afairs, —Hilary Thesmar, everything in their power to try. Across the tells Progressive Grocer. Food Marketing Institute country, retailers are investing in training According to Burris, fresh produce is and education eforts to help their employees the company’s greatest area of concern. get up to speed on FSMA’s new recordkeepTo that end, the regional retailer has been ing requirements, while trading partners are highly supportive of the Center for Proviewing their supply chain eforts in a more duce Safety, a Woodland, Calif.-based collaborative manner to better ensure visggroup that makes grants to streamline ibility. At the same time, new technology is research on fresh produce. hitting the market at a rapid pace to help Wegmans is also addressing food grocers deal with all of these issues. safety via “aggressive training, assess“With 100 percent of the nation’s ment and oversight,” notes Burris. supermarkets focused on perishables, food “We have active engagement in the safety continues to maintain its position as iindustry through our president [Colleen the second-leading factor impacting food Wegman] chairing FMI’s board food W retailers’ businesses in 2015,” notes Hilary safety committee, and our CEO [Danny Tesmar, VP of food safety programs at the Wegman] co-chairing the safety pillar of the W


| Progressive Grocer | Ahead of What’s Next | February 2016


We were one of the first retailers to make phone calls to customers whose purchase records show they have bought a [recalled] product.” —Mary Ellen Burris, Wegmans

Supply Chain

Lessons From Foodservice Chipotle has received more than its fair share of news headlines over the past year, as the restaurant chain that built its brand on fresh ingredients has dealt with numerous, sometimes unrelated food safety scares. As this issue of Progressive Grocer went to press, Chipotle had committed to hosting a Feb. 8 national team meeting focused on food safety at all of its nearly 2,000 North American restaurants (the restaurants were scheduled to open to the public later than usual that day).



It remains to be seen how the fallout will impact the future of the Denver-based company, but for the time being, all players in the restaurant industry are taking an even closer look at food safety, with the aim of preventing such disasters. Many of their concerns mirror those in the retail trade: Consumers continue to desire fresher and locally sourced ingredients, while the Food Safety Modernization Act (FSMA) raises new concerns about traceability.


products sold under its own brand, because the items were inadvertently produced without the beneft of federal inspection from the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS). Wegmans placed automated phone calls the morning of the recall to alert shoppers who had purchased the product.

Consumer Goods Forum, which houses the Global Food Safety Initiative [GFSI],” she says. In addition, Wegmans’ VP of food safety and quality assurance, Gillian Kelleher, is on the board of GFSI. Of course, Wegmans has been particularly focused on FSMA for the past few years. “We’re learning all we can, attending training sessions and partnering with other food retailers,” explains Burris. “Te lead on this is our chief food scientist, Kathleen O’Donnell, with a steering committee of senior managers most afected by FSMA. Among them are our supply chain QA manager and team.” In another important area of food safety, Wegmans has long made product recalls a key piece of its communications with shoppers. “We were one of the frst retailers to make phone calls to customers whose purchase records show they have bought an afected product,” says Burris. Just last month, Wegmans issued a recall of 1,125 pounds of marinated chicken

Supply Chain Transparency Many other retailers are increasing their food safety eforts via specialized technological tools as they gear up for FSMA compliance. Last summer, Keasbey, N.J.-based retailer-owned cooperative Wakefern Food Corp. joined forces with ICIX, a supply chain risk management company based in San Francisco, to better collaborate with food manufacturers and manage private label requirements as part of its food safety and compliance program. “We implemented ICIX to drive transparency

PG recently caught up with several experts at HAVI Global Solutions, a restaurant management consulting firm in Downers Grove, Ill., to discuss food safety in the restaurant industry, and to see whether some of their best practices might be shared with grocery retailers. Here’s what they had to say: Progressive Grocer: What are the greatest challenges in maintaining food safety in the restaurant cold chain nowadays? Eric Pfeiffer, senior director, supply chain integration: “The greatest challenges are around creating effective mechanisms to identify and mitigate risks of food adulteration. This means putting systems and processes in place that trace product from farm to fork to ensure quality standards are met. Additionally, the regulatory environment has evolved to put requirements in place to report instances of foodborne illness.”


Steven Rodgers, VP, business development - analytics, supply chain & promotions: “Visibility, traceability and capacity management are all key challenges.”

Scott Saunders, SVP, supply chain services: “There’s a major push from consumers for restaurants and food retailers to provide fresh products, which include local ingredients. Providing those local ingredients exponentially exposes a cold chain to risk by rapidly onboarding many new suppliers into the supply chain. The process of regularly qualifying new suppliers and ensuring they are compliant to a predetermined set of standards is difficult

| Progressive Grocer | Ahead of What’s Next | February 2016

into our supply chain and assist us with a single source of information for supply chain compliance,” said Mike Ambrosio, Wakefern’s VP of quality assurance, at the time of the announcement. More recently, Midwestern retailer Lund Food Holdings selected PAR SureCheck Advantage Solution, from New Hartford, N.Y.-based ParTech Inc., to support the food safety program at all of its Lunds & Byerlys grocery stores. Te Edina, Minn.based retailer said it would deploy PAR’s SureCheck Advantage, Software-as-a-Service (SaaS) solution for food safety and checklist management across its 28 locations, in an efort to replace its traditional “pen and paper”-based processes. FMI’s Tesmar says she expects more companies to invest in smarter technologies as they prepare for FSMA compliance. “Te Food Safety Modernization Act is challenging to implement, due to its complexity and rigidity, so FMI is in-

vested in smart technologies that will help companies streamline data and ensure the most fastidious ways to create compliance checks and balances all along the supply chain,” she explains. Specifcally, FMI endorses ReposiTrak, a compliance management track-and-trace tool. According to Tesmar, “Tere are signifcant opportunities for collaborative business planning between manufacturers and grocers regarding the Food Safety Modernization Act.” Going forward, rules that impact both manufacturing facilities and retailer distribution centers — albeit in diferent ways — will require better communication between trading partners. PG For more about food safety throughout the supply chain, visit

and time-consuming. In addition, when problems do arise within the cold chain, it becomes increasingly important to track product movement, define the root cause of an issue and address it quickly.”

PG: What food safety lessons/best practices might supermarket retailers pick up from the foodservice industry? What best practices should they keep in mind if they decide to add more foodservice options in their stores? Rodgers: “I think there are best practices to be observed among foodservice providers regarding issues related to available storage, especially cold and frozen storage. Based on their square footage and limited capacity, restaurants deal with this issue on a daily basis, and some have instilled processes and applied technology to best manage these constraints, including inventory monitoring, as well as demand-and-supply planning processes. With grocers’ larger capacities and potentially longer shelf life for their core perishable goods, they could benefit from restaurants’ best practices in order to avoid waste and keep product fresher longer.” Saunders: “Best practices we see in the foodservice space relating to cold chain include a standard of instantly putting delivered products away into the freezer or refrigerator to ensure minimal exposure to noncompliant temperatures. Another best practice is inventory optimization. This means only moving inventory when there is a pre-determined demand trigger, which ensures product is not moved to the wrong place or at the wrong time. Finally, using a robust process to qualify suppliers, then working closely with them to ensure compliance to set standards, is best practice among many foodservice providers.”

PG: Do you anticipate that the changes coming from the Food Safety Modernization Act will impact the restaurant industry in a major way? Why or why not? Rodgers: “Yes. While foodservice will be expected to comply with the act, a more pressing issue is related to the brand damage resulting from food safety issues. A highly visible foodservice company has lost more than 40 percent of its market cap since mid-October because of contamination/ food safety issues. Many other brands are as concerned at all levels that they could face a similar challenge, and that they have very limited capability to address traceability from the consumer back to the supplier of their goods.” Pfeiffer: “Yes, the implementation of traceability requires investment in both data integration and the systems that create and store that data. All suppliers need to upgrade capabilities to label pallets and create advanced shipping notifications (ASNs) that enable lot-level traceability. We’ve seen some restaurant chains that then need to upgrade their distribution network capabilities to accept that data and maintain lot-level traceability through to specific restaurant deliveries. This impacts not only the need for more advanced warehouse management systems at distributors, but enhanced business processes that ensure what gets picked in the distribution center ends up in the right restaurant. For some distributors, this is complicated for high-volume items that are bulk-loaded for multistop distribution runs.” Saunders: “Many food and foodservice providers will start to focus on multitemperature freshness issues. Different foods need to be kept at different temperatures — frozen, refrigerated, ambient — for maximum freshness and taste. Companies will need to figure out how to consistently and reliably ensure that, which may require special packaging and impact how food is displayed in the store, or how it is stored and moved.”

February 2016 | |


Equipment & Design


The Case

for Kiosks These increasingly sophisticated devices make supermarket sense. By Bob Ingram

K Matching wines with meat and deli items using an end cap informational kiosk will become the norm.” —Ben Wheeler, RedyRef


iosks are becoming ubiquitous in food retailing. While there are no statistics available, when asked if they see an increase in kiosks in supermarkets, suppliers are uniformly positive. “Yes, we most certainly do,” afrms Sandy Nix, president of Menomonee Falls, Wis.-based Connected Technology Solutions, manufacturer of Mighty Touch Kiosks. “Te grocery segment continues to enjoy the same enduring momentum toward self-service that many other consumer-driven businesses do.” According to Nix, one of her company’s main focuses at present is on tablet enclosures so that operators no longer have to clear valuable foor space for big cabinets. “iPads and other tablets, with the right peripherals secured in one of our enclosures, can enable shoppers to get information, place orders and swipe a card to complete transactions very quickly,” she notes, “and tablets ofer the added benefts to the grocer of being easily movable and affordable. Tey are a great option when a full-size kiosk is more than what’s needed.” While kiosks will continue to be deployed in the traditional sense, Nix believes that tablet-based technology is about to explode onto the retail scene as an enhancement in the interactive space. “Interactive technology solutions are the stepping stones

| Progressive Grocer | Ahead of What’s Next | February 2016

to deeper and wider relationships with customers,” she says.

Function and Form Ben Wheeler, director of marketing and sales at Riverdale, N.J.-based RedyRef, asserts that there are “absolutely” more kiosks in supermarkets, because “the function and form factors of kiosks are changing rapidly.” Function-wise, according to Wheeler, kiosks are not only informational, but also transactional, including self-checkout, couponing and end caps. “Furthermore,” he says, “transactional ffth-wall applications are increasing that include cofee, lottery, key duplication and carpet cleaning. … I believe that the more tedious a transaction is for a store to service, the more likely the function will be automated.” Form-wise, Wheeler feels that “we will see tablets popping up all over the retail landscape. Matching wines with meat and deli items using an end cap informational kiosk will become the norm.” RedyRef manufactures a line of tablet kiosks and selfcheckout kiosks based on its enGAGE line of kiosk enclosures. Te line is customizable to any size, but is based on 12-, 24-, 36- and 48-inch footprints to make it retail-ready. Regarding the future, Wheeler is adamant. “We see all transactional processes that require human labor being shifted to kiosks — period,” he says. “No benefts, less shrinkage from employees, no sick days. Te harder the push to raise the minimum wage, the quicker the migration will be.”

Hands Off “We anticipate an increase in kiosks in the grocery industry,” says Jim Weaks, VP self-service coin business unit at Cummins Allison, in Mount Prospect, Ill. He adds that customers select his company’s Money Machine 2 coin counters because of the fexibility of the solution and the highly responsive nature of the sales and support organization. “Grocers like our four procurement options: placement, lease, rental or ownership,” he says. “Each provides an opportunity to increase store revenue without increasing user fees.” Weaks notes that Cummins Allison provides what he calls a “handsfree” operation by managing all coin pickup and processing, thus eliminating the time-consuming task of coin handling. “Since replacing their existing equipment, many of our customers have found their monthly revenues have increased because the machines were available when customers wanted to use them,” he observes. Self-service coin redemption is an efective way to use front-of-store space that has been traditionally underused, according to Weaks, and that can dramatically increase the bottom line. Healthy Profits At Grafton, Wis.-based Frank Mayer and Associates Inc., SVP David Anzia notes, “Because more customers, especially Millennials, are embracing technology in-store, supermarkets are employing kiosks to improve the customer experience through a variety of e-commerce solutions.” His company produces several clientspecifc kiosk solutions, with each program unique to the objectives of the retail store, including transactions, loyalty, product information, ordering, health care and gaming. “Kiosks that have proved popular in supermarkets,” notes Anzia, “are those that improve the shopping experience by allowing shoppers to place orders within store departments, provide product scanning, recipe product locators and loyalty card information.” According to Anzia, a highly popular Mayer program is the SoloHealth (Pursuant Health) Station, a kiosk that allows shoppers to check their blood pressure, BMI (body mass index) and vision, as well as receive an overall health assessment. Ad-

Because more customers, especially Millennials, are embracing technology in-store, supermarkets are employing kiosks to improve the customer experience through a variety of e-commerce solutions.” vertising platforms rm atop the monitorr of ofer targeted opportunities portuni to reach sshoppers when they’re in the store, where the product is available for purchase. “One of our recent kiosk programs was a loyalty kiosk allowing customers to sign up for their rewards card right at the kiosk,” he says. “As a result, the client has reported a dramatic jump in new customer registrations.” Kiosks and interactive displays will continue to grow in supermarkets to cater to increasingly technology-driven consumers and to enable grocers to keep up with other retail sectors, he concludes.

—David Anzia, Frank Mayer and Associates

Welcome to the Future In Bellevue, Wash., Dana Krug, VP of sales — grocery, military and fnancial at Outerwall Inc. says, “We believe the future of retail starts now.” With a focus on optimizing its existing network February 2016 | |


Equipment & Design


Te research also discovered that 91 percent of people who use front end services also shopped in-store during the same trip, he notes, so retailers have the opportunity not only to attract customers, but also to drive store sales.

Easy PickinG shoppers at a Giant Food store use a kiosk from Frank Mayer and associates.

of Redbox and Coinstar kiosks, Outerwall regularly evaluates its kiosk designs to identify opportunities for improvement. During one evaluation, the Coinstar team identifed an opportunity to eliminate the need for lighting on the lower section of the kiosks to reduce energy use, with no impact on functionality. Doing so also helped the company meet corporate energy reduction commitments. “Since Coinstar rolled out the design changes to the kiosks,” says Krug, “the result has been a 29 percent decrease in overall kiosk energy use, saving money for retailers as well.” With Millennials as major drivers of the shift from physical store visits to online shopping and by-mail meal subscription services, Krug believes retailers can attract this key demographic and other shoppers into the store by customizing the front end. “Research conducted by Seurat and Field Agent in 2014 showed that the availability of front end services played a part in the grocer and location selection for four out of five shoppers,” he points out. nEw Look coinstar’s cleaner machine design allows for a customized front end.


| Progressive Grocer | Ahead of What’s Next | February 2016

Jewelry Box Kevin Miller, partner and COO at Newport Beach, Calif.-based Goldstür, says he “defnitely” sees an increase in kiosks in supermarkets. “Macro-economic trends associated with employees and the increasing hourly-wage mandates are driving more companies to develop a strategy involving kiosks as their main customer interface,” he says. Goldstür currently manufactures just the Goldstür kiosk, which Miller describes as “the world’s frst and only fully automated kiosk for converting old or unwanted gold, silver and platinum jewelry into cash.” In two minutes, items can be analyzed and cash or a store gift card can be ofered on the spot. Further, the kiosk boasts a footprint of just 2 square feet. “We are receiving requests for installations across the country at a variety of grocers,” notes Miller. “We see this space as a growth area. Over time, the products will change, but long-term there will be growth.” Tat, of course, is the main case for kiosks: growth. PG

The Natural, Organic, Non-GMO Pet Human food trends perk up the category. By Kathleen Furore

H Natural pet food sections with visibility in aisle/ department are a must.” —Paul Cooke, Nestlé Purina PetCare


umanization is a hot trend in today’s pet food industry — and it will continue to drive sales and price increases, according to the “Pet Food – U.S. — May 2015” report from Chicago-based Mintel. “Manufacturers should note that the pet food humanization trend translates into pet owners wanting the same quality and safety standards on pet food as on their own food,” the report notes. Tat translates into big business for those manufacturers, as well as for retailers. “Te overall natural pet food segment is growing, and is currently around a $4 billion business,” observes Paul Cooke, VP and director of trade and industry development at St. Louis-based Nestlé Purina PetCare. “It has been the fastest-growing segment over the past few years, and we

| Progressive Grocer | Ahead of What’s Next | February 2016

don’t see it slowing down anytime soon. In fact, we expect it could make up almost 25 percent of the overall pet food category within the next few years.”

What Pet Food Makers are Marketing While Purina’s nutritional philosophy is to focus on the nutrients pets need, rather than on the ingredient list alone, the company does ofer a variety of natural pet foods at grocery, Cooke notes. Te newest products in Purina’s lineup are Purina Dog Chow Natural and Purina Puppy Chow Natural, both of which start hitting grocery shelves in February. “Dog Chow Natural is made with real chicken as the No. 1 ingredient, and both formulas are made without any artifcial favors, colors or preservatives,” says Cooke, who notes that the natural formulas — like all Purina Dog Chow products — are crafted in company-

True pet experts. true retail partners.

For as long as Ainsworth Pet Nutrition has been in business, our sole focus has been on pets. And through our decades of experience and market research, one simple fact consistently rings true: That pet parents want a convenient way to feed their pets the highest quality food at a price they can aford. And every day, our goal is to give them just that. We call it Pet Store Quality. Supermarket Easy. We know that changing the way pet parents shop for high quality pet foods can only be accomplished through strong partnerships. That’s why we focus on creating value for our retailers that they can then pass along to their shoppers. From delivering unbiased category insights and analyzing growth trends to optimizing shelving and assortment and collaborating on merchandising, we strive to be a true partner in all we do.

owned and -operated facilities in the United States. Other natural oferings include Purina Beyond dog and cat foods, Purina Cat Chow Naturals, and Purely Fancy Feast. Kaleb’s Organics is another company focusing on the natural and organic segment. Te brand’s all-natural, organic, made-in-the-U.S.A. dog treats recently earned Non-GMO Project Verifcation — North America’s only independent verifcation for products made according to rigorous best practices for GMO (genetically modifed organism) avoidance. “Consumers are becoming more health-conscious [about] their pets’ diets, and want to know what’s in their [pets’] food. Research shows there are many concerns regarding GMOs, and we feel it’s important to avoid these ingredients at all costs,” says

Natural and Organic Labeling Rules for Pet Food Today’s consumers are concerned about the ingredients in the foods they eat, and in the products they feed their pets. Consequently, it’s important that retailers and manufacturers alike understand what labels such as “natural” and “organic” mean from a regulatory perspective. “In the current litigation environment, retailers with private label products in particular should ensure that their products’ labels comply with all federal and state requirements,” stresses Will Woodlee, a partner in the Washington, D.C.-based law firm Kleinfeld, Kaplan and Becker LLP. “They should also avoid making unsubstantiated express or implied claims related to their products’ ‘organic’ or ‘natural’ status.” Woodlee explained some of those requirements in the December 2015 webinar “Pet Food Labeling 101: Avoiding Quibbles About Kibble.” Definitions of ‘natural’ and ‘organic’ from the Champaign, Ill.-based Association of American Feed Control Officials were among topics discussed in the webinar and are summarized below: Natural: A feed or feed ingredient derived solely from plant, animal or mined sources, either in its unprocessed state or


Deborah Viney, account executive for Brooklyn, N.Y.-based BH Pet Gear, Kaleb’s parent company. Te treats come in Peanut Butter Crunch, Banana Oatmeal, Blueberry Mufn, Cranberry Granola and Pizza Fusion favors, with Peanut Butter Crunch emerging as a customer favorite, according to Viney.

Competing With Pet Specialty While many consumers seek natural, organic and non-GMO products for their pets, only a small percentage buy those products at grocery and mass retailers — a fact that Purina’s Cooke attributes to “a lack of focus and visibility, specifc to natural product sections. “Unfortunately many consumers are unaware of the availability of natural products in the [grocery Continued on page 132

having been subject to physical processing, heat processing, rendering, purification, extraction, hydrolysis, enzymolysis or fermentation, but not having been produced by, or subject to, a chemically synthetic process and not containing any additives or processing aids that are chemically synthetic except in amounts as might occur in good manufacturing practices. Organic: Organic animal feed meets production and handling requirements of the U.S. Department of Agriculture’s National Organic Program (NOP). According to the NOP website, “organic” products are “produced through approved methods that integrate cultural, biological and mechanical practices that foster cycling of resources, promote ecological balance and conserve biodiversity. Synthetic fertilizers, sewage sludge, irradiation and genetic engineering may not be used.”

Organic products can fall into four categories: 100% organic. These products must contain (excluding water and salt) only organically produced ingredients, and may use a “certified organic” seal.* Organic. These products must contain at least 95 percent organically produced ingredients, excluding water and salt. They may use a “certified organic” seal.* Made with organic ingredients. These products contain at least 70 percent organic ingredients, excluding water and salt. The principal display panel (PDP) may list up to three organic ingredients or “food” groups, but no seal.* Products with fewer than 70 percent organic ingredients, excluding water and salt, may identify ingredients as organic in the declaration, but carry no seal, no certifying agent, and no “organic” designation on the PDP.

| Progressive Grocer | Ahead of What’s Next | February 2016

Pet Marketing Goes High-tech Retailers reach out to pet parents online. By Kathleen Furore

INTERNET PETs Publix Paws is an online club that enables the grocer to further engage aninal owners.



f you want to become a retail destination for today’s tech-savvy pet parents, ramping up online pet oferings is a good place to start. Tat’s the takeaway from “Pet Product Marketing Trends in the U.S.: Technology, Mobile and Social Media,” a report from Rockville, Md.-based Packaged Facts released in December 2015, which reveals that pet owners are more likely to have recently used digital devices and technologies than their pet-free counterparts. According to the report, 41 percent of pet product buyers use the internet to fnd information about pet care services, and 39 percent head online to help choose which pet foods to buy. Te convenience of shopping online and having pet products arrive via home delivery is also an allure. Some 30 percent of dog owners and 35 percent

| Progressive Grocer | Ahead of What’s Next | February 2016

of cat owners said they liked the idea of home delivery for pet food and treats, Packaged Facts data show. Information from the American Pet Products Association’s (APPA) 2015-2016 National Pet Owners Survey supports those fndings. “Tere is a growing prevalence of online and social media networks used to fnd pets and pet products, with websites, product review sites and Facebook pages leading the charge,” reports the Greenwich, Conn.-based APPA. “Emerging channels” such as blogs, YouTube, Pinterest and Instagram are also growing, the organization goes on to note. “Te internet is where information meets opportunity,” observed Packaged Facts Research Director David Sprinkle at the time of the release of the market research frm’s pet product report. “Success in today’s pet market means effectively leveraging the internet as the nexus where pet owners and all things related to their pet companions — be it products, services or simply general information — converge in an infnite stream of possibilities at the click of a mouse or at a tap of an app.”

How Retailers are Engaging Consumers Personalized emails, emojis on Twitter, online video or paid searches are among the vehicles pet marketers are using to communicate with pet parents, according to George Puro, president of White Plains, N.Y.-based Puro Research Group and author of the Packaged Facts report. “Kroger has been one of the more active grocers in engaging pet parents through the internet, using social media tools, digital coupons and content marketing,” he notes.

For example, Kroger teamed with Iams, a brand of Cincinnati-based Procter & Gamble, in December 2015 on the Kroger Holiday Pet Photo Giveaway, which asked consumers to post a picture of themselves with their pet on a Kroger Facebook or Twitter page for a chance to win a year’s worth of Iams pet food. Additionally, the grocer, also based in Cincinnati, posted a “Dear Human” letter on Facebook from a dog named Coco saying, “My treat supply is looking a little low — thought you could use this digital coupon to stock up.” Te letter links to a digital coupon. Pet care-focused content — some of it provided by pet marketers — is another feature on Kroger’s website, Puro notes. Lakeland, Fla.-based Publix is another major retailer tapping technology to appeal to pet owners, via Publix Paws, “a free club that makes it fun and easy to strengthen our customers’ bond with their dog or cat,” Publix spokeswoman Maria Brous says. Paws members receive monthly email coupons for pet food, accessories, toys and treats; the “Inside Scoop,” which notifes them about sales events for pet products before the events are advertised to other customers; and an “Expert Advice” section full of pet care tips. “In addition, we’ve hosted pet contests on our Facebook page, where proud, doting parents of our four-legged friends could submit their cutest baby photos,” Brous observes. “We received great response from our customers and enjoyed the opportunity to engage with our customers even more.” According to Puro, other retailers leading the way in tapping technology in the pet category include:

Stop & Shop. Te Ahold USA division teamed up with several bloggers on a giveaway of its natural dog and cat food when it launched a new product line. Additionally, the Home for the Holidays Sweepstakes on Stop & Shop’s Facebook page ofered a three-night stay at a pet-friendly hotel in New York City and a year’s supply of Purina products as one of the prizes. ShopRite. Te banner promotes the ShopRite from Home service with an online coupon code, “SAVEONPET,” which prompts consumers to “get started at or on the ShopRite app from your mobile device.”

Savvy digital marketing to pet owners begins with However you approach it, tapping technology understanding to reach pet parents won’t succeed unless you know those as much as possible about the customers you’re customers.” trying to attract. “Savvy digital marketing to pet owners begins with understanding those customers,” advises Puro. “Pet owners are passionate about their pets and think of them as family members. Tey love sharing photos about them on social media. And while online deals and digital coupons never hurt, they’re often looking to learn what’s best for their pet. Grocery retailers must show they understand that relationship between customers and their pets. And they must demonstrate that they can provide the expert advice to help pets live healthy lives. If retailers can do these things through the digital realm, they’ll be poised to capture more pet product sales.” PG

—George Puro, Puro Research Group

Sam’s Club. Puro calls the company’s digital aisle “one interesting twist on omnichannel retailing.” Te site, he says, “looks like an actual store aisle stocked with Purina products.”

February 2016 | |


Continued from page 128

store] pet department,” he adds. Tat opens a world of opportunity for retailers willing to stock more natural and organic items in the pet aisle. How they approach the category will determine how successful they ultimately will be in attracting pet parents, industry experts say. “Natural pet food consumers are looking for brands that share their values, and foods that ofer quality protein and simple, natural ingredients,” Cooke says. Interestingly, in most cases, what the pet food doesn’t contain — corn, wheat, soy or byproducts, for example — is almost as important as the ingredients it does ofer, he adds. “Retailers need to ensure that the brands they carry appeal to this type of customer,” Cooke advises. “It’s also important that retailers ofer natural pet food options at a fair value, which is something

Pet Product Showcase Five Star Raw Frozen Diets for Dogs

This super-premium frozen line of raw natural dog food signals an expansion into animal nutrition for G Mason Group, a global provider of quality pet products, including leashes, collars, pet beds, toys and apparel for cats and dogs. The Five Star diets come in five varieties — Chicken & Vegetable; Beef & Vegetable; Chicken, Beef & Vegetable; Duck & Vegetable; and Turkey & Vegetable — each packed in 1-pound chubs. All varieties are USDA inspected and certified.


Optimal Pet Supplements

Your customers’ pets are family, and that can mean big profits in your pet aisle when it comes to keeping those pets active and healthy. Optimal Pet supplements are veterinarian-formulated to provide the latest in animal wellness at a price your shoppers will love. Optimal Pet products are sold through Nutrivet

grocery and mass shoppers have come to expect. Natural pet food sections with visibility in aisle/ department are a must.” Kaleb’s Viney suggests displaying shelf talkers that call attention to the products, and cross-merchandising and -marketing with the store’s natural food section, since customers who buy natural and organic food for themselves often look for similar products for their pets. But retailers can’t succeed with just a one-sizefts-all approach, Cooke stresses. “Te grocery and mass retailers that win in pet are more heavily invested in the category at the store level,” he says. “Tey think of it as a pet department, not just one aisle, and they strive to exceed their customers’ expectations by being mindful of everything, from the brands they carry to the merchandising they display.” PG

Wellness, the leading provider of natural animal products in North America.

Old Mill Nature’s Bits Dog Treats

Multipet International recently acquired these dog treats, which are available in such flavors as chicken, beef, peanut butter, bison, duck and salmon. They are 100 percent made in and sourced in the United States, and gluten- and grainfree, with no artificial colors or flavors — meat, not filler, is always the first ingredient. The product is available in either soft-baked or crunchy baked varieties.

| Progressive Grocer | Ahead of What’s Next | February 2016

Jakks Pacific Kalos Rawhide Treats

Kalos means “good” in Greek, and this new line of patent-pending all-natural rawhide treats from Jakks Pacific Inc., fits the bill because they’re not only longlasting, they taste good, too. Made with superfoods that are naturally rich in nutrients, Kalos chews pack a lot of healthful benefits into each chew, with minimum calories.

Food, Beverage & Nonfood Products

Convenience to a Tea

Boosting Breakfast

CleverFoodies Scramble, a small-batch cooked mix of vegetables, herbs and spices, is designed to be a delicious addition to eggs for nutritious scrambles, omelets or frittatas. Available in three savory flavors — Leafy Greens, Rancheros and Mediterranean — Scramble contains all-natural ingredients, is gluten-free, has no added sugar and boasts only 60 calories per serving. The offering has an SRP range of $3.99-$4.99, and can be found in grocers’ dairy aisles.

U.S. consumers drank more than 80 billion servings of tea in 2014, according to the Tea Association of the USA, and the Tazo brand is helping tea drinkers kick off 2016 with two Chai K-Cup products. The brand’s Classic Chai Latte K-Cup Packs provide a creamy blend of black tea, cinnamon, ginger, cardamom and vanilla flavor, while Tazo’s Vanilla Caramel Chai Latte K-Cup Packs deliver vanilla and caramel flavors with black tea and classic chai spices. Both offerings retail for a suggested $9.99 per 6-count pack.

Simple Ingredients

Providing consumers with a natural alternative to traditional gum — many of which include up to 80 synthetic ingredients — Simply Gum uses only six all-natural ingredients in its recipe, with no artificial flavors or preservatives. The gum is currently available in six flavor profiles, including classic mint and cinnamon, as well as more adventurous options like fennel licorice, maple, ginger and coffee.

Root Beer With a Twist

“We’ve seen a growing consumer interest in sweeter taste profiles, and we jumped at the opportunity to brew an easy-drinking hard root beer,” Rashmi Patel, Anheuser-Busch’s VP of “share of throat,” says of the beer giant’s Best Damn Brewing Co., a recently introduced brand platform with a mission to bring consumers “the Best Damn thing you’ve had all day.” The offering, A-B’s first hard root beer, delivers a “full-flavored, wellbalanced take on a favorite classic taste, aged on real vanilla beans during the brewing process,” according to the company. Best Damn Root Beer is available at grocery and liquor stores nationwide in 6-packs of bottles and 16-ounce cans. February 2016 | |


Meatless Matters

As the movement toward plant-based foods continues to take hold in the United States, The Jackfruit Co. has introduced four meat alternatives in an effort to satisfy the growing market of vegans, vegetarians and “flexitarians.” These ready-to-heat entrées — BBQ, a tomato-based blend of sweet and tangy, with smoky mesquite; Tex-Mex, a savory Southwestern flavor, with notes of cumin and oregano; Sesame-Ginger, a teriyaki-inspired blend of soy, sesame and ginger; and Curry, featuring aromatic spices combined for authentic south Indian flavor — serve up the high-fiber jackfruit plant as a meat alternative. The four flavors are each sold in 10-ounce refrigerated packages at an SRP of $4.99.

Cleaner Condiments

As consumer demand increases for products made with clean, simple ingredients, The French’s Food Co. has unveiled French’s Promise, the brand’s commitment to using only real ingredients, without artificial flavors, colorants, dyes or high-fructose corn syrup (HFCS). Currently, 90 percent of French’s products meet this standard, as noted by a “Promise Seal” featured on packaging. In tandem with h its renewed commitment, French’s has also introoduced two products: Super Yellow Mustard (12 ounces, SRP $2.99) ups the ante on the classic condiment with an extra kick of mustard seeds and more turmeric spice, while the brand’s HFCS-free Buffalo Ketchup (20 ounces, SRP $2.29) offers a bold new flavor infused with Frank’s RedHot sauce.

Shelf Score™ — december 2015 New Product

1 2 3 4 5 5 7 8 9 10

Purchase INteNt score

Popchips Cheddar and Sour Cream Potato Annie’s Variety 12 Snack Packs Sara Lee Caramel Cakes Marzetti Garlic Parmesan Veggie Drizzle Hostess Merry Minty Holiday Cakes Chobani Greek Yogurt Flip: Peppermint Perfection Kroger Limited Edition Mini Quiche: Applewood Smoked Bacon Skinnygirl Vanilla Bean Sundae Protein Shake Armour Sandwich Creations: Shredded Chicken in Taco Sauce Sap on Tap Maple Water

source: Instantly Shelf Score


| Progressive Grocer | Ahead of What’s Next | February 2016

74% 65 64 60 58 58 57 56 44 37

Keeping Skin Healthy

Pursonic USA’s CR500 callus remover features a “powerful yet gentle” buffer that removes toughened, dry and callused skin in seconds. Billed as being safer and more effective than scrapers that use blades to cut the skin, the item boasts an ergonomic design that makes it easy and comfortable to use. Available in a variety of designs, including zebra, cheetah and kiss prints, Pursonic’s cordless callus remover includes a roller head and cleaning brush, and retails for a suggested $19.99.

Savory and Seasonal

Grown in New York state and available exclusively from Crunch Time Apple Growers, RubyFrost is expanding its retail distribution of apples across the United States. Expected to last for a limited time, the 2016 RubyFrost season will yield apples known for their “crisp texture, combined with the well-balanced taste of sweet and tart flavors, making this a great apple for snacking as well as baking,” says Mark Russell, apple grower and marketing committee chair. RubyFrost apples are available in supermarkets nationwide.

Dunnhumby, Aptaris Sign Strategic Partnership Cincinnati-based Dunnhumby and Tampa, Fla.-based Aptaris have announced a new strategic partnership that enables retailers to increase the relevance of the offers to their customers, resulting in improved sales and margins while boosting the efficiency of their merchandising and marketing operations. Dunnhumby and Aptaris provide complementary software solutions that address planning and executing successful trade promotions. With this new partnership, Dunnhumby science will be integrated into the Aptaris solution, providing retailers with a single end-to-end promotions management solution. “The new combined offering allows immediate access to Dunnhumby’s data-driven customer intelligence,” says Tom O’Reilly, CEO of Aptaris. “The higher awareness of financial impact deeply ingrained into the retailers’ existing processes will increase promotional funding and revenue.” www.dunnhumby. com;

MasonWays Rolls Out Mixed Recyclables Bin West Palm Beach, Fla.-based MasonWays Indestructible Plastics has added to its Rhino Forecourt Product Line with the Mixed Recyclables Center. Durable and weather-resistant, the two-stream recycling center has a fexible labeling kit that accommodates specifc separation requirements for clear content disposal identifcation. With modifed openings that ft any stream and interior defectors that prevent cross-contamination and properly sort material, the unit is impervious to weather, chemicals and cleaners. Each unit is clearly labeled so customers can easily discard aluminum cans, plastic bottles, Styrofoam containers or newspapers properly.

RW Garcia Appoints New Sales Director San Jose, Calif.-based snack food maker RW Garcia has hired Kai Mitchell as director of sales. Mitchell will be responsible for sales team leadership, driving revenue, and contributing to marketing and business strategy. “Her extensive experience in the natural food market is a great ft for our goal to expand business worldwide,” says Margaret Garcia, RW Garcia’s cofounder and VP of sales. “Te increasing demand for healthy snacks has led us to expand our innovative gluten-free snack line, and I’m confdent that Kai will play a vital role in increasing our distribution channels domestically and internationally.”

General Mills Acquires Epic Provisions Minneapolis-based General Mills Inc. has acquired Austin, Texas-based meat snack company Epic Provisions. Epic will operate under General Mills’ Annie’s business and maintain its present location in Austin. “Te acquisition positions General Mills for exciting growth with a highly authentic brand in an entirely new natural snacking category,” says John Foraker, president of Annie’s. Launched in 2013, the Epic meat, fruit and nut bar has since been joined by Jerky Bites and Hunt and Harvest Trail Mix. Epic snacks are sold primarily in the natural channel, including nationally at Whole Foods Market, Sprouts and Natural Grocers, as well as at some conventional grocers.;;

Hershey Names New Global Chief Sales Officer Hershey, Pa.-based Te Hershey Co. has hired Rob Gehring as its global chief sales ofcer. Gehring joins Hershey from Coca-Cola North America, where he had been president of Coke’s Walmart Global Team since 2011. A sales veteran with more than 20 years of experience with large category-leading brands in key retail channels, Gehring held a variety of roles at Coke, including leading the feld sales organization in Canada across all trade classes and leading sales for the western United States, where he focused on customer and channel performance. His experience also includes product commercialization and pricing architecture. Various programs led by Gehring have received recognition and won marketing awards.

February 2016 | |


advertiser index 570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 Phone: 224 632-8200 Fax: 224 632-8266 STAGNITO BUSINESS INFORMATION ALSO PRODUCES:

Harry Stagnito President and CEO 224-632-8217 Kollin Stagnito Chief Operating Officer 224-632-8226 Ned Bardic Senior Vice President/Partner 224-632-8224 Korry Stagnito Chief Brand Officer 224-632-8171 Jeff Friedman Vice President/Brand Director 201-855-7621 John Huff Midwest Regional Sales Manager 224-632-8174 Elizabeth Cherry Western Regional Sales Manager 310-546-3815 • Cell 310-990-9597 Maggie Kaeppel Eastern Marketing Manager 630-364-2150 • Cell 708-565-5350 Mike Shaw Northeast, Marketing Manager 201-855-7631 • Cell 201-281-9100 Janet Blaney Marketing Manager (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 Jackie Batson Advertising Manager 224-632-8183


5 Generation Bakers Ainsworth Pet Nutrition Airius Avocados From Mexico Beaver Street Fisheries Better4ufoods Blount Fine Foods Borden Dairy Boston Beer Campbell Soup Company Cargill Meat Solutions Cheyenne International Coca Cola NA Creekstone Farms DecoPac Delizza Inc. ECR Software Food Marketing Institute Forte Product Solutions Generac Power Systems Inc Giorgio Foods, Inc Godshalls Quality Meats Inc Goldstur Goya Foods Inc Grimmway Farms Heineken USA Inc. Hollandia Produce IDDBA Jack Links Beef Jerky Kelloggs Company Loving Pets Products Maple Leaf Farms Mason Vitamins Inc. Mason Ways Indestructible Plastics Mercatus Milk Pep MillerCoors LLC Nature Sweet New England Natural Bakers New Hope Natural Media NOQ Commerce Organic Valley Perdue Farms Inc Pete & Gerry’s Organics, LLC Pompeian Olive Oil Post Consumer Brands Premier Proteins, LLC Robbie Flexibles Ruiz Foods Products Inc Simplot Custom Foods Stagnito Media Sun Pacific The Hershey Company The J.M. Smucker Company Trion Industries Inc. Tyson Star Ranch Angus Tyson Foods USA Pears Well-Pict, Inc. Wholesum Family Farms Wisconsin Milk Marketing Board

76 127 65 17 55 62 - 63 138-139 21 88 31 Insert 35 111 81 89 25 57 7 53, 84 42 23 94 86 - 87 125 15 98 19, 73 101 75 77 Back Cover 129 85 107 66, 80 37 32-33 4 96 44 104 69 13 Cover Tip, 83 2-3 78 - 79 39 91 67 59 61 105, 119 93 9 41 10 - 11 27, 29 70 - 71 97 95 99 45 - 52

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 ©2016 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.

| Progressive Grocer | Ahead of What’s Next | February 2016

the last word

Safety in Numbers


ate at Chipotle last night. I hope I don’t die.” I certainly won’t forget any time soon those two jarringly succinct sentences, which erupted like a bottle rocket in my ear from a panic-stricken friend who called me last fall seeking advice amid an escalating foodborne outbreak at Chipotle Mexican Grill. While she clearly had me confused with an expert, I was nevertheless cautiously optimistic when conveying my guarded belief that she would live to tell the tale — if only because no known deaths had been reported at the time. Te alarming series of outbreaks stemming from the wildly popular Tex-Mex chain began last July with E. coli O157:H7 reported in Washington state, followed by a Salmonella Newport outbreak in Minnesota; norovirus outbreaks in Simi Valley, Calif., and Boston; and the larger, lingering nine-state E. coli O26 outbreak that has not yet been declared ofcially over by the Centers for Disease Control and Prevention. While tainted produce is the prime suspect behind the gastrointestinal illnesses of 514 people — not including my friend who failed to report becoming ill, not once but twice after eating Chipotle burritos — the root cause of the outbreaks was still undetermined at press time. Ofcials from the Denver-based restaurant chain pledge to share all learnings from the 2015 outbreaks at a company-wide meeting of its 60,000 employees on Feb. 8. On the same day, the company will close all of its nearly 2,000 North American restaurants for four hours in tandem with revealing its revamped food safety plans, which “will aim to set the industry’s highest-ever standards of safety,” according to a statement in an open letter penned by Chipotle CEO Steve Ells last December. Yet for the company that’s long hung its sombrero on trademarked “Food with Integrity” emanating from its “Responsibly Raised” meats, local and organic produce, and food prepared with classic cooking techniques, it remains to be seen how the fallout will ultimately impact the future of the company. In the interim, as PG Contributing Editor Jenny McTaggart writes in her “Safety First” feature, which begins on page 118, “All players in the restaurant industry are taking an even closer look at food safety, with the aim of preventing such disasters. Many of their concerns mirror those in the retail trade: Consumers continue to desire fresher

and locally sourced ingredients, while the Food Safety Modernization Act (FSMA) raises new concerns about traceability.” To be sure, with FSMA at long last the ofcial law of the land since November, the trinity of supply chain management, traceability and food safety issues are top of mind at present for many trading partners. However, despite a recent barrage of unfattering headlines, Tom Stenzel, president/ CEO of Washington, D.C.-based United Fresh Produce Association, is among the industry experts who believe that our nation’s food supply is far safer now than previously, when similar problems went undetected. “FSMA is prevention-focused, but we cannot expect it to entirely eliminate an occasional incident,” says Stenzel, “but we will now be able to more quickly identify it, pull it and communicate with the public what they need to know.” Stenzel continues: “Our conversation with consumers has to put the extremely low risk of foodborne illness in perspective — not promise that billions and billions of servings of food every day can be 100 percent safe, 100 percent of the time. As an industry, our commitment focuses on using the very best science, the most innovative technologies and the most rigorous safety systems to prevent any contamination to the best of our ability.” While science also enables us to detect illnesses far more frequently than ever, Stenzel says one issue not open for debate is the mandate for all food industry partners to “work toward reducing risks anywhere in the food chain, while also understanding that the best eforts of government, academia and industry cannot prevent 100 percent of foodborne outbreaks. When they do tragically occur, they should be triggers for learning to continually enhance safety, rather than being the cause of panic because we implied that a one-in-a-billion or one-in-a-trillion event could never occur.” As for what comes next for the embattled Chipotle — whose uphill crusade to win back its once-fanatical customer base promises to be supremely steep — time, as always, will tell. But I’m pulling for it all the way, in hopes that its new protocols will provide further enlightenment and instruction for an industry whose fortunes are increasingly tied to fresh produce. PG Meg Major Twitter @Meg_Major/@pgrocer

I’m pulling for Chipotle all the way, in hopes that its new protocols will provide further enlightenment for an industry whose fortunes are increasingly tied to fresh produce.

February 2016 | |


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Fueling the fresh meat category with consumer-driven insights.

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Th i s y e a r , Cargill initiated a study of

more than 8,000 fresh meat consumers to

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consumer landscape, including when, how




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analyze consumer attitudes and behaviors.1

often, and the benefts consumers seek when choosing fresh meat, we can continue to provide a quality product that people will love,” says Brian Bell, Cargill Vice president of Sales and Marketing. “Consumer habits are evolving, so we are too, in order to solve for and meet their needs with oferings that are appealing to them. We’re determined to provide options to keep red meat a relevant and realistic choice on their plates.”

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“C o ns u m e r ha Bit s a r e e vo lv i n g, s o w e ar e to o” 1

2015 Cargill proprietary Red Meat Consumer Study

Cargill is committed to bringing their partners meaningful insights and solutions that fuel success.


to day ’ s t r u e m eat Love r

Whether hosting a dinner party or enjoying a standard weeknight meal, one market segment consistently chooses high-quality meat cuts. this group, characterized as “true meat lovers,” comprises older, more experienced cooks. “true meat lovers have been our most loyal consumers for years,” says Bell. “they have a passion for food, know what cuts to buy and how to prepare fresh meat.” quality is fundamental. they search the meat case for cuts with optimum favor and marbling and will open their wallets to pay for the best. Representing one-third of all dollars spent in the fresh red meat category, these consumers are primarily females age 45-64.

“Q ua l ity C l a im s th at tr a n s l ate in to im p r e s s iv e m e a l s w il l g o fa r w i th t h is g r o up,” says Be l l .

quAlIty deFIned AS:








For some consumers, life is all about balance.

One group comprised of Generation X and

This group consists of good cooks that enjoy red

millennials represent a quarter of beef sales.

meat, but can go weeks without it. Mostly female,

Referred to as “social conscious foodies,” these

ages 45-64, these consumers are the most

consumers spend more proportionally on fresh

afuent of all segments. “To appeal to this group,

red meat than any other consumer segment.

retailers should place focus on freshness and

“Social conscious foodies will pay for quality;

strategies that keep red meat part of a balanced

however, they are redefning what quality

diet by stocking lean options that pair well with

means, emphasizing the story of their food—

whole foods,” Bell says.

where, how and by whom it is produced,” says Bell. According to the study, these consumers see themselves as foodies and want others to see them that way, too. “Retailers should ofer exclusive information about preparing food, complementing cuts and the latest trends,” Bell says. This group enjoys eating red meat; however, they are less familiar with selecting and preparing it, and are likely to default to brands.

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how I ap pr oac h fo o d.”

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A rushed young mom is on a grocery-shopping

Consumers in the value segment see fresh red

mission. She’s looking for safe, quality

meat as a commodity and would rather wait

products for her family that she can get on

for a sale than pay extra to get it. However, the

the table quickly. “Consumers like this young

study revealed that value consumers like to

mom are at the center of a group looking for

reward themselves. In fact, one of every fve

convenience in all areas of their life,” says

red meat occasions for this group is considered

Bell. Although this segment is not comfortable

indulgent. And when they do step up their

preparing red meat and has little time for

selection, these consumers buy steaks 32% of

cleanup, they do attempt new recipes. Bell

the time. Bell advises, “To win with this shopper,

recommends grocers ofer cost-efective and

grocers need to ofer reliable, quality products

family-friendly quick meal options.

at a value, but understand this bargain hunter is looking to indulge as well.”

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“comprIsIng 21% of

m eal h as b e c o m e a

fresh beef sales,

r ar e lu xu ry … m y fa m I ly

consumers In the value

m oves fast an d I ne e d

segment buy more

affordab le o p t I o ns

product than any

t hat m ak e lI f e eas I e r .”

other group,” says bell.



Red Meat


“By understanding t he reason s Behi nd c onsumer motivati ons, along with how c ons umers are pre paring thei r meals and with whom, we can Better antic ipate their needs,� says Bel l.

connect ing with oth ers For many consumers, preparing a meal with red meat at the center revolves around the occasion in which they will share it with others. Consumers indicated that over 34% of their fresh meat occasions were all about connecting with others, whether it be sharing a Sunday dinner, a nostalgic family tradition or a special occasion.

understanding the everyday Because one in three fresh red meat occasions falls into the everyday need state, it’s important not to overlook this routine demand. A popular need state among young parents and empty nesters alike, this instance is all about preparing a quick and easy meal. For some, it’s that fail-proof, classic recipe that they have been making for years and can throw together with little thought. For others, it’s a grab and go dinner made from ingredients that are readily available.

a b reak From the ord inary For a change from the usual meal rut, an indulgence or a reward, consumers seek to take a break from the ordinary. Over 24% of red meat occasions fall into this category. Behaviors vary by consumer segment with “true meat lovers” using this occasion to experiment and share with a moderately sized group and “value consumers” looking to this occasion to indulge—often on steak or ribs—alone.

At Cargill, we know that our customers don’t just sell products, they sell the reputations behind those products. Our customers provide people with something that they crave and love. It’s a product that we love, too. And we understand how deeply the quality of our red meat connects to our customers’ reputations. After all, it’s our reputation, too. We have been innovating for the last 150 years to bring our partners new solutions that help nourish the world. And we’re committed to evolving with the needs of consumers.

For more information on fresh red meat consumer behavior, category insights or Cargill’s latest innovations, visit or contact your Cargill sales representative.

©2016 Cargill, Incorporated. All Rights Reserved.