Progressive Grocer - February 2019

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Wild Alaska Seafood. It’s a call-to-action for consumers, especially Seafood Spenders, powering the supermarkets who offer it.

Come see us at Expo West booth #7209 ACC Level 3 Ballrooms.



Natural Premium quality

When you feature Alaska Seafood, Seafood Spenders:


Premium taste

are more likely to buy when they see the Alaska Seafood logo




will recommend your store to others


will return to your store in the near future Source: Technomic 2018


EXCLUSIVE RESEARCH: PG’s Annual Retail Meat Review reveals changing habits EYES ON PRIVATE LABEL Innovation rules in an evolving sector REAPING ORGANIC PROFITS Millennials help organic fruits and veggies flourish BLOCKCHAIN’S SILVER BULLET? Tech could one day enhance food safety along the supply chain

Routing the Competition Winners work smallness to an advantage

Gelson’s Century City

February 2019

Volume 98, Number 2 $10 •

Leading the Baking with


Trusted Brands.

Expanding our Portfolio

Creating Innovative Products

Meeting Consumer Needs


Growing Your Pet Category with brands shoppers know and trust.

Proudly offering a portfolio of well-known and beloved brands that nurture the bonds between pet parents and their cherished family members.

©/TM/® The J.M. Smucker Company. © 2019

Contents 02.19

Volume 98 Issue 2

Jungle Jim's International Market



Routing the Competition

This year’s Outstanding Independents demonstrate how being small can be a distinct advantage.

Departments 8 EDITOR’S NOTE

Worthy Obsession



Private Enterprise

Innovation is the watchword as the store-brand sector continues to evolve. 52 SOLUTIONS

Dinner’s Ready

Six o’clock still rolls around every day, but the evening meal is anything but set in time.



The Kit is It

Spirits and Liqueurs


Condiments and Dressings


April 2019




The Big Reveal



Inspiring Operators



Contents 02.19

Volume 98 Issue 2

8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 800-422-2681 Fax: 978-671-0460



Convenient Truths

Options beyond the traditional meat department are gaining ground in protein sales. 68 FRESH FOOD

EDITORIAL EDITORIAL DIRECTOR James Dudlicek 224-632-8238


Organic Harvest

MANAGING EDITOR Bridget Goldschmidt 201-855-7603 DIGITAL & TECHNOLOGY EDITOR Randy Hofbauer 224-632-8240 SENIOR EDITOR Kat Martin 224-632-8172 CONTRIBUTING EDITORS D. Gail Fleenor, Jenny McTaggart, Lynn Petrak and Barbara Sax

The category is robust and growing, thanks to a certain sought-after demographic.





AUDIENCE ENGAGEMENT MANAGER Shelly Patton 215-301-0593

5 Tips for Recruiting Top Tech Talent

LIST RENTAL MeritDirect Elizabeth Jackson 847-492-1350, ext. 318

Grocery isn’t the sexiest opportunity for STEM grads. Here’s how to make it more so.




Work in Progress


Don’t expect a food safety silver bullet anytime soon as the grocery industry continues to work through blockchain’s potential and limitations.


ART DIRECTOR Bill Antkowiak




Alternative Paths to Wellness

Supplements and other OTC products are increasingly available in natural versions.

82 6


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EDITOR’S NOTE By Jim Dudlicek

Worthy Obsession he maxim “the customer is always right” dates back more than a century in the retail world, but it seems to be taking on renewed importance in today’s marketplace. “Focus on the customer. Obsess over them,” advised Tom Furphy, an Amazon veteran who’s now CEO of product replenishment platform Replenium, to an audience at the most recent Food Marketing Institute (FMI) Midwinter Executive Conference. Speakers at the event preached shopper-centric category management, which “must fundamentally shift to thinking like the customer,” asserted Jim Smits, VP of retail development at Retail Solutions Inc. “Retailers need to be 40 percent merchant and 60 percent data miner.” Connecting with shoppers on the issues they hold dear is essential, as Furphy noted: “No retailer is better because they sell more paper towels — it’s because they focus on things that are tactile and emotional.” Experience continues to emerge as a key point of differentiation for traditional grocers facing digital upstarts, which have conquered convenience, selection and price. “We no longer just sell food — we barter in experience and information,” FMI President and CEO Leslie Sarasin said in her keynote address. “We have to become more com- Category fortable talking science, technology and nutrition. … Our management ability to adapt, adopt and must fundamentally evolve is preparing us for the shift to thinking next golden era of retail.” like the customer. I came away from Midwinter with a sense that the Retailers must be event was truly geared to- part merchant ward preparing retailers for and part the new normal. The past few data miner. confabs came across to me as perhaps a bit panicky, arms waving in the air, warning all to jump aboard the online express or be ground under its wheels. This year, the call was no less important, but the gathering felt more like a workshop for how best to get one’s arms around the task of leveraging technology to create a seamless shopping experience for consumers who embrace both the smartphone and the brick-and-mortar store. “Invest in where you can win, not just play,” 8

advised The Dialogic Group’s Thom Blischok, who moderated two sessions on succeeding in digital. “Be comfortable with experimentation. Fail fast and fail cheap.” For his part, Furphy advised, “You can’t just make incremental changes — you have to go outside your comfort zone and focus on things two to three years out.” Retailers are increasingly serving “phytigal” shoppers, who browse and buy in the physical and virtual worlds as their needs require. “Consumers have shown an eagerness to cherry-pick more formats more frequently,” observed FMI’s Mark Baum, noting that a third regularly buy groceries online. How will that continue to evolve? Furphy speculated that within 10 years, 20 percent of all food, and 40 percent to 50 percent of all nonfood products, would be sold online. To survive and thrive in this new retail world, “innovation has to be pervasive in an organization,” said Ripkurrent’s Justin Dye; that means players must experiment, learn and make changes on the fly. “Adapting to digital retail is more about mindset than organizational structure,” said AT Kearney’s Randy Burt; collaboration models need to shift, and retailers must hire digital talent. The program for this year’s conference was built around a recent FMI study that identified five key issues facing the industry: emerging new consumerism, artificial intelligence and technology, workforce, the new marketplace, and food production. Over the years, the industry has seen trends come and go, but never before has lasting change come on so strong. As Chieh Huang, co-founder and CEO of online shopping service, remarked, “We will not see an industry change as quickly and violently as food retail is changing today.”

Jim Dudlicek Editorial Director Twitter @jimdudlicek

Join the conversation: @HersheyCompany The-Hershey-Company



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e s u o h r e Pow


Calendar S




April Fool’s Day

National Florida Tomato Month National BLT Sandwich Month National Soft Pretzel Month



Hand out puzzle ribbons in honor of World Autism Awareness Day.



National Chocolate Mousse Day



National Cordon Bleu Day

National Ramen Noodle Day

National Sourdough Bread Day

National Coffee Cake Day


National Empanada Day



National Chinese National Cinnamon Almond Cookie Day Crescent Day


National Cheese Fondue Day

National Pecan Day


Tax Day National Glazed Ham Day


Easter National Chocolate-Covered Cashews Day



National Eggs Benedict Day


National Cheeseball Day


National Animal Crackers Day

Draw customers to the bakery with a promotion for National Blueberry Pie Day.


Caramel Day

National Raisin & Spice Bar Day


National Caramel Popcorn Day

International Carbonara Day

National Deep-Dish Pizza Day

New Beer’s Eve



National Licorice Day


Stimulate customers’ National Cherry palates with a blind Cheesecake Day taste test for National Jelly Bean Day. National Picnic Day


National Pigs-in-a-Blanket Day


National Shrimp Scampi Day


Celebrate both National Oatmeal Cookie Day and National Raisin Day with fresh oatmeal raisin cookies in the bakery.


Passover begins. National Rice Ball Day

National Baked Ham World Malbec Day. with Pineapple Day Offer a tasting/pairing class featuring this dry, dark red wine. On the Day of the Mushroom, put a call out on social media for the most creative use of the star ingredient.

National Peach Cobbler Day


National Pineapple UpsideDown Cake Day

National Hot Cross Bun Day


National Crotilla Day. For those not in the know, it’s a cross between a croissant and a tortilla. National Zucchini Bread Day




Create a meal-deal special for National Grilled Cheese Sandwich Day.

Today is perfect for a sampling event of craft brews for National Beer Day.



International Carrot Day

National Peanut Butter & Jelly Day


National Soyfoods Month National Grilled Cheese Month National Garlic Month


National Pretzel Day


National Prime Rib Day

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The Big Reveal ELIMINATE #ME TOO HARASSMENT WITH TRANSPARENCY AND TRACKING. ast year was marked by women acting together. In small groups and large, women took on one of the most formidable barriers to gender equality: sexual harassment. Women and their supporters took to the streets, the airwaves and the courts, charging some of the biggest names in corporate America with sweeping workplace harassment claims under the rug. Many of these women’s efforts were aimed at ridding the workplace of mandatory private arbitration of sexual harassment accusations, a practice that prevents women from having their day in court or sharing their accusations publicly, so that other women who may be vulnerable to the same harassment would be warned. Last May, after 14 women who had accused Uber drivers of assault wrote a letter to Uber’s board enjoining them to end mandatory arbitration, Uber eliminated the practice. Lyft quickly followed suit. That same month, workers at McDonald’s restaurants in eight states filed 10 complaints with the Equal Employment Opportunity Commission, alleging that they’d been sexually harassed or assaulted on the job and had faced retaliation when they complained. At the time, a McDonald’s spokeswoman responded that the company didn’t tolerate misconduct. “We are and have been committed to a culture that fosters the respectful treatment of everyone,” Terri Hickey said in a statement. But in September, hundreds of McDonald’s workers who claimed that they faced workplace sexual harassment went on strike in 10 cities. Those who led the strike urged the company to hold mandatory training for managers and employees, and to create a better way of responding to sexual harassment


complaints. McDonald’s responded that it has “strong policies, procedures and training in place specifically designed to prevent sexual harassment.” But the company went a step further, saying, “To ensure we are doing all that can be done, we have engaged experts in the areas of prevention and response, including RAINN [Rape, Abuse & Incest National Network], to evolve our policies so everyone who works at McDonald’s does so in a secure environment every day.” Two months later, thousands of Google employees staged a walkout after The New York Time s revealed that the company had given millions in payouts to male executives accused of sexual harassment, while remaining silent about their wrongdoing. Employees who organized the global walkout asked for the end of mandatory arbitration, a report on sexual harassment instances, greater transparency on salaries and other compensation, an employee representative on the board, and a chief diversity officer with direct access to the board. A week later, Google changed its policy mandating private arbitration for sexual harassment cases. Facebook followed, changing its arbitration policy the next day. From 1991 to 2017, the share of U.S. private-sector non-union employees who were subject to forced arbitration rose from 2 percent to 56 percent, according to a report by the Economic Policy Institute. While arbitration has its place, especially for women who prefer to maintain confidentiality, organizations must be more forthcoming in their handling of sexual harassment and discrimination claims — and their efforts to put an end to both.

Talented women steer clear of companies that allow hostile, unhealthy or unsafe work conditions. Touting gender equality and D&I policies on a company website isn’t enough.

The Power of Accountability

disregarding the complaint or attempting to hide it.

Talented women steer clear of companies that allow hostile, unhealthy or unsafe work conditions. Touting gender equality and D&I (diversity and inclusion) policies on a company website isn’t enough. Companies need to back up their words with decisive action, and tell the world about it. A common refrain from victims of sexual harassment — and from women who doubt their company’s gender equality efforts — is the lack of process, commitment and transparency regarding bias, harassment and discrimination, which often lets perpetrators continue without consequences and creates a hostile workplace. Sexual harassment and gender diversity training is a must, of course. But here are other actions that your company’s leaders should be taking to ensure transparency:

Communicate to all staff when harassment has occurred and what has happened to the harasser.

Publish and share — widely — clearly written policies regarding bias and harassment, and make very explicit the consequences for breaking them. Encourage employees to speak up if they notice a problem. Professor Rosabeth Moss Kanter, of Harvard Business School, recommends appointing selected employees as “witnesses” to keep an eye out for misbehavior. If a complaint is made, respond immediately. A company that doesn’t address an accusation straightaway could be credibly accused of

Keep and publish metrics on gender diversity, women’s leadership, pay parity and the number of claims of gender bias and harassment. The most successful companies keep and share with their employees metrics on sales, margins, expenses and profits. Today, measuring, benchmarking and sharing gender-related metrics is just as crucial to your business. Companies can avoid putting themselves in jeopardy — legally and competitively — by treating the elimination of gender bias and harassment as a business priority, with goals set to measurable metrics that are communicated to all stakeholders.

Sarah Alter is president and CEO of the Network of Executive Women, a learning and leadership community representing 12,500 members representing 900 companies and 22 regional groups in the United States and Canada. Learn more at




Research & Analysis

The Kit is It ME AL KITS GIVE SHOPPERS THE CHANCE TO SAFELY E XPERIMENT WITH NE W FL AVORS AND INGREDIENTS. Consumers love the trendy and authentic dishes they get through meal-kit delivery services. According to Datassential’s 2018 “Insider Special Report” on the subject, the most popular orders include both familiar and exotic ingredients such as stir-fried vegetables and glass noodles. “Ubiquity with a dose of inception” is the Datassential directive for choosing the menu pairings that drive traffic and repeat purchase. Combined with local and organic sourcing, these are powerful tools for your perimeter. Glass Noodles MAC stage: Inception — Ethnic markets, ethnic independents and fine dining

Shakshuka MAC stage: Inception — Ethnic markets, ethnic independents and fine dining

Havarti MAC stage: Adoption — Ethnic aisle at supermarkets, casual independents, fast casual

Barbacoa MAC stage: Adoption — Ethnic aisle at supermarkets, casual independents, fast casual

Trends start here and exemplify originality in flavor, preparation and presentation.

Trends start here and exemplify originality in flavor, preparation and presentation.

These translucent dried noodles (also called cellophane noodles) are used most often in Asian cuisine, especially at Thai restaurants. They’re most often paired with more common ingredients such as chicken, stir-fried vegetables and shrimp

Shakshuka is traditionally a dish of eggs poached in a sauce made from tomatoes, chili peppers, onions and spices. It’s often eaten for breakfast with challah or flatbread for dipping.

Adoption-stage trends grow their base via lower price points and simpler prep methods. Still differentiated, these trends often feature premium and/or generally authentic ingredients.

Adoption-stage trends grow their base via lower price points and simpler prep methods. Still differentiated, these trends often feature premium and/or generally authentic ingredients.

This semi-soft cows’ milk cheese from Denmark has a creamy taste and whiteyellow coloring. It’s good for melting, making it popular on hot sandwiches and burgers. Havarti is often paired with tomato, onion and bacon on cold sandwiches and salads as well.

While barbacoa is a cooking method that originated in the Caribbean, it’s more commonly associated with the Mexican preparation of slow cooking over an open fire. Typically served as a taco dish, this is also a popular burrito filling and most frequently paired with salsa, beans or onions.

On nearly 4% of U.S. restaurant menus

On <2% of U.S. restaurant menus

On <2% of U.S. restaurant menus Up 22% on U.S. restaurant menus 27% of consumers know it/ 16% have tried it Menu Example Sun Basket Korean Steak JapChae with Glass Noodles and Stir-Fried Vegetables Seared steak with gluten-free noodles in an umami-rich sauce of garlic, ginger and sesame


On <1% of U.S. restaurant menus Up 174% on menus over the past four years 12% of consumers know it/ 4% have tried it Menu Example Blue Apron Potato & Pepper Shakshuka Eggs, tomato sauce, pepper, onion, potatoes, za’atar-seasoned pita chips, harissa

Up 61% over the past four years Up 27% over the past four years 51% of consumers know it/ 33% have tried it Menu Example H-E-B Meal Simple Chicken Breast Entrée Chicken breast served with asparagus, Havarti and prosciutto

35% of consumers know it/ 23% have tried it Menu Example Home Chef Barbacoa Steak Tacos Mouthwatering steak strips, cooked with shallot, tomato and seasoning, fill warm tortillas, along with pickled shallot and jalapeño, crumbly queso, and cilantro cream

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Shelf Stoppers

Shelf Stoppers


(52 weeks ending April 2, 2016) Condiments and Dressings

Mayonnaise Ranch Dressing Ketchup Hot Sauce/ Chili Condiments Mustard

Top Supercategories by Dollar Sales

Basket Facts How much are American households Consumers chose spending per trip on frozen broccoli over various condiment alternatives for and dressing per a varietyproducts of reasons: shopping trip?





because it’s quick and easy



0 Latest 52 Wks 2 YA W/E 11/24/18

Latest 52 Wks YA W/E 11/25/17

Condiments and Dressings

Latest 52 Wks W/E 11/26/16

because it tastes $4.25 great

Total US xAOC • Product Share Basis: Total Store There are some interesting contrasts in consumer preferences when it comes to condiment and dressing performance across the United States. In a category that is relatively stagnant (up 0.9 percent in sales), it’s important to align products to emerging WHEN ARE(and CONSUMERS EATING BROCCOLI? consumer use cases, particularly as tastes buying habits) change. FROZEN Take hot sauce as an example. Relative to declines in mustard mayonnaise, hot sauce has seen accelerated growth Broccoli as anand ingredient is most commonly Frozen broccoli is most often used in a side over the past two years. Ranchconsumed dressing another area the category that has by seen and, at is dinner, followed by of lunch. dish, followed as agrowth main entrée. in this case, has overcome consecutive dollar declines from years prior. In both these instances, 3% aligning with recipes and diverse meal occasions has likely contributed to strong performance.”

Spotlight on Frozen Broccoli

—Lauren Fernandes, Manager-Strategy and Analytics, Nielsen 9%

Demographic Spotlight OCCASION

Ranch Dressing

Hot Sauce/Chili Condiments


$ / HH Index - Product

HH Index Product

$ / HH Index - Product

HH Index Product

$ / HH Index - Product

HH Index Product

$ / HH Index - Product

HH Index Product

$ / HH Index - Product

HH Index Product











Small-Scale Families











Younger Bustling Families











Older Bustling Families











Young Transitionals











Independent Singles











Senior Singles











Established Couples











Empty-Nest Couples











Senior Couples











Startup Families

Source: Nielsen Homescan, Total U.S., 52 weeks ending Oct. 27, 2018




because it’s low in calories, fat and sugar

Ranch Dressing




Household Behavior Stage

Hot Sauce


29% dressings, TYPE it’s interesting CLASScontrasts. 62% Looking across various condiments and to see some 35% demographic 61% For ranch dressing, ketchup and hot sauce, both young and older bustling families are spending more than expected, given their size as cohorts. Mayonnaise and mustard, on the other hand, are catering to an older demographic. Within older households, these two classic condiments are overindexed in spending per household, particularly among empty-nest and senior couples. Interesting contrasts in purchase behavior also appear when examining purchasing by ethnicity: Hot condiments DINNER LUNCH OTHER SIDEsauce/chili DISH MAIN ENTRÉE OTHER index highly among African-American and Hispanic consumers, while Asian consumers heavily underindex in mayonnaise, ranch dressing, ketchup and mustard. Mayonnaise


because it’s healthy and nutritious





Source: Nielsen Homescan, Total U.S., 52 weeks ending Oct. 27, 2018

©2019 Goya Foods, Inc.

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Global New Products Database

Spirits and Liqueurs Market Overview

The U.S. dark spirits market continues to thrive, due primarily to the strong growth of American whiskey, which has enjoyed stellar growth over the past five years, thanks to consumers’ interest in craft, product innovation and elevated bar/restaurant cocktail menus. The white spirits market is growing, albeit at a slower rate than dark spirits, driven by strong growth of tequila and higher-end/superpremium gin brands.

The on-premise alcohol occasion represents an opportunity for spirits brands to expose new products to consumers, as nearly half of spirits consumers say that it’s fun ordering drinks that they’ve never had before, as compared with 36 percent of consumers overall. Younger consumers — those age 22-34 — are the most likely age group to agree that spirits are healthier than other alcohol types.

Key Issues

While most dark and white spirits consumers are highly brand loyal, more than four in 10 say that they’re drinking more spirits than a year ago because they’re trying new brands.

Sales of spirits in the United States grew 4.8 percent over the past year to reach an estimated $64.4 billion in 2018.


What Does It Mean? With many experimenting with new brands and becoming more passionate about spirits, there’s an opportunity to highlight the production methods, ingredients and craft that goes into spirits. Spirits flight programs, spirits/ cocktail promotions, in-restaurant advertising, bartender recommendations and crafted cocktails are all effective methods for motivating consumers to try new spirits brands/ varieties when drinking away from home. White spirits brands can appeal to healthconscious consumers by highlighting the healthfulness of white spirits relative to other alcohol types (e.g., fewer carbs than beer, fewer calories than wine, etc.), or by creating a healthfocused marketing campaign.



Meat Market ORGANIC, NATUR AL, GR ASS-FED — WHAT DO THE Y ME AN FOR THE CATEGORY? n estimated 95 percent of Americans eat meat or poultry regularly. Although three-quarters of shoppers put an effort into making nutritious and healthful meat and poultry choices, “price per pound” is still the biggest driver of meat-purchasing decisions. Increasingly, consumers also seek transparency in how animals are fed, raised and cared for from birth to harvest. While conventional meat sales are down 3 percent to 5 percent, meats with a special production claim realized 25.9 percent dollar gains and 38.3 percent volume growth compared with the year prior. “Raised in the U.S.A.” and “antibiotic-free” are the top requested items for expanded assortment, closely followed by “all-natural” and “no added hormones.” Consumers often need clarification about such claims to aid their purchasing decisions. Organic Certified organic meats come from animals that have never received any antibiotics or growth-promoting hormones. Organic beef may come from cattle that spends time at a feedyard and can be grass-finished or grainfinished using certified organic feed. Similarly, organic pigs are required to have access to the outdoors but aren’t required to be raised on pasture, and their feed must be organic. Organic poultry must be raised cage-free with outdoor access; feed must be organic. Natural Naturally raised meat comes from animals that have never received antibiotics or growthpromoting hormones. Beef labeled natural may have spent time at a feedyard and can be either grain- or grass-finished. Generally, “natural” prohibits use of artificial ingredients, colorings or chemicals, and requires minimal meat processing. Grass-Fed Versus Grass-Finished All beef cattle spend a majority of their lives grazing and eating grass on pastures. Grass-finished cattle spend their entire lives grazing and eating from pastures. These cattle may also eat forage, hay or silage at the feedyard. Grass-finished cattle may (or may not) be given FDA-approved antibiotics to treat, prevent or control disease. They also may (or may not) receive growth-promoting hormones. One common myth is that grass-finished beef supplies more omega-3s than conventional grain-finished beef. In reality, neither is a substantial dietary source of omega-3s compared with fish. Grass-fed pork and pasture-raised poultry are available in niche markets.


Added Hormones Federal regulation prohibits the use of growth hormones in poultry, hogs, dairy cattle and veal calves. However, use has been FDA-approved in the beef cattle and lamb industries since the 1950s to stimulate the gland that naturally produces hormones — resulting in increased growth, feed efficiency and carcass leanness. Cultured ‘Meat’ The FDA and USDA recently agreed to create a new joint regulatory framework to oversee cell-based (cell-cultured) meat and poultry, wherein

Shoppers who are more knowledgeable about meat tend to purchase an extensive variety of meats and cook with meat more often while displaying greater store loyalty, more frequent store visits and higher per-person spending.” the FDA oversees cell collection, cell banks, and cell growth and differentiation, while the USDA will oversee production and labeling of food products from harvested cells. Alternative-protein products derived from plants, insects or culturing seek to garner broader consumer acceptance. Meat Aisle Education Retailers should educate consumers about cuts, production methods and home preparation techniques. Shoppers who are more knowledgeable about meat tend to purchase an extensive variety of meats and cook with meat more often while displaying greater store loyalty, more frequent store visits and higher per-person spending. Offer shoppers a balance of recipes featuring familiar cuts, trendy meals made with new cuts, and ideas for convenient, easy-to-assemble meals. Karen Buch, RDN, LDN, is a registered dietitian/ nutritionist who specializes in retail nutrition marketing and communications. One of the first supermarket dietitians, she is now founder and principal consultant at Nutrition Connections LLC, providing consulting services nationwide. You can connect with her on Twitter @karenbuch and at


Outstanding Independent Awards

This year’s Outstanding Independents demonstrate how being small can be a distinct advantage. By Kat Martin

very February, Progressive Grocer honors some of the top grocers in the industry with its Outstanding Independent Awards. This year, 21 grocers share what makes their businesses uniquely equipped to succeed in today’s fastchanging environment. They’re all facing tough competition, including Amazon and a changing consumer who doesn’t shop or see retail stores the same as in the past, and have managed to come out on top. They’ve all shared their winning strategies for being outstanding in the following categories: Single-Store Operator, Multistore Operator, New Concept, Bakery, Prepared Foods, Community Outreach, Local Focus, Meat/Seafood, Produce, Store Brands, Sustainability and Technology. All of this year’s honorees note the importance of meeting the needs of their respective neighborhoods, however they made a difference, whether it was providing free ice for community events or donating meals and money to offset the effect of natural disasters. This personal touch helps create a unique brand identity and enables them to compete against the “Amazonization” of the shopping experience. One common thread they all mention is the importance of their staff in creating a welcoming, knowledgeable environment that customers find invaluable, one that can’t be found anywhere else. The ideas that the independent grocers on the following pages share can be modified to work in your own operation, helping to bring in sales by improving your customers’ shopping experience. Congratulations to a successful group of independents!


Gelson’s Century City




Outstanding Independent Awards


Gooseberries Fresh Food Market, Burlington, Wis. couple of years ago, David Speigelhoff, owner of Gooseberries Fresh Food Market, in Burlington, Wis., found himself in a situation that’s familiar to many independent grocers. “Gooseberries had been open since 2006, and it was at the tipping point of either reinvest and get yourself more niched in the market, or just don’t do anything and eventually die a slow, slow death,” he recounts. Speigelhoff chose to invest $1.5 million to remodel the store to emphasize the perishables departments. “We’re really focused about having our customers enjoy themselves and have fun,” he notes. “We want to offer a value, but we are not out there saying that we’re going to be the cheapest on pretty much anything. Come and have fun, come and enjoy yourself, try the food we offer. We really focus on having fun in the business.” Customers walk into the store through the produce and floral departments before passing through sliding doors that lead into the deli, meat department, bakery and sandwich bar/hot food area before looping around the “food experience” to the wine shop and grocery center store. “We have groceries, but it’s not a focal point for us anymore,” Speigelhoff says, although the store does a good business in ecommerce, which it introduced about five years ago, and which has taken off in the past year. Gooseberries has also invested in catering, making the store a one-stop shop for customers planning parties, especially weddings. Party planners are situated at a kiosk in the store to answer phones and take all orders, in addition to helping customers coordinate all of their party needs across the various departments. When Gooseberries first introduced party planners in 2006, the business supported one parttimer. Now, four full-time staffers work with customers and also stop by the events that the store caters, to make sure that all is running smoothly.


New Possibilities Along with the remodel, Gooseberries acquired a liquor license that allows alcohol to be sold and consumed on premise, which helped open up new possibilities. The prepared foods department — with a sandwich bar (that doubled in size with the remodel) offering 28 named sandwiches, a fullservice deli with a variety of Boar’s Head lunchmeat and housemade salads, a growler bar, and a hotfood station offering five soups daily — features an expanded seating area for up to 55, with all products developed by the store’s executive chef. The bar serves a variety of drink specialties on the weekends, such as a Bloody Mary that includes chicken tenders, a slider, a barbecue pork slider and shrimp. “I mean, it’s a meal,” Speigelhoff notes. The item is served


“We’re really focused about having our customers enjoy themselves and have fun.” —David Speigelhoff, owner

in a Mason jar along with a plate. Holiday weekends often feature mimosas with freshly squeezed orange juice from the store’s self-serve juicer. The seating area is also full on Packers and University of Wisconsin game days, with customers watching the action as they enjoy the store’s food offerings and drinks. Speigelhoff divided his wine, beer and liquor departments into separate departments: Hops, Grapes and Spirits. Part of the decision was dictated by space constrictions within the store. The Spirits department offers a full selection of bourbons and whiskeys, while the Hops department has a 68-foot run with four shelves of specialty cheese showcased in the center. “That has been well received, because more people pair cheese with beer than they do wine,” Speigelhoff explains. The Grapes department is more of a wine store within the store, with wide-open aisles that make it easy for customers to wander and mingle, especially during the three to four different wine tastings that the store hosts on Saturdays. “We just really made the store into a destination where it’s not necessarily just an in-and-out shop,” Speigelhoff says. “They can come in and spend a couple of hours actually enjoying the experience, have a drink or two, have a nice meal, and just spend some time here.”



Outstanding Independent Awards MULTISTORE

Walt Churchill’s Market, Maumee, Ohio alt Churchill’s Market (WCM), with two locations near Toledo, Ohio, is focused on two major themes: What’s for Dinner and Better Because. The two philosophies work in tandem to create a shopping experience for customers that meets their needs so they can feed their families. “Our core customer is more interested in the quality than they are the price,” says Walt Churchill Jr., owner and CEO of the company that was founded by his grandfather in 1917 and run for decades by his father, affectionately known as the General. Both Churchill and his father divided their careers between the grocery business and the Marines. “Our customers don’t like to pay too much, but they’d rather get something good that they want,” he adds. This means that the stores stock restaurant-quality meat and seafood, as well as a variety of specialty items. “Like some of the better supermarkets, we are becoming more like a restaurant than we ever have been before,” Churchill adds. The meat department sells dry-aged Waygu beef, veal, lamb, duck and select game when available, as well as ground bison. WCM offers five varieties of beef — USDA Choice Angus, tall grass, grain-finished, USDA Prime or Waygu — to meet whatever needs a customer has for beef. A large selection of housemade sausages is also available, and both stores additionally feature a smokehouse that imparts a unique flavor to aged and smoked selections. The stores receive three weekly shipments of seafood from



“When you’re eating at home, we want to make it something where you’re happy and it’s easy.” —Walt Churchill Jr., owner and CEO

Boston, which allows the locations to offer daily and weekly specials and seasonal options. Both stores also feature sushi prepared by sushi chefs who have trained in some of the best restaurants in the country. The sushi is made from fresh ingredients in store, including non-GMO rice, and grab-and-go items are available all day, while custom orders are accepted during the lunch and dinner hours.

Easing Dinner Prep Prepared foods also play an important role in both the What’s for Dinner and Better Because strategies. Nearly 90 percent of everything that the deli and prepared food department sells is prepared fresh in-house. The soup is created from stock made fresh in the stores, with a dozen varieties available every day. WCM also looks to local suppliers whenever possible to provide local, quality ingredients. “We make it easy to put a meal on the table,”Churchill says. WCM is also partnering with a local home company that sells furnishings and appliances. “Our guiding light is that we’re trying to make the home a better choice to eat,” he explains. “Us in the food, and them in the furnishings and appliances. When you’re eating at home, we want to make it something where you’re happy and it’s easy.” As for the future of WCM, Churchill is looking at creating an employee stock-option plan (ESOP) to keep the stores running after he’s no longer involved in the business. Outside of the store, WCM has made its presence known in the wider community. For instance, Churchill, an active member in the Toledo Roadrunners, recently took part in the 51st running of the Churchill’s Half Marathon, the second-oldest foot race in Ohio. Inside the stores, Churchill is a regular fixture — one beloved by customers, who often ask him if he’s the boss. His invariable response: “No, we own the place, but you, the customer, you’re the boss.”

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Outstanding Independent Awards


Gelson’s Markets, Encino, Calif. hanges seem to be coming ever faster in the grocery industry; however, “we don’t change just for change’s sake,” asserts Rob McDougall, CEO of Encino, Calif.-based Gelson’s Markets, which operates 27 stores in Southern California. Gelson’s is rolling out a new store design that addresses the new needs of consumers while staying true to the roots of Gelson’s success. “It’s always been about quality; it’s always been about service,” McDougall says. He notes, however, that consumers’ definition of service is quickly changing and doesn’t mean the same thing as it did even five years ago. “How do we meet that need?” he asks. “How do we add more touchpoints to the store? How do we come up with concepts and ideas that create a social experience inside our stores?” Much of the inspiration for Gelson’s new concept came from scouting trips that McDougall takes around the world, especially Europe. “The main reason I go to Europe is because my customers do,” he explains. “They like to spend time in Italy, France, Germany and London. And so we make sure we’re staying on top of whatever trends are there.” Gelson’s also worked with Los Angeles-based design firm Shook Kelley to develop a concept that represents the Southern California lifestyle, McDougall notes.



“How do we meet that need? How do we add more touchpoints to the store? How do we come up with concepts and ideas that create a social experience inside our stores?” —Rob McDougall, CEO

Redesign Highlights New and remodeled stores — Gelson’s has opened two new stores and remodeled seven stores in the past two years — feature a bar that carries up to 20 craft beers and as many as 40 varieties of wine. The mix depends on location, McDougall observes. The company found, for example, that the Long Beach store calls for a wine bar with some craft beer, while the Silver Lake store demands a craft beer bar that also carries some wine. The bars additionally feature freshly prepared foods, from sushi made on site to a variety of tapas developed by Gelson’s executive chef. The burrata salad stands out, according to McDougall, because it introduces some customers to this mozzarella-like cheese, but Gelson’s version features arugula dressed with balsamic vinegar pearls instead of regular balsamic vinegar. “It almost looks like a fine caviar,” he adds. “Customers are like, ‘Oh, this is great, but where can I get these [balsamic vinegar pearls]?’ You know what, you can get them in aisle five. That’s huge, because I want to help [customers] learn how to create these things as well. The more cool things we can come up with, it just helps a sale.” McDougall notes that sales of the $20 bottles of balsamic vinegar pearls are up exponentially in the stores including a bar with the burrata salad on the menu. The bars also afforded Gelson’s the opportunity to offer a new service: the Sip ‘n Shop. Customers can enjoy a glass of wine or beer at the store’s bar, and hand off their shopping list to a member of Gelson’s staff, who will fill it at no additional charge. McDougall points out that customers tend to hand over short lists of 10-15 items, instead of larger orders, making it a win for both parties. Other features of the new concept include customizable breakfasts and bowls in the service deli, and grills in the meat and seafood department. A customer can buy a ribeye, for example, and the store’s butchers will grill it to the shopper’s specifications. “I thought customers would order it like they want and eat it in the store,” McDougall admits. “What they’re doing more of, though, is ordering it and eating it at home.” Similar to the bar and service deli offerings that highlight new ingredients to consumers, the grills in the meat and seafood departments have shown customers how to prepare a cut of meat properly. The new concept also features juice bars that offer cold-pressed juices and smoothies made to order. (Several Gelson’s locations had previously partnered with Liquitarian to learn the process of creating cold-pressed juices.) Meanwhile, the produce department features a fruit and vegetable chop station to take the hassle of cutting produce at home. Along with its other advantages, the concept offered new promotional opportunities for Gelson’s. Several stores have hosted wine- and beer-pairing dinners for which customers pay $75 to sample a set menu of unique products paired with either beverage. The San Diego stores also frequently host Tap Takeover Night, when the wine bar is “taken over” by a local craft brewery and all of the taps feature beers from that brewery, with customers paying a cover charge to participate. Gelson’s operates stores that range from 17,000 square feet to 50,000 square feet, with little room for expansion to house the added elements of the new concept, which has forced the company to get creative. In some cases, the back-room space can be reduced, thanks to better stock management and daily deliveries of products, as well as a streamlined product selection. The stores that have been remodeled to the new concept have seen double-digit sales increases, McDougall says. Gelson’s future plans include remodeling the rest of its stores at a pace of at least two per year, and no more than six.

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Outstanding Independent Awards


Mahomet IGA, Mahomet, Ill. rooks Marsh, owner of Illinois-based Mahomet IGA, decided several years ago that his store needed experts to set it apart. “If we could bring in experts to make our store special in certain areas, we would do that, rather than doing it halfway ourselves,” he explains. One of those departments sorely in need of expert intervention was the bakery, which frankly lacked pizzazz. “We’d almost given up on bakery a few years ago,” Marsh admits. (The store also rents coffee bar space to a local barista and a clothing area that sells items featuring the local high school’s logo and mascot, a bulldog.) To raise the bar and create something unique, the store entered into a partnership with a local cake decorator, Lori Martin, who had made a name for herself in the wedding cake industry but needed a kitchen. Thus, Cakes by Lori at IGA was born. While her business is always marketed as Cakes by Lori


at IGA and her sales are rung up separately, Martin is an employee of the store — she earns a wage and a percentage of her cake sales — and with her expertise in the department, the quality of products overall was raised and category sales have increased across the board. The result is the best bakery in town, according to Marsh. Mahomet IGA offers a full-line bakery selling everything from breads and rolls to the wedding cakes that Martin is known for. The additional sales also required the store to hire another decorator to handle everyday decorated cakes and simpler special-occasion cakes. “Before, people would come to us and get a tray of cookies for graduation, and now that tray is of bulldogs or stars,” Marsh notes. ”All of a sudden, those cookies are $2 apiece instead of $3.99 for a dozen. “The fresh side of the store, including bakery, is the key to the future,” he adds.

“The fresh side of the store, including bakery, is the key to the future.” —Brooks Marsh, owner

Palmer’s Darien, Darien, Conn. hen Megan Palmer Rivera joined her family’s grocery store after attending the Culinary Institute of America, she dreamed of opening a pastry shop. So, in 2007, she opened Palmer’s Bakery inside the store to replace the run-of-the-mill department that had been in place. “We make everything from scratch,” Rivera says, excluding the artisan breads that are shipped from Manhattan daily. “I brought in a whole team of pastry chefs, who I trained, and we have a whole team of cake decorators as well.” The five cake decorators are kept busy creating the 60 wedding cakes that the department turns out annually, along with the 65 specialty-order cakes and 50 case cakes per week. One popular case cake has been the unicorn cake, with the decorators changing the color of the mythical creature’s mane to match the season. Meanwhile, the five pastry chefs produce a variety of signature products. The pear almond tart features a handmade shell with apricot jam, an almond frangipane cake and then Tahitian vanilla bean with poached pears laid on top in the shape of a flower. Tiramisu, on the menu year-round, features ladyfingers soaked in Kahlua coffee syrup layered with Marsala mascarpone whipped filling. The house-made products are packaged in signature pink boxes with a gold logo. “I feel like all of the products deserve that beautiful wrapping when you’re getting this beautiful tart,” Rivera says. “If we took one of our homemade products and put it in a plastic clamshell, I’m not sure I’d feel like it was worth the price.” Made with only the highest-quality ingredients, the products are showcased under chandeliers, which helps clue in customers that the items are deserving of their higher price point. The Palmer’s Bakery brand, along with Palmer’s Catering, which Rivera opened a few years ago, has proved so popular that the supermarket was rebranded from Palmer’s Supermarket to Palmer’s Darien. The bakery “is a huge driver for business,” Rivera notes. “It gets new people in the store.”


“I brought in a whole team of pastry chefs, who I trained, and we have a whole team of cake decorators as well.” —Megan Palmer Rivera, owner



Barons Market, Poway, Calif. e’re a neighborhood market, and we really live up to that description,” asserts Rachel Shemirani, VP of Barons Market, which has seven — soon to be nine — locations in the San Diego area. “Anything we can do to help the local community, we are in.” In 2018, the stores donated or raised more than $300,000 for 280 organizations, ranging from local schools to pet rescue to food banks. Barons raises the monies through a variety of fundraisers, but one that has really taken off is the Backroom Beer Pairings, which match local craft brews with food offerings from the stores. The events are held in each location on the same night, usually on Wednesdays from 6 to 8 p.m., once a quarter, with space for 80 to 100 people. Tickets are $15 per person, and 100 percent of the proceeds are donated to a local charity, which changes with each event. “People come According to Shemirani, craft beer for all different is huge in San Diego, which boasts reasons, but what multiple local breweries, so creating a they really love pairing event was a natural fit. Many of the local craft brewers host tastings in is that it goes to their back rooms, so Barons decided to support a local recreate that experience by hosting its charity.” own events in its stores’ back rooms or —Rachel Shemirani, VP on their loading docks. Shemirani’s team starts working with the brewer about six weeks ahead of time to select the four beer varieties and the food items they should be paired with. “It’s a wonderful cross-section of people, from ones who are just turning 21 to people in their 80s,” she notes. “People come for all different reasons, but what they really love is that it goes to support a local charity.” Last year, the beer pairings raised about $28,000 for a variety of causes, including area schools, Feeding San Diego and a local breast cancer organization. The brewery that participated in the October breast cancer event also created a special pink can to help raise awareness. One of the quarterly events also benefited the community of Alpine, which was devastated by a wildfire. “What community outreach does is bring the relationship part in what we do back into the game,” Shemirani explains, “saying, ‘We are a neighborhood market, but let me show you how we’re a neighborhood market.’”


Treppendahl’s Super Foods, Woodville, Miss. unning a grocery store in a low-income area comes with some unique challenges, but it also provides an opportunity to play an instrumental role in the community. This is a role that Wettlin Treppendahl Jr., owner of Treppendahl’s Super Foods, takes seriously. The store supports as many churches, schools, sports teams and nonprofits as it can within a 30-mile radius of Woodville, Miss., which is 30 miles from Natchez. Educating the youth of the area is a key concern. “People need an education … kids to go off and better themselves and get an education,” Treppendahl says. To that end, the store offers support to a number of local public and private schools, either through donations or scholarships, “People need an or by offering a place education … kids to host fundraisers. to go off and better Treppendahl also plays a themselves and personal role by speaking get an education.” in the schools and —Wettlin Treppendahl Jr., encouraging children to owner “do the right things now,” he notes. “Don’t wait until you get a ticket and start thinking about, ‘Well, I need to start doing the right thing.’ You’ve got to do the right things to start off with.” It’s not just students that receive a helping hand from Treppendahl’s, however. Adults have also found a second chance at the store. One gentleman “rents” a 600-squarefoot space next door to operate a shoeshine business, a skill he learned while in prison. And sometimes, it’s the small things that can really make a difference in the community. Treppendahl’s donates ice for all functions in Woodville, whether it’s a wedding, a church gathering or a school social. “We supply the ice for everything,” Treppendahl affirms. “I mean, it’s not a big thing, but it is a big thing. It is one less expense that organizers have to worry about, and it provides plenty of good will within the community.”





Outstanding Independent Awards


Broulim’s Fresh Foods, Rigby, Idaho ur goal is to expand the local image and feeling of community,” says Scott Zahrn, sales manager for Broulim’s Fresh Foods. “We’re going to have the best-quality Idaho stuff in all of our departments in our stores.” The stores carry a variety of local products throughout all of the departments, including wine, cheese, ice cream, candy, bread, meat and produce. The items are clearly designated with an Idaho Preferred logo, and tags often include details about the local producer. On a weekly basis during harvest season, all 10 Broulim’s locations host farmers’ market-style events. Farmers throughout northern Utah and southern Idaho supply product to the company’s wholesaler, which then ships it to all of the stores, making it easier for both farmers and store personnel. “The communities really like seeing their local stuff,” Zahrn adds. The farmers’ markets, which are in their second year, sold


“We’re going to have the best-quality Idaho stuff in all of our departments in our stores.” —Scott Zahrn, sales manager

out of product every weekend during the last harvest season. Broulim’s also hosted its second Idaho Preferred event, for which the grocer worked with the Idaho Preferred Council to showcase local producers during a weekend in September. The event generated a sales increase of 507 percent over the sales from the previous year. One of the key products were Idaho-grown potatoes harvested at 5 a.m. and in a truck outside the store by 10:30 a.m. More than 2,400 pounds of potatoes were sold, a 958 percent increase over the pounds sold the previous year. Other popular products were Idaho plums, which saw a 376 percent sales increase, and Idaho Honeycrisp apples, which experienced a 1,430 percent sales increase. Local is a key priority for Broulim’s. “We want to get better and better every year,” Zahrn says. “The focus is to keep improving this program and grow our portfolio so we have more reliable growers or producers from our area.”

Oliver’s Market, Santa Rosa, Calif. ocal can be a somewhat vague term, but for Oliver’s Market, it’s quite specific: Sonoma County. The company’s four stores are all in Sonoma County, about 95 percent of all staff lives in Sonoma County, and a quarter of sales come from products grown, produced or raised in Sonoma County. While residents make up the bulk of the grocer’s customer base, it can’t be ignored that Oliver’s Market is in a highly visited tourist area that has become almost as well known as a foodie destination as for its wine. As tourists experience the many different culinary delights in “All of our buyers, the county, they can turn to Oliver’s if they have to find them again if they want something local, another taste or need more to take back home with them, notes Scott they pretty much Gross, general manager. bring it in, as long “All of our buyers, if they have as it’s good quality.” something local, they pretty much —Steve Maass, founder bring it in, as long as it’s good quality,” says Steve Maass, founder. “We’re a community store.” That commitment to local goes beyond simply selling local products to also becoming fully invested in being part of the fabric of the local community. This includes providing help during the recent wildfires that devastated the region and raising more than $550,000 for local charities. When Maass decided it was time to sell the company, instead of turning to a chain, he looked instead to his staff and developed an employee stockownership plan (ESOP). The move garnered a lot of respect in the local community because it kept the stores locally owned. It has been a slightly tougher sell with staff, however, who are just now starting to receive the benefits of the move. Maass expects staffers to be fully on board in the next few years, when they start to see their accounts really grow. “We are in Sonoma County, we are who we say we are, and we live by that,” asserts Eric Meuse, general manager.



“We’re giving the freshest product possible to people.” —Philip Delprete, president and chairman of the board


Uncle Giuseppe’s Marketplace, Farmingdale, N.Y. hen people think of what they’re going to cook at night, it really starts around the meat, right? That’s the basis,” says Philip Delprete, president and chairman of the board of Uncle Giuseppe’s Marketplace, which operates seven stores in New York and New Jersey. The meat and seafood departments are key to the success of the business, he notes, and he should know — both Delprete and his father were butchers. All proteins are brought in fresh, never frozen, according to Delprete. Beef is delivered three times a week, the pork is sourced from a local farmer, and seafood arrives fresh every day, with clams harvested from Long Island Sound and lobsters from Maine. “We’re giving the freshest product possible to people,” he says. The stores are staffed with at least


five butchers as well as apprentices, with between 12 to 15 employees working the meat department to ensure that customers are getting meat cut to their exact specifications. This includes freshly ground beef, chicken and turkey that are often flavored to create custom burgers. The department offers a variety of specialty products, including broccoli rabe burgers,

Hugo’s Family Marketplace, Grand Forks N.D. n the Upper Midwest here, it’s meat and potatoes,” asserts Tom Carriveau, meat director for Hugo’s Family Marketplace, which has 10 stores in North Dakota and Minnesota. “People are still using [meat] as a cornerstone of their meal planning.” For that reason, Hugo’s, which still has butchers in every


“First-time visitors are really surprised; they didn’t expect this kind of variety in a small city in North Dakota.” —Tom Carriveau, meat director

bacon burgers, chicken breasts stuffed with asparagus and fontina cheese, and chicken thighs stuffed with broccoli rabe. “It’s still the old way of bringing the product in as fresh as you can,” Delprete adds, “and giving the best-quality meats to the consumer. We’re just trying to stay with that oldfashioned way. We feel that sets us apart from the average supermarket.”

store, devotes a large amount of space to its meat department, with anywhere from 38 to 48 feet of self-serve cases and 24 to 36 feet of service meat cases, in addition to 8 to 12 feet of seafood. Six stores even have double shelves in the service meat cases. “The first [double shelf] we put in, I thought ‘What are we going to put in all this space?’ Now, in the summer, we wish we had a third shelf,” Carriveau says. About 25 percent to 30 percent of meat sales are from the service counter. “When people visit our Hugo’s meat department, they’re usually surprised [at] the large variety and the amount of signature items we sell,” he adds. “Firsttime visitors are really surprised; they didn’t expect this kind of variety in a small city in North Dakota.” Those signature items are often sold under the Hugo’s Premier Choice brand, which offers 10 kinds of marinated chicken breasts, six types of beef like petite sirloin, and gourmet burgers in one-half and one-third pound sizes. Each burger size has about eight to 10 flavors for customers to choose from. The Hugo’s Premier Choice line also features three varieties of stuffed pork chops, as well as a salmon spread. Carriveau credits the grocer’s long-term staff, some of whom have racked up more than 30 years of service, for the continued success of the department and the store overall. “We’re really lucky that our employees really enjoy working for an independent like this,” he says. “The other thing is our owner. Kristi [Magnuson Nelson] is so committed to being the very best retailer in every community we do business in, even though we are always the smallest one, size-wise. She has great pride in our meat department.” PROGRESSIVE GROCER Februar y 2019



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Outstanding Independent Awards


Vintage Grocers, Westlake Village, Calif. ur goal is for a guest to experience something new in the prepared foods department, whether it be a hot chili or a fig or something’s that’s uber-local, and then go seek that out in the produce department, meat department or the grocery department,” says Melissa Darpino, brand ambassador for Vintage Grocers, with three stores in Southern California. “I come from the restaurant world, so having your source material there at your fingertips, whenever you need it or want to try something new or experiment, is the best of both worlds.” Upon opening its third location in 2018, Vintage Grocers took the opportunity to revamp its prepared foods program. The new menu, introduced at the Pacific Palisades location, will roll out to the Malibu and Westlake Village stores in the first or second quarter of this year. To create the menu, which uses ingredients that can be sourced from the stores’ other departments — about 75 percent of the ingredients are directly from the store — the company hired a consulting chef and interviewed customers to find out what they wanted from the department. “We have deli-standard favorites that are now prepared in a way that is elevated from your standard fare,” Darpino explains. For example, the stores offer a pastrami sandwich that tastes like one from a traditional Jewish deli, and instead of tuna salad, the menu offers tuna conserva. The revamped department includes a poké bar that has proved popular, and an ancient-grain bowl station that offers products from a variety of influences, including the Middle East and Asia. The station offers about 20 items to create a custom bowl, and includes vegetables from local farmers, as well as internation items, like Korean short ribs.


“We have deli-standard favorites that are now prepared in a way that is elevated from your standard fare.” —Melissa Darpino, brand ambassador

The stores also do a booming business for breakfast. The combination of the popular organic juice bar, coffee bar and deli-prepared grab-and-go breakfast items has “people lined up for breakfast in all three of our stores as we open,” Darpino notes. “Many folks are drawn to the grab-and-go department to try something new, and then search the rest of the store for that item,” she adds. “Dinners now can be comprised of things from grab-and-go and things from the center of the store. That’s just how people shop now. So [prepared foods are] a very important part of our store for that reason.”

Woodlands Market, Kentfield, Calif. ur philosophy is pretty simple,” says Jennifer DeBonis, foodservices manager for Woodlands Market, which has three stores in the Bay Area. “We try and offer a really high-quality product made with great ingredients. We try to be really conscious of the environment as much as we possibly can. We have a really big commitment to the communities that we’re in.” Some of those products include an Asian chicken salad, spaghetti with meat sauce, house beef or turkey chili, and house guacamole. When the stores roll out new products, a dedicated demo person helps introduce them to customers and does cross-promotions with the other departments within the store, where customers can find the ingredients to prepare an item at home. “We really believe in getting things in people’s mouths,” DeBonis adds. Woodlands Market uses a central commissary to produce all of the packaged grab-and-go cold items for all three locations, with department managers having the authority to order the products that best fit their store’s demographic. All hot foods are still prepared in store. “We have a great relationship with a lot of the sources of our products, and it also helps accentuate the quality “We have a great that we’re able to deliver year in and year out,” observes relationship with a lot Don Santa, owner of Woodlands Market. Prepared foods of the sources of our make up about a quarter of Woodland Market’s sales products, and it also and one-third to one-half of the profits, Santa adds. “It helps accentuate the is a signature department,” he says. “Many people do quality that we’re able this pretty well, but when we first started doing it three to deliver year in and decades ago, it was somewhat revolutionary, and we kind of set the standard in our area. I think to this day, we are year out.” still leading the charge. It has defined us on a level that —Don Santa, owner has kept us in front of the pack.”




Jungle Jim’s International Market, Fairfield, Ohio n acre and a half of space. Twenty-three percent of the store’s retail square footage. That’s a lot of produce. About 9,000 SKUs, in fact, that are delivered in as many as 80 pallets a day. “Yep, I have one of the biggest produce departments in the United States,” affirms Andrew Reist, produce manager and buyer for Jungle Jim’s International Market, with two locations in Ohio. “We have seven different buyers just in the produce department. This department is treated by all of us buyers as our own store-within-astore. We have our own labor. We have our own gross margin to hit.” The buyers, who each purchase for specialized categories within the department, have a friendly competition among themselves to see who beat last year’s sales by the most or who created a display that hits the grocer’s Instagram page. The department employs about 40 people, from buyers to stockers to accountants. With the large number of products, Reist’s team works with about 90 companies, from the large produce players down to local farmers. “We all go out and try to bring in unique items that are worthy of Jungle Jim’s,” he says. The produce lineup also includes a large selection of international items from a


“We have seven different buyers just in the produce department. This department is treated by all of us buyers as our own store-within-a-store. We have our own labor. We have our own gross margin to hit.” —Andrew Reist, produce manager and buyer

Turnip Truck, Nashville, Tenn. ith a name like Turnip Truck, there can be no mistaking that the company’s two — soon to be three — stores are focused on produce. “You walk into the building, and there’s no question that this is what we do,” says Kim Totzke, COO of the independent grocer based in Nashville, Tenn. “Produce is a core value of the company and [owner] John [Dyke] wanted his company, from the very inception, to be about the produce.” The department has a mission statement: “Enriching our surrounding community by providing quality and responsibly sourced produce.” In keeping with that declaration, the company has strictly enforced buying standards, which are posted along with the mission statement in the department. The first option is USDA organic local (defined as within 200 miles), then USDA organic regional (within 400 miles), followed by USDA organic national, and finally, non-GMO. “Our produce set is usually anywhere from

variety of countries. Both the department’s staff and the stores’ customer base are very international in makeup. Reist estimates that his team speaks about 10 languages, a fact that customers — who are split down the middle between tourists and locals — love when they shop the department: They get a taste of home and the chance to speak their native language. “Mr. Bonaminio [owner Jim Bonaminio] got his start by selling produce,” Reist notes. “Produce is what he loves. If you ever look on the Google reviews of Jungle Jim’s, half of them are about the produce department. Produce is what we’re known for.”

“You walk into the building, and there’s no question that this is what we do.”


—Kim Totzke, COO

90 to 95 percent organic,” Totzke observes. “In the 18 years this company has been open, there’s never been a conventional apple sold in the building.” Totzke and Skyler Glover, the company’s produce buyer, evaluate the relationships with farmers on a yearly basis to make sure that the farmers are still supplying the quality of products that the stores require. “[Skyler] is

so nuts about quality,” Totzke says, noting that he emails vendors after every order is delivered, detailing what was right and what was wrong with the order or the products. “I’ve heard from a lot of people in our community that they know that they’re coming in here, they’re buying that produce, and it can [remain] in their refrigerator for several days,” Totzke observes. PROGRESSIVE GROCER Februar y 2019



Outstanding Independent Awards


Angelo Caputo’s Fresh Market, Carol Stream, Ill. ifferentiating yourself from the competition is key to a successful independent grocery operation, and one way to do that is through store-brand products, something that Angelo Caputo’s Fresh Market has been highly successful at. In the early 1980s, the grocer worked with a tomato grower out of California to introduce peeled, puréed tomatoes under the La Bella Romana brand. Romana was the name of store founder Angelo Caputo’s wife, and la bella means “the beautiful” in Italian. Caputo’s chose the tomatoes because “we were able


to purchase them at a better price,” explains Robertino Presta, CEO. “We were one store at the time, and we were buying loads of them.” From that single product, La Bella Romana grew to include pastas, oil, spices and fresh products made in the stores’ commissary, which is named La Bella Romana Cucina. All hot foods in the company’s six Chicagoland locations, as well as many of the bakery’s house-made products, are branded La Bella Romana. Even flowers from the floral

“You can only get it from us. It singles us out and identifies us. We’re just very proud of it, and we pay very close attention to it.” —Robertino Presta, CEO

department are packaged in sleeves with the La Bella Romana logo. The brand also now graces the company’s meal kits. Aside from the freshly made products, the store-brand products can be found in almost every department, and are often Italian imports or specialty products that are hard to find elsewhere. About 400 SKUs in total carry the La Bella Romana brand, and about onefifth of all customers purchase a store-brand product, Presta notes. While La Bella Romana is its main brand, the company recently opened Bar Angelo in its Addison, Ill., location, and all of the stores carry the Bar Angelo brand of coffee. Store-brand products allow Caputo’s to “concentrate on what we put in there — it’s ours,” Presta explains. “You can only get it from us. It singles us out and identifies us. We’re just very proud of it, and we pay very close attention to it.”

Sendik’s Food Market, Milwaukee

very operator approaches store brands slightly differently. “At Sendik’s, our approach to own-brand item development is somewhat unconventional,” says Joe Wood, chief marketing operator for Sendik’s Food Market, which operates 13 full grocery stores and four Fresh2Go convenience locations in the Milwaukee area. “We base our entrance into a given category based on where we believe there exists a quality-gap opportunity and where we can offer a superior product. Rather than offer tiers of own-brand products with varying degrees of quality to gain mostly a price advantage, our goal is singular: to provide the best quality in the category.” To that end, the stores offer a variety of products with the Sendik’s label, including pasta imported from Sardinia, Italy, which is where the best wheat in the world is grown, according to the company. The wheat is then combined with carefully selected ingredients to create a finished product of outstanding quality. Several products also are made fresh in-store, including potato chips that are made in the Mequon, Wis., location daily. The production process is open to customer view, so anyone can watch the item being made and sample freshly fried chips. Sendik’s uses triple-washed fresh potatoes from “At Sendik’s, the Midwest that are then sliced — skin on — and fried in our approach to allergen-free, triple-filtered peanut oil. The chips are then seasoned and packaged for a truly unique product. own-brand item Many of the Sendik’s-branded products can also boast of development their local origins, including the coffee, which is available in is somewhat bags and as single-serve K-cups, and is packed in nearby unconventional.” Madison, Wis. Plus, it wouldn’t be a Wisconsin store without —Joe Wood, locally made Sendik’s beer brewed by the craftsmen at chief marketing operator Milwaukee Brewing Co.




Outstanding Independent Awards SUSTAINABILITY

New Morning Market, Woodbury, Conn. ith a byline of “Goodness is in,” it’s no surprise that New Morning Market is committed to business practices that serve its triple bottom line of good for financials, good for people and good for the environment. “Our mission, in a nutshell, is to create a local, healthy, sustainable food community,” says John Pittari, owner of the Woodbury, Conn., store. In 2012, the store relocated from a rented facility into its current location, which used to be a bowling alley. Pittari tore down the existing building and recycled all of the materials he could. This allowed him to build an environmentally friendly home for his market. All of the rainwater is recharged back into an aquifer after being cleansed by native plants. “It’s all being collected, and eventually it seeps back into the ground,” Pittari notes. The building materials used were all either recycled material or sourced locally. The concrete, steel and sheet metal all have a high recycled content. The pine paneling was milled locally, the polished concrete floor was sourced from the next town over,


PCC Community Market, Seattle s a triple-bottom-line company, PCC Community Markets is focused on the social, environmental and financial impacts of its business decisions. In 2018, the co-op rolled out a set of five-year sustainability goals that included reducing energy and water use, purchasing renewable energy, donating 1 million meals, and achieving a net carbon-positive store operation. “What’s really cool is that in 2018, we achieved our 100 percent renewable-energy goal, so our stores are powered by renewableenergy credits, which is really exciting,” enthuses Brenna Davis, VP of social and environmental sustainability. PCC also committed to improving the welfare of chickens raised for consumption, by joining the Better Chicken Initiative (BCI) and the Joint Animal Protection Organization Statement on Broiler Chicken Welfare. “We worked with Compassion in World Farming to develop a policy to make sure that all of the chickens in our supply chain, including frozen and prepared foods, are treated humanely,” Davis adds. The stores also stopped carrying Chinook salmon, the main food source for a distressed colony of orcas in the Puget



“Our mission, in a nutshell, is to create a local, healthy, sustainable food community.” —John Pittari, owner

and the granite was scrap from a nearby quarry. Pittari additionally used reclaimed boards from a barn built in 1792 that had been damaged in a storm, and built café tables out of scrap metal from a nearby manufacturer. It’s not just building materials, though — New Morning Market also has a sustainability committee to help ensure that food products are properly reassigned once they can no longer be sold, whether that’s to local food banks or to area farmers to help nourish the animals or crops that the store will in turn purchase. “I wouldn’t say that customers are shopping here because we have propylene glycol in our refrigerator,” Pittari concedes. “They’re not shopping here because we’re energy efficient. They’re not shopping here because we have a pervious parking area. But it’s part of that story we can tell, and then this intangible touchstone that reminds customers that New Morning cares, New Morning wants to do good.”

Sound. This was “an effort to raise awareness about the orcas, but also to minimize the environmental impact of our seafood offerings,” she says. Last year, PCC further revealed that all of the delis in its 11 locations would eliminate petroleum-based plastic and replace it with biodegradable compostable containers by 2022. Plastic is a global concern among consumers, and Davis notes that the co-op is prioritizing the packaging switch that will have the most impact. “We think that investing in sustainable packaging is an investment that is worth the money,” she asserts. As for the future, PCC is planning an awareness campaign for the 50th anniversary of Earth Day in 2020, and will pursue green building certifications for its new stores.

“What’s really cool is that in 2018, we achieved our 100 percent renewableenergy goal, so our stores are powered by renewableenergy credits, which is really exciting.” —Brenna Davis, VP of social and environmental sustainability

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Outstanding Independent Awards “We believe we exist to elevate communities and relationships, always striving to be innovative and forwardthinking with decisions on how to serve our community.”


BFL Grocery Co., Oklahoma City, Okla. utonomous delivery vehicles (ADVs) are on the cutting edge of ecommerce, and independent grocers are getting into the game. BFL Grocery Co. owners Hank and Susan Binkowski are introducing the vehicles to help with last-mile delivery of ecommerce orders for their grocery stores in Oklahoma City, Okla. Their banners include Uptown Grocery, Buy For Less, Buy For Less Super Mercado and Smart Saver. The Binkowskis signed a partnership with Burlingame, Calif.based ADV company Udelv in September 2018 for 10 customized cargo vans to service the greater Oklahoma City area. At the time, it was the largest ADV deal in the world. The first vehicle is expected to arrive in the first quarter of the year, with the full fleet to be on the road by June 2019. The custom-made cargo vans, which are the world’s first ADVs for public-road driving, will operate with safety drivers until both companies and regulators deem them approved for safe driverless operation. “We believe we exist to elevate communities and relationships, always striving to be innovative and forward-thinking with decisions on how to serve our community,” says Susan Binkowski. “As a leading provider of grocery in Oklahoma, we are thrilled to add this new technology that


Sedano’s, Hialeah, Fla. s ecommerce becomes a bigger part of sales for independent grocers, many are looking for solutions to help ease fulfillment stresses. Sedano’s, a Hispanic grocer with 34 stores in southern Florida, has partnered with Waltham, Mass.-based e-grocery solution Takeoff Technologies to introduce what the company says is the first automated hyperlocal fulfillment center anywhere, or “the world’s first robotic supermarket.” Miami-area customers place their orders via an app, and the orders are then filled by Takeoff’s automated


enhances our ability to deliver food with excellence, service and convenience to Oklahoma families.” To accompany the commission of driverless vehicles, Udelv and Esperanza Real Estate Investments, also owned by the Binkowskis, will establish in Oklahoma City a stateof-the-art teleoperations center for the remote control and monitoring of the fleet. The deal also secured an exclusive dealership agreement with Udelv for additional fleet vans to service other local merchants, residents and potential pharmacies in underserved markets. “This agreement and subsequent advent of ADV technology in Oklahoma City is a technological win for Oklahoma,” Susan Binkowski adds.

micro fulfillment center, with the support of Sedano’s employees. Artificial intelligenceenabled robots assemble full supermarket orders of up to 60 items in just a few minutes — a fraction of the speed and cost of current manual-picking options. Currently, only 14 Sedano’s stores in the Miami-Dade area are using the micro fulfillment center. After placing the order, customers then pick it up at a time they select, at the location of their choosing. “This model gives us the ability to leap into the e-grocery industry, develop a new level of employment opportunities, and continue meeting the needs of our valued consumers by offering an affordable and convenient online service,” says Javier Herrán, chief marketing manager at Sedano’s. The objective is to create hyperlocal fulfillment centers that are one-eighth the size of a typical supermarket, through the use of innovative robotics and compact vertical spaces.

“This model gives us the ability to leap into the e-grocery industry, develop a new level of employment opportunities, and continue meeting the needs of our valued consumers by offering an affordable and convenient online service.” —Javier Herrán, chief marketing manager

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—Susan Binkowski, owner

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Private Label Outlook


s private label rises in popularity with U.S. shoppers and becomes an ever more ubiquitous part of the American grocery experience, food retailers must up the ante by embracing what’s new across the board, including products, merchandising and promotions. “One of the biggest trends we are seeing in private brand is the shift from imitation to bold innovation,” asserts Nicole Peranick, senior director, retail transformation at Stamford, Conn.-based Daymon, a provider of global retail strategies and services. “Retailers are increasingly acknowledging that private brand is more relevant than ever to their strategy for success.” The reason for this is that a superior private label offering enables


Key Takeaways Given that a superior private label offering is key to differentiation, and with the rising consumer acceptance of such items, food retailers are embracing own brands more than ever, with some developing comprehensive strategies in this area. When developing new private label items, retailers and manufacturers must incorporate such emerging trends as simple ingredients, local sourcing and an emphasis on fresh perimeter products, while balancing quality and cost considerations. Promoting and merchandising private label products for maximum appeal to shoppers includes performing extensive research, marketing to customers by traditional and digital means, and providing pertinent information.

trade organization’s members who participated in “The Food Retailing Industry Speaks 2018" report, “retailers plan to make growing investments in this business segment, with many forecasting bigger space and SKU allocations for private brands in the next two years. Furthermore, private brands influence 46 percent of consumers in their choice of where to shop, according to IRI data in FMI’s ‘The Power of Private Brands.’” Along with bigger investments, however, grocers must develop a comprehensive game plan for their own brands. “‘Set it and forget it’ isn’t a strategy that works in retail these days,” observes Peranick. “Shoppers want more, and they’re challenging retailers to pioneer. Today, 53 percent of consumers on average say they shop at a store specifically for its private brand. And the more unique the private-brand assortment is, the more loyal shoppers are, as proven by Daymon’s research. Faced with an ongoing battle to drive traffic and store affinity, retailers must continue to push the envelope.”

Pivoting from category-led updates to consumer-centric platform innovation across the store will help raise the profile of your private-brand program and better set you apart from the competition.” —Nicole Peranick, Daymon

SpartanNash's Our Family brand encompasses products across the store.

a grocer to stand out from the pack. “Daymon’s research shows that on average, 98 percent of a retailer’s national-brand assortment is the same as its competition, leaving nearly all differentiation up to private brand,” notes Peranick. “Add to that the fact that consumers continue to reject the notion that national brand is best — with 85 percent saying they trust private brand just as much and 81 percent saying they buy private brand on every shopping trip. As a result, we are seeing the balance of power shift to private brand.” Doug Baker, VP, private brands and technology at the Arlington, Va.-based Food Marketing Institute (FMI), agrees that store brands are a key way for grocers to outstrip their rivals: “A retailer’s private brand is its point of differentiation.” He goes on to note that among the

Her advice for how to do that is clear: “Pivoting from category-led updates to consumer-centric platform innovation across the store will help raise the profile of your private-brand program and better set you apart from the competition.” Among the grocers that have formulated their own comprehensive private label strategies is Carlisle, Pa.-based Ahold Delhaize USA. “We’ve developed a set of best practices regarding the entire private-brand experience,” says Juan De Paoli, SVP, private brands at Retail Business Services, an Ahold Delhaize USA company. “The best practices make recommendations across key areas like quality, price and promotion, merchandising, marketing, packaging, sustainability, innovation and renovation (or reformulation). By leveraging best practices across these areas, we create a cycle of continuous improvement and excellence in private-brand product delivery.”

A Fresh Take on Products

When it comes to developing new offerings, private label items must tick all of the emerging-trend boxes that their national-brand counterparts do. “Our industry is poised to propel the growth of private brands,” notes Baker. “Retailers are innovating with the consumer in mind, from clean ingredients to plant-based products to experiential flavors.” “There is a role for innovative items to bring consumers into their stores for this item that they can’t find anywhere else,” observes PROGRESSIVE GROCER Februar y 2019



Private Label Outlook

Abby Ayers, senior business development manager of retail at Oakland, Calif.-based Fair Trade USA, which collaborated with dozens of retailers to launch 176 Fair Trade Certified ethically sourced private label items in 2018. “Will those items keep the lights on alone? Probably not. But they will keep shoppers coming back.” On the subject of items’ origins, “I expect locally sourced and regional products to become more important as retailers continue to innovate with their brands,” notes Steven Howell, solution sales consultant at Nottingham, England-based Solutions for Retail Brands Inc. (S4RB). “Demands from consumers are increasingly moving towards high-quality, locally grown products, as more people want to participate [in] and support their local community.”

Our industry is poised to propel the growth of private brands. Retailers are innovating with the consumer in mind, from clean ingredients to plant-based products to experiential flavors.” —Doug Baker, FMI


In terms of which categories are trending, Brian Sharoff, president of the New York-based Private Label Manufacturers Association (PLMA), points to the “continuing expansion of store brands in ready-to-serve, heat-andserve and fresh foods, with more and more creativity and innovation in the food products offered to shoppers.” “Consumers are moving away from key commoditized items — such as canned goods, baking ingredients, canned coffee and the like — which are traditionally large private label categories,” affirms John Paul, VP of private brands at Grand Rapids, Mich.-based grocer and distributor SpartanNash. “Instead, they are moving into more fresh categories and looking for healthier food options, including clean ingredients and free-from formats. They’re shopping the perimeter of the stores for value-added options in fresh departments. Because of this, the perimeter of the store continues to grow. There also seems to be a penchant for indulgent and premium items in certain categories, as consumers … want differentiated product for their lifestyles.” “We see several trends in private label, including continued growth of organics and clean-label offerings, and strong growth in the perimeter in fresh categories,” agrees Geoff White, president of own brands for Boise,

Idaho-based Albertsons Cos. “In meat, the trend is in organic, natural and antibiotic-free offerings. In deli, we are seeing growth in prepared foods and time-of-day offerings like breakfast. Perhaps the strongest emerging trend is with plant-based offerings in dairy and frozen. In fact, plant-based alternatives has grown to a $3.3 billion industry in the United States as shoppers seek differentiated offerings, ingredient transparency, and better-for-you and better-for-the-environment options.” In response to these emerging trends, grocers have begun reformulating their private label products. “Years ago, we recognized consumers’ interest in products that meet their desire to lead a healthier life,” notes De Paoli. “That’s why Ahold Delhaize committed to more than 50 percent of own-brand sales coming from healthy products by 2020. I’m pleased to report that we’re not only on track, but exceeding that goal in the U.S. Beyond that, in 2018, Retail Business Services committed to remove all synthetic colors,

The Open Acres line from SpartanNash provides customers with convenient choices in the perimeter.

artificial flavors, artificial preservatives, artificial sweeteners, high-fructose corn syrup and MSG from all private-brand products by 2025. In 2019, providing clean, healthy private-brand products for consumers will continue to be an area of focus.” “Over the past several years, the Our Family brand has been working on a Clean Ingredient Initiative, focusing on providing cleaner products to our customers by removing synthetic colors, MSG and other key ingredients,” says Andrea Anson, SpartanNash’s director, quality assurance and food safety. “The Clean Ingredient Initiative’s purpose is to not only provide products that cater to an evolving consumer, but to educate the consumer in a market where information and product options are numerous and overwhelming.” The initiative currently encompasses more than 400 private-brand products. As far as actual items on shelves, Anson cites such 2018 rollouts as four SKUs of Our Family ice cream that contain only four or five ingredients, such

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Private Label Outlook


as milk, sugar, cream and the appropriate flavoring; core soup offerings that now contain no added MSG; fruit and grain bars that have been reformulated to remove synthetic colors; and, under SpartanNash’s Open Acres fresh brand, a new hummus line providing a plant-based protein solution for consumers. Open Acres also features such items as specialty potatoes, fresh salsa, artisan bacon, ethically sourced seasoned seafood and, in partnership with craft brewery Founders, craft beer brats. SpartanNash additionally offers the Culinary Tours line, which addresses indulgent and premium segments of the business with on-trend flavors and unique products, and Good to Go, a brand providing ready-to-eat meal solutions, including entrées, sides and desserts. “A key area of focus for Retail Business Services is our Nature’s Promise brand,” observes De Paoli. “This brand is already free from more than 100 unwanted ingredients, and as part of our commitment to remove all artificial ingredients from all our private-brand offerings, the Nature’s Promise brand will be further strengthened.” In 2018, Albertsons introduced more than 1,000 new products, many under the O Organics and Open Nature brands, according to White, who adds: “We’ll continue to aggressively roll out new organic and natural products to meet that rising demand. We’re really excited about the opportunities in plant-based offerings. We plan to keep pace with that trend with new product releases throughout 2019.”

The percentage of consumers who purchase private label brands every shopping trip. Source: Daymon

In the Know

The Quality Question

Retailers must bear in mind, however, that product quality is an important consideration, both in developing items and promoting them to consumers, although it can be tricky to balance quality against cost. “Gone are the days of the plain white ‘me too’ package,” asserts Karen Strauss, principal at Wilton, Conn.-based Cadent Consulting Group. “Private label needs to have the right combination of quality, selection and price, and needs to deliver on shoppers’ key decision drivers of lower cost and good


value/quality relative to national brands.” Ultimately, she adds: “Keeping costs low while delivering quality products is important for continued private label success. Turning a profit will come in the form of the grocer’s ability to attract consumers to their lower priced, good-tasting, high-quality private label products.” “There is a role for items that are the lowest price on the shelf to appeal to the shopper who wants as much variety as possible but doesn’t have a lot of disposable income,” notes Fair Trade USA’s Ayers. “These items should still be high-quality. They probably won’t drive the biggest margin, but they will drive a lot of volume.” For his part, PLMA’s Sharoff advises grocers to “emphasize quality, not low price, and build innovation and creativity into every product.” SpartanNash’s Paul agrees with this approach, contending, “Private label always has to be positioned as a quality-first program — and not just quality of the product, but quality of the packaging.” “Contrary to widespread belief, private brands are not all about price,” observes S4RB’s Howell. “Retailers are starting to … offer the quality, packaging and variety that shoppers are seeking. Consumers are looking for greater choice, and those retailers who are developing a strategy to meet those needs will see greater success.”

Albertsons is gearing up to roll out more new products under its O Organics brand.

Beyond the quality piece, private label must be promoted and merchandised for maximum appeal to shoppers. For Jeremiah McElwee, SVP of merchandising and product development at Los Angeles-based Thrive Market, an ecommerce membership-based retailer, that means “know your audience and know your brand. Then be yourself.” Howell puts it a little differently: “Successful private-brand retailers are truly connecting with their customers, and excelling at aligning with their needs and beliefs.” How does a grocer carry out those directives? Some key methods include performing extensive research; reaching consumers where they are, using both traditional and digital means; and providing pertinent information so that shoppers can make informed decisions about products. “Grocers have to really apply consumer segmentation studies to their positioning and promotion to understand the consumer,” suggests SpartanNash’s Paul. “They have to market private label by category, understand how

consumers shop each category and apply their data resources to put forward the best value proposition by category in the very competitive world that is the Private label needs to have the grocery industry.” Daymon’s Peranick counsels that “leveraging right combination of quality, selection and creative merchandising, offering occasion-based soluprice, and needs to deliver on shoppers’ tions, and promoting private-brand innovation on- and key decision drivers of lower cost and good offline through shopping apps and other technologies value/quality relative to national brands.” are some of the ways to ensure you get credit for your innovation efforts.” —Karen Strauss, Cadent Consulting Group “As with any brand, a retailer should consider how the consumer shops, and position and promote their brand to offer convenience and create an in its 2018 “Power of Private Brands: From the Register” report. experience for their shoppers,” says FMI’s Baker, Citing Nielsen’s prediction that within the next decade, overall agreeing that supermarket operators should also be U.S. private label market share will grow to 25 percent to 30 percent, “promoting in channels beyond print to mainstream mainly attributable to the higher availability of private brands on social media sites and apps.” shelves, Ayers warns, “At some point, this will cap, and products will Emphasizing the importance of “great design and have to have something special in order to remain in the hearts of meaningful innovation,” S4RB’s Howell similarly notes, consumers and, in turn, on the shelves of retailers.” “Retailers need to make sure that they are leveraging As Baker observes, “Without retailers, and by extension their available assets to get the brand message across to manufacturing partners, continuing to invest in innovation, private customers in store, online and in the wider media.” brands will lose any advantage the segment has realized through SpartanNash, meanwhile, has “implemented a consumer awareness and acceptance.” new callout system on our packaging that helps draw the consumer’s attention to the removal of things such as certified colors,” explains Anson. “For the Our Family brand, we’re utilizing a leaf to specify key attributes of a given item. For Open ONE OF THE Acres, we’re utilizing a circular swoosh. For patrons of U.S. military commissaries … Freedom’s Choice products have also been a part of the Clean Ingredient IN THE WORLD Initiative, with three stars used to signify key attributes.” She adds, “Our goal is to provide consumers with genuine informational bursts that help them support their family’s goals as effortlessly as possible.” The details may vary, but what’s clear is that grocers must have an overarching plan to boost their private label program’s visibility and sales, or they’ll miss out on a potentially huge source of future profits. According to FMI, private-brand performance within the grocery channel rose dramatically in the past year, although non-grocery retailers — including mass HANDCRAFTED. FARMSTEAD. SUSTAINABLE. and club operators — have been performing much better in this space. There’s a AWARD WINNING CRAVE BROTHERS MARINATED FRESH MOZZARELLA real opportunity for food retail to seize share, however, as private brand accounts for 16.4 percent of dollar sales in the grocery channel, versus 14.8 percent of dollar sales across multiple retail outlets and CRAVECHEESE.COM convenience, the trade organization notes








ix o’clock still rolls around every day, but dinner is anything but set in time. Three squares a day? A dinner table with all family members present, passing a platter and bowls of sides? A from-scratch meal with a meat, starch and potato, maybe served with fruit and, if the family is lucky, dessert? That’s all a blast from the past, of course. For the present and future, dinner is all about the solution to a particular need, taste, lifestyle, occasion or other factor that influences what, where, how and with whom people eat, from early evening through late evening. Because there are so many and disparate demands — not dinnertime-related problems per se —solutions are also varied. “Today’s consumers, including significantly more Millennials, are taking advantage of the broad range of convenient meal solution choices,” notes Marianne Quinlan-Sacksteder, director of insights for Jacksonville, Fla.based Acosta. Quinlan-Sacksteder points to the difference in meal solution choices now compared with a couple of years ago: Carry-out food is at 81 percent now, versus 69 percent two years ago; delivery food is at 72 percent versus 60 percent; grocery prepared foods are at 77 percent versus 64 percent; and meal/ingredient kits are at 42 percent versus 17 percent. For grocers, the trick is getting shoppers to think of the supermarket as a provider of solutions that are broad in scope yet customized for individual needs. “The good

news is that grocers already are a valued resource for dinnertime solutions,” asserts Sarah Marion, Ph.D., director of syndicated research at The Hartman Group, in Bellevue, Wash. “However, there is plenty of room for improvement.” Marion points out that customers must have a reason to trek to the store during the day, late afternoon or early evening. “Consumers’ main barriers to a homecooked dinner are typically time and energy — if there’s no plan, then that is the dinner they’ll outsource to delivery or takeout,” she observes. “Grocers can help that plan come together.” Forward-thinking food retailers already have solid plans to make dinnertime come together — in some parts of the world more than others. “We think that the big U.K. grocers — Tesco, Sainsbury, and Marks & Spencer — are leagues ahead of U.S. grocers on convenient dinner solutions,” says Marion. “They offer a huge array of meal deals with mix-and-match components and customizable sizing, like dinner for one, two or four, etc. Preparations are interesting, with trendy cuisines and flavors well represented, and because of this, they seem higher quality, fresher, and less processed than typical American frozen and convenience foods.” Although most U.S. stores may not be at that level, they’ve changed significantly in terms of dinner offerings from how they were just five or 10 years ago. From grocerants to prepared food areas to grab-and-go cases to value-added proteins to frozen meals, there’s a veritable bounty of solutions for today’s shopper hungry for dinner of some kind or another.

Key Takeaways Grocers must get shoppers to think of the supermarket as a provider of solutions that are broad in scope yet customized for individual needs. With most consumers unsure what’s for dinner the same day that the meal occurs, more manufacturers and grocers are offering such solutions as ready-to-eat offerings and both fresh and frozen heat-and-eat dinners. Meal kits work best for shoppers with the time and ability to experiment in the kitchen.

Ready to Eat/Heat and Eat

Market research confirms that most people have no idea what’s for dinner, even right before the traditional dinner hours. According to Acosta’s “Behind the Dine” report, 85 percent of consumers decide what to eat for dinner the same day that the meal occurs. With such a high degree of uncertainty, dinnertime solutions become pivotal. “People today are stressed for time after work and kids’ activities, so that preparing a nutritious, protein-rich meal in a limited amount of time can be a challenge,” says Ellen Lee-Allen, marketing manager at Acme Smoked Fish, based in Brooklyn, N.Y. Increasingly, food manufacturers and retailers are doing the preparation for shoppers, and that includes the cooking. Readyto-eat and heat-and-eat dinner solutions from grocerants, prepared food areas, delis and grab-go-cases comprise a growing part of grocers’ offerings, especially as retailers compete with restaurants and home delivery services such as Uber Eats, Grubhub and Door Dash. Aaron Ballard is an executive chef at the Harmons Grocery chain in the Salt Lake City area, where he devises new recipes regularly for the stores’ Food to Go dinnertime business. “We had done a non-cooked dinner kit, but we found that customers are more interested in heat and eat,” notes Ballard. At Harmons, he says, there are close to a dozen items on a rotating menu of dinners, and the nearly 3,800 shoppers comprising the store’s subscriber base receive daily texts alerting them to that night’s special. One of the more popular dishes, according to Ballard, is classic meatloaf with mashed potatoes, packaged with raw asparagus that can be cooked by consumers in as much time as it takes to reheat the meatloaf in their home kitchen. Harmons offers dietitian-approved meals like salmon with garden rice and vegetables, or spiralized butternut squash with sliced portabella mushrooms, pumpkin seeds, zucchini, and marinara sauce, as well as more indulgent choices like pulled pork with barbecue sauce and au gratin potatoes. Meals run between $16 and $24 and serve around four people. Another option for busy consumers is a bundle of two large soups packaged with artisan rolls. “It flies off the shelf,” observes Ballard. Beyond grocerant menus and prepared foods, heat-and-eat frozen dinners, which had been part of a declining or flat category, are coming to consumers’ rescue. Large brands like Stouffer’s and Healthy Choice have updated their product lines with new offerings and packages to appeal to the dinner crowd. Smaller and specialty frozen food brands offer a spate of innoPROGRESSIVE GROCER Februar y 2019




vative frozen dinners, including organic and natural products, and meals with authentic ethnic flavors. Acme, for example, has introduced a line of Blue Hill Bay Protein Bowls, which are ready in two minutes and come in Harissa or Lemon Dill varieties. “You only have to heat up the pre-cooked rice packets in the microwave We had done for one minute, flake the salmon a non-cooked dinner portion and mix in the sauce,” explains Lee-Allen. “Just add your kit, but we found favorite topping, and you’re ready that customers are to enjoy.”

more interested in heat and eat.”

Meal Kits

A few years into the meal-kit —Aaron Ballard, trend, many grocers have them Harmons Grocery as part of their dinner program. But is it the solution that it was touted to be? “This is a great question that we’re still wrestling with,” replies Marion, noting that shoppers seem to like the idea of in-store meal kits, but the execution is up for debate. “Price points that are palatable at restaurants — or even

at online meal-kit companies — become less so in the context of the grocery store, where consumers are very focused on saving money. And from our experience listening to consumers, they tend to evaluate a meal kit the way they would a restaurant meal. They look for restaurant-level flavor experiences, and one undesired ingredient can be a reason not to buy a kit. Related to this, meal kits also offer a variety of supply, packing and shipping challenges for retailers, of course.” There are upsides to meal kits, however, and that may be on occasions when people have more time to experiment in the kitchen. As Marion says: “They get to try something new with much less risk. We think that there is a long-term market for meal kits, but it is likely among those who already know how and like to cook.” Acosta’s research likewise finds both opportunities and challenges with meal kits. “When asked about the preferred level of preparation and cooking needed for an

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‘ideal’ meal/ingredient kit, diners were more likely to feel that [it] should take more preparation time than ‘average,’ and involve some cooking ability or offer new skills,” notes Quinlan-Sacksteder.

DIY and Almost-DIY

Of course, grocery stores also cater to shoppers who prefer a DIY or almost-DIY dinner. Even in the meat and produce departments, though, convenience is highlighted, with items like easier-to-cook proteins and pre-portioned vegetables. Merriam, Kansas-based Seaboard Foods is one brand offering solutions for time-crunched consumers, including a new cook-in

Cross-merchandising that brings together different components for a tasty, quickly made meal — ideally with a fresh component — is one option that really seems underleveraged.” —Sarah Marion, The Hartman Group

bag for its Prairie Fresh line of pork. “This product line was developed to help the home cook who didn’t have the time or the knowledge of how to prepare fresh pork at home,” says David Eaheart Sr., Seaboard's director of communications and brand marketing. The package signals the product’s ease of use, with an oven icon and copy lines like “No Prep. No Mess.”

In-Store Eats and Cross-Merch

Acosta’s research shows that eating in store is a real option: 48 percent of diners told the company that they ate in a store’s foodservice dining area at some point in the week prior to being polled. In addition to the range of dinner solutions, how those solutions are communicated and merchandised is pivotal to a grocer’s success. “Cross-merchandising that brings together different components for a tasty, quickly made meal — ideally with a fresh component — is one option that really seems underleveraged,” observes Marion, of The Hartman Group.

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2019 Retail Meat Review


onsumers may be eating meat less often, but they’re also eating it differently, which presents great opportunities for grocery retailers. Total meat sales topped $67 billion for the year ending Dec. 29, 2018, according to Chicago-based Nielsen. While that’s a 3.1 percent increase in dollar sales over the prior year, 2018 saw a drop in volume, with nearly 19.4 billion pounds sold, a year-over-year decrease of 1.5 percent. Fresh meat sales rose 3.4 percent to nearly $45.9 billion, with a 2.3 percent drop in volume. This pattern of more dollars but fewer pounds was common to most categories within fresh meat. A notable exception was meat alternatives — sales rose 22 percent to nearly $8.8 million, with volume climbing almost 20 percent. While meat alternatives represent a small percentage of overall sales compared with traditional animal proteins, growth levels continue to indicate a gradual shift in consumers’ eating behavior. “Interestingly, 72 percent of ... alternative-meat dollars is still coming from the frozen department,” notes Meagan Nelson, associate director of Nielsen’s fresh growth and strategy team. “All meat alternatives are still less than 2 percent of the sales we


EDITOR Progres ’S NOTE: sive Gro cer ’s com Retail S panion eafood Revie will app ear in th w e March 2 019 issue.

have for fresh meat overall. “There are also tofu, jackfruit and other plant-based products in this space,” Nelson adds, “as well as [products like] Beyond Meat.” Meanwhile, the leading animal proteins — beef, chicken, pork and turkey — all gained in dollar sales while losing volume. “Interestingly, one of the largest drivers of the pounds decline in fresh meat across the four primary proteins was ground meat, and that was entirely driven by beef,” Nelson observes. “Beef was down across nearly every subcategory as beef retails rose 7.3 percent. Fresh beef accounted for 37 percent of the entire meat department.” According to Nelson, growth in fresh meat was driven by chicken thighs and wings. “Thighs saw pounds grow by 13.9 million in

Methodology Progressive Grocer’s Retail Meat Review survey was fielded online by EIQ Research Solutions in November and December 2018 to supermarket retailers involved in the meat/seafood category. A total of 52 responses are included in these results, split between operators of fewer than 75 stores, and 75 or more stores. By title, 40 percent are category managers, merchandisers or buyers; 27 percent are from the c-suite; and 4 percent are store managers, with the remainder serving in various capacities, including marketing, consulting and analysis. Among the respondents, meat represents up to a quarter of their total sales.


2019 Retail Meat Review

2018 and wings, 8.9 million,” she says. “In pork, key growth happened in offals and value-added products, and for turkey, ground meat was the highlight.” Sales of the “other meat” subcategory within fresh meat swelled by more than 45 percent, with a substantial increase in volume as well. But Nelson notes that this area is less than 1 percent of the total category. Specifics on what constitutes “other meat” weren’t available — likewise for the “miscellaneous meat” category, about 0.3 percent of total meat — but could be explained by the growing trend in “nose-to-tail” eating. Meanwhile, organics continue to see growth and carry a higher price point. “Organic across the four primary proteins grew 5.8 percent in pounds and carried an overall premium of $1.18 per pound,” Nelson says. Meat sales performance of the past year reflects how diversified grocery shopping has become.


Year-Over-Year Meat Department Sales CURRENT 27%




Net change

31% Increased Stayed the same Decreased Source: Progressive Grocer market research, 2019

5 3.7%

14. 8%

Net change



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2019 Retail Meat Review

“Just like consumers have so many choices of where to get their food — at grocery, restaurants, meal kits, delivery, etc. — they also have numerous options across the store to shop for meat as well,” Nelson says. “Deli has been a growth driver in store for many years now, and we are not seeing any signs of a slowdown soon. As we saw beef decline in the meat department, at the same time, we saw fully cooked beef in the deli department soar, with 16.2 percent growth in pounds — 32.7 million pounds in 2018.” Meat is also found in meal kits designed to make shopping and cooking dinner simpler. “In 2018, we found that households that purchase meal kits have risen to 12 percent, up from 9 percent in 2017,” Nelson observes. “In produce, over 5 percent of packaged salads contain meat and saw 1.9 percent growth in units last year. As options proliferate as retailers and suppliers work to provide convenience and new solutions for consumers, cross-department understanding is critical.”

new flavors

Sales Projected for 2019 CURRENT

YE AR AGO 5.7%

2% 3 6%

79. 2%




Net change

Net change

62% Increase Stay the same Decrease Source: Progressive Grocer market research, 2019

Consumer Demand

In the past year, here’s how consumer demand has changed:



Stayed the Same

Value-Added Products (marinated, kebabs, gourmet burgers, loaves, meatballs, etc.)




Free-From Products (antibiotic-free, hormone-free, msg-free, additive-free, etc.)




Premium-Brand Beef




Value-Priced (ground, flat steaks, etc.)




Smaller Portions/Pack Sizes




Organic Meats




Locally Raised Meat




Grass-Fed Beef




Dry-Aged Beef




Alternative Proteins (e.g., bison, venison, ostrich)




Source: Progressive Grocer market research, 2019

Ups and Downs

More than 40 percent of retailers responding to Progressive Grocer’s survey said that their meat sales increased in the past year. Twenty-seven percent reported a decrease in meat department sales, while 31 percent said that sales were consistent with the prior year. Tony Orlando, owner of Tony O’s Supermarket & Catering, in North Kingsville, Ohio, reported a drop in his meat department sales in 2018, consistent with an overall trend that he says was common to all but deli and wine sales. “The economy is horrible, and we had de-

flation in pricing from the year before,” Orlando remarks. Meanwhile, Eric Otis, senior deli/dairy specialist at a Fred Meyer store in Bremerton, Wash., tells PG that meat sales at his Kroger-owned supermarket increased over the prior year, crediting a new department manager, as well as “proper use of company programs and guidelines.” For the coming year, Orlando is expecting his meat sales to start climbing again, “as I’m very aggressive





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2019 Retail Meat Review

in promoting the department.” Otis also has a positive outlook, explaining that “the forecast on meat sales right now goes hand in hand with the influx of naval ships in port. The Kitsap County area is home to several bases and ports.” Respondents to PG’s survey appear bullish on meat as well for 2019: More than 60 percent said that they expect sales to rise, with 36 percent

anticipating no change and only 2 percent predicting a decline in meat sales.

Business of Service

An overwhelming number of survey respondents — more than 80 percent — reported employing butchers in their stores. Indeed, amid stiff competition for consumers’ grocery dollars, retailers are promoting full-service meat departments as a point of differentiation, as well as pride. “We custom cut anything they want, and can tell them how to cook it,” Orlando asserts. “I also follow up with them for special cuts, after the sale. We are old-fashioned in our service, for sure.” The meat department can and should be a key point of engagement with shoppers to demonstrate a retailer’s prowess in delivering solutions and advice for any meal occasion. “Lean meats are always popular,” Orlando says. “Boneless chicken breast continues to shine, and specialty cuts, like our custom dry-aged beef, are growing. I did a video blog tutorial on our dry-aged beef, which

Effectiveness of Promotional Activities Rated on a scale of 1-6, where 6 = extremely effective Current

Year Ago




Temporary Price Reductions



Social Media



Product Demos/Sampling Events



Flash Sales



Point-of-Purchase Information



Online Marketing



Cross-Promotion Within the Store



Mix-and-Match Bundles (i.e., four for $20)



Direct Mail



Source: Progressive Grocer market research, 2019

Meat Department Category Performance Total U.S., 52 Weeks Ending Dec. 29, 2018

Dollars per Store/Week

Dollar Percent Change





Supercategory Fresh Meat

Beef Chicken Pork Turkey Lamb Other Meat Veal Bison Fowl and Exotics Meat Alternatives Mixed Proteins Remaining Protein Processed Meat

24,892,689,583 11,005,868,528 6,372,081,845 2,396,449,368 422,074,355 336,798,912 164,488,420 162,900,867 110,681,477 8,790,930 8,663,465 1,365,852

3.9 3.3 1.5 0.2 -1.1 45.6 4.8 7.0 1.5 22.0 5.5 2.8

5,263,111,560 4,818,601,239 2,322,959,580 1,111,706,859 60,681,551 105,614,833 24,460,841 18,949,262 40,691,448 1,466,239 1,611,098 294,378


Pounds Percent on Promotion 40.1%

Average Retail Price



Average Retail Percent Change vs. Year Ago 5.9%

-3.2 -0.8 -3.2 -4.0 -11.0 32.4 -10.0 -3.1 -9.5 19.5 -21.0 -9.2

38.7 38.4 43.9 49.8 27.3 25.9 20.7 20.7 22.8 14.0 25.2 42.9

0.7 2.8 1.9 1.7 -1.2 3.4 -0.6 -2.1 0.1 0.9 4.5 32.8

4.73 2.28 2.74 2.16 6.96 3.19 6.72 8.60 2.72 6.00 5.38 4.64

7.3 4.2 4.9 4.4 11.2 10.0 16.6 10.4 12.1 2.0 33.5 13.3



























Fully Cooked Meat









Misc. Meat







Total Meat





Source: Nielsen Perishables Group


Pounds Percent Change

Pounds Percent on Promotion Change vs. Year Ago



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2019 Retail Meat Review

boosted sales another 30 percent overnight in that category.” Regarding his level of service, Orlando adds, “I’ll walk them through the store and help pick out items to complete their meal. I pretty much do it all.” Otis explains that his Fred Meyer store provides customers with meal solution ideas via audio messaging, recipes and sampling, along with seasonal cross-merchandising. “Priorities for meat sales are price, presentation and visual quality,” Otis says. “This is so for both service and self-service counters.” Offering products that target specific needs is a must. More than half of the survey respondents said that demand has increased in the past year for smaller portion and pack sizes, with none reporting such demand letting up. Retailers responding to PG’s survey also reported strong demand for items such as value-priced cuts, like grinds and flat irons; value-added products like marinated, seasoned and stuffed meats; and meat from animals not treated with antibiotics. Not quite half (46 percent) of respondents said that they carry plant-based meat alternatives, and nearly a quarter would consider adding them to the meat department, while about 30 percent said that they have no plans to carry plant-based meat substitutes. “Not much of that happening here,” Orlando says of the plant-based products. “We do almost nothing in plant-based meats, except for Boca Burgers in the freezer.” Otis adds: “Sales of alternatives to animal proteins are a challenge to our location. We are in a very competitive market area for those rings.”

Money Talks

Social media and online marketing are gaining ground among survey respondents as effective ways to promote the meat department. Still strong are tried-and-true methods like product sampling, temporary

What percent of your total fresh-meat sales comes from case-ready versus full-service products? Case-ready products Full-service products

4 5%

5 5%

Do your stores have butchers/meat cutters on site? 18% No

82% Yes Source: Progressive Grocer market research, 2019

price reductions, mix-and-match bundles and buy-one-get-one deals. “This is a very difficult business today, and being in a rural, poor county, it takes a lot of creativity and a solid effort in finding great values for my customers to stay in business,” Orlando notes. “My advantage is my experience in serving the customers properly, and always trying to exceed expectations.” Despite the latest food trends, price still matters “big time,” Orlando asserts. “The people in our area will drive here for my crazy deals, and they appreciate our custom USDA Choice or Prime meats we sell. Our competition cannot match what we do, and we beat them on pricing on every single meat and deli item, which is why I’m still here.”

Double-Digit Growth in Plant-Based Proteins for Foodservice Case shipments of plant-based protein from broadline foodservice distributors to foodservice operators increased by 20 percent in the year ending November 2018 compared with a year ago, with all census regions showing double-digit growth, according to the Chicagobased NPD Group. About a quarter of the U.S. population, many of whom aren’t vegan or vegetarian, say that they eat and drink plant-based beverages and foods, as well as animal proteins, on a regular basis. Among the reasons that plant-based proteins have mainstreamed is that consumers, in addition to adding protein to their diets, perceive them as being a better-for-you option. There are also plant-based fans who have concerns about animal welfare, and they want to know how products are brought to market. These consumers believe that plant-based proteins provide “clean meat” and eliminate many of these barriers. Burgers represent the largest plant-based foodservice category, having experienced year-over-year double-digit growth in pounds shipped to foodservice operators, and it’s plant-based burgers that are showing up the most on many restaurant menus. Although plant-based burgers are popular across demographics, an analysis done with NPD’s receiptmining service, Checkout, shows that smaller, more affluent households are the top buyers of these items. “Plant-based proteins are no longer just a meat replacement — it’s now its own category,” says David Portalatin, NPD food industry advisor and author of “Eating Patterns in America.” “It’s possible that protein overall is evolving into a category, whether animal meat, beans, nuts, soy, wild game or other proteins, in forms ranging from beverage to center of plate.”

Do you carry plant-based meat substitutes (e.g. Beyond Meat, Impossible Burger)?


Yes, we currently carry them

23% We do not currently carry them, but we would consider it

Are you currently or would you consider merchandising plantbased meat substitutes in the meat department alongside their animalbased counterparts?

31% We do not currently carry them and have no interest in doing so

41% No





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Organic Harvest THE CATEGORY IS ROBUST AND GROWING, THANKS TO A CERTAIN SOUGHT-AF TER DEMOGR APHIC. By D. Gail Fleenor or anyone out there who dismissed organic produce as having only temporary appeal for consumers, take another look at the numbers: After skyrocketing sales have settled down to a mature but healthy level, prices are now lower, even competing with conventional in some cases — a comfortable place to be. Primary buyers are the coveted Millennials, who are starting families, a strong indicator of continued growth. Organic produce has hit the sweet spot of sales. The organic produce category is the biggest-selling organic category, according to the Washington, D.C.-based Organic Trade Association (OTA). With the price gap narrowing between many kinds of conventional and organic produce, more price-reluctant customers are trying organic produce. The industry has matured and sales have gone from double-digit to still-strong single numbers. Overall, the OTA notes that organic produce sales have increased a healthy 5 percent to 6 percent over last year, and that 15 percent of the produce Americans buy is organic. “Organic is a strong driver influencing consumer behavior now and moving forward, and it has a strong advantage over other influencers, because it has ties to several hot-button


areas: sustainability, health, and motivational ties like the need for transparency, authenticity and knowing a food’s origin,” observes Laura Batcha, CEO and executive director of the OTA. “That is all playing into the robust demand for organic produce, and we see that trend just getting stronger in 2019.” Organic produce sales reached $5.6 billion in 2018, according to Nielsen data from the Monterey, Calif.-based Organic Produce Network (OPN). Trends in the organic category for 2019 include continued expansion of the berry category, including strawberries, blueberries and blackberries, according to Matt Seeley, CEO of OPN. Seeley also cites growth in value-added organic items such as pre-packaged salads, baby carrots and apple slices for on-the-go consumers. Meal kits are the next opportunity for organic produce growth, he adds.

What Does “Organic” Really Mean?

Organic produce means different things to different people. Some view organic as “cleaner,” while others still view it as a “fancy” option. Many consumers perceive organic produce as more nutritious. The Hartman Group Inc., a research firm based in Bellevue, Wash., says that as consumer involvement with organics has grown, the firm has encountered an ever-expanding body of interpretations, understanding and practice around the definition of “organic.” Laurie Demeritt, Hartman’s group CEO, recalls explaining to companies a few years back that consumers see organic as more about health than the environment. “Companies would put pictures of the earth on products,” she notes. “They assumed people wanted to save the world, but we saw the issue as moms wanting to feed their families better food.” The meaning of organic lies more in the natural growing methods used, which, according to The Hartman Group, organic consumers understand to be legally regulated, grown with more care and in greater alignment with their values. The top reasons to buy organic are concerns about the effects of pesticides, hormones and antibiotics on health in general, and on the health of children in particular.

The Group Worth Considering

Younger consumers, especially Millennials, are more likely to be organic buyers. Of Millennials in the United States, 25 percent are parents, according to the OTA. In the next 10 to 15 years, 80 percent of Millennials will be parents. This is likely to shift organic produce growth and sales into overdrive. “Millennials are the largest consumer group in the U.S., and they’re choosing organic,” observes Batcha. “As more members of this generation become

parents, their presence in the organic market will just get stronger.” Many Millennials hold a strong belief that selecting organic for their families makes them better parents, she adds. The largest generation in the U.S. labor force, at 75 million strong, Millennials are expected to outnumber Baby Boomers this year, according to Washington, D.C.based Pew Research. Baby Boomers had been the largest generation in the United States, but now there’s a new group in

Key Takeaways Consumers' top reasons for buying organic are their concerns about the effects of pesticides, hormones and antibiotics on health in general, and on the health of children in particular. Grocers should make room for organic produce in value-added items and meal kits as organic consumers seek convenient solutions. Millennials are the largest buyers of organic produce, and with 80 percent of them expected to be parents in the next 10 to 15 years, their interest in the category will only increase.





charge — mostly. “Millennials are concerned about the environment, and they recognize that organic farming can be part of the solution to climate change,” says Batcha. “In addition, today’s consumer places high value on other food attributes that organic delivers, including non-GMO and hormone-free, high safety and quality standards, environmentally sustainable and friendly materials, and that will provide the tailwinds for continued organic growth.” That said, Baby Boomers are organic purchasers, too.

Changes in the Organic Section

As the section matures, retailers are seeing changes in many aspects of organic produce. “There’s a difference in price, larger assortment, and more shippers, growers and vendors committed to the category,” affirms Josh J. Padilla, produce and floral coordinator at Gerrity’s Supermarkets, in eastern Pennsylvania, part of Shur Save Supermarkets. “Also, we’re beginning to see more niche specialty items only being grown in the organic sector, such as red dandelion, Russian kale, Buddha’s hand and finger limes.” Padilla says that his top organic produce sellers are pre-packaged salads, bananas, berries and avocados. “I’m starting to see some increased business in packaged value-added items such as microwaveable green beans, broccoli florets, etc.,” he adds. Internationally grown organic produce sales are also rising. Padilla’s company purchases commodities of organic items from abroad because of the occasional scarcity of the items domestically, or due to seasonal rotation. It could be blueberries from Argentina, bananas from Costa Rica, avocados from Mexico, or imported peppers or tomatoes on the vine from Canada or Mexico. “Consistency and quality play a huge factor when procuring these items from certain regions,” he points out. “Sometimes you might have to go without certain items, rather than disappoint the customer with poor quality.”

Millennials are the largest consumer group in the U.S., and they’re choosing organic. As more members of this generation become parents, their presence in the organic market will just get stronger.” —Laura Batcha, Organic Trade Association


of shoppers are willing to pay at least 20% more for organic produce. Source: The Hartman Group

Price Less of an Obstacle

Many consumers have been wary — sometimes with good reason — about organic produce prices. That appears to be a changing situation, however. “Every year, the pricing gets closer and closer on both the cost and retail side between organic and conventional items,” asserts Padilla. “For example, some organic salads can retail at $2.99, the same as conventional salads. I have also seen this with other organic items such as herbs — parsley and cilantro — apples, grapes and berries, just to name a few.” Even if prices of organic and conventional aren’t close, 44 percent of shoppers say that they’d be willing to pay 20 percent or higher than conventional produce for organic fresh vegetables, according to research from The Hartman Group. Because of the close proximity in retail/cost of organic produce items to their conventional counterparts, Gerrity’s sometimes decides to replace conventional with organic, or merchandise the two options alongside each other. “This does two things,” observes Padilla. “It creates value for the organic consumer and introduces new shoppers to the category, where price was once an obstacle when purchasing organics.” He notes that even if you’re marginally off on the retail price, it’s a more likely possibility that consumers could trade up from conventional to organics. From a grower’s perspective, organic prices are a mixed bag. “Chelan Fresh is seeing more availability of organic apples bringing more price pressure on lower grades and off sizes,” says Kevin

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Millennials’ Time Online

Stennes, organic sales manager for the Chelan, Wash.-based apple grower. “But strong conventional market production is bumping up organics on prime retail sizes and grades. We are offering our own Cascade Crest Organics branded #2 pouches for most apple and pear varieties,” something new for Chelan Fresh. The grower’s 2018 season offered organic varieties of 12 apples, six pears, and consumer stone fruit such as cherries, plums, pluots and nectarines. Stennes has seen little to no international competition for organically grown Washington state fruit. “We do bring imports in to fill gaps in our season, but predict a shorter gap this year with a larger organic crop,” he notes.

Online is the place to be for Millennials when they shop, including for food. More Millennials shop for groceries online than older parents — 40 percent versus 30 percent, according to the Organic Trade Association (OTA). A survey by the OTA finds that the attitudes of these younger shoppers are a positive factor for organics. Twenty percent of those surveyed say that they like the quality of organic produce purchased online, while 10 percent report an increase in organic shopping when purchasing online. “Americans are eating more organic than ever before,” says Laura Batcha, CEO of the Washington, D.C.-based OTA. “Organic sales reached nearly $50 billion last year, driven in large part by the Millennial consumer. Millennials having children over the next 10 to 15 years are projected to be a generation of highly engaged organic consumers.” Meeting the needs of Millennial shoppers online appears to be the route to increased sales overall, including organic produce, something that’s highly important to the demographic. The importance of organic produce will likely increase as these consumers seek to provide healthy meals for their kids.

Go Bananas

More Millennials shop for groceries online than older parents — 40 percent versus 30 percent. Source: The Organic Trade Association

Bananas are, of course, not grown in the United States, or at least not in great numbers. In contrast to conventional bananas, organic bananas grow only in dry soil, according to Jamie Postell, director of sales, North America at Fort Lauderdale, Fla.-based Chiquita Brands. “Chiquita offers a premium banana that tastes great, is naturally fat-free, a good source of potassium and fiber, and is 100 percent organically grown,” observes Postell. “Organics have been gaining sales momentum over the last few years, currently representing 9.5 percent value share of the total banana category,” he adds, citing Nielsen Perishables Group figures. “Between the years 2011 and 2017, organic bananas grew dollar sales at a compounded annual growth rate of 23.5 percent.” This growth is mainly driven by increased distribution, in response to consumer demand and their interest in transparency across the supply chain process, as well as in free-from products, according to Postell. He notes that before a product can be officially labeled 100 percent organic, a USDA-approved certifier must inspect the place where the food is grown to ensure that the grower is adhering to all of the rules and requirements to meet USDA organic standards. According to Postell, “Chiquita is in a strong sourcing position, providing our retail partners with the highest-quality fruit and service to support the emerging demand for organic bananas.”


Talent Acquisition & Training


hat’s the fastest-growing job in retail? Buyer? Category manager? Sales associate? If you answered one of those three, you’re wrong — the top-growing job is, in fact, software developer. That’s according to a recent global analysis of LinkedIn user profiles from the Society of Human Resource Management. From 2013 to 2017, retail technology jobs have grown from 7 percent to 9 percent, with software developer moving to the third most-held retail occupation in 2017. Take one look at the grocery channel in 2018, and you’ll see significant ramp-ups intended to support many more technology-focused roles at several top grocers in the United States. Noteworthy happenings in this space include Kroger moving its digital team to a new downtown Cincinnati headquarters, where it plans to expand the workforce; Albertsons partnering with a venture capital firm to launch an incubator intended to help grow emerging companies and technologies in grocery; and H-E-B opening a new headquarters for its grocery technology team in East Austin, Texas, which will house the grocer’s growing digital team and its


on-demand delivery service, Favor. Let’s face it, though: To top STEM graduates, Kroger isn’t Apple. Neither is Albertsons Google, nor H-E-B Microsoft. That’s not to say, however, that grocers don’t have the ability to offer lucrative, rewarding technology careers, especially with technology permeating food retailing faster and more thoroughly than ever. It just might require a bit of effort to convince young minds that a career in grocery technology is really a big deal.

Digital talent — from UX to data analytics — has many options. That means rethinking pay brands and career paths at companies.” —Carlos Castelán, The Navio Group

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Talent Acquisition & Training

To help convince them, grocers should do the following:


Determine the Decision-Makers

This is probably the best first step: A major reason that technology graduates are going to chase tech companies such as Apple, Google or Facebook after graduation is that technology is their core. Meanwhile, grocers typically are merchant-driven, with the digital side coming in second or third place in terms of employee rankings. “This means that it’s a priority from the board and CEO to cede more decision-making to digital teams from the legacy merchandising organization,” says Carlos Castelán, co-founder of The Navio Group, a Minneapolis-based retail and consumer goods consulting firm whose clients have ranged from Whole Foods Market and Meijer to Kraft Heinz. Castelán recommends that grocers begin by hiring great leaders — think Kroger with Chief Digital Officer Yael Cosset or Walmart with Walmart Ecommerce U.S. CEO Marc Lore, for instance. While they might not be Bill Gates or Mark Zuckerberg, these influencers still have the ability to attract other great candidates by providing a compelling vision for how the organization will evolve and put the consumer front and center. Employing technology-savvy recruiters also is key here. In a blog entry, Dave Anderson, content strategist with Seattle-based recruitment software company Recruiterbox, points out that one of the easiest ways to lose a candidate’s interest in a job is to describe that role in a way that doesn’t make sense to them. “A recruiter who specializes in finding tech talent will not only bring you the right candidates,” he writes. “They’ll also make a good first impression on behalf of your company because they can express what you’re looking for in a practical way.”


Budget for Greatness

When trying to court top technology talent — now in demand in many other and sexier fields nationwide — you have to budget for it. No interviewee wants to be told, “We think you’re worth what you’re asking — but we can’t pay you that.” “Digital talent — from UX [user experience] to data analytics — has many options,” Castelán says. “That means rethinking pay brands and career paths at companies.” Think about it: How much value does one extremely talented analyst provide versus an average one? Are you willing to pay a junior candidate significantly more than a longer-tenured employee, because of the need and greater productivity? These are difficult questions that affect the future of the company and its culture, so they must be addressed by forward-thinking human resources teams.


Connect with the Community

Grocers need to wake up to their local technology scene and connect through the ways that its members do. And if they’re not near a major technology hub, they should send their top digital talent and recruiters to one. In his blog entry, RecruiterBox’s Anderson notes that when checking out an area with a high concentration of technology graduates or workers, it’s not difficult to discover Meetup groups; hackathons — where software developers, designers and more collaborate to develop software in a short period of time — workshops; or other social events. Grocers with the appropriate amount of resources might even be able to sponsor such an event. “Some companies take an aggressive approach and put on these types of events so they can connect with talented, passionate people,” Anderson writes. “They might even make their intentions known and outright host a recruiting event. If your company can’t go that far, it’s still a good idea to send a recruiter to local tech events. Many people in attendance may be looking for a job or, at the very least, testing the waters to see what opportunities are out there.”


Consider Non-STEM Graduates

While it would be every grocer’s dream to land STEM (science, technology, engineering and mathematics) grads from top universities, let’s be honest: Grocers aren’t going to be the top pick as employers for these graduates, at least not in the near future.


“Then they see how much of a role technology plays in retail. “Tell them they’re smart,” he continues. “Tell them you want them to stick around. And then offer to halve their time at the office to dedicate the other half to pursuing an M.S. in computer science — paid for by the company — if they promise to stick around a couple years after.” Giving opportunities of a lifetime to associates is a sure-fire way to develop loyalty — and a strong reputation that can help draw top talent.

You go hire really smart English majors and history majors from good schools, then tell them that you’re going to teach them how much fun retail is. Then they see how much of a role technology plays in retail.”


Highlight What’s Important

—David Diamond, David Diamond Associates But what if grocers could go for really smart humanities majors from good schools and get them passionate about retail? Then they could potentially develop these new hires into top technology talent, suggests David Diamond, founder of New York-based consultancy David Diamond Associates. “You go hire really smart English majors and history majors from good schools, then tell them that you’re going to teach them how much fun retail is,” Diamond counsels.

Further, always emphasize to newcomers — whatever field they come from — the true value in solving problems and advancing technology in grocery retail. Food is one of the most vital things in life, notes Tom Ortega, principal of Queen Creek, Ariz.based app consulting firm Omega Ortega — much more so than other commodities. And vital things are ultimately what so many great minds want to work on. “Tech talent is like any talent and wants to work on important things,” Ortega asserts. “What could be more important than helping people get the right foods at the right time to provide sustenance?”

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Food Safety

Key Takeaways Despite all of the hype surrounding blockchain, there’s not yet a viable, full-scale business solution that would work for the entire industry. Consumers can benefit greatly from the technology, especially if it prevents wide-scale outbreaks of foodborne illness, but also since it can provide important farm-to-fork food production information. In the future, blockchain interoperability, or blockchains being able to communicate with each other, must be explored to make widespread usage possible.



lockchain is an emerging technology that holds exciting promise for the future of food safety. Consider these major industry headlines from the second half of 2018: • Software giant SAP began piloting its SAP Cloud Platform Blockchain with farm-to-consumer produce suppliers, including Naturipe Farms, Johnsonville LLC and Maple Leaf Foods. • The IBM Food Trust blockchain solution became generally available to the industry after 18 months in testing. • Walmart announced that all of its leafy-greens suppliers must sign on to the technology in a year’s time to prevent further outbreaks (and then Walmart’s VP of food safety, Frank Yiannas, joined the U.S. Food and Drug Administration as deputy commissioner for foods and veterinary medicine, seemingly to help boost better traceability efforts in the country). There’s no doubt that blockchain would help improve traceability, and hopefully one day make a sizable dent in serious foodborne illness cases like the e. coli-tainted romaine lettuce outbreaks of 2018. But one blockchain and supply chain expert notes that beyond all of the hype, a lot of work needs to be done to find a viable, full-scale business solution that would work for the entire industry. Henry M. Kim, associate professor of Schulich School of Business at York University, in Toronto, and senior research fellow for Moscow-based enterprise-grade blockchain platform provider Insolar, tells Progressive Grocer that the technology is currently showing the most potential among the big — think Walmart — and the small — specifically, locally operated growers and producers with a more singular supply chain. It will still take time, however, to find a workable solution for the often fragmented, multilayered and more complex food supply chain, especially “middlemen” such as producers.




Food Safety

say, 20 percent of suppliers in a specific category. Yet for suppliers, a network with everyone participating doesn’t create any type of competitive advantage; rather, it becomes more of a “strategic necessity,” he explains.

Project Updates

Kim points to Walmart’s huge scale and influence on the industry as obvious forces in its role as retail leader in blockchain. “Walmart is an 800-pound gorilla, so the company can enforce adoption just by handwringing,” he notes. “Walmart is at the receiving end — they can please their customers more, and because they’re 're they're more downstream, they get access to a lot of valuable traceability information.” It will be harder to get producers to participate in a blockchain initiative, however, since they wouldn’t necessarily see a cost benefit or a competitive advantage, he reasons. (IBM Food Trust is allowing suppliers to contribute data to its network at no cost, at least for now, though.) Essentially, because blockchain relies on multiple parties to input data, a wide-scale solution would need many participants in compliance to be successful, Kim says, or consumers won’t see the value in a food safety solution that includes only,

Walmart is an 800-pound gorilla, so the company can enforce [blockchain] adoption just by handwringing.” —Henry M. Kim, York University/Insolar


Walmart and Sam's Club have asked all of their leafygreens suppliers to implement endto-end traceability back to the farm using blockchain by September 2019.

Last September, Walmart and Sam’s Club asked all of their leafy-green suppliers to “implement real-time, end-to-end traceability back to the farm using blockchain technology” by September 2019. At that time, Walmart noted that it had been working with Armonk, N.Y.-based IBM and 11 other food companies to develop the blockchain-enabled food traceability network for more than a year. (Others involved in the initiative include France’s Carrefour and, in the United States, cooperative Topco Associates and retailer-owned cooperative Wakefern.) IBM Food Trust spokeswoman Hannah Slocum tells PG that a number of Walmart’s leafy-green suppliers are already joining the solution. She also says that IBM Food Trust aims to continue to onboard new members and develop new modules for the solution this year. Another, somewhat smaller blockchain project being tested in the United States is SAP Cloud Platform Blockchain. The solution works alongside various SAP solutions to help build business intelligence for organizations in several industries, including food, transportation and pharmaceuticals, according to Lori Mitchell-Keller, co-president, industries for SAP, based in Newtown Square, Pa. The platform is a blockchain-as-a-service solution. The solution’s farm-to-consumer capability is designed to “increase food safety confidence for food producers and retailers alike through supply chain trace-and-track technology,” she notes. On a much smaller scale, Kim recently studied an organic cattle farmer co-op in Arkansas called the Grass Roots Farmers’ Cooperative, which is using a meat product-monitoring blockchain solution developed by London-based Provenance. Consumers can scan QR codes to learn about the meat’s quality, as well as production. “They have a very straightforward supply chain — the end consumer knows they’re getting something straight from the farm,” he explains. “So the fact that this farm could say, these are the ingredients, these are the qualities of

the cow, this is the person who raised the cow … all this provided marketing for their brand.” For a large-scale poultry farmer, however, there isn’t such a clear case for improved brand recognition, he says. Ultimately, Kim believes that blockchain will continue to gain steam in the industry, with more proofs of concept in the next few years. At the end of the day, consumers have much to gain from this technology, especially if it prevents wide-scale outbreaks of foodborne illness, but also since it would provide valuable information about the path of food production from farm to fork. It remains to be seen, however, whether individual producers and manufacturers can find real business benefits from using it, versus its being a strategic necessity. “This may entail getting more technology involved and more use cases,” Kim notes. “I think it will also entail government incentivizing.” Looking even further into the future, blockchain interoperability, or the idea of blockchains being able to communicate with each other, will need to be explored to make widespread usage possible. For now, though, he says that “it’s too early to talk about that.”

Global Applications Around the world, food companies are experimenting with how blockchain can improve traceability efforts. France’s Carrefour, a leading retailer with more than 12,000 stores in 33 countries, is using the IBM Food Trust blockchain network to strengthen its “food excellence” actions. Its stores are initially using the solution to provide information about a number of its own branded perishable products, including free-range chickens, and the solution is expected to expand to all Carrefour brands worldwide by 2022. Carrefour has even built a consumer-facing app based on IBM Food Trust open APIs (application programming interfaces) to allow consumers to learn about the details of the particular food item they’re purchasing, down to the time and place it was picked, according to IBM Food Trust spokeswoman Hannah Slocum. Meanwhile, Chinese ecommerce giant Alibaba is working with several suppliers in Australia and New Zealand to test its Food Trust Framework initiative using blockchain technology. The company is working to address food fraud.

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Health, Beauty & Wellness


zinc lozenges and products like Emergen-C and Airborne on a daily basis, rather than using them once they get sick.” “Boiron and other holistic players have been driving growth in this category,” affirms MaryEllen Tefft, national accounts manager at Newtown Square, Pa.-based Boiron USA. “Sales for our flu-symptom medicine, Oscillococcinum, have doubled, with a 108 percent increase over the same time frame last year.”

By Barbara Sax

onsumers have a rising appetite for natural over-the-counter products, and new ingredients are igniting further interest in a category that keeps on growing. Laura Mahecha, industry manager at the market research firm Kline & Co., in Parsippany, N.J., says that natural sleep aids, cough/ cold and topical analgesics have had the highest growth in the natural OTC sector. Data from Chicago-based SPINS shows that natural sleep aids saw 11.5 percent dollar sales growth for the 52-week period ending Dec. 2, 2018, while topical OTC analgesics experienced a 6.5 percent dollar sales increase. “Anything natural is on the increase,” affirms Jeff Garey, nonfoods director at Woodman’s Food Markets, a 16-store chain based in Janesville, Wis. “Natural products in every single category are showing growth.” According to Keena Roberts, senior consumer health analyst at London-based Euromonitor International, the biggest trend shaping the supplement industry is a movement toward products tailored to address issues “such as energy, beauty or immunity,” rather than multivitamins. “We see a big shift from products such as vitamin B toward combination products addressing a need state,” she says. Additionally, consumers are using these products proactively. “Herbal formulas are seeing nearly twice the growth of single herbs,” asserts Kat Wiranowski, brand manager at Boulder, Colo.-based organic infusion and supplement maker Organic India USA. “People are looking for natural solutions to increase their longevity and well-being — they are investing in wellness rather than waiting to treat illness.”

Daily Doses Against Cough/Cold

Euromonitor research shows that immune defense products, which fall under the cough/cold/allergy umbrella, have seen strong growth — particularly pediatric immune-defense products. “These products are very popular, especially as consumers recover from a particularly bad flu season over 2017-18 and prepare for the 2018-19 season,” observes Roberts. Mahecha says it’s worth noting that “consumers are buying into natural products’ ability to boost the immune system and are using


People are looking for natural solutions to increase their longevity and well-being — they are investing in wellness rather than waiting to treat illness.” —Kat Wiranowski, Organic India USA

Boiron recently launched ThroatCalm, a sore-throat relief medicine that’s a natural alternative to Benzocaine-based medicines, and has now entered the allergy category with RhinAllergy and RhinAllergy Kids. “Unlike conventional medications that mask full-blown symptoms, this new medicine targets specific symptoms of hay fever and other upper-respiratory allergies,” explains Tefft. Meanwhile, Oscillococcinum has become so popular with consumers that Whole Foods Market’s 365 banner now offers a private label alternative. To spark prophylactic use of natural immune-boosting products, Austin, Texas-based Whole Foods merchandises resealable pouches of Nature’s Way Organic Sambucus Zinc Lozenges at checkout counters in its Whole Body section during cold and flu season. The chain also merchandises niche products, including Olba’s all-natural inhaler, Baraka’s sinus rejuvenation oil and Redd Remedies’ sinus-support aromatherapy travel diffuser, on a display wing near the cough/cold/allergy section to encourage add-on purchases. Smaller players are following suit in terms of offering own-brand items. “We’ve started to add private label natural OTC products into our cough/cold and sleep aid sets,” says Rich Brown, HBC buyer for Mechanicsburg, Pa.-based Karns Quality Foods, an eight-store independent. Brown adds that the chain is merchandising the products next to traditional OTCs to give consumers more choice.

Key Takeaways Natural products are not only becoming more popular to treat minor ailments, but consumers are also taking them proactively in a bid to prevent illness. Large and small grocers alike are introducing private-brand natural wellness products. Natural ingredients currently attracting interest include melatonin for sleeplessness, turmeric and ginger for arthritis pain, and cannabidiol (CBD) oil, derived from cannabis, for various health issues.




Health, Beauty & Wellness

Fighting Sleeplessness Naturally

Melatonin-based combination sleep aid products have seen extensive growth at retail, with gummy formulations becoming more popular with consumers. “A lot of people are experiencing occasional sleeplessness and don’t want the side effects associated with traditional sleep aids, so natural products provide a solution,” says Mahecha. Kent Shepard, buyer at Rigby, Idaho-based Broulim’s, affirms that melatonin-based product sales have grown significantly at the 10-store chain. Natrol, Nature’s Bounty, Nature Made, Olly, Zarbees Naturals and Vitafusion natural sleep aid products all experienced

A lot of people are experiencing occasional sleeplessness and don’t want the side effects associated with traditional sleep aids, so natural products provide a solution.” —Laura Mahecha, Kline & Co.

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double-digit increases across multichannel outlets for the 52-week period ending Dec. 2, 2018, according to data from Chicago-based IRI. New products keep the category growing. Last year, Los Angeles-based Hyland’s launched a line of Harmony products in Rest, Calm and Awake formulas to address sleep issues. Large consumer and pharma companies are also jumping on the trend: Last April, Cincinnatibased Procter & Gamble Co. introduced two natural sleep aids, Vicks ZzzQuil PURE Zzzs Melatonin Gummies and Vicks PURE Zzzs Soothing Aromatherapy Balm. In addition to melatonin, the gummies contain a botanical blend of lavender, chamomile, valerian root and lemon balm, and are free of artificial flavors, gluten, lactose and gelatin. Hyland’s also recently ventured into the feminine care category with a five-SKU Doctor Wise line of products specifically formulated to address the most prevalent conditions of menopause: Sleep, Mood, Bladder, Energy and Moisture. “Premium-priced, the products are positioned to help women through the changes in their bodies that go on in menopause,” says Les Hamilton, president of Hyland’s. “We feel confident we have a winner.” Natural topical OTC analgesics are also showing solid growth: SPINS data finds the category up 6.5 percent for the 52 weeks ending Dec. 2, 2018. Capsaicin-based products, derived from red pepper, have long been popular topical analgesics, while turmeric and ginger are becoming more popular ingredients in internal analgesics as more consumers look for effective ways to treat arthritis pain. “There’s been huge growth in turmeric-based products,” notes Mahecha, adding,

“Glucosamine is also shifting from a product that people are using when they experience arthritis symptoms to a product they are using proactively every day.”

Here Comes CBD

Cannabidiol (CBD), derived from cannabis, is also showing up in pain-relief products. Since a number of states have legalized the sale of CBD oil for a range of health problems, use of the ingredient in supplements is expected to grow. “It’s a segment to watch, with big growth potential,” says Mahecha. “Right now, the rules are different in each state and it’s a bit of a Wild West environment, but it’s only a matter of time before the FDA approves its use, and big companies, such as Nestlé and Mars, are already looking at CBD oil.” At the start of 2019, New York-based Fairway Market launched a private label line of full-spectrum hemp oil balms, capsules, lotions and other products in its 15 metro-area stores. The grocer explains that full-spectrum hemp oil, as opposed to hemp seed oil, “contains the natural cannabinoids, plant terpenes, vitamins, minerals and flavonoids of the original plant source.” Salespeople are available to help consumers select and access products, and the chain has created point-of-sale educational materials comparing Fairway Essential Wellness Hemp Oil to other brands the chain carries, such as Charlotte’s Web, Barlean’s and Hemp Fusion. According to Fairway, the store’s brand, which is merchandised on an end cap and advertised on signage in the HBC aisle of the store, has had strong sales right out of the gate. For supermarkets that want to lead in this trend, sales assistance is a must in a category where consumers have been educating themselves, and not much regulation exists. PROGRESSIVE GROCER Februar y 2019



Food, Beverage & Nonfood Products

Rethink Rinse-Off

With adults growing more concerned about what they’re putting on their bodies and hair — but still seeking quality personal care products — The Good Stuff has introduced a hair care line that rethinks the traditional rinse-off conditioner. The line comprises one sulfate-free shampoo and six no-rinse conditioners that vary in format to address different hair types and damage levels. The conditioners don’t requiring rinsing out, so all of the fast-absorbing formulas contained in them can sink into strands throughout the day — like a facial moisturizer, but for hair. To use, simply apply one of the conditioners to towel-dried, freshly cleansed hair and style as usual for nourished, shiny strands. In addition to being sulfate-free, The Good Stuff is vegan, free of parabens and dyes, and packaged in 100 percent recycled bottles. Each bottle retails for a suggested $7.99.

Immune-Boosting Teas

Tea has long been known to provide many health benefits, but today, brands are formulating interesting new blends with all sorts of herbs, spices and — mushrooms? Tamim Teas has brought out five immune-boosting herbal teas in eco-friendly canisters, adding the health benefits of medicinal mushrooms to the blends. Made in partnership with American organic mushroom growers, the teas contain no caffeine, sugar, additives or processed powders. The mushrooms are freshly dried and paired with flavorful, organic herbs and spices, resulting in handcrafted tea blends that maximize the beneficial properties of each mushroom. Health benefits from the teas range from natural energy boosts to improved mental clarity and relaxation. Varieties include Chaga Chai, a fragrant chai packed with chaga mushroom, rich chai spices and added turmeric for spice (3 ounces); Reishi Delight, nutty reishi mushroom with warming cinnamon, herbal honeybush and bright orange peel (2.4 ounces); Chaga-Reishi Boost, chaga and reishi combined with roasted carob, healthful elderberries and soothing red rooibos (2.2 ounces); Lion-Maitake Clarity, lion’s mane and maitake mushrooms together in a blend of nourishing tulsi and refreshing ginger, with a splash of cinnamon (1.7 ounces); and Lion’s Spice, subtly sweet lion’s mane with golden turmeric, ginger and fragrant spice (2.7 ounces). Canisters of the teas can be purchased in cases of 10 each for $110.

Grab-and-Go Goodness

As consumers’ lives continue to get busier, protein-packed, easy-to-prepare breakfast foods become a bigger priority. In response, Raybern’s has launched its Hearty Breakfast Sandwiches for grocers’ freezer aisles. The sandwich line comes in three varieties: Egg, Bacon and Cheese on a Hoagie Roll; Ham, Egg and Cheese on a Pretzel Roll; and Sausage, Egg and Cheese on a Hoagie Roll. Each sandwich contains at least 17 grams of protein and retails for a suggested $3.49.

Cheese, Please

It’s hard to find anyone who doesn’t love the pure indulgence of cheese — but sometimes, fromage fans need something a little more indulgent. Enter Emmi’s Cave-Aged Gouda, added to the brand’s Kaltbach family of cheeses, which also comprises Emmentaler AOP, Le Crémeux and Le Gruyère AOP. Made with milk from dairy farmers in central Switzerland, this cheese naturally ripens for three months before curing in the mineral-rich environment of the sandstone Kaltbach Caves. Once inside, the gouda is placed on a wooden board and hand-smeared with a saltwater wash. The natural moisture in the caves’ air then works to ripen the cheese while imparting flavors from the other Kaltbach cheeses aging beside it. The result is a unique cave-aged gouda with a pale-yellow hue, a dark-brown rustic rind, and a nutty caramel flavor with a hint of pear on the finish. Also now available are 5-ounce exact-weight portions of the cheese, each of which retails for a suggested $7.99.


Slim and Strong

Who says portion control can’t apply to beverages targeting a more mature audience? To prove this point, Heineken USA has come out with Strongbow 100 Cal Slim Cans, 8.5-ounce cans of hard cider in three flavors, each can containing just 100 calories. Positioned at the intersection of cider, canned wine and hard seltzer, the product comes in a variety pack that features Strongbow’s latest variety, Dry Pear, a mildly sweet pear-apple cider with a light, dry finish, alongside the Rosé Apple and recently relaunched Original Dry varieties. All Strongbow products contain no artificial flavors or colors. The SRP range per case is $12.99-$13.99.

An Egg-citing Twist

The Power of Plant Protein

Plant-based protein continues to be all the rage, as are easy-to-pack, on-the-go protein bars. Knowing this, plant-based snack manufacturer Good has launched a line of plant-powered protein bars, each containing 15 grams of plant-based protein. Containing 10 or fewer grams of sugar and 11 grams of fiber, each bar is made from a blend of fava and brown rice proteins, and features a soft, creamy center. The shelf-stable protein bars are available in six flavors: Choc P.B., Cookie, Choc. Mint, Lemon, P.B. and Blueberry. Each bar has an SRP of $2.39.

Healthy, quick-fix breakfast foods are in vogue right now, and Les Trois Petits Cochons now offers an exotic twist on the traditional breakfast egg that’s also healthful and convenient. New all-natural, cage-free Sous-Vide Egg Bites provide a quick, healthy breakfast that’s high in protein, low in carbohydrates and free from sugar. Available in four varieties — Bacon & Swiss, Prosciutto & Gruyère, Ham & Espelette Pepper, and vegetarian option Spinach & Feta — each variety contains between 100 and 180 calories, more than 9 grams of protein and only 1 gram of carbohydrates. The products employ the traditional French sous-vide method of cooking, resulting in tender, perfectly cooked egg bites with a refined texture and gourmet taste. Each single serving retails for a suggested $1.99.

Seltzer, Spiked

Light, effervescent and easy to sip — while also being easier on the waistline than traditional alcoholic beverages — Braxton Brewing’s Vive Hard Seltzer is made with pure Kentucky artisan water and will be available early this year in four naturally flavored varieties: Mango, Lime, Dragonfruit and Grapefruit. At only 100 calories and 2 grams of carbohydrates per 12-ounce slim can, the 5 percent ABV seltzer offers a light — as well as gluten-free — alternative to beer. The SRPs are $8.99 per 6-pack and $15.99 per variety pack. PROGRESSIVE GROCER Februar y 2019



Alaska Seafood Marketing Institute Bascom Family Farms


Beaver Street Fisheries


Biro Manufacturing




Campbell Soup Company


CANADIAN MARKETS • Convenience • Pharmacy • Foodservice

CA Tobacco Control



Crave Brothers Farmstead Cheese, LLC



Creekstone Farms


Distant Lands Coffee


Domino Foods

Inside Front Cover

Forte Products


Godshalls Quality Meats Inc.


Goya Foods Inc.


Jelly Belly


LaCroix Sparkling Water

90-Inside Back Cover, Back Cover

Lindar Corporation


Marukan Vinegar (U.S.A.) Inc.


MasonWays Indestructible Plastics


Mettler Toledo


National Confectioners Association


New Hope Network


New Pig


Organic Valley Family Of Farms




Sealed Air Corporation




Simply Protein


Spindrift Beverage Co.


Supervalu Inc.


The Hershey Company The J.M. Smucker Company

9 3

Thermal Technologies Inc.


Tosca Ltd.


Treasury Wine Estates


Trion Industries Tyson Foods


Cover Tip

UNITED STATES MARKETS • Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Technology • Hospitality • Apparel

7 31, 67

Uniweb Inc.




V & V Supremo Foods, Inc.



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We’ve all heard the saying that good things come in small packages. (It’s one of my favorites, since I’m just 5’2’’ tall.) In this month’s issue, we showcase our Outstanding Independents, our annual recognition of the “small guys,” starting on page 24. Independent grocers can fly under the radar when it comes to national press, but they really pack a wallop when it comes to their customers and communities. This is my fifth year selecting the grocers to be honored, and every year I come away from the interviews more amazed than ever by the vital role that independents play in both the industry itself and the communities in which they operate. No matter the size of the operation, however, all supermarkets are having to adjust to rapid change. McKinsey recently released a report, “Reviving Grocery Retail: Six Imperatives,” outlining the three major factors that are disrupting the grocery industry: consumers’ changing habits and preferences, intensifying competition, and new technologies. Most of the independents honored this month mention at least one of these factors as a driving force behind some of the decisions they’ve made to ensure that their businesses continue to succeed. To help retailers, McKinsey also offered six solutions that retailers could employ to help address those three disruptors: Define a distinctive value proposition — Convenience, inspiration, value for money: All three of these

are right up the independent’s alley. Your stores are typically smaller and easier to shop, providing a quick get-inget-out shop if needed. “It takes you longer to get from your car to the shopping area in some of the big boxes than it does to walk our whole store,” notes Walt Churchill, owner of Walt Churchill’s Market, in Ohio, and winner in the Outstanding Multistore category. Several operators also offer inspiration; both Gooseberries, in Wisconsin, and Gelson’s, in California, are showcasing new store concepts that are all about spurring shoppers to try new things. Independents further know that value doesn’t necessarily mean the cheapest: Almost all of the winners note that they aren’t the cheapest in town, but they’re the best when it comes to offering value for their products and services. Shape your ecosystem — and either go big or get out: McKinsey’s report noted that technology was

the key here, especially winning on last-mile delivery. This is something that BFL Grocery Co., a winner in the Technology category, knows a little something about. The company, which operates several banners near Oklahoma City, is introducing autonomous delivery

vehicles that will be able meet customers’ demand for groceries delivered when they want them. Put technology to work in every part of the value chain: This can be anything

from self-checkout to digital marketing. Some of the real value, however, may be found in the “back room,” where customers don’t ever see it. Sedano’s, a Hispanic market in southern Florida and a winner for Technology, has introduced an automated hyperlocal fulfillment center that can “shop” 60 items per minute to quickly fill customers’ ecommerce orders. Win back lunch and dinner: Prepared

foods or other fresh departments were noted as the key to winning today’s consumer’s dollar. Many of the operators featured in this issue note how they’re using this department to grow sales, but Vintage Grocers and Woodlands Market, both in California and winners for that category, share insights on how their differing operations are using prepared foods to win all three dayparts. Rethink all of your real estate: McKinsey’s report noted that grocers should look at shedding unnecessary stores, something that independents don’t tend to have, but it also suggested looking at how you use the real estate within the four walls of your store. Again, this is something both Gooseberries and Gelson’s had to do with their new concepts. Rob McDougall, CEO of Gelson’s, observes that his team often shrinks the back-room space to add more enticing customer-facing elements. Innovate 10 times faster: This is some-

thing all independents excel at doing. They have no long chain of command to approve any needed changes, so if they see something, they can implement it swiftly. Several operators note that they travel around the country and the world seeking inspiration, and can implement ideas almost as quickly as they want. If you’re interested in reading the whole McKinsey report, you can find it online at www. Also, to see how real-life operators are putting these suggestions into action, be sure to read about all of the 2019 Outstanding Independent Operators in this issue. PROGRESSIVE GROCER Februar y 2019


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