Exclusive! Retail Meat Review: Solid sales amid shift to plant-based alternatives
Go Private Future of retailers’ own brands looks bright Dinner DeliGhts Get consumers excited about convenient meal options a little More Conversation Conversational commerce grows with grocers
AheAd of the GAme
this year’s winners show how they outplay the competition
My Fresh Basket, Spokane, Wash.
February 2018 • Volume 97, Number 2 $10 • www.progressivegrocer.com
Beat the Competition by Delivering a Remarkable Customer Experience
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Another Innovation from Epson Business Solutions EPSON is a registered trademark and EPSON Exceed Your Vision is a registered logomark of Seiko Epson Corporation. OmniLink is a registered trademark of Epson America, Inc. Copyright 2017 Epson America Inc. 1. Requires the use of a beacon dongle connected to TM-T88VI printer via the USB-A port. Supports only Apple® iBeacon™ compliant format. The Epson-approved dongle is Laird model BT820. 2. NFC tag requires use of a device that includes NFC reader, and may require additional software.
Who are we? We’re an all-star lineup of beef and pork brands, backed by the most comprehensive supply and support network in the nation. We’re decades of industry experience and innovation.
ibp Trusted Excellence® brand Open Prairie® Natural Angus Open Prairie® Natural Pork Chairman’s Reserve® Premium Beef Chairman’s Reserve® Premium Pork
We are committed to delivering our customers only the best in products and service. We’re the Tyson Fresh Meats Team: The Beef & Pork Experts™—and we’re just getting started.
Chairman’s Reserve® Prime Pork Reuben® corned beef Star Ranch Angus® beef Supreme Tender® pork
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Expanding our Portfolio
Creating Innovative Products
Meeting Consumer Needs
Volume 97 Issue 2
28 COVER STORY
More prominent than ever, private label at grocery is poised for further growth.
owning the Moment
2018 outstanding independent awards
solving the dinner equation
Ahead of the Game
this year’s outstanding independents show how they outplay the competition.
20 niElSEn ShElF STOPPERS
96 EdiTORS’ PiCkS
Food, Beverage & nonfood products
8 EdiTOR’S nOTE
the protein solution
22 minTEl CATEGORY inSiGhTS
12 PulSE 24 nEW hORizOnS
gender equality is not a ‘women’s issue’
16 COnSumER inSiGhTS
26 All’S WEllnESS
the driving Forces Behind private Label purchases
dump the dinnertime dilemma
14 in-STORE EVEnTS CAlEndAR
the addition of new items and merchandising, plus a bit of subtraction and multiplying, can equal better sales and loyalty.
98 indEPEndEnT ThOuGhTS
as the world turns
Progressive grocer Februar y 2018
Volume 97 Issue 2
8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 800-422-2681 Fax: 978-671-0460
66 Fresh Food
Tell a Story
Retooling produce crossmerchandising in 2018. 74 Progressive grocer’s 2018 retail Meat review
svP, Brand director Katie Brennan 201-855-7609 • Mobile: 917-859-3619 email@example.com editorial Managing Director of content Strategy Joan driggs 224-632-8211 firstname.lastname@example.org eDitorial Director James dudlicek 224-632-8238 email@example.com Managing eDitor Bridget goldschmidt 201-855-7603 firstname.lastname@example.org Digital & technology eDitor randy hofbauer 224-632-8240 email@example.com
Circling the Wagons
Senior eDitor Katie Martin 224-632-8172 firstname.lastname@example.org
Retailers expect healthy meat sales in the coming year despite shifting consumer eating patterns.
Senior eDitor anna wolfe 207-773-1154 email@example.com contributing eDitorS D. Gail Fleenor, Jenny McTaggart, Lynn Petrak and Barbara Sax advertisiNg sales & BUsiNess SoutheaSt account executive larry cornick 224.632.8248 firstname.lastname@example.org MiDweSt Marketing Manager angela Flatland (ar, co, il, in, ia, kS, ky, Mi, Mo, ne, nD, ok, SD, tn, wi) email@example.com 224-229-0547 • Mobile: 608-320-4421 Senior Marketing Manager Judy hayes 925-785-9665 firstname.lastname@example.org Senior Marketing Manager theresa Kossack 214-226-6468 email@example.com
weStern regional Marketing Manager rick Neigher (ca, or, wa) firstname.lastname@example.org 818-597-9029 northeaSt Marketing Manager Mike shaw 201-855-7631 • Mobile: 201-281-9100 email@example.com account executive/claSSifieD aDvertiSing terry Kanganis 201-855-7615 • Fax: 201-855-7373 firstname.lastname@example.org
claSSifieD ProDuction Manager Mary Beth Medley 856-809-0050 email@example.com eveNts SvP, eventS & conferenceS Maureen Macke 773-992-4413 firstname.lastname@example.org cUstoM Media general Manager, cuStoM MeDia Kathy colwell 224-632-8244 email@example.com MarKetiNg Marketing Manager courtney hofbauer 224-632-8215 firstname.lastname@example.org aUdieNce develoPMeNt Director of auDience DeveloPMent gail reboletti email@example.com auDience DeveloPMent Manager shelly Patton 215-301-0593 firstname.lastname@example.org liSt rental the information refinery 800-529-9020 Brian clotworthy SubScriber ServiceS/Single-coPy PurchaSeS 978-671-0449 or email at EnsembleIQ@e-circ.net art/ProdUctioN Director of ProDuction Kathryn homenick email@example.com
Chat and Collect
Bundle of Joy
Although still in its infancy, conversational commerce is seeing increased adoption by grocers. 86 sUPPly chaiN
Cold Chain on the Brain Up-and-coming tech firms offer their thoughts on better managing perishables distribution.
Developing a total baby care section can give birth to healthy profits.
aDvertiSing/ProDuction Manager Jackie Batson 224-632-8183 • Fax: 888-316-7987 firstname.lastname@example.org creative Director colette Magliaro email@example.com art Director Bill antkowiak firstname.lastname@example.org rePriNts, PerMissioNs aNd liceNsiNg Wright’s Media email@example.com 877-652-5295 corPorate oFFicers
executive chairMan alan glass chief oPerating officer richard rivera chief buSineSS DeveloPMent officer Korry stagnito PreSiDent of enterPriSe SolutionS/ chief revenue officer Ned Bardic PreSiDent anD executive Director, Path to PurchaSe inStitute Mike McMahon chief Digital officer Joel hughes chief huMan reSourceS officer Jennifer turner
DEAR FOOD INDUSTRY PARTNERS:
THANK YOU! Food companies are driving transformational changes in how animals on farms are treated. Your companies are switching to cage-free eggs; you’re switching to more humane pork products. And in recent months, dozens of the largest food retailers—including Burger King, Subway, Jack in the Box, TGI Fridays, Boston Market, Sonic Drive-In, Aramark, Sodexo, Compass Group, Focus Brands and many more—have announced plans to ensure their chicken suppliers switch to healthier breeds of birds, provide animals better living conditions, and transition to a more modern processing system. Your work has already led major poultry providers, like Perdue Farms and Wayne Farms, to make similar animal welfare announcements of their own. You’re setting the stage for a more humane food supply and more humane society. Thank you.
Editor’s NotE By Jim Dudlicek
The Protein Solution s this the beginning of the end of the supermarket meat department as we currently know it? Surely, there will always be folks for whom a meal isn’t really a meal without meat as their entrée. But animal protein’s dominance at center of plate continues to be chipped away by evolving tastes and changing attitudes toward what one eats, where it comes from and how it got to their local market. According to Nielsen’s latest protein survey, more than 20 percent of consumers intend to eat less meat over the next year and consume more seafood and plant-based alternatives. “Protein continues to be a hot topic,” Nielsen’s Sarah Schmansky tells Progressive Grocer for our latest Retail Meat Review, starting on page 74. But while nearly 80 percent of consumers still regard meat as their primary source of protein, Schmansky notes, “Consumers are looking beyond the traditional meat department to fulfill their protein intake.” Overall U.S. supermarket dollar sales of fresh meat fell 0.6 percent last year, according to the Nielsen Perishables Group, while sales of plant-based foods and beverages are up about 15 percent, with conspicuous growth of meat alternatives in prepared foods, driven by younger, multicultural shoppers. Nielsen says that nearly 40 percent of American consumers are trying to eat more plant-based foods. Grocers, why not transform that traditional meat department into a comprehensive protein department? As consumer habits change, create a new one-stop destination for vegans, flexitarians and carnivores alike. Many folks find meatless meals a challenge, so offer them the same prep advice and recipe ideas that they’d find in the butcher shop. Some major retailers are already merchandising plantbased meat substitutes, like the popular ground beef-like patties from Beyond Meat and Impossible Burger, in the meat case right alongside animal-based products. For its part, Beyond Meat recently told Food Navigator that 70 percent of its customers are meat eaters looking to change up their diet. Meanwhile, food retailers are starting to get in on the game, with Aldi launching a store-brand line of vegan products that includes meat substitutes. But all is not lost for meat, even though Nielsen’s Schmansky notes that about half of all shoppers “don’t give meat the credit it deserves within their protein rotation.” Some analysts suggest that animal protein will be a culinary food trend in 2018 as meat aims to reclaim center plate, with increased culinary creativity and novel marketing approaches. David Sprinkle, research director for Packaged Facts, suggests that traditional cuts like 8
Imagine the merchandising possibilities that a protein destination presents, encompassing all manner of products, from roots to roasts.”
steaks, chops and chicken breasts will give way to “nose-to-tail” cuts such as culotte, short ribs, shoulder, neck and thighs, with growth in lamb, pork, duck, sausage and charcuterie, and “over-easy or sunny-side eggs ... topping everything, including doughnuts, sandwiches and vegetarian bowls.” Imagine the merchandising possibilities that a protein destination presents, from daypart solutions and meal kits, to cooking demos and sampling events, to wellness-focused eating guidance, encompassing all manner of products, from roots to roasts. It’s an opportunity for grocers to own the meal solution space. It’s PG’s mission to rally food retailers to adopt a solution strategy, from meals to wellness, all with a whole-store focus. It’s the impetus behind our partnership with the United Fresh Produce Association on the new SmartFood Expo in Chicago this coming June, along with the colocated Healthy Shopper event we’re hosting, as well as the Grocerant Innovation Summit during the Path to Purchase Expo this fall in Minneapolis. Keep watching these pages and progressivegrocer.com for more event information and the latest guidance on being a grocery solution leader.
Jim Dudlicek Editorial Director jdudlicek@ensembleIQ.com Twitter @jimdudlicek
Trion WonderBar ®
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Proprietary gate keeps product from being jostled o off rear.
F Flip-front Label Holder swings up for easy access a and product removal.
L Loads from rear, or easily dismounts to insure fast re restocking, product rotation and reduced shrinkage.
Sa Saddle mounts on a Universal Bar design allowing to tool-free installation on all thick- and thin-walled go gondola and cooler uprights.
St Stocked in 4 lengths compatible with all standard sh shelf sizes allowing mixed use in display.
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©2014 Trion Industries, Inc. 297 Laird Street, Wilkes-Barre, PA 18702-6997 Phone 570-824-1000 l Fax 570-823-4080 Toll-Free In U.S.A. 800-444-4665 www.TrionOnline.com Note: Product photography is a simulation of a retail environment and is not meant to imply endorsement by or for any brand or manufacturer.
Are the sides you're serving Your pre-packaged customers don’t want to take a number, and they don’t want to wait – but they don’t want to settle, either. If you’re not packing enough variety into your pre-packaged oﬀerings, your Millennials will ﬁnd someone who will. That’s where Blount’s culinary expertise comes in. Instead of a bread stick, you get to pair quality side dishes like broccoli rabe with white beans, mac & cheese, and truﬄe polenta with those short ribs, turning an everyday option into a gotta-have-it meal. For more info, contact your Blount sales rep at 800-274-2526.
What’s trending noW on progressivegrocer.com
News that Lidl, since its U.S. entrance, has had a severe, “unprecedented” effect on rivals’ price cuts made the top slot during the Dec. 16Jan. 15 time period on progressivegrocer.com, with reports that the effect of its entry on a market is more than three times stronger than the effect of the entry of a Walmart, according to research from the University of North Carolina. On average, competing retailers near Lidl stores set their prices about 9.3 percent lower than in markets where Lidl isn’t present. Walmart made three of the remaining top six headlines for the period, with closures and layoffs in the spotlight: With barely a day between each announcement, Walmart said it would shutter 63 Sam’s Club stores, reopening up to a dozen of them as ecommerce fulfillment centers, and that it would lay off more than 1,000 people at the corporate level, following news that it was raising the starting wage rate for associates and offering a onetime bonus and new maternity and parental benefits. The remaining headlines all pointed to significant changes at grocers: Kroger made news by claiming it would be the first to bring cashierless technology to the mass market, while Hy-Vee revealed an overhaul of its ad program, combining direct mail, newspaper ads and increased digital communications with shoppers.
Lidl Drives U.S. Rivals’ Prices Down to ‘Unprecedented’ Levels: Study http://bit.ly/2F7naNK
“The competitive price-cutting effect of Lidl’s entry in a market is more than three times stronger than the effect of Walmart’s entry in a new market reported by previous academic work.” —Katrijn Gielens, associate professor of marketing, Universit y of Nor th Carolina’s Kenan-Flagler Business School
Kroger Will be 1st to Bring Cashierless Tech to Mass Market http://bit.ly/2zM3OuL
Walmart Cutting 1,000+ Corporate Jobs: Report http://bit.ly/2n8uHEI
Walmart to Shutter 63 Sam’s Club Stores http://bit.ly/2DE1hbP
Hy-Vee to Change Ad Program
Walmart Suspends Shoplifting Policy
“It’s not welcome everywhere, and I want to understand that better. We want to make sure we are partnering with local government.” —Joe Schrauder, VP of asset prote ction and safet y, Walmar t
SEASONED BEEF. Smithfield Seasoned is now more than just pork. As the Seasoned Fresh Pork category leader, we are proud to expand our portfolio and bring you two new Seasoned Fresh Beef items made with USDA Choice Beef. With 89% of households purchasing Beef — and Seasoned Beef sales1 up +7% — you can count on Smithfield Seasoned Beef Steaks firing up your shoppers’ grills and your seasoned category sales with our hottest new items this summer grilling season.
©2018 Smithfield Foods
Drive Seasoned Category Growth
Grow Total Meat Department Sales
Increase Total Basket Ring
For more information about how Smithfield Seasoned Beef can help boost your bottom line, contact your Smithfield Sales Representative or firstname.lastname@example.org. 1
52 weeks ending 10/28/17
Easter National Sourdough Bread Day
National Peanut Butter and Jelly Day
National BLT Sandwich Month National Soft Pretzel Month National Soyfoods Month
National Chocolate Mousse Day. Pin your favorite recipes on Pinterest.
International Carrot Day
National Grilled Cheese Month National Garlic Month
Caramel Day National Raisin & Spice Bar Day
One Cent Day. Promote buy-oneget-one-for-onemore-cent specials.
National Empanada Day. Introduce customers to these delicious savory pastries.
National Chinese Almond Cookie Day
National Glazed Ham Day, and tomorrow is National Baked Ham with Pineapple Day, so stock up!
National Eggs Benedict Day
Day of the Mushroom
National Cherry Cheesecake Day National Picnic Day
National Jelly Bean Day
National Shrimp Scampi Day
National Oatmeal Cookie Day National Raisin Day
National Cheese Fondue Day. Promote fondue pots, forks and cheeses.
National Pigs-in-aBlanket Day. Offer coupons on mini hot dogs, refrigerated crescent rolls and mustard.
National Egg Salad Week
New Beer’s Eve. Start a new tradition and promote local specialty beers. National Fresh Tomato Day
National Beer Day. Set up a display of glasses, steins, growlers and craft beers.
National Caramel Popcorn Day
National Peach Cobbler Day
National Coffee Cake Day
National Pecan Day
National Licorice Day
National Animal Crackers Day
On World Malbec Day, set up a display of a variety of this red wine.
National Grilled Cheese Sandwich Day
National Cheeseball Day
It’s Tea Day, so set up tasting stations around the store.
National Cinnamon Crescent Day
New York Tabletop Spring Market starts today and continues through the 13th.
Cheesetopia is today in Milwaukee.
National Zucchini Bread Day
Celebrate National Grilled Cheese Month by offering a variety of your employees’ favorite cheeses or version of the gooey sandwich.
National Pretzel Day
Promote bacon to help celebrate National BLT Month.
Arbor Day. Donate a tree to a local park or open space in your store’s name. National Prime Rib Day
National Chocolate-covered Cashews Day
National Blueberry Pie Day
The Driving Forces Behind Private Label Purchases What are consumers looking for? Private label or store-brand products are becoming an increasingly important offering in supermarkets, but what are consumers really looking for when it comes to these products? Progressive Grocer, along with sister company EIQ Research Solutions, interviewed 500 consumers who have household responsibility for grocery shopping to find out why they turn to store brands. Unsurprisingly, price was the largest factor, no matter the age of the consumer. Older generations find value and uniqueness in store brands, while retailers still have some convincing to do of younger shoppers when it comes to value. However, younger shoppers find store brands to be innovative. Survey respondents sourced via ProdegeMR, reinventing the market research process by taking a respondent-first approach. Visit www.prodegemr.com for more info.
how do you view private label products? Younger Millennials
of Gen Xers surveyed purchase private label products based on price.
Worse than national brands
Comparable with national brands
Comparable with national brands
Better than national brands
5 8 .0%
5 5. 2%
5 8 .1%
Worse than national brands
18 . 2%
Comparable with national brands
Worse than national brands
18 . 2%
18 . 8%
Comparable with national brands
78 . 8%
Better than national brands
Better than national brands Value Worse than national brands
Better than national brands Innovation
Base: All respondents
What are your reasons for buying private label products?
43% of shoppers use in-store signage to find out information about private label products.
Comparable/lower prices compared with national brands
6 6. 2%
8 8 . 8%
Comparable/better quality compared with national brands
More unique products compared with national brands
Attractive product/packaging design
2 . 5%
Base: Respondents who buy private label products (n=498) Source: Progressive Grocer market research, 2017
ORGANIC SNACKS ALL GROWN UP! Snacking is now half of all eating occasions.* • The first organic snack kits for adults. • All three varieties feature Organic Valley cheese, Organic Prairie Summer Sausage and organic, stone-ground crackers.
Contact your Organic Valley salesperson or email email@example.com to place your order. *Source: SPINS/IRI 52 weeks ending 11/5/17
©2018 CROPP Cooperative | 17-10068
• All organic. No antibiotics, synthetic hormones, toxic pesticides or GMOs.
Brand innovation from the farm to your store. Real food is food weâ€™re proud to serve in our own kitchens. Real food has roots. Real food is prepared with care. Real food should be accessible to all.
ÂŠ2018 CSC Brands LP
H E A LT H & WELL-BEING CREDENTIALS
Transparency Positioning and Investment in Real Food Credentials.
$1 BILLION Net Sales from Fresh Products.*
Organic Portfolio, Growing Double Digits.
Servings of Vegetables Annually.
Tons of Whole Grains Provided to Consumers.
Products with Healthy Reduced Sodium in the U.S. and Canada.
Products with <100 Calories Per Serving in the U.S.
Products That Meet FDA Criteria for Healthy.†
* FY17 Q4/year end press release of Campbell Fresh Sales – 12 months ending 7/30/2017 † Gross sales of foods met the definition of “healthy,” defined as those foods with nutritional profiles satisfying the FDA and other globally accepted criteria
Frozen Vegetables TOTAL FROZEN VEGETABLE SALES REACHED $2.97 BILLION IN THE PAST YEAR
(52 weeks ending April 2, 2016)
Be ver age sales re ached more than $82 Billion in sales in the past ye ar, down slightly from the pre vious ye ar, due to slow sof t drink and juice sales, But Buoyed By strong energy drink and water sales.
Consumers chose Consumer frozen broccoli over Insights alternatives for
a variety of reasons:
Which beverages are seeing the fastest dollar 12% becausein it’s the growth quick and easy latest year?
because it tastes great
Spotlight on Frozen Broccoli
because it’s healthy and nutritious
WHEN ARE CONSUMERS EATING FROZEN BROCCOLI?
52 wks - w/e 11/04/17 52 wks - w/e 11/05/16 52 wks - w/e 11/07/15 Broccoli as an ingredient is most commonly Frozen broccoli is most often used in a side consumed at dinner, followed by lunch. dish, followed by as a main entrée. energy Beverages water fruit drinks fruit juice 3% 9%
Beverages remains yet another part of the store being transformed by health-and-wellness ideals. Performance has been a mixed bag across OCCASION MEAL ITEM beverage categories this year: While soft drinks have seen declines of close 29% TYPE CLASS 62% 35% 61% to 2 percent in sales, trendy and health-conscious alternatives like kombucha and sparkling water have seen double-digit growth of 43 percent and 15 percent, respectively. In the face of declining sales, it becomes more important than ever to home in on the demographic cohorts that are drinking certain beverage brands. Beyond that, innovation into LUNCH with OTHER DISH MAIN ENTRÉE OTHER strategic ingredients that can DINNER move the needle health-minded SIDE consumers is also an option. As we’ve seen with the impressive growth of beverages containing alternative sweeteners like stevia, alignment with wellness regimes can reap dividends in the long run.”
because it’s low in calories, fat and sugar
—Jordan Rost, vp consumer insights, nielsen
Spotlight on Soft Drinks Comparison Products
prepared food-dry mixes
pizza, snacks, hors d’oeuvres-frozen
desserts, gelatins, syrups
Source: : nielsen retail measurement services, core rewrite syndicated hierarchy, total u.s., 52 weeks ending nov. 4, 2017, upc-coded
We’re number W∑ nderful. · #1 fastest-growing snack brand: W∑ nderful Pistachios1 · #1 citrus brand: W∑nderful Halos 2 · #1 premium juice SKU: P ∂ M Wonderful 3 4
Over 50% of U.S. households choose W∑ nderful brands. With an annual ad budget over $100 million, $200 million invested in sustainability research and innovation, and double-digit sales growth, we’re the partner you want in your corner—or, preferably, the middle of your ﬂoor.
© 2018 The Wonderful onderful Company LLC. All Rights Reserved. WONDERFUL, POM, POM POMS, HALOS, PURE GOODNESS, ANTIOXIDANT SUPERPOWER, the accompan accompanying logos and all other trademarks are owned by The Wonderful Company or its afﬁliates. 1 Brands with over $310MM in dollar sales, IRI T Total US MULO, 52 weeks ending 6-11-17. 2 IRI latest 52 weeks ending 7-2-17 Total US MULO. 3 IRI 52 weeks ending 4 6-25-17 Total US MULO. IRI 52 weeks ending 6-11-17. WF171211-02
Mintel Category insights
Global New Products Database
FOR MORE INFORMATION, VISIT WWW.MINTEL.COM OR CALL 800-932-0400.
Diapers Market overview Competition, discounting and stalling birth rates are contributing to slow growth in many countries, including the United States. The United States remains one of the countries with the most new product development activity, however. The top five diaper product claims in North America are as follows: male, 11 percent; hypoallergenic, 11 percent; eco-friendly package, 11 percent, ease of use, 10 percent; and children, 9 percent.
Key issues Brands need to continue to call out superior absorbency, skin health and leakage prevention. Secondary features can add differentiation. 24 percent of U.S. respondents to a Mintel survey purchase diapers based on trial of other diapers and knowing which ones work best; this trial-anderror approach underscores the need for brands to promote efficacy. Just 7 percent of U.S. respondents to a Mintel survey typically only buy natural/organic diaper brands, and/ or choose a specific diaper based on its being sustainably made. Globally, natural and ethical claims have seen flat or declining new product development in recent years.
What Does It Mean? Brands that emphasize efficacy, safety and skin-friendliness, as well as touting certifications such as USDA Certified Organic, can help drive consumer interest in natural/eco-friendly diapers, and appeal to those parents who remain skeptical about natural diapers and require proof of efficacy.
While of secondary importance, features such as scent and novelty/stylish designs can expand and help lend differentiation. Social media logos and references could be more overtly featured on the front of the packaging, rather than the back where they more often appear, given the heavy use of social media platforms by consumers of child-bearing age.
Leading food brands make it OSI Group is a premier food processing company. We make proprietary items that the world’s leading food brands sell every day. You can count on OSI Group for: • A 360º innovation approach, from concept to consumer • World-class processing, packaging and logistics for end-to-end solutions • Product development and materials sourcing expertise to speed innovations to market
Now make it
for your leading brand.
A World of Food Solutions © 2018 OSI Group, LLC
www.osigroup.com • 630.851.6600
NEW HORIZONs By Sarah Alter
had a moment of realization,” he recounted. “First of all, I hadn’t noticed, and second, the reason for the gender imbalance on stage was that there were only men in charge of the respective departments. My leadership team was not a reflection of our broader team. It was a reflection of myself.” Since then, Gamson has launched LinkedIn’s Women’s Initiative to support women who want to advance. The effort has helped raise the percentage of women in senior roles in LinkedIn’s global solutions business from 6 percent to 30 percent.
Problem? What Problem?
Gender Equality is Not a ‘Women’s Issue’ Str ategieS for ge t ting men involved in furthering workpl ace incluSion.
ttempting to close the gender gap in retail and consumer goods without the help of men is like attempting to ride a tandem bike alone: You might move forward a bit, but you’ll crash before you get very far. Even as they’re enthusiastically rolled out, many companies’ gender diversity efforts are destined to fail — because they’re focused almost solely on women. Many times, men aren’t invited to participate in gender equality programs, and even if they are, they’re often unsure how to be supportive. Some don’t recognize the value of gender-diverse leadership, or view their own company’s leadership ranks as equally open to anyone who’s talented and ambitious. Mike Gamson, SVP of global solutions at Sunnyvale, Calif.-based LinkedIn, was one of those men. “I used to think that the world is fair, that it was a meritocracy,” he told Michelle King, of Women@Forbes. “I no longer believe that. “I think people who think it is an even playing field are probably like me — they have had it easy their whole life,” continued Gamson. “They are probably a guy, they may be white, and they have likely been in the majority their whole life, and they assume that it is like that for everyone else.” A few years ago, at an annual LinkedIn global sales event, a woman on Gamson’s team pointed out that all of the speakers on stage were men. “I
Many men don’t recognize gender inequality in the workplace, even when it’s staring them in the face. Nearly half of all men believe that women are “well represented” in leadership when only one in 10 senior leaders in a company is a woman, according to “Women in the Workplace 2017,” based on research by LeanIn.org and McKinsey & Co. Not only do men and women view gender inequality at work differently, they disagree on how company resources should be used to close the achievement gap. Boston Consulting Group (BCG) found that companies spread their diversity investments evenly across five categories: recruitment, culture, leadership, retention and advancement. But only one-fourth of women surveyed by BCG felt that they’ve benefited from these investments. What’s more, men identified recruitment as the biggest challenge for gender diversity in the workplace, while women cited advancement and retention.
Men are the solution The good news: When men are engaged in gender diversity efforts, change happens. Worldwide data from BCG shows that 96 percent of companies with men actively involved in gender diversity initiatives report progress at all levels, compared with only 30 percent of companies without men engaged. So, what’s a man to do? BCG recommends five ways for men to become more involved:
Support flexible work policies: Part-time and remote work, job sharing, parental leave, and added unpaid vacation are the most effective ways to support a gender-balanced workplace,
Bcg reports. But these policies will be little used if male leaders don’t use them themselves in a public, transparent way.
Model the right behavior: Be conscious of the messages you send and the culture you help create. Don’t make assumptions about any woman’s career ambitions.
Sarah Alter is president and CEO of the Network of Executive Women, a learning and leadership community representing nearly 11,000 members, 950 companies, 105 corporate partners and 21 regional groups in the United States and Canada. Learn more at newonline.org.
Communicate fairly: Don’t dominate discussions. ensure that everyone has a chance to speak, no one is talked over and a good idea is credited to the person who originated it — not the person who talked the loudest or longest. if you’re giving feedback to a female employee, stick to feedback on actions and not personality traits.
Sponsor a high-potential woman: invite her to high-level meetings, support her for a promotion, and ensure that she gets the training and development opportunities she needs to advance.
A Fresh Alternative
Get involved in company-specific initiatives: serve on a diversity and inclusion committee, attend a women’s leadership conference (more than 100 men attended our NeW Leadership summit last fall), and use social media to spread the message: Women’s leadership is a powerful business strategy. New York-based catalyst, which promotes male engagement in gender diversity through its Men Advocating real change initiative, offers strategies for women who want to promote men’s participation in creating gender equity. Among them: Challenge your assumptions: Do you assume men are unwilling — or know how — to act? Invite men in: Would you attend a workplace meeting you weren’t invited to? Mentor men: Help break down stereotypes and develop men’s awareness of gender dynamics. Listen to the experience of men of color: They can be strong allies in creating inclusion, which won’t exist without engaging people of all ethnicities and races.
Supermarkets are in a unique position to support shoppers seeking fast, fresh and healthy meal options by promoting their top selling produce, prepared foods and seafood items in healthy meal solutions that require little to no prep and clean-up time. We’ve created the perfect blend of science, technology and art to create flexible packaging solutions that meet shopper demands for convenience and healthy foods.
Progressive grocer Februar y 2018
All’s Wellness By Molly Hembree
Dump the Dinnertime Dilemma GE T CUSTOMErS ON A HE ALTHIEr Tr ACk wITH CrE ATIvE SUGGESTIONS.
n an effort to answer the proverbial question of “what’s for dinner?” retailers are working hard to find easy, tasty, affordable and wholesome solutions to America’s favorite meal. Dinnertime might be the best opportunity we’ve had all day to unwind and be more intentional in our food choices. Sitting down to a family (or group) meal might make a greater impact than we realize. Each September, the Food Marketing Institute (FMI) Foundation touts National Family Meals Month to urge families to gather around the table. According to The Hartman Group, 68 percent of consumers say that dinner is the meal that most people in the household eat together. Frequent family meals, defined by the Journal of Pediatrics & Child Health as at least three meals a week, can significantly improve family connection, self-esteem, well-being, positive social behaviors and stronger family relationships while decreasing the chance of “risky” behaviors. Up the ante by inviting the whole family to get involved in the kitchen and to adapt their plates to their own liking, such as more or fewer grains in their rice bowls, extra or no salsa in their tacos, or double or no mushrooms on their pizza.
Options such as click-andcollect, online grocery delivery, meal kits, readyto-eat fare, par-baked and par-boiled goods, and an expanding selection of frozen meal ideas can be foolproof ways to get a meal on the table in minutes, if not seconds. Ground-up solutions In putting together ideas for dinnertime, recommend that shoppers start from the ground up by beginning with easy staples. To craft a meal, it can be simple to begin with steamed quinoa, frozen vegetables, canned beans, refrigerated greens or dry pasta. Add favorite lean proteins from turkey to tofu, top with seasonings from sage to smoke, and finish with fruit from bananas to blackberries. Constructing a meal can be a creative outlet. Urge shoppers to browse family cookbooks, ebook recipes, Pinterest posts, grocery store recipe cards or a nearby bookstore for food inspiration. Also, encourage shoppers to assign different nights of the week ethnic dinner “themes” such as Italian, Greek, Indian, Lebanese and Mexican cuisines on corresponding days of the week, Monday through Friday. This way, their homes can have more
freedom to determine specific dishes, but more guidance for the types of foods to be served on a particular evening. Promote the power of leftovers. Encourage consumers to plan ahead for mealtime by making a dish that will last a household two to three days — often dubbed “planned overs” — thereby saving on time and alleviating the need to make additional food decisions. Most core ingredients for favorite meals can be stored safely below 40 degrees Fahrenheit for up to four days. Advise shoppers to pre-wash, cut, measure and store ingredients as soon as they return home from the grocery store. Many consumers have also found success mapping out a menu for the week in calendars or agendas, or posting on a visible whiteboard in the kitchen, to reduce potential stress at mealtime. Grocery stores have launched many dinner solutions for busy customers that take the guesswork out of mealtime. Options such as click-and-collect, online grocery delivery, meal kits, ready-to-eat fare, par-baked and par-boiled goods, and an expanding selection of frozen meal ideas can be foolproof ways to get a meal on the table in minutes, if not seconds. Team up with your store’s chef or dietitian team to offer nutrition demonstrations, culinary sampling, cooking classes or dinner guides to assist shoppers in making this main meal matter.
of consumers say dinner is the meal that most people in the household eat together. Source: The Hartman Group
Molly Hembree, RD, LD, is a registered dietitian coordinator for The Little Clinic and Kroger.
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Outstanding Independent Awards
AheAd of the GAme this yearâ€™s outstanding Independents show how they outplay the competition. By Katie Martin
eing successful in the supermarket industry means that you have to be on top of your game and outplay your competition. This year, Progressive Grocer honors several companies that are doing just that in different categories. Companies are honored for outstanding single-store operator, outstanding multi-store operator, outstanding new concept, bakery, center store, deli/prepared foods, meat/seafood, produce and technology. All of this yearâ€™s Outstanding Independents have found success in their own ways; however, they all have had to differentiate themselves from the competition, and some common themes have emerged. More than in previous years, the winners stressed their commitment to being a neighborhood store. While they all wanted to attract as many customers as possible, they were all keyed into what their immediate neighborhood needed, and tried various ways to meet those demands. As locally owned stores, they all emphasized their dedication to bringing in local products and developing tight relationships with local producers. Creating an enjoyable experience also was a high priority. Whether this was through the customer-facing technology they offered to create a variety of shopping options or ensuring that the store was easy to navigate, all were committed to taking the hassle out of shopping. This yearâ€™s winners all have ideas that can work in a variety of other stores to improve customer experience and, in turn, increase sales. Congratulations to a successful group of independents!
Outstanding Multi-stOre Winner Barons Marketâ€™s new North Park store, in San Diego, is the independent grocery chainâ€™s first urban-format location.
Progressive grocer Februar y 2018
Outstanding Independent Awards
Outstanding single stOre
Cardiff Seaside Market, Cardiff, Calif.
xpansion doesn’t always mean a second location. Instead, Cardiff Seaside Market owners John and Pete Najjar decided to remodel and expand the location they had, growing it from 13,000 square feet to 18,500 square feet. (The market does operate a small store inside PetCo Park, San Diego’s major-league baseball stadium.) “We decided long ago not to expand to a second location,” says John Najjar. “That was our big deal. We live and work in the neighborhood — I live a block and half away — and we just wanted to be the best community market anywhere. We don’t consider ourselves upscale, which everybody says we are … We consider ourselves good and better than anybody.” In addition to supporting the community through several civic opportunities, the store offers a variety of unique items that can only be found at Seaside Market. One such item is the Burgundy Pepper Tri-tip that’s sold nationwide through ecommerce. It has become known as “Cardiff Crack” and is extremely popular — it even has its own Wikipedia page. The tri-tip is made from Stone Porter bone-in pork chops marinated in either the exclu-
sive Burgundy Pepper or Spicy Chipotle Marinade, both of which are also bottled and sold separately. The department managers are given a lot of leeway to make decisions on what the store should carry, and without a corporate buyer to give approval, they can make decisions quickly, notes Tim Muleady, store director. Even in the winter, the store is able to offer locally grown strawberries. “We know the growers,” Muleady adds. “We’re able to secure these types of items, so that really is what separates us.” That decision-making ability enables department managers to bring in the products that customers request. “We can go right out and produce that product,” Muleady explains. “We’re listening to our customers, and we’re really able to change on a dime, so to speak.” The Najjars also work to eliminate any fear of failure. “Managers are encouraged to try, and we are going to make mistakes, or we are going to miss on opportunities that we thought would be successful,” Muleady says. “But going through that, every so often, we will also hit home runs. That’s what it’s really about.” Creating a pleasant shopping experience for the customer also is a key element in Seaside Market’s success. The philosophy is that the store should
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look as good at 9 p.m. as it does when it opens at 7 a.m. Displays are always kept full and fresh with the highest-quality product. “The owners are committed to that philosophy and provide the tools to the departments, but at the same time, the department managers are encouraged to come up with new ideas,” Muleady says. Perishables are really what sets the store apart, though. The produce department focuses on locally sourced items. In addition to the strawberries, the store recently had local persimmons and Meyer lemons. The full-service meat department allows customers to interact directly with the staff to select the exact cut of meat they want, which can be cut down if needed. Seaside Market also is well known for its gourmet cheese department, as well as the prepared food or cuisine department, where everything is made fresh in-store. “We have a grill where they can order food to go, from breakfast all the way through to sandwiches and burritos,” Muleady notes. “We’re a destination for people. Obviously, we have everything a full-service grocery store would have, but we are definitely a destination for those looking for quality produce, local, and gourmet cheese. My vision is just to improve us day to day, that every customer comes in and finds the item they are looking for, are happy with the quality they can get, and so the next time they have to go grocery shopping, Seaside Market is the first thing that pops into their head.”
True or False? DairyPure’s velocity is 3X that of the leading brand of almond milk in grocery. That’s true. In fact, conventional white milk has a velocity 10X that of plant-based alternatives. But that doesn’t mean you should put milk on autopilot and turn your focus to launching newer products. At Dean Foods, we’ve worked hard to create the #1 brands of white and flavored milk, as well as a complete portfolio of proven products that help dairy drive 1 out of every 6 dollars spent in grocery. And we believe that a little extra focus on core dairy products — along with the right product and promotion strategies — can add fuel to your business. Rocket fuel.
It’s time to rethink dairy.
Source: IRI Grocery Channel L13 wks ending 12-13-2017, Current © 2018 Dean Foods Company | All Rights Reserved. DairyPure®, TruMoo®, and Dean’s® are registered trademarks of Dean Foods Company. Friendly’s® is a registered trademark of Friendly’s Manufacturing and Retail, LLC. Mayfield® is a registered trademark of Dean Intellectual Property Services II, Inc. Caribou Coffee® & design is a trademark of Caribou Coffee Company, Inc., used under license. Organic Valley® is a trademark of Cooperative Regions of Organic Producer Pools, used under license. DairyPure Mix-ins™ is a trademark of Dean Foods Company. Copyright © 2017-2018 Uncle Matt’s Organic. All Rights Reserved.
Outstanding Independent Awards
Barons Market, Poway, Calif.
etting your stores apart is a tough business. “We really had to be very forward thinking in this industry,” says Rachel Shemirani, VP of marketing for the seven-store Barons Market, based in Poway, Calif. “The grocery industry, especially in Southern California, is just so competitive. For us, what makes us stand out is our customer experience. We put a lot of time, energy [into] creating a really exciting and engaging — we call it taste-bud-tempting — customer experience.” Barons’ customer experience begins with the way the stores, which range from 15,000 to 18,000 square feet — the sweet spot is about 16,000 to 17,000 square feet, notes Shemirani — are arranged so that shoppers have a 10-minute shopping experience. “People are busier than ever,” she points out. “They love food, they love to shop, but they hate food shopping. It was a real challenge for us to create an experience where they love coming to Barons.” Part of that is to make sure the selection of products is competitively priced through careful sourcing, and to keep the prices in range with the rest of the market. The product selection also is finely honed, down to about 9,000 SKUs, which helps create a satisfying shopping experience by eliminating some of the choice. To ensure that the products in the store are the best of what’s available, Barons gathers about 30 managers and buyers to participate in a taste team meeting. About 80 to 120 products are tasted every week to select the best items — about five to 10 items usually make the cut — and if the product is in a category already offered in the store, the potential new item is tested against what’s already on the shelf to ensure that customers are always getting the best product available in the category. “It’s like a big family Thanksgiving dinner where we eat everything, and then we talk about it,” Shemirani explains.
“We get very passionate sometimes.” Products are evaluated on taste, ingredients — Barons looks for clean labels — packaging and price. Shemirani explains: “We always ask, ‘How much would you pay for this?’ and also, ‘Would you buy this product again?’ Because you might like something and think, ‘Okay, that was fine and that was fancy, but would I ever buy this again?’” For new products, the stores automatically begin demoing — demo stations are operated for eight hours a day in the store. “That’s the best way for someone to learn about the products, is to go in, taste it, but also talk about it with our demo staff,” she notes. Further, the stores are always looking to add new features to improve the shopping experience; this has included olive oil and balsamic vinegar bars that were put in as novelties, but have ended up providing steady sales that doubled over the holidays, and cookie bars that offer a variety of locally made cookies by the pound. Next year, Barons is looking to add hot-food bars. Produce is one department that the stores really are known for. Many of the products are sourced from local farms that the grocer buys from directly. “That’s money-saving; we save on transportation costs because it’s right down the street,” Shemirani says. “Most of these local farms, even though they’re not USDA organic, are pesticide-free and also have great quality.” Part of the produce program is what she calls “the ugliest. We have the ugliest oranges, but they are so sweet and so good. We have some ugly watermelons, too. We like the uglier, the better. They’re not made with pesticides. We’re pretty proud of our ugly oranges and ugly watermelons.” An extension of the in-store customer experience is the community at large, which each Barons Market does its best to support. The grocer is opening a new store later this year, and when a location opens, Barons goes into the surrounding area to find out what’s important to that neighborhood, because it’s different in each one. “Anything we can do to partner with them to help raise money for their organizations,” Shemirani says, “that’s something that’s really important for us.”
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Outstanding Independent Awards
Outstanding new COnCept
My Fresh Basket, Spokane, Wash.
hen My Fresh Basket owner Ramona Higashi was approached about building a supermarket from the ground up along the river in Spokane, Wash., she and her team knew that the concept would have to play off the location. “We have a great view, so we thought, all right, we’re going to highlight the perishable and fresh part of grocery shopping, try to take the chore out of shopping,” says VP Dave Yount. “Be a destination for people to come in, grab a snack or lunch or dinner, and have a glass of wine up on the veranda and overlook the river.” The team hired a James Beard Award-winning chef to create the fare for the prepared food department, including a hot bar and carving station surrounded by the produce department that lines the large windowed outside walls, which offer views of the river as well as letting in a lot of natural light. At the end of the store is a fresh bakery, a fresh juice bar, a charcuterie and cheese display, an olive bar, a poke bar, and a fresh meat case. The team wanted a bit of an upscale look, so the store features marble countertops in the deli, hot bar, salad bar, juice bar and espresso bar, and, to soften the marble and exposed ductwork in the ceiling of the store, rough-
hewn wood was used as an accent. The store, which opened June 30, 2017, has developed a nice culture, Yount notes: “We get a lot of customers that come in and spend their lunch hour here with co-workers, and they tend to come back after work to either grab a pre-made meal out of the carving station or do their shopping.” The in-store dining area seats about 50, and in the summer, an upper-level veranda seats another 30, along with a ground-level outdoor area with about 30 seats. The construction process was planned to last about eight months, but as anyone who has ever dealt with building or remodeling a store knows, that number wasn’t hit. Yount wishes that he had added more time to that phase of the project. Planning and design of the store actually took about 18 months. “I’ve been in the industry now for about 35 years, so I had a good idea of how I wanted the flow of the store,” he says. “I think that was a huge part of how it turned out, doing a lot of research and reading up on trends, what people are looking for.” The 25,000-square-foot store is just the right size for customers to feel comfortable in when they enter, without seeming too large and overwhelming, he observes: “As you’re walking in the doors, there’s enough service-oriented departments that you hit right away, so the customer feels like there’s actually employees here that want to help and are excited to see them.” And offer them samples. The center store features wide-open aisles with enough variety that customers can find what they need and have a few choices. “We looked at trends on organic and conventional CPG items: shoppers want to eat better but they don’t want to pay a ton of money for it,” Yount notes. The team also was aware that the store couldn’t be everything to everybody, but hit upon dividing the offerings into onethird organic, one-third natural or clean label, and one-third conventional to try to meet as many needs as possible. “That’s about as well as you can do to try to be everything to everybody,” Yount asserts. “They aren’t going to find everything, but they are going to find a nice cross-mix. They can pick and choose what they want to spend their money on.”
Geissler’s Supermarkets, East Windsor, Conn.
ompetition is everywhere, and Geissler’s Supermarkets, with six stores in Connecticut and one in Massachusetts, is in one of the more competitive markets in the country. “In Connecticut, you can have five supermarkets within a square mile of each other,” notes Jim Williams, bakery supervisor. “We try to keep everything as fresh as possible and keep things a little unique.” The bakeries use a combination of mixes and frozen dough, but Geissler’s adds its own touch to the products, such as incorporating herbs like garlic, or butter, and employing decorations like a touch of chocolate drizzle or streusel on top. “We bake in all the stores; everything’s made right there,” Williams says. “Nothing is sitting around for a day or two
waiting for the truck to take it to a different location.” Geissler’s bakeries are known for their muffins, of which the grocer offers a wide variety. During the winter holiday season, the apple cider flavor is popular, but year-round, blueberry comes out on top, with corn and banana nut also popular choices. However, flavors like cranberry orange wal-
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Outstanding Independent Awards
nut, lemon toffee and apple cinnamon showcase the department’s ability to go beyond the basic flavors. The staffers — each bakery department has between seven and 12 employees — also are given leeway to create products that they think will sell in their particular store. “That’s what a lot of employees love about the bakery department,” Williams asserts. “You have the ability to be creative, try new things. You never want to shoot down an idea that might sell a lot.” Family members also provide inspiration, with Williams’ wife’s Pinterest habit inspiring some new brownie varieties for the stores that include s’mores and peanut butter coconut. While Geissler’s seven stores are fairly close together geographically, the bakeries’ product lines differ — Italian bread sells better in one store than another, for example. The one thing that
remains the same, though, is the freshness. “That’s what our big draw is,” Williams emphasizes. “Everything is always fresh, fresh, fresh.”
CALIFORNIA WALNUTS TRUST COMMITMENT QUALITY •
From our farms to your store shelves, California walnuts are handled with great care and attention to bring our customers and consumers the best quality product. For more than a century, the California walnut industry has earned a reputation for producing the highest quality walnuts in the world while maintaining an exceptional food safety record. It all starts at the farm, with growers setting the stage for producing a wholesome product by following established best practices, known as Good Agricultural Practices (GAPs). With the 2017 harvest underway, walnuts are shaken from the trees and quickly processed, adhering to, if not exceeding, standards set by the United States Food and Drug Administration (FDA). The California walnut industry has been a leader in ensuring food safety through continuous investment in education, training and research. And while it helps that walnuts, in addition to being rich in beneﬁcial omega-3 fatty acids, are also naturally protected by two layers of a hull and a shell that signiﬁcantly reduce the possibility of contamination, there is no substitute for due diligence and effective food safety, sanitation and safe product handling practices while growing and handling walnuts through the supply chain. In preparation for the Food Safety Modernization Act (FSMA), including the Produce Safety Rule for growers, the industry has been proactively training walnut growers on reducing the risk of food borne illnesses. Furthermore, several of the walnut handlers voluntarily undergo rigorous GMP and GFSI audits to demonstrate their commitment to food safety and quality. With over $2.1 million invested in food safety research projects for nearly a decade, our industry is committed to solid science to protect our customers and consumers. And this is evidenced by the excellent food safety track record of the California walnut industry.
SUPPORTING GOOD AGRICULTURAL PRACTICES
Outstanding Independent Awards
Roche Bros., Wellesley, Mass.
hat sets Roche Bros.’ bakeries apart from the competition is the bakers, says Josh Naughton, director of deli, seafood and bakery. “We’ve got some of the best bakers in the industry running our departments,” he notes. “They’re very passionate; it shows with the quality of product they put on the shelf and the quality, personalized service they give our customers.” The bakeries have up to 30 associates working in the department to provide that top-notch service — all staffers, even the bakers, are trained for customer service. The service case generates a lot of business in the department — about a quarter of sales — with a large selection of specially decorated cupcakes, cannoli and tarts. The top-selling product is muffins,
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with blueberry, coffee cake and chocolate chip the top three varieties. “On any given day, [muffins] are the No. 1 perishable item sold throughout the whole company,” Naughton notes. “One day it’s muffins, the next day it’s bananas. It’s always muffins and bananas.” The one item that’s unique to the department, however, is the Key lime pie. “I really haven’t seen it in any other market,” he adds. “It’s a great item. We sell a ton of it.” The departments do a lot of merchandising on self-service tables that were specially designed for the company, and Naughton likes them to be laden with product. “When you see a table stacked 10 high of whatever it is, you’re going to walk over there; you want to see what it is,” he explains. “I think it needs to look full, and it needs to scream, ‘You need to buy me.’ If you have a table display on the floor, and there’s only five loaves of bread on it, I think the perception is that it’s old; we already sold what we were going to; [the product] is old for the day. I like everything overflowing and big, bold, aggressive, high displays.” Undoubtedly, the bakery products bring in customers. “Our bakery is a total destination for the consumer,” Naughton says. “Our bakeries are one reason why customers come to our stores.”
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Outstanding Independent Awards
C.E. Lovejoy’s Brookswood Market, Bend, Ore.
o succeed in center store, grocers have to think outside the box. C.E. Lovejoy’s Brookswood Market, in Bend, Ore., also has begun thinking outside the keg. “We’ve definitely had our battles, but we’ve found the best thing we can do is keep a good variety of what’s hot on tap, and at the same time keeping our fingers on the pulse of our own neighborhood,” says Chris Whaley, store manager. The growler station at C.E. Lovejoy’s — amusingly dubbed Love Handles — keeps on tap 11 beers and one kombucha that are regularly rotated. The store receives five to six kegs a week to keep up with demand, so varieties can change quickly. “We’re changing half our taps every week to new beers,” Whaley notes. “We have a nice fluctuation of beer in there all the time, and every three months, a new seasonal will come out, so we’ll have that on tap.” Love Handles’ varieties are posted on the store’s website so customers can easily see what’s on offer. C.E. Lovejoy’s also recently changed its
liquor license to sell beer by the pint, so customers can now buy a pint to drink as they shop or try a small sample before they invest in the larger growler. The varieties also tend to be hyper-local. Of the 11 beers available when PG spoke with Whaley, five were from Bend, two were from towns around Bend, two were from elsewhere in Oregon, and the other two were from the West Coast, one from Washington state and the other from California. The kombucha also was from Bend. Whaley credits the “beer connoisseurs” on staff with staying on top of what customers want. With its location away from downtown Bend, C.E. Lovejoy’s is truly a neighborhood market and has to meet the needs of that neighborhood. Part of that means hosting twice-monthly beer gardens during the summer that also feature live music and food like sausages made in-house in the store’s meat department. “That’s a great way for people to come down and try a beer,” Whaley says. “To get it on their mind and get them thinking about what they want and what they like.”
Olsen’s Market, Ajo, Ariz.
Arizona and beyond, so Olsen’s Market carries a variety of RV- and camping-related items that travelers might have trouble finding elsewhere, like the smaller propane canisters that are used in camping equipment. The store also stocks a variety of travel-size products. With the decline in customers coming in for center store items like health and beauty, Olsen further reduced the selection. “We’re down to two SKUs of toothpaste or soap,” she notes. “Just enough that if they need it, they can grab it.” Instead, she now stocks a variety of small electronics like coffee makers or slow cookers, also supplied by Ace. In the winter, especially for holiday shopping, Olsen’s Market offers a larger variety of specialty and natural products like specialty olives or free-from flours. To attract the large tourist shopping segment, Olsen uses social media to promote the store, so those travelers doing research ahead of time can find the store and know it will provide the items they need.
ompetition had created a real challenge for Olsen’s Market’s center store, so owner Bryanne Olsen’s husband encouraged her to add Ace Hardware to the product line. The couple had explored the idea more than 10 years earlier, but it wasn’t the right fit. Several years later, however, the 4,000-square-foot option for the 20,000-square-foot store was exactly what the location needed. Olsen credits Ace with helping create the new floor plan for the store with the least amount of rearranging. “Each year, Ace gets stronger and stronger sales for us,” she says. “It’s a good feeling to be in the checkout line and I see a toilet seat and a loaf of bread going through together.” The hardware section takes up four aisles in the store, and products can be purchased from the store’s main checkout or from a cash register located in the section. The store, which is located right off a busy interstate, serves a large camping community whose members stop in the town on their way to various locations in
Belmont Market, Wakefield, R.I.
n Belmont Market’s busy prepared food department, Chef Ginger Costa and her staff of up to 36 people take to heart one of the store’s taglines: “We’re real people making real food.” The kitchen sources the bestquality food ingredients it can, and does the seasoning and prep work on-site. “We take so much pride and put so much work into making sure everything is just wholesome,” Costa says. Customers are taking note, with the department bringing in about 10 percent of store sales and selling 25 gallons of soup a day year-round. The kitchen uses some of the same ingredients that customers can find in other departments of the store, but some items, especially cuts of meat, are available only in the prepared food department. Costa notes, however, that meals she’s offered have occasionally introduced customers to new ingredients, like quinoa or farro, that are then brought into the store aisles. The department’s menu is fairly fluid, but offers everything from tuna and egg salad to butternut lemongrass risotto. “Even though you might see some of the same things every day, it changes every day because of demand,” Costa notes. She additionally oversees all of the catering activity and can dictate what’s on offer in the department. “It also gives us a chance to try new things,” she observes. “We might see something in a magazine, and we get to play with it.” When Progressive Grocer spoke with Costa, for instance, she was experimenting with a vegan stroganoff. Belmont Market, which is owned by Jack Siravo, has been in business for more than 75 years and started as a produce stand. The prepared food department was added in 2003, but has quickly established itself as a destination. “Belmont Market has a strong reputation locally,” Costa asserts. “You get people that come in here because of the name, and you get people coming in here because of this department.”
Busch’s Fresh Food Market, Ann Arbor, Mich.
ike many other independents, Busch’s Fresh Food Market, operating 17 stores in southeastern Michigan, works to create stores that draw consumers’ attention. To do that, the Busch family opened J.B.’s Smokehouse in its new Canton store. The barbecue restaurant can be accessed through the supermarket or its own separate entrance, but the door from the store is situated within the deli/prepared food area with gelato and juice bars as well as a Starbucks, creating a bit of a food court feel, according to John Busch, chairman. “We try to be fairly synergistic with the store,” he adds. A barbecue-style restaurant fits well with the other offerings in the store’s prepared food department. Both the store and restaurant order from the same suppliers; they place separate orders, but the products used in the restaurant’s menu can typically be purchased in the store, including the beer selection. Even the barbecue sauce developed for the restaurant is bottled and sold on the store shelves. Some of the restaurant’s offerings are prepared in the meat department’s smoker used for briskets, pork shoulders and other products that require a long cooking cycle. Shortercooking items, like chicken and ribs, are prepared in the two wood smokers at the front of the store. The store and the restaurant also use some of the same prepared foods. “The potato salad that we sell in the deli is the potato salad you would get with your meal in the restaurant,” Busch says. Customers also can purchase wine in the store and drink it in the restaurant for a $5 corkage fee. “It’s an evolving concept for us,” he notes, “but both feed off each other. Sometimes, they’re here for different purposes and different meals.” Customers can eat in the in-house restaurant or come in and get a meal for carry-out. JB Smokehouse also offers online ordering for quick pickup. “If you need to grab some detergent and a gallon of milk while you’re at it,” Busch adds, “it’s easy to do.” Progressive grocer Februar y 2018
Outstanding Independent Awards
Lakeview Supermarket and Deli, Lucerne, Calif.
akeview Supermarket and Deli, with its tagline of “You can’t beat our meat,” bills itself as a meat store that also sells groceries. Owner Kenny Parlet claims that the store does four times the national average in meat sales, and more than triple the sales per square foot of the average supermarket. Any way you slice it, that’s a lot of meat. Parlet brings in restaurant-quality meat not often found in retail stores, and the quantity sold ensures that the meat is always the freshest available, he notes. The store’s mission is to offer customers the highest-quality chicken, pork and beef, along with the ultimate in personalized service, while still offering the best possible value. Lakeview offers 14 meat packs in eight sizes, which offer a variety of beef, pork, chicken, breakfast and specialty items that range in price from $49.95 to $349.95, to fit any family size and quality demand, and provide savings of up to 20 percent over the retail price. If customers are unfamiliar with a certain cut or aren’t sure how to prepare an item, Lakeview also offers cooking instructions. The meat packs range from an introductory sampler to BBQ & Broil Meats to luxury meat packs with high-end cuts. The Monthly Meat Experience program allows customers to set a standing order (although the store goes over the order every month with shoppers) to have frozen meat delivered to their homes. Holiday meat items, like turkey, ham and prime rib, are delivered fresh, with the delivery schedule adjusted to ensure that customers get the products before the festive occasion.
McKinnon’s Supermarket, Portsmouth, N.H.
hen you claim to be home of the super butcher shop, you’re setting the bar pretty high, but McKinnon’s Supermarkets follows through on the claim. One Yelp reviewer exclaims that the Salem, N.H., store (the company operates four stores total — two in New Hampshire and two in Massachusetts) has three aisles of meat. “We pride ourselves on having the biggest selection in New England,” says coowner Ed Penta. “It’s very important to us. Meat is center of plate, and it’s a good percentage of our business.” McKinnon’s stores feature large meat displays. The Portsmouth store, for example, has a 240-foot meat case, and while the choices abound for customers, including Certified Angus Beef, it’s the staff that keeps them coming back, according to Penta. “We have extensive knowledge” when it comes to meat, he says, adding: “We have real meat cutters on staff. Real meat cutting and knowing how to cut from the carcass down to the plate.” The two New Hampshire stores, which are larger in square footage, have service meat counters that allow customers to get the exact cut they want, although about 80 percent of sales come from the self-service cases. Portsmouth has 20 employees in the department alone. Some of the department’s best-sellers include sirloin tips, sirloin flat meat and marinated chicken. (The marinade is so popular that McKinnon’s now bottles it and sells it separately.) Penta sees a lot of growth potential in oven-ready products like the marinated chicken.
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Outstanding Independent Awards
Farmhouse Market, Fall City, Wash.
hile most food retailers tend to have the same produce variety, it’s often one of the departments used to create distinction in the minds of consumers. How Farmhouse Market goes about that is where it sources its product. “It comes direct from the farms in our truck,” says owner Jay Bluher. “We get whatever we can locally, based on what’s in season, of course.” Every March for the past 12 years, Bluher and his wife, Melissa, have erected a 15-foot-by-30-foot tent in the parking lot right in front of the store’s doors. “The first local produce isn’t available until mid-April, but we’ll still put it up,” Bluher says. “People get excited; that’s the first sign of spring, when they see the tent going up at Farmhouse Market.” The tent remains up through the end of October, when pumpkin season fades away. “Every June, people start asking when the local tomatoes, corn, cantaloupe or whatever their favorite is will be arriving,” he adds. The bulk of the local produce, defined as originating within the state of Washington and coming from a handful of producers, is found within the tent, although products that need refrigeration are housed in the store’s year-round produce department. The in-store department remains stocked throughout the year, continuing to carry a full line of products, including those that can’t be sourced locally. The Bluhers were a bit ahead of their time with the local movement, but the reason for their embrace of regional produce was the desire to be different. “To have so much growing that close to home, it just doesn’t make sense to not use that and take advantage,” Bluher explains. “It’s just such a different product. Tomatoes, for example, when they’re coming in, picked that day, compared to something that’s being ripened in a truck while being transported.”
Treasure Island, Chicago
n a competitive market like Chicago, quality becomes important, and Treasure Island takes that challenge to heart in its produce departments. “Quality is No. 1 on our priority list,” asserts Bob Zenawick, VP of operations. “We have three buyers that go to the market for us on a daily basis. They work seven days a week trying to procure only the best of quality at the best price possible.” The majority of the produce is purchased at Chicago’s Water Street Market, “so it’s as local as it can get,” he adds. Depending on the time of year, the grocer also sources some product directly from local farmers. Most are able to supply all seven Treasure Island stores, to keep the selection the same. Aside from quality, one of the biggest trends in Treasure Island’s produce departments is convenience. Customers are looking for pre-cut, pre-washed and pre-trimmed products, Zenawick notes: “Everybody is leaning to that now, regardless of the generation, because everybody’s time-starved.” The fruits and vegetables are cut on a daily basis at the company’s Montrose store, but when the newest location opens next summer, it will feature an on-site produce butcher, so customers can select what items they want cut and how they want them cut when they want them cut. Treasure Island is committed to produce — it’s the largest category in the stores in terms of square footage, with at least 1,000 SKUs available at any time. The departments also feature salad bars, and certain stores have two salad bars to accommodate the influx of customers. The departments also do a lot of business in healthy beverages like smoothies, juices, chai and infused water, all of which are prepared on-site at the stores. A variety of fruits are cut up and placed in bottles of water, with varieties like strawberry, kiwi, blueberry, lemon, lime and orange. “Customers can’t get enough of them, especially in the warmer months; in the spring and summer, it flies,” Zenawick notes. “Our roots and our foundation are built on the produce department, and that’s something we take a lot of pride in.”
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Outstanding Independent technology
Foodtown/Freshtown (PSK Supermarkets), Mount Vernon, N.Y.
SK Supermarkets, a 13-store independent family-run grocery chain in the New York metropolitan area, uses technology in a variety of ways to deepen relationships between customers and team members to drive sales and remain competitive. Foodtown has offered an ecommerce site for online shopping for three years. Its stores face fierce competition when it comes to online shopping, but PSK has been steadily building its online shopping business to compete with an array of rival internet shopping services in their marketplace. The key to the service is personal shoppers, who get to know their customers, and go up and down the aisles shopping the orders. “By providing our customers a state-of-the-art platform and combining it with personalized service, we can outcompete all the other companies in the online space,” affirms Noah Katz, co-president. PSK Foodtown also“has been fully invested in loyalty marketing for years,” notes Katz. With the help of its loyalty vendor, PSK uses the vast amounts of data it collects to reward shoppers in the ways they want. “Our program is as extensive as what you see in the casinos and credit card industry when it comes to loyalty marketing,” he adds. Best Customers earn higher levels of rewards, based on their shopping patterns in the store — the more they spend, the more they get back. On the back end, PSK updated its human capital management system to the Ceridian Dayforce platform, which provides a real-time, cloud-based, single HR record for each associate. VP Ed Hunt notes: “I can view, in real time, how much money we are spending, by region, by store, by department, by day on payroll, compared to what our managers promised us they were going to spend when the schedules were posted.”
ShopRite Supermarkets, Florida, N.Y.
ow consumers shop is changing, and supermarkets have to ensure that they’re offering the technology those consumers want. At Florida, N.Y.-based ShopRite Supermarkets (SRS), which operates 35 stores, that includes the ability to shop from home, using an app or in-store kiosk to place deli orders or use another app to scan items as they shop. In its newest store, ShopRite of North Greenbush, along with seven other locations, SRS offers Mobile Scan, an app that allows shoppers to scan items as they shop, and then pay. To use, customers log onto the store’s WiFi, scan the items they want with the app, and then go through the selfcheckout by using their loyalty card to pull up their order and pay by whatever method they choose. The Mobile Scan required training of both staff and customers. The stores did a lot of in-person outreach to let customers know that the app was available, which included a table set up with information, and the staff even would walk through the store with customers to show them how to use the app. “Yes, there was a lot of hand-holding, but the rewards on the backside have been very nice,” says Jim Shivers, director of retail technology. On the staff side, associates had to learn both the customerfacing function and the back end of the app. They had be aware of some of the common mistakes customers may make, such as whether they’re using the store’s WiFi. For customers who might not have time to walk through the store, SRS also offers Shop From Home, an ecommerce website. Not all of its stores offer the pickup option, but the company’s entire market area is covered by a store, so if the customer’s local store doesn’t offer pickup, they can get delivery from another SRS location. “We have Shop From Home to meet the need of every one of our consumers, whether they’re time-starved or homebound,” notes Sarada Bernstein, manager of community affairs and public relations, “or we have all the avenues for the fast-paced customer to the customer who wants to take their time and enjoy the service we provide at ShopRite.”
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Owning the Moment More prominent than ever, private label at grocery is poised for further growth. By Bridget Goldschmidt
rivate label has been around for decades, but the caliber and breadth of items available today are a far cry from the Brand X macaroni and cheese in plain white boxes in the value sections of 1970s supermarkets. The near future should bring even more excitement, with such emerging players in the U.S. market as German deep-discounter Lidl, which proudly touts its mainly private-brand selection as being of superior quality. As Jim Holbrook, chairman and CEO of Stamford, Conn.-based retail services company Daymon, says: “We are definitely just getting started when it comes to the revolution of private label products. If you look at the headlines, private brands are innovating when it comes to selection, packaging and taste — but they are still finding their stride. Private brands have the true potential to offer
solutions across the store — something no CPG brand can do — and we’ll definitely see more of that in 2018.” To illustrate his point, Holbrook adds: “At Daymon, we recently conducted a survey with shoppers across the U.S. on their perceptions of private brands, and what we found is that six out of 10 shoppers have admitted to buying more store brands over the last couple of years, and large motivators for this are improved quality and variety. As consumers look for more solutions, instead of individual products or brands, private brands are becoming more relevant than ever. In fact, our study also found that 53 percent say
What’s Behind the Door 3 STEPS TO UNLOCKING THE POWER OF MILK MERCHANDISING
Shoppers who purchase the milk category routinely and without thought. Source: Seurat Group P2P Dairy Study 2016; Seurat Group Shop-alongs 2016
t’s one of the most timeless staples at the grocery store—yet milk is fresher than ever.
U.S. shoppers bring home 3.9 billion gallons of milk and alternatives per year from a category growing more diverse and dynamic by the day.1 And opportunities for growth remain: By implementing the right mix of distribution, shelving and merchandising strategies, retailers could bump annual milk consumption to 13.9 million gallons.2 But hitting that mark is possible only if retailers take a new approach to the category and its shoppers. The milk category is evolving both in terms of how consumers shop the dairy aisle and what they look for once they get there. In the past, shoppers considered milk akin to paper towels or toilet paper: a one-size-fits-all household staple. But today’s milk shoppers seek a wide repertoire of items from the dairy aisle, aiming to address multiple occasions and a range of family members’ cravings and needs.
Choice options Reflecting these more diverse demands, dairy aisles now boast a vast array of cartons, jugs and boxes. The milk shopper can choose from a range of fat levels and flavors, select items that meet specific nutrient profiles or health needs, or align with emotional values like clean labeling and animal welfare. But with more choice comes more confusion. As dairy shelves grow ever more crowded, shoppers are beginning to feel flustered: Research shows they are more likely to deem fluid milk as “hard to shop” than any other key SPONSORED CONTENT
dairy category.3 And when shoppers feel overwhelmed, they tend to just grab whatever they came in for (once they actually find it) and then walk away without giving other products a second glance. As the milk category becomes more complicated, retailers must navigate a delicate balance between keeping products in stock without overloading the aisle. The key is maintaining a diverse selection while also making it easy for shoppers to find go-to brands, understand which products offer certain features and benefits, and maybe even experiment with something new and different. Retailers that can accomplish this feat will see not only growth in the category, but sales lift across the entire store. To unlock the power of milk, read on for three key steps to maximizing milk merchandising.
Step 1: Eliminate the walkaway Shoppers rarely select a store based solely on its milk selection, suggests research by Dean Foods. 4 Most consumers just plan to grab a gallon wherever they’re buying the rest of their groceries, which means they expect the store’s dairy aisle to have exactly what they want so they don’t have to make two trips. Dean research shows that 1 in 5 (21 percent) shoppers say they look for a retailer that always has fluid products in-stock.5 So while consumers may not actively select a store based on milk, they may very well avoid retailers that don’t meet their dairy demands. What’s more, if a retailer can’t fulfill the shopper’s milk need, then the rest of the basket may walk out the door too. DEAN FOODS
what she came in for, the more likely she is to fill her cart with additional items.8 Research shows that if a shopper locates her desired item in less than 10 seconds, she is more likely to purchase additional items. In other words, stores that strike the right balance between simplicity and variety are likely to see bigger basket sizes.
That’s why it’s vital to make sure all key segments—and the marquee brands within them—are represented in your milk assortment, including: traditional dairy organic plant flavored special needs products like lactose-free There’s also opportunity to fuel growth in trending segments, such as: single-serve sizes unique/indulgent flavor options6 whole-fat milk (fat seems to be where it’s at these days: 2 in 3 shoppers now say they opt for 2 percent milk fat or higher on the majority of their milk runs). Retailers should also invest in segments that align with emerging consumer values, particularly the rising demand for clean and free-from foods that eschew artificial hormones.7 However, there’s a fine line between accessible and excessive. As Step 2 will show, optimizing in segments like conventional white milk (CWM), organic and plantbased often requires a “less is more” mentality.
Step 2: Reduce redundancy While it’s crucial to represent all segments and offer good, better and (sometimes) best tiers within them, more is not always more. When no milk brand has enough space to shine, all brands suffer because a cluttered or confusing dairy aisle causes shoppers to go into auto-mode. The key is making it easy to find both go-to items and impulse buys, because the quicker your customer finds
So what’s the sweet spot? When it comes to CWM, Dean Foods’ research indicates that retailers carrying only a private label option plus one or two strong brands9 outperform those stores offering three or more brands (although a strong regional brand may be justification for adding a third CWM option).10 The same holds true for organic white milk: Stores fare best when they limit selection to just one or two brands.11 As for plant-based options, the research shows offering three to five brands is enough to meet shopper needs without generating confusion.12
Step 3: Think multi-stop shopping Today’s shopper may well purchase a gallon of white milk for cereal, soy creamer for coffee and a ‘why not?’ pint of chocolate milk—all in the same shopping run. The multiple milk shopper looks for a dairy aisle where it’s easy to find the items she’s looking for and also discover something new. Merchandising strategies that entice shoppers to try more and therefore buy more represent the final step in maximizing the milk aisle. To achieve this, it’s vital to communicate each segment’s features and benefits at all touchpoints. Promotions
Large format accounts carrying 2 or fewer main CWM brands drive higher velocity, and nearly all reach 80% sales with fewer than 3 brands CWM brands to 80% CWM sales % OF LARGE FORMAT ACCOUNTS
88% 2 or fewer brands 12% 3 or more brands Source: Seurat Group Shop-alongs 2016; IRI retailer accounts, 52 weeks ending March 27, 2016. Note: where IRI private label data were unavailable, leveraged Seurat Group Audits for private label brands
that highlight flavors, functionality or occasion not only boost basket size, they help shift shoppers away from buying based on price alone. This is especially important because many retailers still rely on discounting to drive sales, even though this strategy doesn’t generate enough category performance to offset the discounts.
A growth-minded merchandising strategy also requires allocating fair share of space to star players. In many dairy aisles, the biggest performers get relatively short shrift. For example, although CWM delivers a 58 percent share of weekly gross dairy products, the average store devotes just 46 percent of linear feet to the CWM segment.
Build out high frequency, staple purchase section with CWM & OWM within 1st half of shelf 1/2 DOOR
Flavored and single-serve
Conventional milk Aligned with ~10% of milk and creamer sales
60% of weekly gross profit, increase to a minimum of 5 doors
S H E L F S E T W I T H 10 D O O R S
Source: Average shelf set doors calculated from Seurat Group Milk Audits
Maximizing productivity means not only aligning share of space to profitability, but ensuring shelves reflect consumption and usage patterns while spurring potential impulse buys. This can include placing impulse items such as flavored milk near the go-to gallon of white milk,
Leverage single-serve and flavored to drive incremental purchases as shoppers are buying multiple milk items Location of single-serve: INDEXED VELOCITY-LARGE FORMAT TTL MILK-$/TDP
or getting creative with shelving sought-after specialty products such as lactose-free. Since shoppers are willing to work a little harder to find them, these items can be located in less prime locations and help drive traffic to other areas of the store. Finally, maximize milk’s productivity by highlighting differentiation within the set. This means providing a clear hierarchy of good (private label) versus better (branded CWM such as DairyPure®) versus best (organic). After all, today’s milk shopper already sees the category through a multidimensional lens. The more a store’s merchandising strategy mirrors this mindset, the stronger its opportunities for growth.
Source: Seurat Group Audits 2016; EYC 2016; Seurat Group Shop-alongs 2016
Top specialty segments % OF SEGMENT VOLUME
Almond milk Lactose-free/reduced milk Soy milk 13% Other 13% 9%
Source: IRI, total U.S. multi-outlet + convenience milk alternatives & lactose free, 52 weeks ending April 24, 2016; EYC 2016; NPD Group; Seurat Shop-alongs 2016
Top ways to unlock the power of milk merchandising Distribution Ensure key segments and brands are always in stock. Optimize stock-up products such as CWM, organic and plant-based brands. Get ahead of emerging trends and values by expanding size, fat and flavor options as well as sustainable offering.
Shelving Simplify dairy offerings to avoid overwhelming shoppers. Limit conventional and organic white milk selection to one or two brands. Stick with three to five plant-based options.
Merchandising Clearly communicate features, benefits and good/better/best hierarchies to promote differentiation within the set. Ensure profitable products such as CWM get their fair share of space. Leverage core segments to spur impulse purchases. 1 2 3 4 5 6
IRI, total U.S. multi-outlet + convenience, calendar year ending Dec. 24, 2017 3-D Insights, Seurat Group Shop-alongs Seurat Group P2P Dairy Study 2016; Seurat Group Shop-alongs 2016 Seurat Group Shop-alongs 2016; Seurat Group P2P Dairy Study 2016 Seurat Group Shop-alongs 2016; Seurat Group P2P Dairy Study 2016 The NPD Group/US/Dieting Monitor, data for years ending December 2014; The NPD Group/National Eating Trends®–Jan. 27, 2016; Seurat Group P2P Dairy Study 2016 The NPD Group/US/Dieting Monitor, data for years ending December 2014; The NPD Group/National Eating Trends®–Jan. 27, 2016; Seurat Group P2P Dairy Study 2016 TNS, Stop Interrupting Shoppers–Opinion Leader Seurat Group Shop-alongs 2016: IRI retailer accounts, 52 weeks ending March 27, 2016; where IRI private label data were unavailable, leveraged Seurat Group Audits for private label brands IRI retailer accounts, 52 weeks ending March 27, 2016; where IRI private label data were unavailable, leveraged Seurat Group Audits for private label brands IRI, total U.S. multi-outlet, 52 weeks ending March 27, 2016; Seurat Group Shop-alongs 2016; where IRI private label data were unavailable, leveraged Seurat Group Audits for private label brands IRI retailer accounts, 52 weeks ending March 27, 2016; Seurat Group Shop-alongs 2016; where IRI private label data were unavailable, leveraged Seurat Group Audits for private label brands
Content of this article provided by Dean Foods Company. Dean Foods is a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States. Headquartered in Dallas, Texas, the Dean Foods portfolio includes DairyPure®, TruMoo®, and well-known regional dairy brands. Dean Foods also makes and distributes ice cream, cultured products, juices, teas and bottled water.
Contact: Dean Foods 2711 North Haskell Ave., Suite 3400 Dallas, TX 75204 (214) 303-3400 www.deanfoods.com SPONSORED CONTENT
they shop at a store specifically for its private brand. This will increase, and will do so very quickly. It’s always a challenge to estimate the true size of the market, but when we look across the industry, we put the size at a minimum of $166 billion in the U.S. Over the past year, privatebrand sales have outpaced national brands by about eight times … [up] 4 percent compared to [up] less than 0.5 percent.” When asked the reasons for this boom in private label growth at supermarkets, Holbrook attributes it to “the result of a perfect storm. Shoppers don’t care about brands anymore; they’d be fine if 74 percent of brands disappeared, and that can be a hard reality to adjust to, but the fact is, shoppers are more excited about private-brand-forward retailers. Because of this, supermarkets are rolling out the private labels in an effort to cater to their customers’ demands as they look for stellar-quality products that are tailored to their lifestyle without being overpriced.” He’s quick to point out, however, that “this isn’t all about price. Nowadays, shoppers browse the internet to compare products and to see whether they’re being duped or not, and honestly, they’re tired of having their guard up. With private brands, there’s the notion that you’re getting a deal, or at least not paying a nonsensical premium for the name on the packaging, and that’s why these brands are growing so much. It’s just natural selection at work.” What’s more, he notes that “private-brand products that cater to consumers’ needs are finding themselves well positioned to drive sales and loyalty. Retailers are recognizing this and providing more cross-category solutions with private brands, more seasonal programs, and they are continuing to expand health-and-wellness offerings.” Asserts Holbrook: “A retailer that truly understands its shopper trading geography can create scale with hyper-personalized brand solutions
Key Takeaways Design a private label portfolio to meet shoppers’ distinctive needs, based on insights derived from customer data. Depend on a supplier/ manufacturer with a vast array of resources to build a store brand. Differentiate through better products, assortment, pricing, promotions, customer service and marketing. Deploy such content as unique recipes using key private label ingredients, and instructive newsletters.
Earth Fare’s private-brand products, found throughout the store, showcase healthfulness and clean ingredients.
Develop a compelling brand story leveraged throughout multiple consumer touchpoints.
Progressive grocer Februar y 2018
out of shoppers admitted to buying more store brands over the past couple of years. Large motivators for this were improved quality and variety. Source: Daymon
that distribute in ways that traditional CPG brands just can’t replicate. Add that to the fact that up to 52 percent of shoppers say that they would specifically shop at a store because of its private brands, and that’s all the reason retailers need to dramatically expand private brands on shelves.”
Keeping Pace Other industry observers offer similarly rosy assessments of the current private label scene. Describing the state of such products at supermarkets as “very healthy indeed,” Brian Sharoff, president of the New York-based Private Label Marketing Association (PLMA), observes: “Retailers have kept pace with consumers in offering store brands that emphasize organics and natural ingredients as well as creative microwaveables and fresh meals and side dishes. ... While price is always important to shoppers, the expansion of assortment and attractiveness of packaging has given store brands a new cachet.” Sharoff is of the opinion that “supermarkets themselves are really the major factor causing private label’s growth. While one can cite demographics and marketing, the simple fact is that regional, national, specialty chains and discounters have committed themselves to their own brands as the best way to promote themselves.” Further, while noting “that consumer perceptions have improved dramatically over the past 20 years, as retailers have invested in quality, packaging, assortment and image of their store brands,” he goes on to assert that “it is more than that: Store brands are responding to consumer trends in ways that national brands have been unable to do. Whether it is ready meals or natural ingredients, ethnic foods or healthier beverages, retailers have carried the banner better than anyone else.” “The perception of own brands definitely changed over the years, and [they] appeal to shoppers of every tier: value, mainstream, specialty and premium,” concurs Linda Phan, category manager at Elk Grove Village, Ill.-based Topco Associates, a well-known provider of private label products to its food industry member-owners and customers. “It’s not just entry level. Retailers have been doing a great job of responding to customer 52
needs [by] expanding their own-brand assortments into the mainstream and the premium specialtybrand tiers.” Adds Phan: “We are continuing to see ownbrand items respond to the latest trends and excel with unique packaging and brand storytelling. Own brands, now more than ever, are offering items that are better than national brands and available at a competitive price. In the premiumvalue tier, we are seeing more offerings as well as better differentiation.” “There is a role for store brands for all incomes and generations — the quality and perception of store brands have shifted over time,” asserts Diane Harper, VP of consumer insights and analytics at Marshall, Minn.-based Schwan’s Co., which last November revealed the formation of Strategic Partner Solutions, a new business unit focused on growing its private label and contract-packing businesses with select retailers and food manufacturers. Echoing Holbrook, she adds: “Store brands are evolving with innovation, high quality, and healthand-wellness benefits. Consumers are looking for more choices, and those retailers and manufacturers who are adjusting their strategy to meet those needs will see greater success.” “There is a resurgence of private label brands in grocery with a more ‘differentiated/unique selling proposition’ versus [the] first generation of private label brands that were positioned more around ‘generic
Private Label Sales Surge Grocers stand to profit from risinG consumer interest Hand in hand with its higher profile in stores and on consumers’ shopping lists, private label is seeing increased sales at grocery. “In the last year, store-brand performance has been strong,” affirms Diane Harper, VP of consumer insights and analytics at Marshall, Minn.-based Schwan’s Co., a manufacturer of private label products. “Despite the fact that the economy has improved, many consumers still feel financial pressure, particularly Millennials. This segment of consumers is more thoughtful about what goes into their carts, and are more savvy shoppers in general. Many are just as likely to choose a store brand as they are a national brand if they perceive it to be a good value.” Adds Harper: “The grocery industry is highly competitive, and offering high-quality store brands is a way for retailers to differentiate themselves from their competition. The majority of consumers are choosing which store to shop at based on the variety and selection in offerings. Younger consumers are not as wedded to national brands as older generations. They are much more open to buying a store-branded item if they find it at a retailer they trust and there is a story behind it that they can relate to.” Earth Fare is one retailer that has experienced soaring private label sales in response to its unwavering commitment to healthy, clean-ingredient products. “In recent years, our private brand has seen double-digit growth year over year — outpacing the industry average,” notes Frank Scorpiniti, president and CEO of the Asheville, N.C.-based natural food grocer. Not all grocers have had similar results, however, leading them to redouble their efforts to engage consumers with novel fare going forward. “2017 was a tough year for the grocery industry,” admits Nicky Walsh, director of business development with the in-house Daymon team at Williamsville, N.Y.-based Tops Markets LLC. “While there was significant focus on private brands, the total business did not grow as expected. We have several plans in place for 2018 to help mitigate the total store trend.” The regional supermarket chain hopes that its investments in on-trend products and unique items such as imported Italian pizza will be able to turn things around.
brands at the lowest price,’” agrees Howard Kaufman, VP of sales and marketing at Lehi Valley Trading Co., a Mesa, Ariz.-based snack food manufacturer with a core competency in private label. “This resurgence is driven in part by Millennials — now America’s most powerful consumer bloc — who seek quality at a value price, skew more towards better-for-you products and tend to be less loyal to national brands. Additionally, with the increased penetration in the U.S. market of retailers such as Aldi and Lidl … the overall awareness and adoption of private label brands by consumers is increasing.”
Views From the trenches For those stakeholders on the front line — food retailers themselves — it’s imperative to offer a range of private label products that not only inspire their customers to make initial purchases, but also to keep them coming back for more. “There is an enhanced understanding of private labels, more so now than we have seen in a long time,” says Nicky Walsh, director of business development with the in-house Daymon team at Williamsville, N.Y.-based Tops Markets LLC, which operates 169 supermarkets, along with an additional five supermarkets operated by franchisees under the Tops banner, in upstate New York, northern Pennsylvania, western Vermont and north central Massachusetts. “People understand that private brands deliver great quality, just like the national brands. It’s just like another brand to them that delivers another good, if not better, option. Years ago, private brand was considered generic. That’s not the perception any longer.” As for Tops’ approach to product procurement, Walsh notes: “We are constantly looking for new items. On average, we introduce 150-200 new items each year. During the life cycle, we may discontinue a few items each year as we make room for new items, but we make sure we hop on new trends. We go to great lengths to bring fresh, new ideas to our customers. We listen to suppliers, we go to trade shows, and try to remain innovative and relevant.” As an example of the lengths to which the retailer will go to find innovative in-store offerings, she cites a certain overseas trip. “[I]n 2017, a team of Tops senior management traveled to Italy to attend a trade show,” recounts Walsh. “There, we were exposed to the latest trends and were encouraged by one of our contacts to try a certain pizza. We were blown away by this pizza, so much so that all three of us knew we had to have this in our stores. The toppings were delicious, but it was the crust — light and airy — that jumped out to us right away and was different from anything we had in the United States. We knew we wanted to be able to offer that to consumers. We
will have four varieties exclusive to Tops shoppers available in March 2018.” At Asheville, N.C.-based Earth Fare, with more than 40 stores and counting across 10 states, private brands showcase optimal nutrition and clean eating. “There was a time when private label items were considered to be a lesser-quality product than national brands,” observes Director of Private Brands Chris Slick. “Now, more broadly, private brands have advanced to take into account how consumers shop a specific category. However, we set out to develop a most unique brand program with a laser focus on health.” In terms of customer response to such products, Slick notes, in common with Lehi Valley’s Kaufman: “We’ve found that our Millennial shoppers in particular have grown up exposed to the higherquality store-brand items that we’ve seen across all areas of retail in the last 15 years or so. They expect an exceptional product at an approachable price.” Adds Slick: “Today, cultivating a private label brand is about so much more than slapping a label on a generic product. These products need to meet a need for the shopper, while also introducing them to new and innovative flavors and experiences.” Underpinning Earth Fare’s healthyproduct development and further private-brand rollouts is a strong commitment to the kinds of offerings it should carry, and the growth of its store footprint afforded it the opportunity to up its items of this kind across the store. “Earth Fare believes that the foods we eat have a dramatic and direct impact on our overall health, quality of life and longevity,” explains President and CEO Frank Scorpiniti.” Our Food Philosophy forbids hundreds of harmful chemicals and ingredients from making their way onto our shelves, and is among the strictest in North America. With our philosophy in mind, about two years ago, Earth Fare set out to further enhance our customer experience, with the goal of empowering our shoppers to make even more clean, healthy food choices, which ultimately help them lead a healthier, happier, longer life. Expanding our private-brand offering is a core part of that revitalization. We enhanced everything,
from the breadth of products we offer, taste profile and packaging, to pricing, marketing and merchandising at the shelf.” Continues Scorpiniti: “We knew our rapidly expanding store base would be unlocking our ability to bring significantly more private-brand choices to our customers with our added scale, so the plans to enhance and expand this area of the business began some time ago. Our line expansion is not just about offering more products — it’s about fulfilling our health-conscious customers’ needs with the cleanest, most relevant products that national brands don’t make available, whether that means a clean version of a pantry staple, like baking soda, or new innovative products such as our frozen vegetarian Thai dinners, imported directly from Thailand. We’ve introduced hundreds of items since 2015, and are adding more to the shelves each month to make Earth Fare the easiest one-stop shop for our health-enthusiast customers.” “Our Handpicked by Earth Fare line is a direct response to our core shoppers’ desire for globally inspired, sophisticated products,” notes Slick, citing such items as authentic Italian wood-fired pizza imported from Modena, Italy, and award-winning brie. As well as an expression of its most deeply held values, however, Earth Fare’s health-centered private label fare can also be seen as a canny strategy. Daymon’s Holbrook affirms that “wellness brands are the fastest-growing in the private-brand universe: Sales of the top five organic categories in private brand grew 17 percent from 2016 to 2017.” Additionally, when it comes to promotion and positioning, the grocer makes sure that its own brands are the stars of the show. “At Earth Fare, our private label lines are our best-selling brands — and we treat them that way,” says Slick. “As our brands expand into each new category, we approach our marketing and merchandising the way consumers shop that category.” Of course, it’s not just smaller regional or niche operators that are beefing up their private brands to retain shoppers. “Leading grocers such as Kroger and Publix continue to expand their private label offerings and to leverage
Progressive grocer Februar y 2018
Consumers are looking for more choices, and those retailers and manufacturers who are adjusting their strategy to meet those needs will see greater success.” —Diane Harper, Schwan’s Co.
key trends, such as increased growth in better-for-you products, to ensure relevancy to end consumers,” notes Kaufman. “To also ensure relevancy, many grocery retailers are taking a ‘consumer packaged goods’ approach to developing and marketing their private label brands, i.e., hiring a brand manager/marketing team to focus on private label brands, leveraging research insights to develop a differentiated selling proposition or driving private label brand innovation via in-house R&D. Clearly, retailers understand the economic benefit of private label brands to their bottom line, including higher gross margins, less reliance on competing on price only, increased consumer loyalty, and better insulation from competition, including online retailers such as Amazon and other specialty retailers.”
Make a Difference As private brands continue to develop, what can grocers do to strengthen consumer engagement? “It is critical to remember that private brands have evolved far beyond just products,” advises Holbrook. “Unique solutions, destinations and services are just as critical to a sound private-brand strategy as item development. All of this helps to transform a transaction into an experience. It goes without saying that retailers should partner with creative manufacturers to offer innovative and unique products.” What’s more, according to Holbrook, “The best way to address private label competition … is by differentiating. Make better products, provide more assortment, price things with a sharp eye, offer more relevant promotions, ensure customer service is top-notch, and get bold with your marketing, because there will always be new players in the game, and if you want to stand out, you need to think differently.” Two examples he offers: “A properly curated offering can eliminate duplication and inefficiency in the store, leaving more room for solution merchandising. Employees can spend less time worrying about restocking four brands of the same item … and instead focus on creative merchandising and engaging displays. … Also, be sure to interact with the consumer — 47 percent of shoppers say that sampling would encourage them to buy more private brand.” “Retailers should leverage the full range of own-brand products they can offer the shopper across the entire store, from the center store aisles to the perimeter, including dairy, produce, meat and deli/bakery,” suggests Kina Guyton, Topco’s senior director of marketing. “Using data to fully understand the way they use their store, retail56
ers should design their own-brand portfolio to meet the distinctive needs of shoppers. The key is starting with the relevant data to gain the insights into what this assortment should be.” Adds Guyton: “Retailers have great marketing and merchandising assets to support their own brands. In addition to fully supporting these brands with great brand blocks at shelf, off-shelf displays, point-of-sale materials and circulars, retailers should also focus on content creation. Shoppers within the premium space like to stay informed, and retailers can reach these shoppers with tools such as unique recipes offered online and in stores with key own-brand ingredients, as well as instructive newsletter content.” “Focus on innovation that fills the gap of unmet consumer needs,” Kaufman counsels retailers. “Develop a strong and compelling ‘brand story’ that can be leveraged throughout multiple consumer touchpoints (packaging, advertising — TV, radio, print, billboard, social media, experiential — sampling/demos/events, etc.). Leverage best-inclass learnings/insights from consumer packaged goods companies to develop and market private label brands. Partner with a supplier/manufacturer that has a vast array of resources that can help retailers build their store brand.”
‘unique Opportunity’ Savvy retailers and manufacturers are already preparing for even greater private label acceptance and penetration among consumers.
Sampling is a key way that grocers can get shoppers to engage with private label items.
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Private Label Partners in Private Label SupplierS of all SizeS are offering more ServiceS, Support When developing a private label line, retailers obviously need to choose the right partner to work with. Today’s private label suppliers, large and small, are rising to the occasion to meet the shifting expectations of retailers and, ultimately, of consumers. Last November, “Schwan’s Co. announced the formation of Strategic Partner Solutions, a new business unit focused on growing the company’s private label and contract-packing businesses with select retailers and food manufacturers,” says Dimitrios Smyrnios, CEO of the Marshall, Minn.-based parent company of Schwan’s Home Service Inc., Schwan’s Consumer Brands Inc., Schwan’s Food Service Inc. and Contract Partner Sales, as well as the new venture. “Private label is growing and is a very important segment for our customers. For that reason, it’s important for us to increase and improve our capabilities here. This new business unit will help us develop a more strategic focus on our private label activities. As an added benefit, this change allows our other Schwan’s business units to narrow their scope to home in on growing and strengthening our retail brands.” “As a leading snack food manufacturer, with a core competency in private label, we have certainly seen, over the 30-plus years of partnering with our grocery customers, an evolution in private label brand development, from a focus on ‘cheapest’ products, generic packaging/labeling and limited innovation to an enhanced offering that in many cases is on par with national brands,” observes Howard Kaufman, VP of sales and marketing at Mesa, Ariz.-based Lehi Valley Trading Co. “As our customers have evolved, so have we, to meet their private label brand needs. We offer a wide assortment (450-plus SKUs) of high-quality snack foods, one-third of which we manufacture; innovative product and packaging that capitalizes on key consumer trends (i.e., better-for-you, graband-go, etc.); category management; consumer research; professional label design services; on-site digital printing to enhance label quality; and more.”
“We anticipate that customers will accept innovation more and more,” says Walsh, at Tops. “Because the younger generation doesn’t have the loyalty to brands as previous generations did, we can certainly win them over with our great-tasting products as they meet their needs.” Topco’s Phan believes “that retailers will continue to push the envelope with unique branding, product attributes, innovative packaging and cleaner ingredients — this is all in response to consumer demand. At the same time, retailers will also invest more effort in merchandising as acceptance grows.” “The near future of private label will depend on what supermarkets will look like,” offers PLMA’s Sharoff, sounding a slightly cautionary note. “If we see discounters like Aldi and Lidl build extensive nationwide chains; if we see Amazon, Walmart, Kroger and others emphasize their own brands as they compete both in physical stores and online; if regional retailers like Wegmans, HE-B and Publix continue to perfect the in-store experience; if consumer behavior continues to [be] led by Gen X and Millennials, then store brands’ importance will magnify and they’ll become even more important than they are today.” Speaking of the players most likely to emerge triumphant in the private label realm, Kaufman asserts, “Those who win will win on a compelling value proposition and innovation.” For his part, Holbrook notes: “Consumer needs are as fragmented as can be — 66 percent are eating a wider variety of ethnic cuisines, 20 percent of the aging population will be over 55 by 2020, and households are getting smaller by the day. Therefore, we need to throw out the archaic ‘one-size-fits-all’ model for good.” Spurred by such factors, “the marketing of private brands will pick up dramatically — local marketing, social media, social commerce and the instore presence will increase,” he predicts. Above all, Holbrook believes that the area is particularly ripe for innovative expansion as grocers continually seek to personalize the shopping experience. “Private brands have a unique opportunity in this landscape to tailor to shoppers in a way that’s scalable, because the retailer controls the process and knows its shoppers well,” he observes. “So, as retailers look to up the ante with their privatebrand products, I’m sure we’ll see private label become more sophisticated and relevant brand builders when compared to national brands.” Read more about private label at progressivegrocer.com.
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hat’s the question — and quandary — facing many shoppers as the traditional dinner hour draws near. Some consumers who venture to grocery stores may walk in with an ingredient list and a mission. Many people, though, have no idea what they’ll be having for dinner when they visit a supermarket. Make that most people. According to Chicagobased food data company Food Genius, up to 80 percent of Americans don’t know what they’re having for dinner by 4 p.m. the same day. What’s more, a majority of consumers don’t particularly like the task of making dinner. Industry analyst Eddie Yoon, author of “Superconsumers: A Simple, Speedy and Sustainable Path to Superior Growth,” reports that only 10 percent of consumers love to cook, 45 percent “hate it,” and 45 percent are “lukewarm” about cooking. That said, while they aren’t big on planning or cooking, consumers are still big on eating and enjoying their food, especially younger consumers. One survey conducted by Chicago-based online grocer Peapod and ORC International, in Princeton, N.J., shows that Millennial consumers are twice as likely to eat dinner at home and prefer meals that are easier to cook.
Solving the Dinner Equation The addiTion of ne w iTems and merchandising, plus a biT of subTr acTion and mulTiplying, can equal be T Ter sales and loyalT y. By Lynn Petrak
We’re known as experts in the industry – because we’ve spent decades sourcing the best seafood and setting the standard for what goes on the plate.
Key Takeaways Offer such convenient solutions as prepared meal options placed by the entrance, meal kits and an order-ahead/ pickup option. Promote dinner selections in hot-food bars, prepared food areas, deli and grocerants.
Hurdles Ahead Industry analysts see the same shift in consumers who like the idea of cooking but not the time-consuming preparation, and who need help finding solutions to their dinner dilemmas. ‘I don’t think there’s any question that the answer to ‘Is the need for dinner solutions more acute now?’ is yes,” observes Bill Bishop, chief architect and cofounder of Barrington, Ill.-based consulting firm Brick Meets Click. “I think it has to do with peoples’ schedules, skills and changing preferences.” Given the current need states, are grocers doing enough to provide dinnertime solutions to shoppers? According to its 2017 U.S. supermarket experience study, the Lake Success, N.Y.-based Retail Feedback Group reports that supermarket customers gave an overall satisfaction rating of 4.42 out of 5.0 before 3 p.m. and a lower rating of 4.36 out of 5.0 between 3 p.m. and 7 p.m. Steven Johnson, “grocerant guru” at Tacoma, Wash.-based Foodservice Solutions, thinks that grocers should be keeping close tabs on what people want and expect to avoid such dissatisfaction. “The team that conducts our Foodservice Solutions Grocerant ScoreCards continues to find that consumers do not believe that traditional grocery stores are addressing the need for answering the question of what’s for dinner,” he notes. “In fact, when our instore teams ask consumers, ‘Does [this store] provide simple meal solutions for dinner?’ 76.1 percent of consumers asked between 2014 and 2017 said no.”
Variety is important in capturing and recapturing shopper attention, so make sure to rotate dinner menus. Drive unit sales with digital meal-planning menu boards in the meat department and product sampling.
When it comes to the often-discussed Millennial demographic group — who consider themselves “foodies” but strive to avoid inconvenience — Johnson says that younger shoppers are in need of dinner solutions across the store. “The simple fact is Millennials who like food discovery have told the team at Foodservice Solutions that going to a traditional grocery store is a bit like walking through a corn maze on Halloween, but a lot less fun,” he remarks. Bishop, too, says that grocers have some hurdles to overcome in providing and merchandising dinnertime solutions across their locations. “Stores are basically category-oriented or departmentoriented, versus solution-oriented,” he points out. “We have a historical structure that is the way we run our business.”
Convenient options Despite those assessments, grocers can make concerted efforts to deliver real solutions to shoppers wandering around the store after 4 p.m. and before closing time. According to Johnson, the results of the Foodservice Solutions survey provide some ideas. “When asked how stores could help with what’s for dinner, 69.3 percent responded, ‘Have prepared meal options by the front door’; 11.7 percent responded, ‘With meal kits’; and 4.1 percent responded, ‘Order ahead and have a pickup option,’” he notes. Other industry research bears out the significance of prepared meals or ready-to-prepare meals displayed in a convenient area of the store. According to research conducted by Chicago-based SPINS LLC, sales of refrigerated meals and snack kits increased by 4.1 percent over the last 52 weeks ending Dec. 3, 2017, while products classified as refrigerated meals and entrées rose 55.4 percent.
of Americans don’t know what they’re having for dinner by 4 p.m. the same day.
Source: Food Genius
There’s another bit of news in those SPINS findings that’s applicable to grocers seeking to deliver on dinner solutions. “I break out the data by channel, and what I found interesting is in most of these segments, it’s the natural channel that is seeing growth,” observes Kimberly Kawa, senior nutritionist and researcher. “That seems like a trend across all threads.” Meanwhile, to Johnson’s point, meal kits can be part and parcel — no pun intended — of dinnertime merchandising success. According to research from Chicago-based data company Nielsen, meal kits in U.S. grocery stores garnered $80.6 million in sales from March 2016 to March 2017, a 6.7 percent increase from the previous year. Nielsen also found that more than a third of consumers (36 percent) have expressed interest in buying meal kits at their local grocery store. Many retailers have made headlines by offering or expanding their meal kits, such as Giant Food, Whole Foods Market and the Kroger Co. In December, Cincinnati-based Kroger revealed that it’s adding its Prep+Pared meal kits to more divisions and at least 200 more stores. Also in 2017, Boise, Idaho-based Albertsons Cos. said that it was buying New York-based meal-kit delivery company Plated, with an eye on the future. Bishop underscores the importance of meal kits as part of the dinnertime solution for shoppers. “Whether you call it solution selling, home meal replacement or meal kits, you should drive meal kits as fast as you can and in as many ways as you can,” he advises. In addition to meal kits, grocers can tout dinner selections in their hot-food bars, prepared food areas, deli and grocerants. Research published by Arlington, Va.-based Food Marketing Institute shows that prepared foods accounted for 58 percent of
of consumers buy hot-food items at the grocery store at least once a month. Source: EnsembleIQ Research
the $25 billion in deli sales in mid-2016. Consumers continue to warm up to hot-food bars for meal solutions. Research from EnsembleIQ, parent company of Progressive Grocer, reveals that 88 percent of consumers said that they buy hot-food items at the grocery store at least once a month, and almost all of those surveyed — 98 percent — anticipated that their purchase level would stay the same or increase during the next year. Moreover, 74 percent of purchases at the hot bar tend to be for dinner, compared with 54 percent for lunch. EnsembleIQ’s research pinpointed items that consumers like to buy at hot bars. Topping the list were chicken entrées, followed by mashed potatoes, vegetables, chicken noodle soup, rice, beans, beef entrées and vegetable soup.
out-of-the-box thinking Bishop says that grocers should remember that variety is important in capturing and recapturing shopper attention when it comes to dinner solutions. “The restaurant business does a good job of recognizing that menus rotate,” he notes. “If there is more of a focus by retailers on changing menus and communicating what’s on the menu, it would appeal to people seeking variety.” Beyond meal kits and prepared foods that are ready to eat or close to it, grocers can be more solutions-driven in the meat department. Johnson says that consumers still aren’t sure how to cook items offered in the fresh meat case; for example, 79.6 percent of consumers hadn’t heard of cuts like coulotte steak, minute steak and sirloin butt steak, according to Foodservice Solutions’ findings. He offers at least one solution-based initiative: “Digital meal-planning menu boards in the meat department, along with product sampling, would drive unit sales.” Some stores are thinking outside of the box — at least out of the box layout of the store itself — to offer their customers some solutions. Grand Rapids, Mich.based Meijer revealed in late December that it’s partnering with the Wahlburgers restaurant chain to add Wahlburgers locations to its sites in the Midwest, on or near the stores’ property. As part of the deal, some Wahlburgers food trucks will visit select stores to offer the chain’s specialties, including co-founder and actor Mark Wahlburg’s favorite Thanksgiving Day sandwich. Also outside the store is curbside pickup offered by a growing number of grocers. San Antonio-based H-E-B, for example, recently said that more of its locations will offer curbside pickup. In addition to providing menu items and ingredients that give consumers choices for dinner meals and snacks, stores should be more upfront about their role in helping shoppers solve that daypart dilemma, say industry observers. “If we are silent and the shopper has a need, we just lost out,” asserts Bishop. “We have to let people know by raising our arms and waving that we are in this business.”
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Tell a Story Re tooling pRoduce cRoss-meRchandising in 2018. By D. Gail Fleenor
ross-merchandising in produce attracts customers seeking meal solutions all in one place. The strategy tells a story that adds positively to the customer experience by solving the “what’s for dinner?” question. Customers can learn how to add produce to create healthier diets as department sales and profits soar. Research from Food Marketing Institute’s (FMI) “Power of Produce” shows that 58 percent of impulse produce purchases are the result of eye-catching displays. Also, 83 percent of shoppers would welcome advice about unfamiliar items or preparation techniques. These numbers indicate promotions such as cross-merchandising may drive new dollars in produce. “Cross-merchandising may help spark an idea or need, or help complete a recipe,” says Maria Brous, director of media and community relations at Lakeland, Fla.-based Publix Super Markets. “In some cases, it provides an impulse sale. Cross-merchandising offers a convenience to customers by providing accompanying items.” “I think there is a massive shift happening in food retail, particularly in dietary trends, as plant-based diets – vegan – are becoming more mainstream,” notes Neil Stern, senior partner at Chicago-based McMillanDoolittle LLP. “This means that supermarkets need to think about the produce
Key Takeaways Locate a cross-merchandising display for maximum impact by determining whether it should be within the produce department or outside of it. Include at least three items in the cross-merchandising plan. Create a theme or thread that ties items together, such as a sports- or holiday-themed program, and then promote it with signage. Visit fruit and vegetable supplier websites for fresh ideas. Offer in-store alternatives to online meal-kit services.
department as a source of meal planning, not just as an ingredient section.” “Cross-merchandising gives customers ideas to enhance their meal planning,” observes Mike Tipton, VP of produce for St. Louis-based Schnuck Markets. “It also offers them value and suggestions, and helps create loyal customers because of the excitement and new things that they see on each of their shopping trips to their local Schnucks.”
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Tipton adds that Schnucks cross-merchandises baking potatoes, onions and tomatoes near the meat department, and lemons and limes in the beer section. “We set up merchandising plans with pictures that we send to our stores, with ideas and suggestions for them to use,” he says.
Profit Centers Placing vanilla wafers on the top of the banana table or packages of glaze next to fresh strawberries still makes good cross-merchandising sense. However, there are many more profitable ways to cross-merchandise both in and out of the department, ideas that fulfil the busy shopper’s need for mealtime ideas or healthy snacks for the kids. Cross-merchandising, then, needs to reflect the broader role of the department. Early and obvious cross-merchandising has been the inclusion of salad dressings and dips within the produce section. More
Publix customers can grab fruit, salads or juices, along with sandwiches or biscotti, at checkout.
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evolved cross-merchandising starts to build on fulfilling recipe needs such as putting basil, mozzarella and tomatoes together to help make a caprese salad. Other examples include dessert options featuring ingredients for banana crème pie or dipped apples, according to Stern. “These programs are always challenged by the need for retailers to plan collaboratively – produce, meat and grocery planning promotions – and store personnel being able to manage displays,” he points out. “As displays are created in our stores, we also use this opportunity to cross-merchandise produce,” Brous says. “An example would be Italian Days in February.” On that occasion, Publix stores build displays to include pasta, sauces, cheese, breads, olive oils, tomatoes — everything needed to create an Italian meal at home, she notes. Another way that Publix cross-merchandises is with refrigerated displays at checkout featuring fruit, juices and salads displayed with bakery items and water, enabling customers to grab healthy snack or meal items at the last minute. Cross-merchandising can encourage customers to sample new vegetables and fruits they haven’t tried before. These displays can also give shoppers ideas and recipes for using the items. When planning a promotion such as this, grocers should be sure to take into account the strategy’s profit potential. For example, the primary promo item may be on sale, while the accompanying items may bring home the profit.
How to Display for Profit There are three ingredients that are necessary to make a cross-merchandising display work, according to Simcha Weinstein, director of marketing for Logan Township, N.J.-based Albert’s Organics: Location: Most cross-merchandising efforts stay within the produce department, because it appears there’s more room. For location, the “where” question should be “Will I increase my sales more by adding companion nonproduce items to my merchandising, or would it be better to add a free-floating produce display outside the department?” When cross-merchandising outside the produce department, many supermarkets use an end cap to display meal solution ingredients. Planning: Many merchandisers believe there should be at least three items in the cross-merchandising plan for success. Weinstein says that pairing bananas with cereal is no longer cross-merchandising, since customers understand the link and new sales will be limited. However, adding soymilk will draw some attention to the bananacereal combo and can tempt customers to try the items together. Promotion: Promotional signage demonstrating why items are grouped for cross-merchandising attracts more attention and sales, Weinstein advises. This is especially important with a menu grouping or new variety of produce. By creating a theme or thread that ties items together and then promoting it with signage, a cross-merchandising idea stands a better chance of influencing sales.
Supermarkets need to think about the produce department as a source of meal planning, not just as an ingredient section.” —Neil Stern, McMillanDoolittle LLP
Always keep in mind that there must be a logical connection between cross-merchandised items so they complement each other. Items must be displayed in a way that makes sense to the customer. Simply putting products near each other may not be enough; some products need to be displayed in a way that shows how the products would be used together, along with descriptive signage or recipes. Displays should also be neat and clutter-free.
Cross-merchandising Ideas Eric Diaz, produce merchandiser for Whole Foods Market, in Austin, Texas, notes that the chain has two or three daily examples of cross-merchandising in its produce departments. Recent examples include Whole Foods Market private label crackers with apples, cider beer with apples, and specialty cheese with apples. “Cross-merchandising absolutely boosts sales,” Diaz says, adding that the company frequently cross-merchandises high-margin, popular or new items. Cross-merchandising can be used in advertising, something that Bucky Slagle, produce and floral director for Abingdon, Va.-based K-VA-T Food Stores/Food City prefers. From time to time, there are meal-planning specials in Food City circulars, such as Spaghetti Night, featuring pasta, sauce, bread, and bagged salads from produce. The chain’s in-store crossmerchandising includes limes, pistachio nuts and peanuts alongside wine offerings, he observes. Need some inspiration? Create displays around athletic events, suggests Kathy Means, VP, industry relations for the Newark, Del.-based Produce Marketing Association. “It’s not always chip and dip,” she says. The Orange Bowl and Citrus Bowl are obvious tie-ins. “Try promoting crudité trays of raw veggies with dip for those who want more variety than chips,” counsels Means, who also points out that the Olympics and March Madness basketball games are coming up, providing opportunities for produce departments to feature a “Coach’s Corner” or “Training Table” with a display of produce and other healthy items that a local college/university or high school coach recommends as smart choices for a sports team. “Find the right combinations and execute your plan well for a win-win.” Try visiting fruit and vegetable websites for crossmerchandising ideas.
For instance, the National Onion Association site (www.onions-usa.org) notes that 50 percent of customers purchasing bagged salads also buy onions; a cross-merchandising idea born of that fact could be a display of onions with knives and onion keepers. Colorado Potatoes (www.coloradopotato. org) says that potatoes are often used for crossmerchandising, and for good reason: The tubers don’t require refrigeration and are a staple of many meals. Tests of cross-merchandising a small display of fresh potatoes in the meat department increased the category’s net volume by 35 percent, a healthy number, the organization found. Distributors of some produce items may want to get involved in cross-merchandising to bring in promotional dollars. For example, Pink Lady apples are usually featured in February to tie into Valentine’s Day. “Cross-merchandise the fruit with wine-andcheese pairings to play off the idea of having date night at home,” advises Brianna Shales, communications manager at Wenatchee, Wash.-based Stemilt, whose offerings include Pink Lady apples. “Charcuterie boards for meats and cheeses are very popular right now and are another way to tie the apples, cheese and other products such as crackers and olives into the Valentine’s Day meal theme.”
Plan Your Cross-Merchandising Planning your cross-merchandising displays can avoid problems when implementing and help build sales. Here are some questions from food and beverage marketer The Food Group to answer before you build that display.
Location Where is the best area to set up the display, in produce or another section? Is there enough room for the display? Where will customers see the display best?
Planning Displays How often will you change displays? Who will build and maintain the display? Have all components been ordered?
Promotion Has signage been created to demonstrate how displayed items go together? Is there a theme so customers will see both how things work and how they can use the items? If promoting a new item, are there handouts or recipes available?
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Cross-merchandising in Prepared Meals Combining produce, meat and grocery promotions can be just what customers are looking for, and a way for retailers to combat meal-kit programs like Blue Apron and Hello Fresh, McMillanDoolittle’s Stern notes. One of the most popular ways to cross-merchandise outside the produce department is with meal solutions like Publix’s Aprons Simple Meals in-store program. “Each week, our meals specialist recreates one to two recipes in-store and provides an opportunity for our customers to taste the meal of the week,” Brous says. Customers are provided a recipe card to recreate the meal at home, and in an adjacent case, the customer can find all of the ingredients for the recipe. “Produce is often a staple in the meals and cross-merchandised with ingredients from other departments,” she adds. Whole Foods’ produce departments cross-merchandise between departments by offering pre-cut side dishes like cole slaw, stir-fry ingredients, or potatoes with meat department items, Diaz observes, while Food City produce departments offer ready-
to-cook dishes merchandised in meat and seafood departments, such as fish with vegetables. Is expanded cross-merchandising a fad or here to stay? Means argues for the latter. “Produce is part of the overall food culture, not just a side dish, or an agriculture product anymore,” she asserts. “Produce can and should be featured as that — part of the food culture, a key component in every eating situation. Helping customers cope with their lives is key: convenience for busy folks, ideas for those whose imagination is tapped out, tips and foods for dealing with picky or principled eaters — the mushroom in place of a steak so you don’t have to cook two different meals. Making customers’ lives easier helps differentiate retailers.”
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2018 Retail Meat Review
Circling the Wagons
EDitOr Progres ’S NOtE: sive Gro cer ’s com retail S panion eafood revie will app ear in th w e March 2 018 issue.
Re taileRs e xpect he althy me at sales in the coming ye aR despite shif ting consumeR e ating pat teRns. By Jim Dudlicek
Key Takeaways ake no mistake: Changing eating habits are taking their toll on meat sales, gradually chipping away at animal protein’s longtime dominance at center of plate. Yet the greater willingness of consumers to try alternative proteins and the advancement of plant-based meat substitutes don’t seem to have quelled the confidence of grocery retailers regarding the success of their meat departments, at least for the foreseeable future. That’s according to the results of Progressive Grocer ’s latest Retail Meat Review, an exclusive retailer survey that found expected continued meat sales growth, despite pricing challenges and the rise of alternative products.
Sustainability and health attributes will continue to be driving growth factors in the meat department through 2018. One-fifth of consumers intend to eat less meat over the next year, moving to seafood and plant-based alternatives. Americans are actively trying to incorporate more plant-based foods in their diets, but say that eliminating meat altogether is a challenge.
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2018 Retail Meat Review
In fact, nearly 80 percent of survey respondents expect their meat sales to increase during 2018 compared with 2017. Just under 6 percent expect sales to decrease, while about 15 percent anticipate that sales will stay the same. “Meat sales will increase, as I am pushing forward with even more deals, and have added some more smoked meat space in another area,” Tony Orlando, owner of Tony O’s Supermarket & Catering, in North Kingsville, Ohio, tells PG. In the past year, “deflation caused a slight drop in sales, but our tonnage remained about the same,” Orlando notes. “We will stay very aggressive and keep buying in big when the market drops, and post a ton of deals on Facebook and our website.” To be sure, a full-service meat department with diverse offerings and knowledgeable staff prepared to go the extra mile to delight shoppers is a key point of differentiation for independent grocery retailers like Tony O’s. But that confidence isn’t unanimous, as competition continues to mount in many markets. “We cycled a competitive closing in July, and started seeing declines as the economic environment got more difficult,” says A.J. Swander, store director of the SpartanNash Co.’s Family Fare supermarket in Manistee, Mich. “The big box [store] also struggles for sales, so the competition heated up, and our sales are flat to slightly declining in meat.”
Meat Department Sales Performance Current
Ye ar ago 5 3.7%
31.5% Increased Stayed the same Decreased
Projected for Total 2018 Current
Ye ar ago
5.1% 79. 2%
High Stakes Looking at the broader market, overall U.S. supermarket sales of fresh meat fell 0.6 percent in dollars, to $36.6 billion for the year ending Oct. 28, 2017, while weekly volume per store fell 0.4 percent, according to the Nielsen Perishables Group. “Across the board, grocery’s meat
40. 8% Increase Stay the same Decrease Source: Progressive Grocer market research, 2018
Methodology Progressive Grocer ’s Retail Meat Review survey was fielded online by EIQ Research Solutions in October and November 2017 to supermarket retailers involved in the meat/seafood category. A total of 61 responses are included in these results, split between operators of fewer than 75 stores, and 75 or more stores. By title, 23 percent are category managers, merchandisers or buyers; 31.2 percent are from the c-suite; and 5 percent are store managers, with the remainder serving in various capacities, including marketing, consulting and analysis. Among the respondents, meat represents about 20 percent of their total sales.
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2018 Retail Meat Review
Consumer Demand In the past year, here’s how consumer demand has changed: Increased
Stayed the Same
Value-added products (marinated, kebabs, gourmet burgers, loaves, meatballs, etc.)
Value-priced (ground, flat steaks, etc.)
Free-from products (antibiotic-free, hormone-free, msg-free, additive-free, etc.)
Smaller portions/pack sizes
Locally raised meat
Alternative proteins (e.g., bison, venison, ostrich)
Source: Progressive Grocer market research, 2018
What percent of your total fresh meat sales are from case-ready versus full-service products? Case-ready products
5 3. 2%
Source: Progressive Grocer market research, 2018
Do your stores have butchers/ meat cutters on-site? 10.2% No
Source: Progressive Grocer market research, 2018
department still felt the residual effects of 2016’s price deflation,” says Sarah Schmansky, VP of fresh growth and strategy for Chicago-based Nielsen. “In 2017, we saw average prices decline within stores, causing overall dollar decline, coupled with minimal positive movement to increase overall tonnage. That said, beef continues to rebound and slowly capture additional volume — just not enough yet to move the entire department.” Retailers indicate that pricing will continue to be a struggle, especially as they contend with competitors. “We expect another decrease, as another tertiary competitor will be opening,” Swander tells PG. “Our market [northern Michigan] is very competitive and will continue to be so, with sales so hard to come by.” Meanwhile, Scott Karns, CEO of Karns Foods, in Mechanicsburg, Pa., expects his meat sales to “increase, with expected slight cost increases.” But perhaps more significant than economics is the emerging sea change in the way that folks eat. “The good news is that protein continues to be a hot topic, and an important attribute for many consumers and their wellbeing,” Nielsen’s Schmansky says. But while Nielsen data shows that 78 percent of consumers see meat as their primary source of protein, “we’re starting to see a shift occur,” she observes. “Consumers are looking beyond the traditional meat
Effectiveness of Promotional Activities Rated on a scale of 1-6, where 6 = extremely effective Current
Temporary price reductions
Product demos/sampling events
Cross-promotion within the store
Mix-and-match bundles (i.e., four for $20)
Source: Progressive grocer market research, 2018
department to fulfill their protein intake.” in fact, 22 percent of consumers intend to eat less meat over the next year, according to Nielsen’s protein survey, and in turn, move to seafood and plant-based alternatives. “There is a knowledge gap to be filled here – to reinforce to consumers that meat is a high-protein option,” schmansky says. “currently, about half of all shoppers don’t give meat the credit it deserves within their protein rotation.”
Progressive grocer Februar y 2018
2018 Retail Meat Review
Sprouting Sales While plant-based meat alternatives are one of the hottest topics on everyone’s radar, it’s still a very small percentage of overall meat sales. That said, Schmansky advises that “it is important to keep a close eye on the amount of consumers turning to overall plant-based foods to improve their well-being, which is taking dollars away from this department.” According to Nielsen data, 39 percent of Americans are actively trying to incorporate more plant-based foods in their diets. This trend is being driven mainly by young, multicultural consumers who desire to improve their overall health and nutrition. And with 15 percent of total food and beverage sales coming from products that meet a plantbased diet, the options are increasing. “However, with change comes a learning curve and an opportunity for grocers: Consumers have noted that eliminating meat altogether is a challenge, with 36 percent saying it’s hard to prepare a meatless meal,” Schmansky says. It’s another opportunity for grocers to own another part of the wellness equation – offering preparation guidance for plant-based products, and having meat managers collaborate with in-store dietitians to create meal plans that incorporate plant-based meat alternatives. This will go a long way toward demonstrating a commitment to shopper needs and keep them from shifting their loyalty away from your banner as their eating habits evolve. Nearly half of the retailers who responded to PG’s survey carry plant-based meat alternatives, with about a quarter considering adding them to their product mix. Just over half say that they do or would merchandise these products alongside animal proteins in the meat case.
Do you carry plant-based meat substitutes?
47.6% 26.2% 26.2% Yes, we currently carry them
We do not currently carry them and have no interest in doing so
Source: Progressive Grocer market research, 2018
Are you currently or 4 8.4% would you consider No merchandising plantbased meat substitutes in the meat department alongside their animalbased counterparts?
Source: Progressive Grocer market research, 2018
Protein continues to be a hot topic and an important attribute for many consumers and their well-being, … [but] consumers are looking beyond the traditional meat department to fulfill their protein intake.” —Sarah Schmansky, Nielsen
We do not currently carry them, but we would consider it
Follow-up responses suggest that the availability and positioning of plant-based meat substitutes will reflect local demand for them, particularly among smaller, independent grocers. Karns Foods doesn’t offer them in its meat department, “but feel[s] it will grow in its own department and set,” Karns says. At Michigan’s Family Fare, meat substitutes are currently confined to the frozen aisle, Swander notes: “They are a small portion of sales, but do OK when promoted.” Meanwhile, Orlando asserts that meat substitutes are “not something I do.”
Price, Quality, Service Despite the changes that may someday transform the traditional meat department into a broader protein destination, in the here and now, selling meat still comes down to three basics: pricing, quality and service.
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2018 Retail Meat Review
Nearly nine out of 10 PG survey respondents employ in-store butchers, and nearly all stress this to their customers as a point of differentiation. Even so, respondents say that their case-ready offerings edge out the service counter
as a percentage of overall meat sales, suggesting that time and convenience are still important to shoppers. “This market is promotional pricing, quality and everyday pricing,” Family Fare’s Swander affirms. At Karns Foods, “it’s still all about pricing to drive sales, but [consumers] are accepting value-added price increases if it saves them
Meat Department Category Performance Total U.S., 52 Weeks Ending Oct. 28, 2017
Dollars per Store/Week
Dollars per Store/Week Percent Change vs. Year Ago
Volume per Store/Week
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 Percent Change vs. Year Ago
$19,135 10,167 4,755 2,095 296 142 51
-0.6% 1.4 -4.7 -0.9 -2.2 -3.9 -8.9
4,141 4,427 1,788 1,006 41 37 7
1.6% -1.0 -3.2 -0.0 -4.2 -10.9 -5.0
26.0% 24.4 33.3 38.9 22.8 22.5 21.6
0.5% -1.8 -0.7 -0.1 -0.5 1.4 3.2
$4.62 2.30 2.66 2.08 7.29 3.82 7.56
-2.2% 2.4 -1.5 -0.9 2.1 7.8 -4.1
$1,879 744 373 371 267 118 104 2
0.8% 2.5 4.8 -3.0 -4.5 17.6 -4.2 -19.0
501 173 122 71 45 33 15 0
3.0% 1.9 4.7 0.7 -0.5 14.4 -4.5 -27.6
18.9% 18.9 28.0 26.3 14.5 21.3 11.6 29.3
-0.8% -1.2 -1.0 1.8 -0.5 -0.6 -1.7 8.8
$3.75 4.30 3.07 5.24 5.89 3.55 6.72 5.65
-2.2% 0.7 0.1 -3.7 -4.0 2.7 0.3 11.8
$1,537 24 21
1.1% -49.3 44.4
492 4 8
1.7% -54.7 38.2
25.8% 16.4 15.2
-1.3% -5.1 -3.4
$3.12 6.12 2.82
-0.5% 11.9 4.5
$352 194 134 27
10.0% -0.5 -12.1 -11.9
83 63 24 11
7.9% 0.6 -11.3 -14.4
23.9% 21.2 32.7 29.8
0.6% 1.1 -2.2 1.8
$4.26 3.07 5.67 2.46
2.0% -1.1 -0.9 2.9
$4,182 3,652 2,579 2,168 1,491 1,287 13
-2.6% 5.1 -1.4 -1.1 7.8 -2.3 0.5
922 723 710 696 872 545 4
-0.8% -0.6 -0.4 -3.1 7.6 -2.1 2.3
15.4% 27.5 24.7 24.0 21.5 43.7 11.0
0.2% -1.3 -0.1 -0.9 1.7 1.2 0.5
$4.54 5.05 3.63 3.11 1.71 2.36 3.50
-1.9% 5.8 -1.0 2.1 0.2 -0.2 -1.7
Fresh Meat Beef Chicken Pork Turkey Lamb Fowl and Exotics Veal Fully Cooked Meat Chicken Other Meat Vegetables/Stuffing Pork 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 Source: Nielsen Perishables Group
time,” Karns says. “customers are looking for more meal-ready items that have some prep work completed, but still allow home cooking. Additionally, customers are looking for new options.” Tony o’s is “a custom-cut store, and there are not many of us left,” orlando boasts. “in my area, price is king, and i have the best prices in the county, which i remind my customers of all the time. We also lay out our case differently each week, and sometimes i will switch up the case different for the weekends, and even more, if i find a crazy deal.” He adds: “i buy big and sell big in large displays, which brings in more sales with good profits. A well-run independent can outmaneuver the big stores quite easily, as i can change the case as needed, with no central planning from headquarters.” But although the basics still rule the day, meat managers must prepare for a very different world that looms in the near future. “sustainability and health attributes will continue to be a driving growth factor in the meat department through 2018,” schmansky says. According to Nielsen data, 31 percent of consumers are willing to pay more for ethically raised meat, resulting in claims like ABF (antibiotic-free), hormone-free, natural, vegetarian-fed and grass-fed showing positive dollar and volume growth. And even with newfound consumer interest in these claims, schmansky asserts that organic meat varieties will continue
to play an important role in overall meat department success. “We know that retailers winning in the fresh meat space are increasing their assortment of organic fresh-meat options,” she says, “and roughly 9 percent of total meat dollar sales come from organic items in these top-performing retailers.”
a ibi i
Progressive grocer Februar y 2018
Minneapolis-based mass-merchandiser Target plans to expand voiceactivated shopping nationwide — which also allows for using the Target Redcard on purchases — through a partnership with Google. The Google Express voice assistant can be used via its app as well as through the Google Home voice-activated device and Android TV. Bentonville, Ark.-based mega retailer Walmart has debuted voice shopping via Google Assistant, offering hundreds of thousands of items that can be purchased by speaking to the Google Home smart speaker or on the Google Express website or mobile app.
Chat and Collect Although still in its infAncy, conversAtionAl commerce is seeing incre Ased Adoption by grocers. By Randy Hofbauer ince their debut more than three years ago with the launch of the Amazon Echo, smart speakers have often been seen as more novelty than valuable resource. However, this reality is changing as companies partner with the devices to make consumers’ lives more convenient. Increasingly, this is becoming the case in the grocery industry: Consumers who do their grocery shopping online are more likely to see the value in these devices, according to new research from London-based technology company GlobalWebIndex. Some 56 percent of online grocery shoppers worldwide said that they either currently use a voice-controlled smart speaker or plan to purchase one within the next six months, the research shows. Although it involved consumers across the globe, results were consistent across regions. “Voice assistants took off in 2017, and retailer investment in this technology will only continue to grow,” says Dan Farmer, VP of retail solutions with Toronto-based ecommerce platform provider Unata, which was recently acquired by third-party grocery delivery service Instacart. Food retailers are catching on and introducing smart speakers and similar technology into their ecommerce operations, with several operators leading the charge for conversational commerce in grocery. For instance:
Online grocer Peapod, a division of Carlisle, Pa.-based Ahold Delhaize USA, has launched Ask Peapod, its Alexa skill for hands-free voice ordering, to enable immediate, in-the-moment additions to shoppers’ weekly grocery carts. Moreover, the service now allows patrons to build and update their orders for pickup and delivery via text messages with a new Chat-to-Cart platform powered by StorePower. Users can even build orders using emojis. Austin, Texas-based Whole Foods Market has partnered with Conversable, a developer of conversational intelligence platforms that’s also based in Austin, to create a Facebook Messenger chatbot that acts as a recipe concierge, allowing users to input products, cuisines and even emojis to get recipe suggestions while shopping in-store or trying to get ideas on the way home from work. Boxed, an online club store concept based in New York, recently added Bulky, a chatbot which, through Facebook Messenger, lets users interact like they’re chatting with another human online to track orders, build baskets and find new products. It’s integrated with Boxed’s artificialintelligence-enabled feature, Smart StockUp, so it also can tell which items a user is low on and assist with easy reordering.
Experiment With Multiple Providers From startups to industry leaders, technology providers in the area of conversational commerce vary in size and capabilities. Ken Fenyo, head of consumer markets for New York-based consulting firm McKinsey Fast growth, who was previously vP of loyalty at the cincinnati-based Kroger co., recommends that grocers experiment with a range of technology partners to see which solutions and partners most appeal to their shoppers and fit their operating model. “As with grocery in general, it will be critical for retailers to leverage their data and ability to personalize the shopping experience to capture share of wallet,” he says, noting that retailers also need to “find partners to help them tap into the various text-messaging platforms to ensure they reach every one of their shoppers when they want to order.” in structuring these relationships, grocers must be sure that they don’t get disintermediated along the way by retaining control of their customer data as well as key consumer touchpoints such as delivery and pickup or product selection. one way to do this is to partner with multiple tech innovators to ensure broad coverage and test emerging capabilities.
Go Beyond Just Ordering Products While the clearest use of voice-assistant technology and chatbots is for building lists and adding to baskets, it’s not the only way grocers can employ them. Fenyo observes that although they might be more prevalent in such channels as beauty, chatbots, for instance, can also do such things as recommend recipes or new products to try. Additionally, on the back end, chatbots can help automate and streamline customer-service calls.
Know Your Platforms … When it comes to ordering groceries, every platform has its own context and purpose — some are better for the quick out-of-coffee situations, while others work best when there’s time to plan out the week, according to cat De Merode, vP of product at chicago-based Peapod. For instance, Ask Peapod is suitable for use in the kitchen — a room where many
place their voice-activated smart speakers — when someone might have his hands full while cooking. Meanwhile, texting is a good way to add something quickly before it’s forgotten, or for coordinating requests across family members through a medium that they already use. For chatbots in particular, the best platform is whatever one a grocer’s customers are currently using, advises conversable ceo Ben Lamm. There are some considerations in terms of privacy and regulation around certain industries that may influence the ultimate decision, but overall, the choice of platform should be based on consumer demographics and preferences.
… But Be Unique on Each One However, grocers still need to design for each platform fairly uniquely, Lamm says. What may be a useful style of serving users on one platform might be a nuisance on another. For instance, conversable has developed chatbots for restaurants that can list all offerings on a menu through a voice interaction that a client might want on the internet or, even more thoroughly, through text-based conversations. The problem is, the experience would be exhausting, Lamm cautions. grocers must design for the various interaction mediums and conversion channels.
Don’t Confuse Capability With Usefulness innovation is supposed to provide value that didn’t previously exist, notes Boxed cTo Will Fong. The good news is that a lot of these technologies are still in their infancy, so understanding where each has its strengths and applicable-use cases is, and will continue to be, key to unlocking that value. “The grocers that understand this and continue to adapt their implementation will have a competitive advantage,” Fong says.
Don’t Try to Outsmart Customers in the end, conversational commerce is all about trusting customers. De Merode notes that if a grocer, through conversational commerce, can’t find what a user is seeking, it should admit the truth and not just give a dead end. “give them another way to try what they’re looking for,” she explains. “if you can come across as simple and humble, it will make your misses more forgivable and your wins that much sweeter.”
Know Your Bots While chatbots can be programmed and developed for numerous uses, ultimately there really exist two types of bots: those that use rule-based logic, and those that employ artificial intelligence (AI). According to Ben Lamm, CEO of Conversable, an Austin, Texas-based developer of conversational intelligence platforms, rule-based bots are built on a calland-response system. A user inputs data, and a new set of data comes out. There’s a limited and exhaustive amount of both inputs and outputs. AI bots, however, are flexible and adaptive because they learn. Rather than depending on the user to input the “right” data to return a result, the bot is programmed to determine a user’s intent and understand context. Grocers seeking to employ a bot should think about their end goal: If the solution is to provide straightforward, discrete uses such as ordering items, asking for store hours, etc., they should think about employing a rule-based bot. However, if they want anything beyond simple one-and-done requests, they should consider an AI bot. Progressive grocer Februar y 2018
Cold Chain on the Brain Up-and-coming tech firms offer their thoUghts on be t ter managing perishables distribUtion. By Jenny McTaggart
ooking ahead to the next decade of food retailing, there are plenty of trends to follow: the growth of online shopping and home delivery (ramped up by Amazon’s purchase of Whole Foods Market); an increased consumer focus on eating healthfully yet conveniently; and a desire by both businesses and consumers to preserve the planet by reducing waste, to name just a few. One thing these trends have in common is that they’re all directly associated with the perishables supply chain. Moving forward, retailers will need to take a much closer look at how their supply chains operate to keep up with the demand. Three tech firms working in the grocery space tell Progressive Grocer that they see an opportunity for retailers not only to improve their cold supply chains under these changing conditions, but also to set up new strategies now so that they can establish a competitive advantage in the years to come. “It really is a watershed moment for grocers,” observes Peter Mehring, CEO of San Jose, Calif.-based Zest Labs, a company that develops monitoring technologies to improve business performance. “They need to be thinking about where they want to be in two years, and in doing so, decide strategically what they need to do differently to compete. If there ever was a time to be proactive in the industry, it’s now.” Mehring’s sentiments are echoed by executives at FreshRealm, a Ventura, Calif.-based company focusing on meal kits and the “prep perishable” supply chain, and Jaggaer, a provider of indirect and direct source-to-pay solution suites that help grocers with produce procurement, based in Morrisville, N.C. While these tech thinkers have slightly different takes on how grocers can improve their cold supply chains, one thing they agree on is that traditional food retailers need to embrace outside help today to navigate the uncertain waters ahead. “This industry is extremely complex,” notes Michael Lippold, founder and CEO of FreshRealm. “I advise retailers to partner with businesses who have a core competency in specific areas, as we do with technology and managing the supply chain.”
Key Takeaways Examine how your supply chains work to keep up with the evolving perishables supply chain. Implement new strategies now to an establish a competitive advantage. Team with businesses with core competencies in specific areas. Don’t neglect major food safety issues. Leverage supply chain technology.
FreshRealm’s Focus on ‘Prep Perishables’ Lippold explains that Freshrealm works as the “intel inside” for its clients in three specific areas: providing in-store prepared meal kits, home delivery of meal kits, and managing a retailer’s entire prep perishable supply chain, if needed. Freshrealm works with rancho cordova, calif.-based renaissance Food group, which Lippold refers to as a “best-in-class producer of prep perishable items,” along with other partners, to ultimately get the freshest ingredients to consumers in the shortest possible amount of time. The company does this by using its FreshTech technology and a reusable shipping container called the FreshPorter, which maintains a temperature of 32.5 degrees to 41 degrees Fahrenheit on a Fedex or UPs truck, according to Lippold. Freshrealm is the force behind the meal-kit company Terra’s Kitchen, based in Baltimore, as well as a “handful of large enterprises for the to-home and in-store retail program,” he says. Progressive grocer Februar y 2018
A lot of supermarket back-office operations have already been modernized, and we believe the supply chain is next.” —Ron Summerhill, Jaggaer
Lippold believes that the meal-kit business is currently in “version 1.0,” but he envisions a “2.0 phase” in which meal kits will offer more variety and less prep time, and will primarily be purchased in store. Beyond the specific trend of meal kits, however, a much larger sea change is affecting the fresh supply chain, as Lippold sees it: “There’s a very large macro trend that’s playing out right now, where consumers are eating less frozen and shelf-stable foods, and more fresh foods. “Fresh food typically has a shelf life of eight days,” he notes. “If you think about how our food distribution system in the U.S. has traditionally been built over the past four or five decades, we’ve perfected shipping and distributing frozen and shelf-stable foods. So, from a production standpoint, you make inventory and you push it to the market. “When you switch to the world we live in, you don’t have that ability,” he continues. “So we almost need to reverse the entire distribution channel, where everything — or most everything — that is made from one of our suppliers is made once an order is already tagged to it.” To enable this fast-moving distribution process, FreshRealm operates “quick-turn fulfillment facilities” where raw ingredients that are prepped come into its facilities the night of the order, and are packed into a meal kit the next day and shipped out just a couple of hours later. “We operate a 24-hours-a-day, seven-days-a-week supply chain,” notes Lippold. “So if it’s hot in northern California and the baby arugula supply is short, we have to be well ahead of that.” He urges traditional grocers to think of their cold supply chains in the same way, and never to ignore food safety risks. “In all this fast action to keep up with changing consumer demand, we live in a business where you can run into some major food safety issues, so don’t skip that,” he advises.
a Day at the auction Like FreshRealm, Jaggaer is focused on providing technology to improve the cold-chain process. Its specialty, however, is auction technology that helps retailers gain better visibility of the produce marketplace and ultimately become more aggressive in getting the lowest prices. “A lot of supermarket back-office operations have already been modernized, and we believe the supply chain is next,” says Ron Summerhill, senior consultant/best practices center at Jaggaer. “One of the biggest differentiators of supermarkets versus other retailers is produce shelf life. If you have contracts or qualifications in place already, the biggest challenge then becomes product spoilage.” The company offers a retail suite that combines its Advanced Sourcing Optimizer (ASO), Total Supplier Manager (TSM), Total Contract Manager (TCM) and Spend Radar modules.
Summerhill encourages grocers to leverage supply chain technology like Jaggaer’s to tackle spoilage and to better deal with pricing challenges. In one example of its work, Jaggaer helped a regional grocer in Pennsylvania set up its sourcing solution and run a truckload event for produce. “In addition to identifying and selecting local supplier sources, we helped the grocer build an extended supply chain for more seasonal or climate-sensitive produce that required a direct relationship with the supplier or consortium/network of farmers both nationally and internationally,” says Summerhill. “This direct supplier relationship cut costs and logistical issues associated with a ‘middle man’ and resulted in an overall faster sourcing system.”
‘Zest’ for Freshness Across the country, in California, Zest Labs is working to modernize the food distribution and delivery system with its Internet of Things (IoT)-based freshness management solutions. The company recently revealed that it’s working with West Des Moines, Iowa-based regional grocer Hy-Vee in a trial of the Zest Fresh solution to help automate farm-to-fork traceability of fresh produce. John Griesenbrock, Hy-Vee’s VP, produce/Health Markets, said at the time of the announcement: “We are excited to work with Zest Labs to determine how Zest Fresh can help both monitor and improve freshness, while providing complete traceability through the cold supply chain. With traceability support, we will become even more invested in bringing the freshest and highest-quality produce to our customers.”
FreshRealm’s Meal Development tool allows chefs to design recipes for meal kits that can be immediately ordered and fulfilled at one of the company’s fulfillment centers.
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Mehring also urges retailers to take advantage of newer IoT applications to get more complete, real-time data. “Today, a lot of the data collection in the supply chain is very manual,” he observes. “I think this leads to poor communication, because they don’t have complete data, or they get the data consolidated very late. If you use IoT, this would be automatic, because the device on every pallet would automatically tell you when it shipped, and could notify you in real time and give you the visibility. Further, then you could manage by exception.” Ultimately, retailers that rethink their supply chains and take advantage of new technology will have a competitive advantage, Mehring maintains. “A supermarket could show that in the last 90 days, its average shelf life of strawberries was six days at the consumer level,” he offers as an example. “They could highlight this fact, showing that they’re doing things to make sure the consumer has a good experience.”
Grocers need to be thinking about where they want to be in two years, and in doing so, decide strategically what they need to do differently to compete.” —Peter Mehring, Zest Labs
Zest Labs’ Mehring advises retailers to take on a radically new mindset when thinking of how to operate their supply chains. “Most of the supply chain today is reactive,” he says. “In our view, retailers need to become proactive and preventative in their efforts, whether it’s dealing with delivery time, delivery quality or freshness.” Mehring points to the trend of large retailers that have been pushing delivery “on time in full,” penalizing their suppliers that are late or come up short with orders. “To me, the perspective is broken, because with visibility and transparency, they would be able to actually see that the product shipped on time in full, which gives it a very high chance of success of being delivered on time and in full,” he notes. “Don’t lead with a stick; lead with a carrot, saying, ‘We’ll help you as a supplier.’ Share in the data exchange.”
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Bundle of Joy De veloping a total baby care section can give birth to he althy profits. By Barbara Sax or too many retailers, the baby care category is all about price. Nielsen research shows that over the past year, retailers have increased promotions of baby care products by 10 percent. “We have to keep prices low to keep the customer coming in,” affirms Chris Merrill, HBC buyer at eightunit Crest Foods, based in Edmond, Okla. According to Merrill, despite help from Procter & Gamble and Kimberly-Clark, diaper sales at the chain are down. “We’ve done end cap displays that feature free baby wipes with the purchase of diapers, but that hasn’t given us the shot in the arm we need,” he admits. “We’re selling diapers and food at cost or below,” echoes Kenny Braun, manager at Breaux Mart, a five-unit chain based in Metairie, La. Diaper sales have slowed considerably at the chain as consumers turn to dollar stores or online options. “Everyone is taking a bite out of the supermarket business,” adds Braun.
Join the Club Yet research suggests that a race-to-the-bottom approach isn’t always necessary. “Compared to the average across packaged goods, baby care shoppers are far less likely to price check and far more likely to be influenced by research online,” says Jordan Rost, VP of consumer insights at Chicago-based Nielsen. At a time when baby care sales are shifting online, Rost suggests that “retailers need to think much more holistically across channels when merchandising baby care.” Chains, particularly those with higher-income demographics, are concentrating on creating a total baby category that focuses on providing information and generating loyalty. “When it comes to baby, moms are looking to retailers who can help educate them and help them find options they may not know exist,” notes Annette Domnik, chief marketing officer at Draper, Utahbased Zarbee’s Naturals. Domnik says that parents may not know that products such as gripe water and chest rubs are safe for infant use. “Letting moms know these products are available at supermarkets is critical,” she observes. To address that important consumer, retailers are creating educational components to their baby loyalty programs, long a staple of the category. In addition to coupons for brand-name and Publix-brand baby products, the Publix Baby Club program includes a free newsletter, available in English or Spanish, with helpful tips on parenting, health and nutrition, and recipes, plus a free copy of “Your Baby’s First Year,” the classic parenting guide. “Our hope is to create loyal, raving fans,” explains Maria
Brous, director of media and community relations at Lakeland, Fla.-based Publix Super Markets. “We provide parents with helpful tips and information, as well as recipes, coupons and a plethora of helpful information for the early years.” Martin’s Super Markets, a 21-unit chain based in South Bend, Ind., offers a free prenatal program through its pharmacy as part of its Oh Baby! Savings & Rewards program. “We utilize that as an opportunity to educate prospective moms on the Oh Baby! program,” says Krista Wendt, director of marketing at the chain. The
program offers weekly savings on baby essentials that allow consumers to earn $10 in “Baby cash” with purchases of more than $50 four times a year. Baby club loyalty programs can be invaluable to the category. A recent study by Dublin, ireland-based Accenture revealed that members of loyalty programs generate 12 percent to 18 percent more incremental revenue growth per year than nonmembers. “club programs can provide education, savings and even automate some of the purchasing that parents need for their growing families,” says Nielsen’s rost.
Behind pet food and treats, diapers and wipes are the packaged goods most commonly bought online via subscription, he notes.
Organic and Natural Gains growth and profit in the category are coming from natural and organic items. “Products like our cough syrups and our baby chest rub, which are made with natural ingredients, are great basket builders,” asserts Zarbee’s Domnik, adding that parents who may not have used any baby oTc before are willing to try something that’s natural. “We’ve had success with some of our retail partners, such as Harris Teeter and Wegmans, in developing signage that helps draw attention to more natural solutions,” continues Domnik. “We’re working with partners and bringing risers and shelf strips into the Progressive grocer Februar y 2018
baby department to make it easy to shop.” Parsippany, N.J.-based King’s Food Markets, for example, uses signage to call out organic products in its baby department. “Supermarkets have an opportunity to develop baby wellness centers on end caps and side caps, and to put these more natural and organic brands in front of moms,” says Domnik. “I’d love to see stores cross-merchandising near the newborn diapers with signage that educates moms about OTC products that are available to even their youngest family members.” Wegmans Food Markets’ Montvale, N.J., store, for instance, merchandises baby care near the pharmacy in a boutique layout. Basics, including food, formula and diapers, are merchandised alongside OTC and HBC products. The store uses a center store end cap to merchandise a carefully curated selection of feeding products and accessories from higher-priced brands such as Avent, Dr. Brown’s and Lifefactory. Side wings give the section an opportunity to introduce in-and-out products, such as plush rattles, that keep the category fresh. The chain also merchandises Little Golden Books on a spinner rack adjacent to the department to spark impulse purchases. Natural and organic are also providing the profit on the edible side of baby care. “Organics are creating the margin in baby food,” says Crest Foods’ Merrill of a category that’s otherwise flat at his chain. “New parents are some of the most transparency-minded consumers,” notes Nielsen’s Rost. “This is particularly true within baby food, where natural and organic baby foods capture nearly a quarter of all dollar sales. But even within baby care, sales of organic products are growing 5 percent, while top-line category sales are flat.” “We see the shelf merchandising changing to emphasize the availability of organic baby foods, and stores are adding signs to point out which sections are organic,” says Shazi Visram, founder, “chairmom” of the board and chief visionary of New York-based natural baby food brand Happy Family. “In several major chains, more than half of the shelf space and item count
Supermarkets have an opportunity to develop baby wellness centers on end caps and side caps, and to put these more natural and organic brands in front of moms.” —Annette Domnik, Zarbee’s Naturals
is now dedicated to organic brands.” Happy Family has created store displays to create a one-stop opportunity for organic food and care items under the theme of “Nourish Your Baby Inside and Out.” “This was very well received by moms as retailers recognized the wisdom of marketing with a theme,” notes Visram.
Assorted Goodies Accessories are another profit opportunity. “Fast-moving consumer goods, smaller brands and companies have been able to more effectively take up prices on cleaner, simpler, more natural products as compared to the average company,” says Rost. “While the average price across baby care actually fell over the last year, retailers need to build the right assortment to offer shoppers what they need while also delivering growth. A category like nasal aspirators has seen tremendous sales growth with limited promotional support over the last few years.” According to Brous, Publix is focused on enlivening the mix for consumers. “The category is changing all the time, and we’re bringing in new items to attract consumers,” she notes. For its part, Plainwell, Mich.-based Harding’s Friendly Market, which operates 27 Harding’s Market, Marketplace and Fresh Express stores in Michigan and northern Indiana, has added Top Care’s Tippy Toes private label feeding products to its mix to boost margin in the category. The Tippy Toes brand is extensively represented at Rochester, N.Y.-based Wegmans in nearly every baby category, from infant formula to pacifiers.
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delish Fish dish 2017 saw poke, a Hawaiian salad made with raw fish, take off in foodservice as a lean, protein-rich dish that also satisfies consumers’ desire for exotic flavors. Now Acme Smoked Fish Corp. offers its own take on the dish with Blue Hill Bay Smoked Fish Poke Bowls, build-it-yourself refrigerated fare that comes in Smoked Salmon and Smoked Ahi Tuna varieties. The bowls offer eaters nationwide a healthful and innovative lunch or dinner meal kit, each with either lightly salt-cured salmon or tuna cubes that have been cold-smoked with a blend of natural hardwoods, and containing a pre-cooked rice packet, a signature poke sauce — a flavorful soy base with hints of sriracha, chili pepper and sesame oil — and a special blend of poke seasoning made from chili peppers, black and white sesame seeds, ginger, and orange peel. Each refrigerated single-serve bowl contains 20 grams of protein and 1,400 milligrams of omega-3 fatty acids per serving, as well as no artificial preservatives. The SRP is $8.99 per 8.8-ounce bowl.
A sparkling tree-t As people seek out the latest beverages to fuel their energy, keep them hydrated and still function as a tasty drink, a new contender has emerged: sparkling tree water. TreTap Beverages’ shelf-stable line has been certified organic with the USDA by EcoCert and, according to the brand, “gives consumers a choice of healthy and environmentally sustainable beverages.” Newly popular sap drinks typically are canned once a year, during the maple syrup season, and have a shelf life of one year. TreTap’s Organic Tree Water’s shelf life is open-dated. Flavors consist of Maple, Blueberry, Cucumber and Cranberry, and each has an SRP of $5.99 per 4-pack of 12-ounce cans.
convenience-minded chicken For Millennial moms who crave convenience, Perdue has introduced Perdue Fresh Cuts chicken breasts, designed to save up to 30 minutes of prep and cleanup time. The precut boneless, skinless chicken breasts can simply be added directly to a pot or pan, requiring no cleaning or cutting. The refrigerated product comes in three recipe-ready varieties — diced, strips and thin-sliced — with an SRP of $5.29 per pound.
A smoother shave Any time a women’s razor brings increased comfort and fewer chances of nicks and cuts to the shaving process, ladies are sure to take notice. Knowing this, Schick has introduced the Schick Intuition F.A.B., which stands for “forwards and backwards.” Said to be the first of its kind to enable women to shave with a razor in both directions without lifting it from the skin, the product includes a cartridge with built-in advanced moisture gel for an effortless glide and a more comfortable shave. The SRP is $13.99 for one razor and two refill cartridges.
UNITED STATES MARKETS • Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Technology • Hospitality • Apparel CANADIAN MARKETS • Convenience • Pharmacy • Foodservice ADVERTIS ING SALES & BUS INES S STAFF EXECUTIVE CHAIRMAN Alan Glass 609-276-2842 email@example.com CHIEF OPERATING OFFICER/CHIEF BRAND OFFICER Richard Rivera 973-264-4380 firstname.lastname@example.org
Beaver Street Fisheries
Blount Fine Foods
California Walnut Commission
Campbell Soup Company
Carl Buddig & Company
Dean Foods Co.
32-33, Insert 51
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CHIEF BUSINESS DEVELOPMENT OFFICER Korry Stagnito 224-632-8171 email@example.com
Godshalls Quality Meats Inc.
Heineken USA Inc.
CHIEF CUSTOMER OFFICER/PRESIDENT OF STRATEGIC PLATFORMS Ned Bardic 224-632-8224 firstname.lastname@example.org
International Dairy Deli Bakery Association
SENIOR VICE PRESIDENT/BRAND DIRECTOR Katie Brennan 201-855-7609 • Cell: 917-859-3619 email@example.com
Jelly Belly Candy Company
Mann Packing Co., Inc.
63 79, 83
SOUTHEAST ACCOUNT EXECUTIVE Larry Cornick 224-632-8248 firstname.lastname@example.org
Mason Vitamins Inc.
MIDWEST, MARKETING MANAGER Angela Flatland (AR, CO, IL, IN, IA, KS, KY, MI, MO, NE, ND, OK, SD, TN, WI) 224-229-0547 Cell: 608-320-4421 email@example.com
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SENIOR SALES MANAGER Judy Hayes 925-785-9665 firstname.lastname@example.org SENIOR SALES MANAGER Theresa Kossack 214-226-6468 email@example.com WESTERN REGIONAL SALES MANAGER Rick Neigher (CA, OR, WA) 818-597-9029 firstname.lastname@example.org NORTHEAST, MARKETING MANAGER Mike Shaw 201-855-7631 • Cell 201-281-9100 email@example.com ADVERTISING MANAGER Jackie Batson 224-632-8183 firstname.lastname@example.org
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89 PROGRESSIVE GROCER Februar y 2018
Independent thoughts By Katie Martin
As the World Turns Finding “your truth” in a world oF dichotomies. s anyone else as confused as I am about what’s going on in the world? Is retail coming to an end? It’s not, but knowing what to think can be bewildering with so many conflicting reports around. In the span of a week, I read that more stores will close in 2017 than ever before — more than 6,700 — according to Fung Global Retail & Technology, a retail think tank, but that was followed by a report by IHL Group noting that 2017 will have 4,080 net stores opening, with the supermarket industry seeing net growth of 674 stores (a simple Google search shows this dichotomy clearly). I don’t know about you, but I like the IHL Group report a lot more. The conflict doesn’t lie just in store openings, though: The Amazon-Whole Foods Market merger is still making headlines, with some saying it will be the death of its competitors, especially independents, while others postulate that it’s the best thing that could have happened to the industry; technology is changing the way people shop, and it’s destroying the retail store, or technology is changing the way people shop, and they’re turning to stores more than ever; you have to offer everything to attract everyone, or you have to specialize because people want to know that they’re buying from experts. You get the idea. What should you believe?
People still need what they need, and they have to get it from somewhere. 98
I don’t have the answer, so I guess that you should just believe in yourself, your staff and your customers. They’ll tell you what you need to know. What I do know is that people still need what they need, and they have to get it from somewhere.
seeking differentiation I recently read a thread on RetailWire, “Will independent grocers turn it around in 2017?” It generated a fairly lively discussion from several parts of the industry, but the gist of everyone’s comments was differentiation, which can come in many forms, whether it’s customer service, technology or food offerings. Let’s face it, you can’t out-Walmart Walmart. But you have to get your store to be top of mind for consumers when they need what they need. Easier said than done, I know. But by independents’ very nature — being smaller — differentiation should be easier than for chains. When a unique opportunity comes up, indies are often — or should be, in theory — able to jump on it more quickly. For example, Plum Market, which operates six stores in southeast Michigan and Chicago, recently announced that it’s opening a 5,000-square-foot location inside the Henry Ford Pistons Performance Center, in Detroit. The opening is part of the market’s agreement to be the official foodservice provider for the Detroit Pistons basketball team. The new café and retail store will open when the center opens in summer 2019. The store will also include a coffee shop that will offer products from Zingerman’s, another independent deli/bakery. “We are pleased to partner with the Detroit Pistons on this unique collaboration that provides food services for the basketball team and engages Detroit and the New Center area community with a new premium food and beverage location,” noted Plum Market CEO Matt Jonna. Obviously, not all independents are located in urban areas with big sports complexes, but what are the needs in your community? Or in the next town over? All grocery operators are firmly entrenched in their communities, but not all are in a position to take advantage of unique opportunities, or to even search out those opportunities. Retail isn’t dead. It’s definitely changing, however, and you have to be top of mind for consumers when they need what you’re selling. Being different from the other guys will help.
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