Page 1

We’re looking for the most innovative meal solution concepts!

CATEGORIES INCLUDE: Cross-Merchandising Concept Dine-In Concept Grab & Go Concept Meal Kit Ready-to-Cook Program Shopper Engagement Snacking Program Signature Chef Creation

DEADLINE TO ENTER:

May 20, 2019 Winners will be honored in our August issue and in a ceremony at our

TOTAL MEAL SOLUTIONS SUMMIT September 9 & 10 in Austin, TX

Enter at:

progressivegrocer.com/TMSAwards


“Let’s try a little queso fresco with our dinner tonight and we’ll make something special for the dogs too.”

IDDBA

COMPETITION COMMUNITY TECHNOLOGY FOOD SAFETY CONSOLIDATION PEOPLE

IS THE RESOURCE FOR CONSUMER TRENDS COMPETITION extends beyond the industry, in the form of advanced vending machines, fast food or high-end restaurants. The IDDBA considers innovation critical, and your membership is the gateway to technology, plus the latest in trends to attract today’s consumers.

Industry Research Reports New Products News Merchandising Trends What’s in Store - DIGITAL! MEMBERSHIP IN THE LEADING TRADE ASSOCIATION FOR DAIRY, DELI AND BAKERY BUYERS AND SELLERS IS ONLY A CLICK AWAY.

IDDBA.ORG


“I know what my family eats, I just need to get in and out of the store with what works for them.”

IDDBA TECHNOLOGY COMPETITION COMMUNITY FOOD SAFETY CONSOLIDATION PEOPLE

IS RELEVANT

REPORTING, ONLINE TECHNOLOGY has become one of the key differentiators for many retailers including those in our own industry. Convenience with the accessibility of product information continues to evolve. The IDDBA is providing these trends and more, and it’s all available online in What’s in Store 2019 - Digital.

E-BOOK ACCESS

Industry Research Reports New Products News Merchandising Trends What’s in Store - DIGITAL! MEMBERSHIP IN THE LEADING TRADE ASSOCIATION FOR DAIRY, DELI AND BAKERY BUYERS AND SELLERS IS ONLY A CLICK AWAY.

IDDBA.ORG


Unraveling the Complexity of Today’s Commerce Through Collaboration Today’s “always-on” shoppers are changing how you do business. Join industry leaders as we uncover solutions and unite the community to meet the challenges of today’s commerce. The Path to Purchase Summit is an invitation-only event for retailer and consumer goods professionals. To request your invitation, please contact us at p2psummit@ensembleiq.com.

May 15-17, 2019 • Fort Lauderdale, FL

An official event of:

Produced by:

p2psummit@ensembleiq.com

19SUM_ADV_EIQ_02.indd 1

1/4/19 2:20 PM


PG’s Retail Seafood Review spotlights healthy and sustainable products PLAYING TO WIN Which retailers will survive in an increasingly competitive landscape? ICY SPARKS Grocers, manufacturers team to boost frozen sales FRESH TAKES Perimeter packaging strives to meet consumer demands

Keith Knopf, President & CEO, Raley’s

IN

FOOD WE

TRUST Transparency, nutrition drive new Raley’s concept

March 2019

Volume 98, Number 3 $10 • www.progressivegrocer.com


Visit us at

CPMA Booth #700

Check out our NEW

PRODUCT LAUNCHES IMPROVED! Now 50 calories or less per serving.

NEW! 15 calories or less per serving.

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Contents 03.19

Volume 98 Issue 3

22 Features

34 ANALYSIS

22

The Battle for Baskets

34

STORE OF THE MONTH

411 on the 5-ONE-5

42 FROZEN & REFRIGERATED FOODS

Solid Partnerships

Concept store is the ‘end zone’ of transparency and nutrition to which Raley’s aspires.

Departments 8 EDITOR’S NOTE

Moment in the Sun 10 IN-STORE EVENTS CALENDAR

May 2019 12 CONSUMER INSIGHTS

Consumers Look to Boost Cooking at Home

Experts weigh in on regional market conditions and which players are equipped to come out on top.

Grocers and manufacturers collaborate to drive sales in the frozen aisle.

14 MENU TRENDS

20 ALL’S WELLNESS

Seafood Trends as Opportunity

Get Hooked on PlantBased Seafood Substitutes

16 NIELSEN’S SHELF STOPPERS

86 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS

Prepared Foods

90 TECH TALK

18 MINTEL GLOBAL NEW PRODUCTS

Sweeteners and Sugar

14

Kroger CEO Rodney McMullen’s 8 Keys to Grocery Retail Transformation

PROGRESSIVE GROCER March 2019

5


Contents 03.19

Volume 98 Issue 3

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

www.ensembleiq.com

48 GROCERY

PRESIDENT, CANADIAN DIVISION & NORTH AMERICAN GROCERY Jennifer Litterick jlitterick@ensembleiq.com

Thirsty Work

The rising water category is awash in innovation.

EDITORIAL EDITORIAL DIRECTOR James Dudlicek 224-632-8238 jdudlicek@ensembleiq.com

54 PROGRESSIVE GROCER’S 2019 RETAIL SEAFOOD REVIEW

MANAGING EDITOR Bridget Goldschmidt 201-855-7603 bgoldschmidt@ensembleiq.com

Go Fish

SENIOR EDITOR Kat Martin 224-632-8172 kmartin@ensembleiq.com

DIGITAL & TECHNOLOGY EDITOR Randy Hofbauer 224-632-8240 rhofbauer@ensembleiq.com

54

Grocers see ongoing potential in healthy and sustainable options while playing down any threat from plant-based alternatives.

CONTRIBUTING EDITORS D. Gail Fleenor, Kathy Hayden, Bob Ingram, Lynn Petrak and Barbara Sax ADVERTISING SALES & BUSINESS SOUTHEAST ACCOUNT EXECUTIVE Larry Cornick (NEW ENGLAND, SOUTHEAST) 224.632.8248 lcornick@ensembleiq.com SENIOR MARKETING MANAGER Judy Hayes (CA, PACIFIC NORTHWEST) 925-785-9665 jhayes@ensembleiq.com

64 FRESH FOOD

SENIOR MARKETING MANAGER Theresa Kossack (MIDWEST) 214-226-6468 tkossack@ensembleiq.com

Great Expectations

WESTERN REGIONAL MARKETING MANAGER Rick Neigher (SOUTHWEST) rneigher@ensembleiq.com 818-597-9029

Perimeter packaging must align with consumer desires, which include personal and environmental health, along with convenience and literal transparency.

ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com EVENTS VICE PRESIDENT, EVENTS Michael Cronin mcronin@ensembleiq.com

72 TOTAL MEAL SOLUTIONS

MARKETING MARKETING MANAGER Carly Kilgore 201-855-7601 ckilgore@ensembleiq.com

Ask a Chef

Ardent Mills’ Jason Gronlund has a crop of ideas for packing more fiber and nutrition into grocerant favorites.

64

AUDIENCE ENGAGEMENT DIRECTOR OF AUDIENCE ENGAGEMENT Gail Reboletti greboletti@ensembleiq.com AUDIENCE ENGAGEMENT MANAGER Shelly Patton 215-301-0593 spatton@ensembleiq.com LIST RENTAL MeritDirect Elizabeth Jackson 847-492-1350, ext. 318 ejackson@meritdirect.com SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES 978-671-0449 or email at EnsembleIQ@e-circ.net

74

74 TECHNOLOGY

It’s Personal

Consider taking these steps toward more customized digital marketing solutions in 2019.

PROJECT MANAGEMENT/PRODUCTION/ART VICE PRESIDENT OF PRODUCTION Derek Estey destey@ensembleiq.com CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com REPRINTS, PERMISSIONS AND LICENSING Wright’s Media ensembleiq@wrightsmedia.com 877-652-5295

78 EQUIPMENT & DESIGN

Step Right Up

Aided by creative design modifications, kiosks are becoming ubiquitous in supermarkets.

CORPORATE OFFICERS EXECUTIVE CHAIRMAN Alan Glass CHIEF EXECUTIVE OFFICER David Shanker

82 HEALTH & WELLNESS

CHIEF FINANCIAL OFFICER Dan McCarthy

Epidemic Proportions

CHIEF INNOVATION OFFICER Tanner Van Dusen

Grocers are joining the battle against the scourge of opioid addiction, armed with a range of initiatives.

6

progressivegrocer.com

CHIEF DIGITAL OFFICER Joel Hughes CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several

82


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EDITOR’S NOTE By Jim Dudlicek

Moment in the Sun rocery retailers are seeking any competitive advantage they can find to secure shopper loyalty and long-term profitability. In this issue, we take a deep dive into the competitive landscape of key grocery markets across the country, drawing on the findings of expert industry analysts. One of those observers is Burt Flickinger, managing director of the New York-based consultancy Strategic Resource Group, whose roots in retail run deep. Flickinger offers an extensive breakdown of the grocery battlefield as part of our report that starts on page 34. Ultimately, he concludes, the winners are going to be those retailers that most efficiently and successfully invest in capital expenditures, particularly technology, ecommerce and sustainability. For the last of these, Flickinger singles out solar power as being of particular importance. “Our research clearly indicates that up to 40 percent of shoppers will shift a meaningful percentage of food shopping to solar-powered retailers and away from retailers that simply put sustainability statements on their webpage,” he tells Progressive Grocer. “Moreover, in states from the Northeast to the Midwest and West, government mandates are for 50 percent of commercial energy to be from sustainable sources, and solar is the most environmentally and financially beneficial.” Solar power, Flickinger as- The success of serts, “is the biggest consumer quality, value and competitive advantage, and and serving the investment imperative for funding from ESG (environmental, community is the social and governance) financ- winning common ing, which is the single biggest denominator in source of investment funding food retailing. growth in food retailing.” Additionally, Flickinger says that working with government constructively at the local, state and national levels is important to food retailers’ success. “Without a constructive partnership with government leaders, it can be catastrophic, as Amazon and Walmart get most of the government billions of giveaways that create a commercially, operationally and financially unbalanced and unsustainable food retail playing field,” he contends. Talent will also be key — grocery executives who responded to PG’s 2018 Annual Report survey told 8 progressivegrocer.com

us that it was the issue keeping them up most at night. (Is it still, a year later? We’ll tell you in our April 2019 issue.) Flickinger argues that the winners in leadership are retailers that “tend to promote from within, rather than use big search firms with principals who have neither been operators nor practitioners.” And despite great strides over the past decade, including those honored by our own Top Women in Grocery Awards (whose 2019 nominations just closed, with winners to be revealed in June), Flickinger contends that “food retailers fail to retain the best and brightest women. … In food retail, women make 80 percent of the purchase decisions for buying, yet no regional, national and international food retailers are using marketing agencies run by women.” But through it all, high quality and lower prices are at the core of what consumers want, Flickinger acknowledges. “The success of quality, value and serving the community is the winning common denominator in food retailing,” he says. Among those he names as making the grade: B.J.’s Wholesale Club, Costco, H-E-B, Kroger, Marc’s, Market Basket, Sedano’s, Walmart, Wegmans and WinCo. Success on these fronts by traditional players, Flickinger maintains, will be “Amazon’s worst nightmare for the future.” Also consulted in this month’s feature is the esteemed industry expert Bill Bishop, of Brick Meets Click, who identifies Raley’s as helping to drive the premium segment. Read about PG’s visit to Raley’s latest concept, starting on page 22.

Total Meal Solutions

PG is launching a new awards program, challenging retailers to share their best concepts for meal solutions, from meal kits to prepared foods. Watch for details at Progressivegrocer.com.

Jim Dudlicek Editorial Director jdudlicek@ensembleIQ.com Twitter @jimdudlicek


IN-STORE EVENTS

Calendar S

05.19

M

National Beef Month National Barbecue Month National Loaded Potato Month National Egg Month

T

W

1

In honor of National Chocolate Parfait Day, ask customers what ingredients are needed for the ultimate dessert.

National Hamburger Month National Salad Month National Salsa Month National Strawberry Month

T

2

National Chocolate Truffle Day

F

S

3

4

National Chocolate Custard Day

National Orange Juice Day

National Raspberry Popover Day

National Candied Orange Peel Day

National Homebrew Day

5

National Enchilada Day — Happy Cinco de Mayo!

6

National Crepe Suzette Day International No Diet Day

7

As customers can be scared of cooking lamb, offer a special in your prepared food department for National Roast Leg of Lamb Day.

8

9

10

National Butterscotch Brownie Day

National Liver and Onions Day

15

16

17

18

22

23

24

25

National Coconut Cream Pie Day

Mother’s Day National Nutty Fudge Day

13

National Apple Pie Day

14

National Brioche Day

National Fruit Cocktail Day

National Shrimp Day

National Empanada Day

National Hoagie Day

12

National Foodies Day

Give customers a free tollhouse cookie in honor of National Chocolate Chip Day.

National Barbecue Day

National Cherry Cobbler Day

11

National “Eat What You Want” Day. Need we say more?

National Cheese Soufflé Day

International Hummus Day National Buttermilk Biscuit Day

19

National Devil’s Food Cake Day

20

National Quiche Lorraine Day National Pick Strawberries Day

21

Promote the red berry for National Strawberries and Cream Day.

26

27

28

National Cherry Dessert Day

National Grape Popsicle Day

National Hamburger Day

National Blueberry Cheesecake Day

10

National Italian Beef Day

progressivegrocer.com

National Brisket Day

National Vanilla Pudding Day

National Taffy Day

National Escargot Day

National Brown-Bag-It Day National Wine Day

29

National Biscuit Day

30

Raise your metal cup in honor of National Mint Julep Day.

31

National Macaroon Day


Speaking with… Joe Toscano, Vice President, Trade and Industry Development, Purina

Clean is Tidy’s very first unscented litter, and also half the weight of the traditional clumping litter. After one year on the market, it’s now the #1 branded unscented cat litter in the category. We’re also innovating our entire line of Tidy Cats LightWeight litters to be now 100% dust free. Combined with guaranteed ammonia odor protection and even tighter clumping action, this litter delivers against all of the top consumer tensions and eliminates the dust, which is increasingly a consumer concern. PG: Do you have any suggestions on ways retailers can merchandise their selection of litter in ways that will let consumers know about the new products in the marketplace?

Progressive Grocer: At the retail level, it seems that cat products are less prevalent than dog products. Can you tell me about the opportunity for retailers in the cat segment? Are there certain products or brands that retailers should be focused on in order to win in cat? Joe Toscano: While it’s true that dry dog food leads in overall sales across the pet category, cats should not be ignored. One great example is the opportunity in cat litter. Currently more than 33 million U.S. households shop for cat litter, with around 50 percent of those shoppers loyal to Purina Tidy Cats. Litter is actually one of the fastest growing segments within the entire pet care category, growing over 7% in 2018 and expected to be a three Billion dollar business by the end of 2019. So the opportunity in cat litter is ripe for both manufacturers and retailers alike. PG: Tell me about the latest trends in

cat litter, and how Purina is either leading or reacting to those trends. JT: In recent years we’ve seen a trend towards the premiumization of cat litter. Cat owners have come to expect basic product performance, and they are constantly on the hunt for added benefits that their litter can deliver. We find that pet owners want a product that’s not only 100 percent safe and effective for their pet to use, but also one that performs in keeping their house tidy and odor and dust-free. And they’re willing to pay for these added benefits. Our data shows that litter buyers are spending 11% more per trip than non-litter buyers. When it comes to innovation within the litter category we have to acknowledge that consumers see litter as a chore, and since Tidy Cats is the leading litter brand, it’s our job to provide a product that delivers on solving the most common litter problems cat owners encounter. We start with identifying the consumer tension, i.e. weight, odor or dust, and we design our products to combat these issues. Take for example Tidy Cats Lightweight Free & Clean, which we released in January 2018. With no added dyes or fragrances, Free & S P O N S O R E D CO N TE N T

JT: There are a number of merchandising and promotional strategies retailers can leverage to win in litter and ultimately lift their overall pet category sales. ● First, make it simple for your shoppers to locate the litter section in your store. Cat litter should anchor one side of your cat department and be adjacent to dry cat food, with navigational signage to help shoppers find their chosen product. ● Also ensure you carry the right assortment, with a focus on premium products that deliver on form and function. Highlight products that offer multiple benefits and solve the consumer tension that comes with a category like litter. ● Next, ensure that you promote cat litter as part of your ecommerce solutions. Litter is heavy, and therefore inconvenient to shop. Retailers should promote litter as part of their click & collect or delivery offerings. Capturing the ecommerce sale also will spur repeat purchase. ● Lastly, build a promotion strategy around cat litter. Consider crosspromoting litter and dry cat food at regular intervals, such as monthly. Also consider adding cat litter to your spring cleaning ads, since it goes hand and hand with the cleaning category.


CONSUMER INSIGHTS

Market Research Current Habits Versus Next Year

Consumers Look to Boost Cooking at Home When looking at their behavior for the past year, more than one-third (37 percent) of consumers indicated that they were cooking at home more often, and 30 percent plan to do more cooking at home in the next year, according to research from Progressive Grocer, which, along with sister company EIQ Research Solutions, surveyed 1,000 grocery shoppers about their cooking/ shopping/eating habits. Nearly one-fifth (19 percent) are purchasing more fresh prepared foods compared with the previous year. Survey respondents were sourced via ProdegeMR, reinventing the research process by taking a respondent-first approach. Visit www.prodegemr.com/ensembleiq for more information.

8% 1%

11% 37%

CURRENT

20%

CURRENT

53%

58% 2% 1% 30%

Will do more next year

13%

CURRENT

54%

14%

23%

8%

4%

NEXT YEAR

9%

22%

11%

19%

4%

NEXT YEAR

NEXT YEAR

No change Will do less next year

65%

66%

Not applicable

COOK AT HOME

11%

MEAL PLAN

19%

13%

MEAL PREP

4%

16%

28%

CURRENT

52%

NEXT YEAR

7% 6% 23%

NEXT YEAR

68%

NEXT YEAR

69%

GET FRESH PREPARED FOOD

64%

DINE OUT

9% 43%

54%

4% 6%

12% 21%

37%

14%

CURRENT

57% 11%

7% 25%

CURRENT

8%

of consumers indicated that they were cooking at home more often and 30% plan to do more cooking at home next year.

66%

GET TAKEOUT

6%

9% 31%

17%

CURRENT

24%

CURRENT

CURRENT

5%

17% 6% 38%

6%

10% 44%

NEXT YEAR

12%

58%

69%

52%

33%

39%

NEXT YEAR

NEXT YEAR

48% 12% GET FOOD DELIVERED

5% GROCERY DELIVERY

Source: Progressive Grocer market research, 2019

12

progressivegrocer.com

8% USE MEAL KITS


Wrap Up Some Green Savings Make the Leap to a New Wrapper The best backroom investment decisions are made by those who focus on the lowest total cost of ownership. By leveraging METTLER TOLEDO’s manufacturing expertise, you can make backroom processes more efďŹ cient, keep up with customer demand and also manage costs and shrink. Learn more about our weighing, wrapping and labeling solutions today by visiting www.mt.com/retail-backroom or calling 1-800-METTLER.


MENU TRENDS

Research & Analysis

Seafood Trends as Opportunity ISN’T IT TIME YOU STARTED ACTING ON THE DATA YOU HAVE AT YOUR FINGERTIPS? Food trends on restaurant menus are amazing predictors of what shoppers will look for next on the shelf, especially in the perimeter. Seafood is a staple in both the frozen section and the fresh case — and this is great data to help you deliver “ubiquity with a dose of inception” to drive traffic in those key areas. Branzino MAC stage: Inception — Ethnic markets, ethnic independents and fine dining

“Sustainable” MAC stage: Adoption — Ethnic aisle at supermarkets, casual independents, fast casual

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

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 small white fish, also known as European sea bass, is often found in Mediterranean cuisine. It has a delicate flavor and few small bones. This versatile ingredient can be prepared whole grilled, roasted, steamed, poached or even braised. On 2% of U.S. restaurant menus Up 79% on U.S. restaurant menus 19% of consumers know it / 7% have tried it Menu Example Brio Tuscan Grille Grilled Branzino & Summer Panzanella Salad Arugula, cucumber, tomato, grilled red pepper, chickpeas, red onion, croutons, feta, red wine vinaigrette.

14

progressivegrocer.com

Ahi Tuna MAC stage: Proliferation — Proliferation-stage trends are adjusted for mainstream appeal. Often combined with popular applications (on a burger, pasta, etc.)

Cod MAC stage: Ubiquity — Ubiquity-stage trends have reached maturity, and can be found across all sectors of the food industry. Though often diluted by this point, their inception-stage roots are still recognizable.

The term “sustainable” is used to describe specific farming or sourcing practices that protect the environment, public health and animal welfare.

Another name for yellowfin tuna, stemming from the Hawaiian word “ahi,” this ingredient is often used in raw dishes such as sashimi or poké, which are up 167 percent over the past four years on menus. It’s also ideal for grilling or searing.

On less than 2% of U.S. restaurant menus

On nearly 9.8% of U.S. restaurant menus

Up 100% on menus over the past four years

Up 28% over the past four years

Up 8% over the past four years

69% of consumers know it / 53% have tried it

64% of consumers know it / 36% have tried it

86% of consumers know it / 63% have tried it

Menu Example McCormick & Schmick’s Wild Isles Salmon Crudo Sustainable salmon raised in the open waters off Scotland’s Shetland Island.

Menu Example Bar Louie Ahi Poké Diced ahi poké tuna with basil, cilantro, mint, spicy kimchi slaw, sesame seeds and green onions, topped with tiger sauce.

Menu Example Chick-Fil-A Deluxe Fish Sandwich Two breaded and deep-fried cod fillets on a toasted buttered bun with two pickles, a slice of cheese, lettuce, tomato and a side of tartar sauce.

This dense, flaky white fish has a mild flavor and is a staple on store shelves and restaurant menus alike. Everything from fish and chips, fish tacos, and centerof-plate entrées use cod to appeal to a broad base of consumers. On 13.5% of U.S. menus


People have always loved our

ICONS

They have embraced what’s

NEW

Everyone will want what’s

NEXT TIMES CHANGE. SO DO WE. Our brands have tremendous appeal and play a big role in the lives of generations of consumers. From our iconic soups, delicious snacks to fresh and organic products, we offer the foods and beverages people love and reach for time and again. As we move into the future, we’ll focus on continuing to delight today’s and tomorrow’s shoppers, while providing innovative products in the entrepreneurial spirit of our founders. ©2019 Campbell Soup Company


FRONT END

Shelf Stoppers

Shelf Stoppers

Frozen Vegetables TOTAL FROZEN VEGETABLE SALES REACHED $2.97 BILLION IN THE PAST YEAR

(52 weeks ending April 2, 2016) Prepared Foods

Olives Breakfast Meals/ Combos Breakfast Meat Ramen Sushi

Growing prepared food categories to watch

Basket Facts How much are average American households Consumers chose spending on prepared frozen broccoli over foods per for trip? alternatives

$1,200,000,000 1,000,000,000

a variety of reasons:

800,000,000

12%

600,000,000

because it’s quick and easy

400,000,000 200,000,000

10%

Prepared foods

$8.51 because it tastes great

0 Latest 52 Wks 2 YA W/E 12/29/18

Latest 52 Wks YA W/E 12/30/17

Latest 52 Wks W/E 12/31/16

Spotlight on Frozen Broccoli

Total U.S. xAOC (all outlets combined) – includes grocery stores, drug stores, mass merchandisers, select dollar stores, select warehouse clubs and military

WHEN ARE CONSUMERS EATING FROZEN BROCCOLI?

Broccoli as an ingredient is most commonly Frozen broccoli is most often used in a side consumed at dinner, followed by lunch. dish, followed by as a main entrée. The prepared food category has experienced impressive growth this year, much of 3% Millennials which has been driven by younger cohorts. Compared to older generations, are spending the most per household in this category, and are likely seeking the 9% convenience that prepared food options provide. From the strong performance of breakfast meals and combos, to high growth in ramen, sushi and breakfast meat, the quick-oriented and eclectic tastes of younger consumers can be seen influencing growth throughout this section of the store.”

9%

because it’s healthy and nutritious

8%

Prepared becausesandwiches it’s low in

$6.49 calories, fat and sugar

OCCASION MEAL ITEM —Lauren Fernandes, Manager-Strategy and Analytics, Nielsen TYPE CLASS 62% 35% 61%

29%

Demographic Spotlight Looking across various prepared foods, several For soup and DINNER LUNCHdemographic OTHER shifts emerge. SIDE DISH MAIN ENTRÉE OTHER salads, older couples in the empty-nest or senior stage of life are spending more than we’d expect, given their size as cohorts. Sandwiches, on the other hand, are catering to a younger demographic, and are over-indexed in spending per household across families, particularly those with preteen and teenage children. Prepared foods as a whole also index highly among the largest families, that is, those with five or more members.

Prepared soup

$4.66

Generational Spotlight Which cohort is spending the most per trip on prepared foods?

Prepared complete meals

Millennials

Gen X

Boomers

The Greatest Generation

$9.20

$9.10

$8.02

$7.41

Source: Nielsen Homescan, Total U.S., 52 weeks ending Dec. 29, 2018

16

progressivegrocer.com

$7.12

Source: Nielsen Homescan, Total U.S., 52 weeks ending Dec. 29, 2018


Trion Cooler Merchandising ®

AMT Adjustable Merchandising Tray ™

Organize Org ga aniz Chaos, Increase Sales Designed for yogurts; dips; spreads; puddings, gelatins and snacks; ice cream and sherbet; instant soup cups; microwave single-serves; food-to-go offerings, tubs, bottles and other difficult to organize products. ■

Small AMT adjusts from 2 11/16" to 3 5/16" wide for 4-6 ounce yogurt cups and similar small products.

Medium AMT adjusts from 3 5/16" to 3 15/16" wide for 5-6 ounce greek yogurt cups and mid-range offerings.

Large AMT adjusts from 4" to 4 5/8" wide for tub, pint, 11/2 pint, ice cream and large containers.

Width adjusts in 1/8" increments and locks in place. Two breakaways allow easy adjustment in the field from standard 22" length to 20" and 18."

Built-in manual feed allows trouble-free forwarding and facing of products for increased sales and profits.

Trays lift out for rear restocking and proper rotation.

Durable, easy-clean plastic construction for long-life, even under heavy use and in harsh environments.

Optional plain-paper label, sign and flag holder provides a protected home for product and price information and improves promotional opportunities. Proudly Made in the U.S.A.

Built-in Manual Feed

Adjustable Width

Built-in Handles

Optional Label/Flag Holder

Breakaway Lengths

Built-in Ventilation

Paddle Extenders Sidewall Extenders

Part of the Trion® Shelf Works® System of Cooler and Storewide Merchandising Solutions.

©2014 Trion Industries, Inc. 297 Laird Street, Wilkes-Barre, PA 18702-6997 Phone 570-824-1000 l Fax 570-823-4080 Toll-Free In U.S.A. 800-444-4665 www.TrionOnline.com Patents and patents pending. Note: Product photography is a simulation of a retail environment and is not meant to imply endorsement by or for any brand or manufacturer.


MINTEL CATEGORY INSIGHTS

Global New Products Database

Sweeteners and Sugar

FOR MORE INFORMATION, VISIT WWW.MINTEL.COM OR CALL 800-932-0400

What Does It Mean?

Market Overview

The sugar/alternative sweetener category is in the midst of a decadelong drop in sales, which is expected to continue.

The entire category continues to face a consumer base that perceives sweeteners as largely unhealthy, artificial or not.

Consumers are turning away from sweeteners at a considerable rate, with less than one-fifth saying they’re avoiding the products to one degree or another.

Key Issues

A large number of consumers are either limiting their consumption or avoiding the category altogether.

Sweetener limiters are chiefly motivated by health, notably longerterm health concerns that are unlikely to dissipate. Innovations that address those concerns fall largely into the realm of artificial sweeteners, and consumers are seeking to avoid artificial ingredients.

In sales, the lone bright spot in the category has been honey, users of which are motivated by an interest in natural: Two-thirds of those who use honey as a sweetener indicate that they avoid artificial sweeteners. Honey launches in recent years have capitalized on consumer interest in environmentally friendly products.

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The challenge in growing the category will be in combating those negative health perceptions or delivering options that require less sweetener to achieve the desired flavor profile.

Younger consumers express a keen interest in limiting sugar consumption for dental or aesthetic reasons. Sugar alternatives can address these issues and ideally also leverage “natural� attributes.


New Year New Innovation

Š General Mills


ALL’S WELLNESS By Diane Quagliani

Get Hooked on Plant-Based Seafood Substitutes MANY OFFER NUTRITIOUS OPTIONS, BUT DON’T OVERLOOK TR ADITIONAL ITEMS.

raditional seafood — fish and shellfish — is a star of the nutrition world, so much so that the Dietary Guidelines for Americans note that Americans don’t eat enough seafood and urge that we increase our intake to about 8 ounces per week. Why? In addition to protein and a host of vitamins and minerals, seafood provides the omega-3 fatty acids EPA and DHA (especially fatty fish like salmon, mackerel, albacore tuna, lake trout and sardines), which are linked to cardiovascular health, reduced risk for obesity, and healthy pregnancy outcomes. Despite seafood’s benefits, however, plant-based seafood substitutes are surfacing in response to factors such as rising interest in plantbased diets, and concerns about the mercury content of traditional seafood, animal welfare and the environment.

Retail Dietitians School Shoppers

Retail dietitians are a resource for shoppers who need help comparing the nutritional value of traditional seafood and seafood substitutes. For instance, dietitians can sort out differences in amounts of protein and omega-3s per serving; recommend alternatives for shoppers with seafood, soy, wheat and other allergen issues; address concerns about mercury content in traditional seafood; and advise shoppers with health conditions about nutrients of concern such as sodium, which can be hefty in packaged versions of both traditional and plant-based seafood.

Retail dietitians are a resource for shoppers who need help comparing the nutritional value of traditional seafood and seafood substitutes.”

Seafood Substitutes: The Nutrition Angle

It’s difficult to directly compare the nutritional value of traditional seafood and seafood substitutes — and even to compare one substitute with another. That’s because substitutes from different manufacturers are often made with diverse ingredients, including different protein sources, and may or may not contain plant-based omega-3s. For example: Newtown, Pa.-based Good Catch Foods makes pouches of fish-free tuna, sliders and burgers, and crab-free cakes. Ingredients include a proprietary six-bean blend of pea, soy, chickpea, lentil, fava and navy beans, which provides 14 to 16 grams of plant-based protein per serving, and a plant-based form of the omega-3 fatty acid DHA, derived from algal oil found in sea algae. Gardein, based in Richmond, British Columbia, offers fishless filets made from soy-based textured vegetable protein, and crabless cakes made from textured wheat protein. Both products contain 9 grams of protein per serving and omega-3s from DHA algal oil. Atlantic Natural Foods, in Nashville, N.C., offers canned Tuno and single-serving pouches of fishless tuna under the Loma Linda brand. Made from non-GMO textured soy protein, Tuno provides 5 to 7 grams of protein per serving, and the pouches offer 7 to 9 grams of protein each. Ahimi, from New York-based Ocean Hugger Foods, is a plant-based alternative to the raw tuna used to make the sushi sold in restaurants and supermarkets. Ahimi is made from fresh tomatoes, non-GMO soy sauce, filtered water, sugar and sesame oil.

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In addition, dietitians can steer individuals at high risk for foodborne illness away from raw traditional seafood such as sushi, and toward seafood substitutes or properly cooked traditional types. High-risk individuals include those with compromised immune systems or decreased stomach acidity, as well as older adults, pregnant women, infants and young children. Diane Quagliani, MBA, RDN, LDN, specializes in nutrition communications for consumer and health professional audiences. She has assisted national retailers and CPGs with nutrition strategy, web content development, trade show exhibiting, and the creation and implementation of shelf tag programs.


MARCH 2019

Store of the Month

Concept store is the ‘end zone’ of transparency and nutrition to which Raley’s aspires. By Jim Dudlicek Photography by Vito Palmisano


Market 5-ONE-5 Sacramento, Calif.

What’s 5-ONE-5? The store’s name stands for what it delivers, its mission and what it represents for consumers. 5 senses: see, hear, smell, touch and taste ONE: Organics, Nutrition, Education 5 essential nutrients: carbohydrates, fats, proteins, vitamins and minerals, and water “The old rules don’t apply here,” Market 5-ONE-5 asserts on its website. “Instead, we’ve carefully curated every item on every shelf in every aisle. Simply put, if a product doesn’t meet our rigorous standards, we don’t carry it. And if you’re not sure what product is right for you, then our knowledgeable team is here as your resource. They know the farmers, fishers, ranchers, bakers, chefs and producers we work with, and will help you find your new favorites.”

PROGRESSIVE GROCER March 2019

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STORE OF THE MONTH

Market 5-ONE-5

he future of grocery isn’t only about food — it’s about nutrition. That’s the mission that Michael Teel, owner and chairman of West Sacramento, Calif.-based supermarket chain Raley’s, had in mind when he founded Market 5-ONE-5, the company’s new independently run banner aimed at boosting transparency and educating consumers on how to eat better. It’s the first of what President and CEO Keith Knopf envisions will eventually grow to as many as 40 stores and serve as a guide for the transformation of the 129-store Raley’s chain, whose scale makes it a great incubator for the fledgling concept. “This store is the end zone,” Knopf tells Progressive Grocer during a recent visit to the 11,000-square-foot casually upscale market in a historic district in downtown Sacramento. “It’s where we want Raley’s to be.” And just where is that? “It’s a foundation built on nutrition, not just on food,” he says. “We believe the health of people in this country has been compromised by the way food has been produced and marketed.” To that end, Market 5-ONE-5 was developed to meet the needs of consumers who are overwhelmed by trying to decipher food labels and ingredient lists. The products offered are held to the highest standards of health and nutrition set by Market 5-ONE-5’s brand promise of minimally processed, organic and sustainably sourced items that are free of unrecognizable ingredients not found in nature. “This is what grocery shopping can be and should be in the future,” Knopf says. “We hope it leads the way. It’s our responsibility to do better and help people live more informed lives.”

Longtime Vision

The 5-ONE-5 team: (front row, from left) Tony Marks, Joe Lowery, Greggs Hajian, Derrick Thornton, Elizabeth Sotelo; (middle row, from left) Jeff Fischer, Angie Johnson, Laura Gonzalez, Matt Olszewski; (back row from left) Juli Moulton, Michael O’Connors (store team leader), Andy Hagstrom, Eric Cederlof, Nathan Palmerin, Brittany Stephens and Kevin Wright (general manager).

This neighborhood market concept is founded on the principle that quality, nutritious food should be accessible and affordable. Every item was selected according to three core values: organic, nutrition and education (ONE). “Market 5-ONE-5, and what it stands for, has been a vision of ours for a long time,” Teel says. “Its purpose is to offer our community access to fresh, nutritious and affordable food. Its mission is to help people live healthy, vital lives by taking the guesswork out of understanding nutrition.” Hired from inside and outside the grocery industry, store staffers are committed to providing exceptional service. They include chefs, foodies, urban farmers, nutritionists and a registered dietitian. “Our biggest strength is inside our store,” says Kevin Wright, general manager of Market 5-ONE-5. “We have diversity in knowledge and skill sets.” PROGRESSIVE GROCER March 2019

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STORE OF THE MONTH

Market 5-ONE-5

Among the many offerings packed into the compact yet inviting space, the store features wine by the glass; beer and kombucha on tap; a coffee, tea and juice bar; and space for indoor and outdoor dining. The location also provides seasonally prepared cuisine for in-store dining and delivery, with the market offering both click-and-collect and delivery service. “With the exception of a couple soups, everything is made in-house from scratch — no kits,” says Michael O’Connors, store team leader, explaining that all ingredients in the prepared food section are either organic or natural. “We have more control over the quality — see it from start to finish. … We have at least two chefs stocking the hot bar, batch after batch, every day.” The store is highly curated, with many local products and few mainstream brands. The organic produce is locally grown and delivered daily. A full-service butcher shop offers a wide selection of fresh, humanely raised natural and organic meats; all seafood is wildcaught. Prepared foods are chef-driven, with ready-to-eat, custom and grab-and-go options. Most of the beer is craft, much of it from local and regional brewers; the wine selection is similarly diverse; and a daily happy hour serves both, along with local coffee in the café. “Market 5-ONE-5 is about conviction to a core set of principles,” Knopf says. “We don’t stock products we don’t believe in, so customers can trust everything on the shelves. Our team members know exactly where our products come from, what is in them and how they were produced.” 26

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Always Something New

During a store walk with O’Connors, he stresses Market 5-ONE-5’s fixation on organic, local, clean foods. “We’re much more seasonally driven,” he says of the 100 percent organic produce offering; fruits, vegetables and floral items are provided by local suppliers. Colorful art calls out selections. “We have an instore artist that makes our posters,” O’Connors notes. End caps and featured displays include products closely aligned with wellness needs (e.g., nondairy, low sugar) as well as local demands. “Sacramento loves plant-based protein,” O’Connors says,


pointing out a display of energy drinks boasting 20 grams of plant protein. “All our breads have no preservatives. Quite a few are organic.” Breads, cakes and pastries are delivered daily from local suppliers that use wholesome ingredients. The freezer case is dominated by vegetarian and vegan items, and the store does a brisk business in Beyond Meat plant-based products. “We have to order as much as we can, because the demand is so high,” O’Connors notes. That said, the meat department is built around a full-service butcher counter offering house-made Market 5-ONE-5’s deli carries sausages, some grass-fed beef, and value-added senatural meats, carefully lections seasoned with house-made marinades and portioned to create signature local spices. “Everything is hormone-free, no antibiand custom sandwiches. otics ever. If it’s not organic, it’s natural,” O’Connors Salads, sides and entrées are says, noting that hanger steaks and in-house grinds created by a team of chefs. are big sellers, along with pepper-crusted burgers that are “great for barbecues.” As for seafood: “We only carry wild-caught, never anything farmed.” At the whimsically named Mermaid Sushi counter, a chef rolls sushi to order, using sustainably procured fish and organic ingredients. Nearby in the deli, consumers can order a cus20954_2019_Trade_Ads_Mar_Progressive_Grocer_Half_Pg_Ad_FNL.pdf 1 2/18/19 AM tom8:58 sandwich or opt for one of the store’s signature

C

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PROGRESSIVE GROCER March 2019

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Market 5-ONE-5 915 R St. Sacramento, CA 95811

Grand opening

May 15, 2018

11,000

Total square footage

Selling area

7,000 square feet

12,000 SKUs

50 Employees Checkouts: 6 Store hours: 7 a.m.-10 p.m. Designer: Coact Designworks and Stuart James Construction

This is what grocery shopping can be and should be in the future. We hope it leads the way. It’s our responsibility to do better and help people live more informed lives.” —Keith Knopf, Raley’s president and CEO

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STORE OF THE MONTH

Market 5-ONE-5

PROGRESSIVE GROCER March 2019

29


STORE OF THE MONTH

Market 5-ONE-5 The grab-and-go case is a popular destination for the lunch crowd at Market 5-ONE-5. Sandwiches and salads are made on the premises.

selections, like the delicious roast beef on ciabatta with onion relish, pickles, goat cheese and romesco sauce sampled during PG’s visit, along with several house-made deli salads. A team of experienced chefs turns out a variety of entrées and sides crafted from wholesome ingredients, creations like wheat berry and marinated beet salad with citrus vinaigrette and New Mexico spiced flank steak.

Raley’s Future With Market 5-ONE-5’s inaugural store open since May 2018, Raley’s is already planning more locations. In fact, the company is actively seeking new store sites and hopes to be able to announce up to three additional locations in the not-toodistant future, according to Keith Knopf, president and CEO of West Sacramento, Calif.-based Raley’s. How long might it take for the fledgling banner to reach the 40 locations that Knopf envisions? “There’s a lot of factors,” Knopf says, suggesting that the process could take “not less than five, not more than 10” years, helped along by Raley’s capital resources. Meanwhile, it’s hoped that some of Market 5-ONE-5 will rub off on its parent. “The learnings from 5-ONE-5 will help accelerate the transformation of the Raley’s banner,” Knopf notes. Raley’s has “a legacy of quality and service, but not necessarily health and wellness,” Knopf says, adding that it’s hoped that the influence of Market 5-ONE-5 will help the parent company “transform at a rate that customers can understand and grow with. … We’re proud it’s an extension of the Raley’s business, but we don’t go too far to stress the connection.” In fact, Market 5-ONE-5, founded by Raley’s Chairman Michael Teel, is operated as an independent company with its own supply chain. “There’s an advantage to incubating a concept under the umbrella of

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There’s also a grab-and-go case stocked with sandwiches and salads, all made in house, with a three-day shelf life, but they seldom last that long. “During the lunch rush, we get wiped out,” O’Connors says. Wright adds: “We have a large contingent of office workers who come in for lunch. We have a hot bar we’re really proud of.” A hot-bar fan favorite is the cauliflower mac and cheese, which O’Connors notes is Keto friendly. “We go through that like crazy,” he says, adding that the store is working on an in-house pizza program. A café area offers limited seating inside, with additional space outside, although alcohol can only be consumed indoors; patrons can opt for single cans of beer if they don’t care for the daily tap offerings, which also include kombucha. In fact, between tap and ready-to-drink options, Market 5-ONE-5 boasts one of the most extensive selections of kombucha in Sacramento,

the parent company,” Knopf acknowledges. “It allows us to test and learn. The scale is there to support it … but it has a life of its own.” As Market 5-ONE-5 looks to open new stores, “Raley’s will likely expand through acquisition,” Knopf tells Progressive Grocer, within its core market, the northwestern quadrant of the United States (Raley’s currently operates stores in northern California and Nevada). The company is also pursuing other innovations. ‘We’ve leaned into ecommerce in a heavy way,” Knopf says, noting that the retailer has tapped talent from the specialty apparel, department store and pet sectors. Additionally, as the retail industry seeks a new balance between digital and brick-and-mortar sales, Raley’s is re-evaluating its store footprints. “We have stores that have more space than we need because we curate our assortment. We’ll be looking at strategic partners that complement our brand and drive revenue,” says Knopf, who came to Raley’s in 2015 from department store operator Kohl’s, which recently revealed that it’s partnering with Aldi as Kohl’s reassesses its own square footage. “We’ve already pruned about 10 of our stores that didn’t fit anymore,” Knopf says, noting that in the past year, 22 Raley’s stores have been reconfigured to accommodate ecommerce growth as part of its hub-and-spoke delivery model. “We’re comfortable with our current portfolio.”


STORE OF THE MONTH

Market 5-ONE-5 where offerings sit alongside the dairy department, which showcases natural, organic and local brands of milk, eggs and butter. With more than 70 craft brewers in the greater Sacramento area, Market 5-ONE-5 stocks more than 200 varieties of craft beer. “Most of what we feature is local,” O’Connors says. “it’s always changing — it’s so seasonal. Seems like every three weeks, you get something new. It’s all small-batch, always rotating.” Additionally, there’s a vast curated selection of wines from California and beyond. They include organic wines as well as biodynamic varieties, which O’Connors explains are “organic to an extreme — if a caveman did it.” The store is also popular for its Keto-friendly wines,” he adds.

In Our Backyard

Market 5-ONE-5’s location has special meaning for Raley’s and the city of Sacramento. The repurposed structure in which the market is located was, at times, a furniture store and a Goodyear tire center in a historic district on Sacramento’s R Street, home to the state of California’s first railroad and industrial corridor.

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Excavation of the site, which had to be brought up to current earthquake codes, unearthed intact ancient glass bottles, century-old license plates and other artifacts, some of which are now on display in the store. “The first of its concept needed to be in our backyard,” Knopf says of the site. “We wanted to give back to the community. We wanted to be close [to corporate headquarters] so we could learn more quickly.” Chelsea Minor, Raley’s corporate director for consumer and public affairs, says that the store’s location creates “a great synergy with Sacramento’s farmto-fork” scene. Wright adds: “With a rich history of agricultural innovation and developing foodies, Sacramento is the perfect home for the store’s inaugural location.” Since the company is creating a new brand that’s trying to gain exposure, “garnering new customers has been the largest challenge,” Wright admits. “We want people to better understand the brand and believe in what it represents. Once customers understand the position of the store, retention is solid.” Social media is helping as well, notes Elizabeth Sotelo, the store’s experience manager. The market has received a big response on Instagram and Facebook not only from visitors sharing their experiences, but also from the store calling out new items and sharing nutrition information. “We’ve brought so many people into the store with that,” affirms Sotelo, who’s been busy planning programs with area schools, animal shelters and local agencies. Among them: a nutrition-themed art show for kids who can display their work at the store. The market has further strengthened ties to the neighborhood by holding a contest for local artists, with winners getting to display their work inside and outside the store, Knopf notes. Additionally, a portion of every eligible customer purchase is donated to a local charity, Wright says. Plus, the store has become an incubator for local vendors developing new products. “We have a great weekly business due to all the office foot traffic in the area, but the weekends are slower,” he observes. “We’re focusing our social efforts on weekend events to draw customers in. The store has hosted health fairs, pet adoptions, partnerships with local schools, and a daily happy hour to create a buzz in the community.”

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We want people to better understand the brand and believe in what it represents. Once customers understand the position of the store, retention is solid.” —Kevin Wright, general manager


Corporate Nutrition Strategist Yvette Waters and General Manager Kevin Wright show off Market 5-ONE-5’s all-organic produce section.

Making Informed Choices

The store doesn’t need to be be big, its leaders contend, because its selection is so well curated — they’ve done all of the hard work for consumers seeking food that’s better for them and more information about what’s in it.

“The items on the shelf are trusted,” Minor says. “Trust is embedded in the brand.” Knopf notes that nutritionists “influence merchandising decisions and educate customers.” A dietitian was on the store’s founding leadership team; several offer guidance in the store. “I want to cut through the mud of information and provide good nutrition information, speaking to people on a personalized level,” says Yvette Waters, corporate nutrition strategist and brand influencer for Raley’s. “Whatever their needs or preferences are, they have options … so they’re making a more informed choice.” With an extensive banned-ingredient list, “everything here is already vetted,” notes Waters, who reviews all of the company’s nutritional messaging “and take[s] lots of calls” from curious consumers. “This is a great testing ground for innovative products while showing how important it is to have that baseline understanding of nutrition,” Waters says of Market 5-ONE-5. “The most important thing is pushing for transparency, to help people understand there’s nutritious food at a reasonable price. We don’t want to be preachy — we just want to provide the information. Nutrition doesn’t have to be stuffy.”

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ANALYSIS

Grocery’s Competitive Landscape

THE BATTLE FOR BASKETS E XPERTS WEIGH IN ON REGIONAL MARKE T CONDITIONS AND WHICH PL AYERS ARE EQUIPPED TO COME OUT ON TOP. By Jim Dudlicek

arket disruptors are giving stalwarts a run for their money, compelling grocery retailers to be constantly innovating and ever vigilant. But even the disruptors can be disrupted, and ultimately success comes down to how well you know, connect with, engage and serve your market. That means being all in on shopper insights, talent development and diversity; learning from the wins and losses of parallel sectors; and delivering a seamless experience that doesn’t let consumers discover that you don’t have something they need. To paraphrase the wise sensei Mr. Miyagi in the inspirational 1984 film “The Karate Kid,” either you do retail “yes” or you do retail “no” — you do retail “guess so,” you get squished, just like grape. Despite continuing industry consolidation and the presence of several strong national giants, the battles for dominance are playing out regionally. Still, it’s those big players, assembled from formerly independent regional banners, that are leveraging their scale to disrupt or be disrupted. Bill Bishop, chief architect of Barrington, Ill.-based Brick Meets Click, offers Progressive Grocer his thoughts on the state of competition in key U.S. markets.

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The Northeast is competitive, “but there have been no major competitive disruptions, with the exception of Lidl’s entering the New York market, which will increase competition and probably trigger a price war,” Bishop asserts. In the South, “Walmart, Publix, Lidl and now Wegmans are all expanding in ways that are increasing the pace of competition,” he says. In the Midwest, Aldi and Hy-Vee “are both expanding and increasing competition,” Bishop notes, while in the West, Kroger and Aldi “are disrupting an otherwise generally stable market.” As competition ramps up, which retailers are in the best position for success? In New England, it’s Ahold

Key Takeaways Shopper loyalty to a specific chain is becoming more important in the modern landscape of home delivery and immediate fulfillment, and has emerged as a good barometer of a retailer’s health. Strong regional and independent retailers are racking up wins in key markets across the United States. Hard discounters stand to make major inroads, especially in regions with high costs of living.


ANALYSIS

Grocery’s Competitive Landscape Delhaize, Bishop says, “because of their experience competing successfully in Europe, and ShopRite, because of their strong prices and reputation for innovation.” In the South, he sees Walmart continuing to win, “because of their EDLP and online grocery focus, and Publix, because of their stellar customer service.” In the Midwest, Bishop names these retailers as his top three: “Kroger, with all of their innovation; Hy-Vee, driven by their exceptional culture; and Aldi, with extreme value and small-store convenience.” And in the West, he says, “Kroger, with some historically strong KMAs and all the innovation, is probably best positioned for success, followed closely by Walmart and Aldi.” Burt Flickinger, longtime industry observer, analyst and managing director of the New York-based Strategic Resource Group, makes this prediction: “The best leaders with the best women, who strategically invest in the business and hire from within, will be the big winners.”

Loyal and Lingering

A customer’s loyalty to a specific chain is becoming more and more important in the modern landscape of home delivery and immediate fulfillment, and has emerged as a fairly good barometer of a business’ health. “The grocery landscape is changing rapidly. There are many factors impacting the traditional experience, such as online-to-store pickup, that affect how much time we spend and how frequently we visit,” says Cameron Peebles, CMO of InMarket, a mobile-at-retail marketing platform and app developer based in Venice, Calif., that analyzes trends and patterns to provide its clients with a near real-time understanding of modern shopper behavior. InMarket provided PG with an analysis of the top grocery retailers by region (detailed in the accompanying charts) and how they rank in terms of shopper loyalty (where they shop most often) and dwell time (where they spend the most time and, presumably, the most money). In terms of loyalty, there should be no surprises for most industry watchers. For example, the top three grocery chains in the South,

It’s no surprise that grocery is a regional game. ... The grocery landscape is changing rapidly. There are many factors impacting the traditional experience, such as online-to-store pickup, that affect how much time we spend and how frequently we visit.” —Cameron Peebles, InMarket

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according to InMarket’s data — Publix, H-E-B and Harris Teeter — are considered leaders in their respective markets, with deep ties to their communities. Similarly, loyalty in the West is led by three Kroger-owned banners, Fry’s (Arizona), Ralphs (Southern California) and Smith’s (Utah, Nevada, New Mexico). Loyalty in the Northeast is led by Giant Eagle, Stop & Shop (Ahold Delhaize), and ShopRite (Wakefern); surprisingly, considering its avid following, Wegmans ranked only sixth in InMarket’s study. Pittsburgh-based Giant Eagle also ranks tops for loyalty in the Midwest, with stores in Indiana and Ohio, followed by Kroger (operating under its own banner, as well as Mariano’s in the Chicago area and Pick ‘n Save in Wisconsin) and Whole Foods Market, based in Texas but with a strong national following. Look at dwell time in these regions, and the InMarket data paints a different picture. In the South, shoppers are spending more time at The Fresh Market (based in North Carolina), Whole Foods and Lowes (Carolinas). Up north, ShopRite leads in lingering shoppers, followed by Market Basket (New England) and C-Town Supermarkets (New York). In the Midwest, consumers are shopping longer at Marc’s, a 60-store grocery and drug chain based in Ohio; Whole Foods; and Fresh Thyme, a regional chain with headquarters in the Chicago suburbs. Meanwhile, out West, Whole Foods leads in shopper dwell time, according to the InMarket data, followed by Colorado-based Natural Grocers and El Super, a Hispanic chain with 59 stores throughout California, Arizona, Nevada, New Mexico and Texas. “It’s no surprise that grocery is a regional game, but now we have a more clear-cut picture as to how these chains stack up,” Peebles says. “You can look at a Northeast-only chain like Stop & Shop, which at 12th overall wouldn’t make a national top 10 for loyalty. But relative to the rest of the Northeast, its performance is quite impressive.” How do national chains like Whole Foods, Trader Joe’s and Aldi stack up against fierce regional competition? “They’re typically in the middle of the pack, with Whole Foods ranking No. 3 in the Midwest as the best showing,” Peebles notes. “Aldi is toward the bottom in each region. It’s clear that shoppers still prefer their regional stores over the national chains.”

Regional Battles

Flickinger recently conducted an extensive analysis of regional grocery markets and shared his findings with PG. “The Northeast is evolving from one of the most over-stored markets in North America to one of the most competitive U.S. markets,” he says, offering some historical context. “Due to the oppressive taxes in most Northeast cities, counties and states, and most of the northern U.S., as well as higher operating and utilities costs, many of the big chains had challenges investing in cap ex, while taking on unsupportable debt.” This, Flickinger says, led to the bankruptcies of many


of the biggest supermarket chains of the 20th century, including Grand Union, A&P, Penn Traffic, Fairway and Tops. “The supermarket bankruptcies in seriatim have created a tremendous food retail vacuum for retailers with outstanding leaders and executive officers to capitalize on by accelerating their highly successful food retail expansion,” he observes. That competition is coming from abroad: “From what our team studied in the EU, U.K. and Ireland, Lidl is bringing its best leaders to transform U.S. food retail, starting with two ‘pincer moves’ in the Northeast. For perspective, we saw how quickly Lidl and Aldi, as well as Ocado, ran Walmart/Asda out of its last European strategic salient in Ireland, Scotland and England.” Lidl’s bold moves include the “transformative” acquisition of Best Market on New York’s Long Island, as well as in New Jersey, and its conversion of “abandoned, high-volume supermarket sites like Pathmark in Philadelphia,” Flickinger says. “After some early Southeast deceleration, Lidl is accelerating and converting consumers quickly as it becomes a major force in food retailing along the Eastern Seaboard, and ultimately across America,” he notes, adding, “Aldi will move very successfully in both the Northeast and all U.S. markets.” Conversely, Flickinger continues, Whole Foods/Amazon is having some of its biggest U.S. setbacks in the Northeast. “After bulldozing a huge Bon-Ton department store, Whole Foods opened in an ideal location near the busiest Canada-U.S. border crossing and numerous universities, colleges and community colleges in the Buffalo-Niagara region,” right in Wegmans’ territory, he notes. “The Wegmans are some of the best and fiercest competitors in food retailing, and their outstanding operations team never let Whole Foods/ Amazon get out of the starting gate.” Additionally, Flickinger says, “great independent food retailers added competitive pressure, and BJ’s Wholesale Club and Walmart, with more organic and natural foods at better prices, all crushed Whole Foods/Amazon.” In addition to Market Basket, Wegmans, Big Y and Stew Leonard’s “having exceptional success with both new and existing stores,” Flickinger notes, “Ahold Delhaize, under new leadership, is gaining sales and market share in New England,” asserting that Ahold Delhaize’s primary struggles are in New York City, Long Island and New Jersey. “With the legendary leaders of the Cullen family selling King Kullen to Ahold Delhaize, Stop & Shop may achieve better operating costs and savings, which will be passed along in the form of lower prices to Long Island food shoppers,” Flickinger says. “Long Island shoppers are already paying some of the highest costs of living in the U.S. Saving money on groceries is the only way for Long Island working families to practically balance their monthly cost-of-living budgets.” The retailer with the greatest risks in the Northeast appears to be the Tops corporate store group, Flickinger points out, “as its independently owned and operated

2018 Southern Regional Loyalty Ranking Loyalty Score

Regional Rank

National Rank

Grocer

(Avg. visit frequency)

1

4

Publix Super Markets

2.26

2

6

H-E-B

2.23

3

7

Harris Teeter

2.20

4

8

Kroger

2.17

5

9

Safeway

2.12

6

10

Food Lion

2.03

7

13

Albertsons

1.90

8

16

Whole Foods Market

1.78

9

17

Winn-Dixie

1.75

10

27

Sprouts Farmers Market

1.54

11

30

Weis Markets

1.52

12

31

Giant Food

1.52

13

32

Trader Joe's

1.51

14

35

Food City

1.49

15

36

Food Giant

1.49

16

43

Aldi

1.46

17

45

Tom Thumb Food & Pharmacy

1.45

18

46

Save-A-Lot (Onex)

1.44

19

47

Ingles Markets

1.44

South Average

1.75

2018 Western Regional Loyalty Ranking Loyalty Score

Regional Rank

National Rank

Grocer

(Avg. visit frequency)

1

1

Fry's Food & Drug Stores

2.44

2

3

Ralphs

2.26

3

5

Smith's Food & Drug Stores

2.24

4

9

Safeway

2.12

5

11

Vons

1.95

6

13

Albertsons

1.90

7

16

Whole Foods Market

1.78

8

19

King Soopers

1.70

9

20

WinCo Foods

1.69

10

26

Save Mart Supermarkets

1.54

11

27

Sprouts Farmers Market

1.54

12

28

Lucky Supermarkets

1.53

13

32

Trader Joe's

1.51

14

33

Stater Bros. Markets

1.51

15

35

Food City

1.49

16

41

Food 4 Less

1.47

17

43

Aldi

1.46

18

50

Raley's

1.43

West Average

1.75

Source: InMarket PROGRESSIVE GROCER March 2019

37


ANALYSIS

Grocery’s Competitive Landscape 2018 Midwest Regional Loyalty Ranking Loyalty Score

Regional Rank

National Rank

Grocer

(Avg. visit frequency)

1

2

Giant Eagle

2.30

2

8

Kroger

2.17

3

16

Whole Foods Market

1.78

4

18

Dillons Supermarkets

1.72

5

21

Schnucks

1.61

6

24

Jewel-Osco

1.57

7

29

Pick 'n Save (Roundy's)

1.52

8

32

Trader Joe's

1.51

9

34

Hy-Vee

1.50

10

43

Aldi

1.46

11

46

Save-A-Lot (Onex)

1.44

12

48

Cub Foods

1.44

Midwest Average

1.67

2018 Northeast Regional Loyalty Ranking Loyalty Score

National Rank

Grocer

(Avg. visit frequency)

1

2

Giant Eagle

2.30

2

12

Stop & Shop

1.91

3

14

ShopRite

1.89

4

15

Key Food

1.86

5

16

Whole Foods Market

1.78

6

22

Wegmans Food Markets

1.60

7

23

Giant Food Stores

1.58

8

25

Big Y Foods

1.55

9

30

Weis Markets

1.52

10

32

Trader Joe's

1.51

11

37

Hannaford Supermarkets

1.49

12

38

Price Chopper

1.48

13

39

Tops Friendly Markets

1.48

14

40

C-Town Supermarkets

1.47

15

42

Market Basket

1.47

16

43

Aldi

1.46

17

44

Redner's Markets

1.46

18

46

Save-A-Lot (Onex)

1.44

19

49

Foodtown

1.43

Northeast Average

1.61

Source: InMarket

franchisees continue to be big winners, and Tops corporate has not yet appeared to fully glean the lessons in operating success from its independently owned franchisees, the Perna and DiMino families.” Meanwhile, he observes, “Golub/Price Chopper may have longer-term challenges as its Market 32 stores appear to lose market share to Wegmans, Wakefern/ShopRite, DeMoulas/Market Basket, Ahold Delhaize’s Hannaford, and others.”

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Sedano’s is the “major new news” in the Southeast, Flickinger says, adding, “The great Herran family leadership team has partnered with Takeoff.com e-grocery retail and Jose Aguerrevere, Max Pedro and Curt Avallone to ‘checkmate’ Amazon with micro fullfillment e-grocery centers, with robotics and mechanization.” Bankruptcies, he notes, “have been a tragic theme in the Southeast as private equity-owned food retailers have outsourced operations and struggled financially, as Bi-Lo went bankrupt with Bruno’s, and then declared bankruptcy with Southeastern Grocers (SEG).” At press time for this issue, SEG had announced the closure of 22 stores, reported by progressivegrocer.com Kroger and Harris Teeter continue to hold and gain share in the region, Flickinger observes. Meanwhile, he likens the brewing battle of Wegmans versus Publix in the Southeast to “the ‘Thriller in Manila’ legendary Ali-Frazier heavyweight title fight. While [Publix CEO] Todd Jones and his team have more victories and titles than coaches Nick Saban, Dabo Sweeney and Bobby Bowden combined,” he enthuses, “Wegmans may be the early favorite. … Wegmans has met and beaten the best of the U.S., Canadian and European-owned competition. Publix has bested big, formidable food retail foes, too [but] Publix has benefited from more big food retailers filing for bankruptcies.” Louisiana-based Rouses has demonstrated “spectacular success” in the Gulf Coast region, which has had a record number of bankruptcies, Flickinger says. “The Rouse family has uniquely won against all odds from hurricanes Katrina and Rita back to back, and the corresponding loss of approximately 50 percent of the population, which declined from a few energy exploration recessions as well,” he continues. “Rouses’ private label work has connected very well with consumers, building on the Rouse family’s sensational regional and in-store merchandising.” In sum, Flickinger says that Kroger/Harris Teeter, Publix, Walmart, BJ’s, Wegmans, Sedano’s and Rouses will expand their leadership positions in the Southeast for the foreseeable future. On the flip side, he notes that SEG and Whole Foods/Amazon “appear to be the most vulnerable for sales and market share losses.”

Midwest Mash

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Regional Rank

Southeast Skirmish

The Midwest is “a very dynamic market,” Flickinger asserts, “with vacuums created from the beginning of this decade to now, with bankruptcies including Marsh Supermarkets and Central Grocers Cooperative. With Meijer filling the vacuum in northern Ohio from the exit of Tops, and Giant Eagle moving back from Toledo, Meijer and Kroger will be the big winners, with Walmart.” According to Flickinger, independent grocers in the region hold a position of strength. “The great Mayne family at Dorothy Lane Markets, Buehler’s and SpartanNash-supplied retailers will be significant sales and market share winners for the next five-plus years, along with Standard Market, which is a gold standard for fine


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ANALYSIS

Grocery’s Competitive Landscape food and wine retailing in Chicagoland,” he predicts. He cautions, however, that while Heinen’s “has a great, highly deserved, award-winning history in Ohio, from our observations of its Illinois stores versus the top competitors, it appears to need to catch up and bring more of the excellence from Cleveland metro to the greater Chicago market.” In Wisconsin, Minnesota and the Dakotas, Flickinger says, “Woodman’s continues to lead the Midwest with great high-volume

Don’t Ignore the Hard Discounters While the promised disruption of the U.S. grocery landscape by insurgent hard discounters Lidl, which opened its first stores in this country two years ago, and Aldi, which has embarked on an aggressive expansion plan, hasn’t quite come to pass, a new report from Boston-based management consulting firm Bain & Co. cautions that mainstream grocers should remain on guard. According to “How U.S. Grocers Are Standing Up to Europe’s Hard Discounters,” the German retailers’ slow and steady gains in the United States translate to a growing competitive threat for their mainstream rivals. The report finds that Lidl and Aldi have leveraged their strong customer advocacy and ability to attract shoppers into cross-shopping as a wedge to bolster their presence and popularity, noting that as many as 30 percent of shoppers at mass and traditional grocery stores also routinely shop at Lidl and Aldi. Indeed, Batavia, Ill.-based Aldi continues to lure American consumers, Bain observes. The retailer’s consumer advocacy rose to 55 percent last year from 46 percent in 2017, outperforming in the two most critical areas for shoppers: best everyday low prices and best value for the money. This has resulted in strong market performance and the above-mentioned slow but steady gains. According to a study this past summer, Aldi — No. 9 on Progressive Grocer ’s 2018 Super 50 list of the top grocers in the United States — racked up a more than 3 percent share of grocery spending in six of the eight markets studied, and experienced share gains in the majority of those markets over the past two years. Arlington, Va.-based Lidl likewise snared a 3 percent or more share in five of the seven markets studied in summer 2018, gaining spending from traditional competitors. “Lidl and Aldi are just beginning to flex their competitive muscles,” explains Mikey Vu, a partner with Bain’s retail practice and a co-author of the new report. “What we’re seeing is that U.S. grocers can effectively stand up to these hard discounters, but that they need to remain vigilant and innovate in strategic areas to keep their edge.” A 2017 Bain report highlighted price as the most crucial factor in competing with hard discounters and laid out five rules for growing share: Embrace your own private brands before your shoppers move on to someone else’s Lead with fresh Become more convenient while your competitors become less so Transform your cost structure rather than just tweak it Employ advanced analytics to unlock new sources of value While all five are still key, two have risen in significance, the company notes: investing in convenience, and using advanced analytics or other new technologies to boost operational efficiencies.

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2018 Northeast Regional Dwell Time Ranking Regional Rank

National Rank

Grocer

(Minutes)

1

2

ShopRite

34.40

2

3

Market Basket

34.05

3

5

C-Town Supermarkets

33.82

4

6

Whole Foods Market

33.52

5

7

Key Food

33.25

6

9

Shaw's

32.89

7

10

Wegmans Food Markets

32.67

8

11

Foodtown

32.32

9

13

Giant Food Stores

32.04

10

20

Acme Markets

30.53

11

25

Tops Friendly Markets

29.84

12

27

Stop & Shop

29.78

13

29

Trader Joe's

29.72

14

30

Price Chopper Supermarkets

29.62

15

32

Weis Markets

29.46

16

37

Big Y Foods

28.54

17

40

Aldi

28.30

18

41

Save-A-Lot (Onex)

28.21

19

43

Price Chopper

28.06

20

46

Hannaford Supermarkets

27.92

Northeast Average

30.95

Dwell Time

2018 Western Regional Dwell Time Ranking Regional Rank

National Rank

Grocer

(Minutes)

1

6

Whole Foods Market

33.52

2

8

Natural Grocers

33.18

3

15

El Super

31.61

4

16

WinCo Foods

31.03

5

19

Grocery Outlet

30.80

6

24

Sprouts Farmers Market

29.98

7

28

King Soopers

29.72

8

29

Trader Joe's

29.72

9

40

Aldi

28.30

10

42

Food City

28.11

West Average

30.60

Dwell Time

Source: InMarket

stores [and] like Meijer, as well as Marc’s, in the eastern Midwest,” operates excellent stores with low prices. Additionally, he calls Upper Midwest operators Coborn’s, Festival Foods, Hugo’s, Jerry’s, Johanneson’s and Lunds-Byerly’s “outstanding food retail operations.” Additionally, Schnucks, Dierbergs, Ball’s and Associated Wholesale Grocers “continue to invest well in both existing stores and opportunistically expanding operations.”


Minneapolis-based Target “needs to invest more in fresh, staffing and inventory and less in consulting firms,” Flickinger advises, “which have appeared to have led retailers, from Kmart to A&P and others, the wrong way, in my professional view.” Among other nationals, he says, “While Whole Foods/Amazon faces more challenges in the Midwest, Walmart’s best expansion initiatives are in the Midwest and West. The dollar stores, most notably Dollar General, and chain drug stores, led by Walgreens and CVS, are gaining the most in the Midwest and Western markets.”

Western Showdown

While Texas is a “shoulder market” between the West and the Southeast, according to Flickinger, “H-E-B Chairman Charles Butt is still the greatest living leader, student and teacher of retail. Despite pronounced price wars ranging between Walmart Supercenters and Costco, H-E-B in food retail is better than any sports team in any sport in North America.” Continuing his application of sports metaphors to grocery, Flickinger says that “[Albertsons Chairman] Bob Miller is the next All-Pro Hall of Fame winner for bringing Albertsons LLC to unprecedented size and scale while rescuing most of Supervalu corporate retail, with the addition of Jim Donald and other dynamic women and men of the Albertsons-Safeway team.” Hispanic- and Asian-American-owned and -operated chains continue to generate the greatest growth, Flickinger contends, “with unparalleled merchandising and marketing, and team leadership skills.” California-based grocers he singles out include El Super, Superior, Northgate, Vallarta, Bristol Farms and Cardenas, adding that “Hannam, HMart, Mitsuwa and other Asian-American food retailers are power players for the foreseeable future, too.” Additionally, Costco and WinCo Foods “are winning the most in every market,” he says. “While Walmart is now Amazon’s emerging worst nightmare, WinCo and Costco have been the ongoing competitive nightmare for all retailers, given the ongoing excellence of WinCo and Costco with their exceptionally successful respective expansion in existing and contiguous markets.” Rounding out the West, Clark’s, in the Intermountain region; Harmons, in Utah; and URM, Metropolitan Markets and Red Apple, in the Pacific Northwest, “are examples [of] outstanding independently owned and operated food retailers,” Flickinger asserts.

The Road Ahead

Flickinger describes Walmart as “the newest Roman Empire of retail,” and observes that “Amazon appears to be slipping, as Jeff Bezos is facing his Waterloo on many fronts, from Whole Foods and beyond. “In the end,” he continues, “Main Street will continue to outsmart Wall Street, with the independents and family-owned/-operated and professionally led food businesses” working with food science educators to “lead our food industry to record-breaking success, health, and lower prices and higher profits, through greater innovation and efficiency.” For his part, Bishop envisions grocery retail becoming “more clearly divided into three consumer-defined segments: premium, mainstream and discount.” The premium segment, he says, will mainly be driven by Whole Foods and other Amazon grocery businesses, along with a handful of highly differentiated food retailers like Wegmans, Publix, H-E-B and Raley’s.

2018 Midwest Regional Dwell Time Ranking Regional Rank

National Rank

Grocer

(Minutes)

1

1

Marc's

35.27

2

6

Whole Foods Market

33.52

3

12

Fresh Thyme

32.06

4

23

Hy-Vee

30.19

5

29

Trader Joe's

29.72

6

33

Jewel-Osco

29.12

7

35

Pick 'n Save

28.76

8

36

Dillons Supermarkets

28.73

9

38

Kroger

28.39

10

40

Aldi

28.30

11

41

Save-A-Lot (Onex)

28.21

12

45

Fareway Stores

28.02

Midwest Average

30.02

Dwell Time

2018 South Regional Dwell Time Ranking Regional Rank

National Rank

Grocer

(Minutes)

1

4

The Fresh Market

33.84

2

6

Whole Foods Market

33.52

3

14

Lowes Foods

31.68

4

17

Rouses Markets

30.88

5

18

Food Giant

30.86

6

21

Giant Food

30.41

7

22

Harris Teeter

30.32

8

24

Sprouts Farmers Market

29.98

9

26

Fiesta Mart

29.82

10

29

Trader Joe's

29.72

11

31

H-E-B

29.51

12

32

Weis Markets

29.46

13

34

Bi-Lo

28.83

14

38

Kroger

28.39

15

39

La Michoacana Meat Market

28.32

16

40

Aldi

28.30

17

41

Save-A-Lot (Onex)

28.21

18

42

Food City

28.11

19

44

Tom Thumb Food & Pharmacy

28.04

20

46

Hannaford Supermarkets

27.92

South Average

29.90

Dwell Time

Source: InMarket

“The mainstream segment will be driven mainly by the growth of Walmart and other high-volume grocery operators such as WinCo,” Bishop adds. “The discount segment will be driven mainly by Aldi, Lidl and Trader Joe’s.” PROGRESSIVE GROCER March 2019

41


FROZEN & REFRIGERATED FOODS

Sales Strategies

Solid Partnerships GROCERS AND MANUFACTURERS COLL ABOR ATE TO DRIVE SALES IN THE FROZEN AISLE. By Lynn Petrak

he shopper standing in front of the grocer’s freezer may look alone, but he or she has some company in the purchase decision: The grocer and manufacturer that have worked together to provide a product that meets their shared interest and need at the point of sale. Behind every purchase, of course, there’s a lot of effort that goes into the product and the selling of that item. In the frozen food category, energized by a new dynamic in recent years (see sidebar on page 46), the supplier-retailer relationship is pivotal in lifting sales and, on a broader level, improving perceptions of frozen foods.

A Single Vision

“We have to have the same vision,” asserts Ryan Powell, VP of merchandising and category management for Dallas-based Symphony RetailAI, a provider of artificial intelligence-enabled solutions. “It’s about bringing retailers and manufacturers together to be able to understand what we should be offering shoppers.” Likewise, industry consultant — and former frozen department manager — Daniel Lohman says that the collaborative mindset, while new to some in the industry, is effective. “Traditionally, a brand comes in and says, ‘Would you buy my products?’ and the retailer spends time promoting that product with the brand’s help,” notes Lohman, organic and CPG strategic advisor with Brand Secrets and Strategies, in Littleton, Colo. “But true collaboration isn’t always there, in my opinion.” He offers a suggestion: “If brands focus on unique customers to bring them to the store, that helps retailers. Because grocers can’t be the experts in everything they sell, they can leverage the strengths of the brands to drive sales.” Collaboration sounds good, but how does that work on the ground at the store level? Powell points to the emergence of enabling technologies. “We’ve already started to leverage content in technology, providing platforms with real-time interactions that allow a manufacturer to sit side by side with a retailer to execute a plan together,” he says. “You can dialogue, make a change and view a result. The power of that is significant, we feel, from a business standpoint, because retailers and manufacturers are figuring out how to start reaching their goals with one seamless vision. They can get there by partnering together to fill in gaps.” The frozen category requires such partnerships and technologies, given the fact that frozen foods pose some challenges, adds Powell. “Frozen is more complex — how do you drive people to the frozen aisle?” he observes. “So, the strategic, connected planning between a retailer and manufacturer is important in frozen.”

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Key Takeaways In the frozen food category, the supplier-retailer relationship is key to driving sales as well as boosting product perceptions. Large and small manufacturers alike are rolling out innovations to lure more consumers down the frozen aisle. Emerging technologies like artificial intelligence to aid assortment, along with tried-andtrue marketing and merchandising approaches, can also be effective in growing frozen food sales.


FROZEN & REFRIGERATED FOODS

Sales Strategies

What Shoppers Want

Figuring out what draws consumers to the frozen aisle has been a focus of manufacturers, retailers and industry organizations in recent years. A new report, “The Power of Frozen,” presented by the American Frozen Food Institute (AFFI) and the Food Marketing Institute (FMI), includes consumers’ feedback on what they would like to see in the frozen food section. Based on shopper responses, the most notable areas are organizational improvements; a greater variety of brands and product types, including frozen foods from smaller and niche brands; and better prices and promotions. More specifically, survey respondents said they would like visible signs categorizing frozen foods within doors and parts of the freezer case, along with better lighting and access to freezers. Product innovation has been one component of revitalizing the frozen food category, and that’s a result of the efforts of manufacturers that create unique products, and of grocers that

agree to carry those items. “There’s a plethora of new offerings in the frozen food aisle — ethnic flavors, organic, vegetarian, and unique fruit and vegetable varieties,” remarks Adrienne Seiling, executive director of Arlington, Va.based AFFI. “I think there’s an opportunity for retailers, in partnership with the frozen food and beverage industry, to think about dynamic new retail strategies featuring these exciting, innovative food options as a method to drive people down the frozen food aisle.”

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frozen meals aisle, and Benihana has high brand awareness with younger, more affluent consumers,” notes Lynn Galia, head of communications for the Chicago-based company. Kraft Heinz is reaching out to another demographic through its line of Indulgence nutritional single-serve frozen meals. “This conflicted Gen X consumer struggles to find a frozen meal that satisfies her from a taste standpoint as well as health standpoint. She feels overly guilty when eating a traditional fro-

Innovation in the Aisles

To Seiling’s point, many brands are adding new items to their product lines or creating new lines to provide solutions for consumers. That includes major, long-established frozen food companies as well as smaller and niche brands just getting into the category. The Kraft Heinz Co., for instance, recently added a new brand presence to the grocer’s freezer with branded Benihana frozen Japanese meals. “Consumers are seeking authenticity and variety in the

There’s an opportunity for retailers, in partnership with the frozen food and beverage industry, to think about dynamic new retail strategies featuring these exciting, innovative food options as a method to drive people down the frozen food aisle.” —Adrienne Seiling, American Frozen Food Institute

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45


FROZEN & REFRIGERATED FOODS

Sales Strategies

zen mac and cheese or pot pie, but yet doesn’t enjoy the flavor of the traditional diet-focused brands with their lower-fat, lean recipes,” explains Galia, adding that the Indulgence line is designed for those conscious of calories and interested in flavor. Many new products are coming from specialty and smaller brands. One example is Lundberg Family Farms, based in Richvale, Calif., which entered the frozen category in mid2017 with Organic Grainspirations Arancini, and added new Frozen Rice & Quinoa Bowls last fall. According to Todd Kluger, Lundberg’s VP of marketing, the impetus was providing true solutions to consumers in the frozen space. “In recent years, cleaner labels and high-quality ingredients have turned an increasing number of grocery store carts down the frozen aisle,” Kluger observes. In addition to offering a greater variety of products from more and different brands, the importance of cross-merchandising and the idea of moving frozen into other areas of the store, and other shelf-stable or fresh products into areas near frozen, are also underscored in consumer recommendations shared in “The Power of Frozen” report. Shoppers like the idea of displaying items that complement frozen meals in end caps, like parmesan cheese for lasagna, or ice cream cones for ice cream, for example.

Tech Solutions

Frozen Landscape Frozen is hot: Both dollar and unit sales of frozen foods increased in 2018, up 2.6 percent and 2.3 percent, respectively, according to “The Power of Frozen” report from The American Frozen Food Institute and the Food Marketing Institute, both based in Arlington, Va. Further, new research published by Northbrook, Ill.based MarketsandMarkets finds that frozen food was a $219.9 billion market in in 2018, and is estimated to reach $282.5 billion by 2023. According to “The Power of Frozen,” a whopping 99.4 percent of households buy frozen foods. And the future looks set, based on interest among younger consumers: A report from Rockville, Md.based Packaged Facts shows that households headed by adults under age 25 are 26 percent more likely to eat frozen breakfast entrées and 23 percent more likely to eat frozen entrées. —Lynn Petrak

$219.9 Billion Sales of frozen foods in 2018 Source: “The Power of Frozen”

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“Because merchandising is important in consumers’ minds when it comes to frozen, manufacturers and grocers working together can use technologies to look at the macro picture, in addition to providing consumers with solutions and information that meet their micro needs,” notes Symphony RetailAI’s Powell. “The vision of connected category management is changing. Five years ago, it was connecting different capabilities — ‘How do you connect assortment and merchandising?’ Now it’s, ‘How can we connect the entire ecosystem?’” That includes other aspects like lighting, fixtures, and promotions spanning signage to social media. Again, technology can help retailers and frozen food companies connect the ecosystem dots. Powell points out that Symphony RetailAI has been developing artificial intelligence for that purpose over the past couple of years. “In assortment, one of the major things we’re working on allows you to monitor mass quantities of data and identify changes within data sets and the environment. It alerts the retailer and manufacturer when a change needs to be made, and gives them data for that change,” he explains. Changes can involve the demand for gluten-free frozen foods or other product-related innovations. Emerging technologies like AI also provide an ROI benefits timeline to see the impact of changes that have been made, adds Powell. “It’s a dynamic planning process driven by benefits to the customer and ROI, versus just capacity,” he notes.


Consumer Connections

While technology contributes some changes to solution management in frozen, grocers and manufacturers can run a parallel track by literally reaching out to shoppers. “The Power of Frozen” included comments from readers asking for more product sampling and demos. Connecting with consumers that way is important, especially for products with which shoppers may not be familiar. One example is Phoenix-based Spinato’s, a brand fairly new to the retail frozen food category. After making pizza for 40 years at its own pizzeria, the company now offers frozen pizza with a broccoli crust, along with a gluten-free variety, at retail. “After creating a compelling product, it’s all about creating promotional opportunities for the retailer to help accelerate the product,” says Anthony Spinato, president and co-founder. “Participating in promotional events that retailers hold dear is important, even if it may be unprofitable at the time, because, in the end, you are driving more interest, and shoppers will come back for more.” Additionally, Lohman underscores the fact that brick-and-mortar stores, including those offering click-and-collect services, can set themselves apart from pure-play ecommerce competitors because of their frozen offerings and the quality of those offerings. “People are reluctant to buy frozen products and have them delivered,” he notes. “The fact that traditional stores have refrigerated and frozen products is a primary point of differentiation, and if a retailer can leverage that, it’s how they can compete against online [sales]. Manufacturers would want in on that, too, as a way to convey consumer access to appealing frozen products.”

Lohman also recommends that grocers keep tabs on emerging food and drink items, with an eye toward carrying, merchandising and sampling them, and be open to new frozen food and beverage partners. “[Retailers] have to think about other trends in the store, like plant-based,” he advises. “Those trends are driving customers into their stores, and that’s the next thing they need to pay attention to.”

After creating a compelling product, it’s all about creating promotional opportunities for the retailer to help accelerate the product.” —Anthony Spinato, Spinato’s PROGRESSIVE GROCER March 2019

47


GROCERY

Water

rk o W y t s r i Th Y C AT E G O R G W AT E R IN . IS N R IO E T H A T IN IN N O V IS A W A S H Sax By Ba rba ra

are ew flavors and functional benefits t, boos big a gory cate r giving the wate opening the floodgates on sales for grocery retailers. Dollar sales for the category as a the whole surged nearly 8 percent for , 52-week period ended Dec. 30, 2018 from data nnel icha mult according to Chicago-based IRI. “Flavored bottled water has seen that the introduction of new flavorings rage beve r othe to ated were once releg sito, categories,” says Alexander Espo market research firm Euromonresearch analyst at London-based particular have proved popular in rs flavo ical itor International. “Trop juice and soda categories. These in bringing in consumers from the rs to flavored waters.” ume cons new have helped to attract functional products are putAccording to Esposito, flavored and market for still water brands “The . gory cate ting profit back into the competitive, leading to a and d has become increasingly fragmente of both the name brands lf beha on ity activ al high level of promotion s for flavored and price t s. “Uni and private label brands,” he note still water, often in than er high tly ifican sign functional waters are the brand.” on g ndin er, depe between two and four times high accelerating are nts entra r wate anal artis New functional and led water. bott of n eptio perc grow th and changing consumers’ ins, vitam with ed infus and rs flavo new Still water, buoyed by g health havin as d tione posi , and electroly tes, alkaline or charcoal ent. perc 6 ly benefits, was up near

48

progressivegrocer.com

Key Takeaw ays

New functio nal and ar tis anal water options, as w ell as novel fla vors, are driving gr ow th in, and changing consumer s’ perception of , the category.

Compelling cross-promot ions are generating in -store excite ment, and customiz ed displays ar e on the increase. Sparkling w ater is a key grow th area, with m ore brands th an ever clamoring to enter the se gment.


H OW P R E M I U M WAT E R I S

MAKING WAVES IN THE CENT PREMIUM WATER IS IN HIGH DEMAND WITH CONSUMERS. RETAILERS CAN BENEFIT FROM THIS BY OFFERING A STRONGER AND MORE BALANCED PRODUCT MIX. NEIL KIMBERLEY | Chief Strategy Officer

THE WATER MARKET HAS SEEN RAPID CHANGES IN RECENT YEARS. WHAT MARKET DRIVERS ARE BEHIND THE CHANGE? HOW HAS THE CATEGORY EVOLVED? NK: In 2016, bottled water surpassed carbonated soft drinks to become the fastest-growing category in

beverage in the U.S. A year later, it grew by almost 13% to $2.4B at retail. This shift is attributed to the widespread concern for sugary beverages and consumers opting for bottled water as a healthier option. Brands are tapping into this evolution by offering bottled

water with functional benefits and differentiation factors — influencing and shaping the premium bottled water category. HOW VERSED ARE RETAILERS IN THE CURRENT WATER SPACE? WHAT ARE SOME COMMON


PREMIUM WATER —

ADVERTORIAL

IDEAL ASSORTMENT

33% SOURCE WATER is water in its natural state from a spring or other natural source prior to any treatment for drinking. It naturally contains minerals.

33%

ALKALINE/ IONIZED WATER

ER STORE MISCONCEPTIONS? NK: There is certainly an opportunity for more education on the premium water space. For many years, the bottled water category was dominated by value brands delivering low-priced hydration, so it wasn’t uncommon to hear retailers say that “people just want to buy cheap water” or “premium water won’t be successful in my store.” In today’s landscape, that is no longer the case. Retailers should make space for premium water not only for the higher profit margins but for the engaged consumers purchasing it.

is purified or source water that has a higher pH either from ionization/ electrolysis and/ or added natural alkaline minerals.

33% ENHANCED WATER

is purified or source water that promotes added functionality or benefits. Electrolyzed/restructured water which contains added ingredients, such as minerals, electrolytes, vitamins and/or flavors. Enhanced waters can also be alkaline water.

WITH PRODUCT SELECTION AT AN ALL-TIME HIGH, WHAT SHOULD A RETAILER LOOK FOR WHEN CREATING A BALANCED ASSORTMENT? NK: We know that premium water is in high demand with consumers, so it’s imperative that retailers curate their shelf with the right balance of premium water. An ideal assortment for premium water is 33% Source Water, 33% Alkaline/Ionized Water, and 33% Enhanced Water. By offering premium products like Essentia Water, an ionized alkaline water, retailers can make higher margins when providing the right space and pricing to 1L, 1.5L, and 1L 6packs. The most successful retailers are focused on the brands that can deliver growth while maintaining high levels of revenue and profitability. THE CENTER STORE HAS ALWAYS BEEN A CHALLENGE. HOW CAN WATER HELP DRIVE GROWTH THERE? NK: Last year the bottled water category added over $1 billion in sales — the overall largest contributor to center store growth. Retailers should make sure the right premium bottled water brands are available in locations for immediate consumption and impulse purchases, such as the deli, bakery, produce, pharmacy and checkout. WHAT’S THE NEXT TREND IN WATER TO LOOK FOR? NK: Premium water will continue to be a key driver within the beverage industry. I predict we’ll see brands exploring enhanced water like antioxidants or hydrogen-infused.


GROCERY

Water

“Functional waters are one of the biggest contributors to category growth in the water aisle,” affirms Rita Konrad, chief sales officer at Beverly Hills, Calif.-based Formula Four Beverages, maker of Oxigen water. “Consumers are looking for healthier/goodfor-you products in all their shopping purchases, and when it comes to water, they want waters that deliver more than just hydration.” “Consumers are becoming more intrigued with premium still water, and alkaline waters are part of that,” observes Neil Kimberly, chief strategy officer at Bothell, Wash.-based Essentia Water. Kimberly notes that growth of alkaline waters is outpacing overall category growth. “Premium water grew around 13 percent in 2018, but high-pH waters, which represent about 15 percent of the category, were up 36 percent,” he says, adding that he expects to see more upside for the category in 2019. “Premium water and alkaline water are some of the most exciting areas of beverages,” Kimberly asserts. “Consumers are exploring the space and discovering great new brands.”

Flavored bottled water has seen the introduction of new flavorings that were once relegated to other beverage categories. Tropical flavors in particular have proved popular in bringing in consumers from the juice and soda categories.” —Alexander Esposito, Euromonitor International IRI data shows that Essentia dollar sales increased 72 percent for the period cited and Life Wtr dollar sales surged 64 percent. Even established brands are getting more play in supermarket aisles: Quincy, Mass.-based Stop & Shop, an Ahold Delhaize USA banner, recently featured Smartwater on a three-for-$5 promotion in floorstands in the water aisle and near the meat department. “We see a big opportunity in creating consistent merchandising sets that put the right brands in the right spaces with cross-merchandising opportunities,” Kimberly says. “There’s a lot of interest in getting water into delis, salad bars and produce areas. We do a lot of work building engaging retail displays and adding unique giveaway items for store excitement. Since the premium water segment is regularly promoted, we try to use promotions to drive trial.”

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Functional waters, infused with vitamins, electrolytes, alkaline or charcoal, are significantly contributing to category growth.


Crossing Over

Manufacturers are also creating compelling cross-promotions. Among them, Fiji Waters’ Crack, Sip, Repeat promotion pairs Fiji Water with Wonderful Pistachios. “Prominently displaying better-for-you snack options with healthy beverages like Fiji Water can help drive purchase,” notes Clarence Chia, VP of marketing and ecommerce for Los Angeles-based Fiji Water, adding that the brand “is also providing retailers with eye-catching displays to drive awareness during those key time periods. We’re helping retailers to create a variety of POS options that fit needs of retailers of all sizes.” According to Konrad, the Oxigen brand partners with accounts on themed promotions such as wellness or healthy-living displays, cross-merchandising with other healthy/good-for-you products, as in the case of health bars and water. “This allows us to do sampling in-store, as well as case stack displays or checkstand displays, especially around significant events,” she explains. The brand recently launched a 1-liter size to complement its 20-ounce bottles. Retailers are devoting significant space to customized water displays. Malvern, Pa.-based Acme, an Albertsons banner, features a three-sided custom end cap devoted to Polar Beverages’ Polar branded water at one end of its beverage aisle. The chain also features Polar water in a large display in the produce aisle and a number of premium water brands on displays throughout the store. Acme also recently displayed branded Voss water on a fixture near snacks and a stacked display of S. Pellegrino across from the deli. Meanwhile, the grocer locates organic water brands — Hint flavored waters, Mountain Valley sparkling water, Avitae caffeine water and Sanavi organic flavored sparkling spring water — in its organic and natural section, adjacent to produce. In a different approach, a New York metro-area ShopRite, part of Keasbey, N.J.-based Wakefern Food Corp., a retailer cooperative whose members operate ShopRite stores across the Northeast, merchandises all water brands in one large water aisle, which can run up to 100 feet. The store has added a number of functional brands to its department, including Alkazone antioxidant alkaline water; Gloe plant-infused sparkling water in turmeric and ginger flavors; Neuro Water’s Sweet Dreams, Reduce Stress and Energy Refresher formulas; and Propel and Body Armor electrolyte waters. “In many accounts, Hy-Vee for example, we have dual placement in the water aisle alongside other premium functional waters, in the health market, and then with additional displays throughout the stores and in cold sets and coolers, both at checkstands and throughout the stores,” Formula Four’s Konrad says. “Our shots are usually found at the check registers, but also merchandised in the HBC sections where you find health bars and supplements.”

Sparkle Plenty

Retailers are giving more space in particular to sparkling water, a key growth area, with dollar sales up nearly 16 percent, according to IRI data. For instance, La Crosse, Wis.-based La Croix is nearly neck-andneck with private label flavored sparkling water, each with a dollar share of around 20 percent. Data from Chicago-based Nielsen shows that canned sparkling water in particular has emerged as a huge contributor to category performance, with more than 30 percent of new products in the water segment last year packaged in cans. While bottled sparkling water commands 64 percent of all sparkling-water dollar sales, according to Nielsen, canned sparkling-water dollar sales were up 43 percent from the previous year to reach sales of more than $803 million. Branded players in that space saw significant growth, with La Croix’s dollar sales up 25 percent and Newton, Mass.-based Spindrift seeing a triple-digit dollar sale increase, according to IRI data. Other brands are clamoring for a piece of the action. A recent study by Euromonitor shows that in 2018, 71 percent of new items to the water category were sparkling waters. Last year, Purchase, N.Y.-based PepsiCo introduced Bubly flavored seltzer in cans; Stamford, Conn.-based Nestlé Waters North

Retailers are creating impactful displays throughout the store to maximize sales of both still and sparkling waters.

America introduced sparkling versions of its six regional spring water brands — including Poland Spring — in PET bottles and cans; and Atlanta-based Coca-Cola acquired Topo Chico, sparkling mineral water sourced in Mexico and packaged in glass and PET bottles. Retailers are giving sparkling water plenty of play in stores, too. Acme recently featured La Croix multipacks at one end of its beverage aisle and devoted floor displays to no less than five brands — Refresher, Vintage, Soleil, Bubly and its own Signature brand — of canned sparkling water or seltzer in the section. For its part, Stop & Shop recently featured Bubly 12-packs on an end cap display and stacked out Poland Spring’s still and sparkling water at the end of its water aisles. PROGRESSIVE GROCER March 2019

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FRESH FOOD

2019 Retail Seafood Review

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Go Fish GROCERS SEE ONGOING POTENTIAL IN HE ALTHY AND SUSTAINABLE OPTIONS WHILE PL AYING DOWN ANY THRE AT FROM PL ANT-BASED ALTERNATIVES. By Bridget Goldschmidt

Key Takeaways As seafood consumption rises, retailers are expressing confidence in the category’s future. Grocers and marketers cite health, convenience, greater willingness of consumers to experiment with unfamiliar species, and concerns about sustainability as drivers of higher fresh seafood sales. A majority of retailers carry plant-based seafood alternatives or would consider doing so, and most would be amenable to merchandising them alongside traditional seafood products, indicating that most grocers don’t view plant-based options as a threat to seafood sales, but rather as a way to bring new consumers, such as vegans and vegetarians, to the department.

s consumers increasingly turn to seafood as a source of lean protein — U.S. per capita consumption for 2017 grew to 16 pounds from 14.9 pounds in 2016 to reach the highest per capita consumption in almost a decade, according to National Fisheries Institute data released in late 2018 — food retailers are feeling confident about the category’s future, Progressive Grocer’s state-of-the industry Retail Seafood Review has found. With service seafood departments present in 58 percent of respondents’ stores, comprising 6 percent of total store sales, 70 percent of retailers responding to PG’s annual survey reported that department sales had increased from the prior year, while 30 percent said that they had remained the same. No one reported a sales decrease over the past 12 months. On average, sales rose from the prior year by 9 percent. Similarly, when asked about their fresh seafood sales expectations for the coming year, 70 percent said that they expected sales to increase, and 30 percent predicted sales would be flat, with no respondents anticipating a sales decline. On average, retailers expected sales to rise by 6 percent.

Reasons to be Cheerful

These results mirror the optimistic assessments of industry players contacted by PG. “Seafood … is poised for continued increase in usage,” affirms Megan Rider, domestic marketing manager at the Juneau-based Alaska Seafood Marketing Institute (ASMI), which provides a variety of merchandising tools for retailers, as well as working with retail partners on custom promotions to help drive seafood trial and purchase through cross-merchandising, in-store demos, signage and digital coupon programs, A key cause of this expected growth, Rider believes, is seafood’s healthy halo. “As consumers are becoming more aware of how food can have a positive impact on health, species like Alaska salmon provide an excellent source of long-chain omega-3s found only in marine sources, which help support many functions in the body,” she notes.

PROGRESSIVE GROCER March 2019

55


FRESH FOOD

2019 Retail Seafood Review

The availability of a greater range of convenient options is another big sales driver, which, to a certain extent, intersects with consumers’ health concerns. Having observed “a shift toward value-added and convenience items,” Steve Disko, seafood category manager at St. Louis-based Schnuck Markets, notes, “Consumers unfamiliar with cooking seafood, but aware of the health benefits, are looking for solutions.”   For instance, Schnucks “kicked off a company-wide promotion at the first of the year focused on healthy eating,” says Disko. “Seafood plays a big part in that. Ready-to-go steamer bags are a quick, healthy source of protein.” For his part, Richard Castle, director of seafood at Pittsburgh-based Giant Eagle, attributes category gains to consumers’ greater enthusiasm for trying new things, particularly when it’s made easier for them to do so and they receive the proper guidance. “We are seeing a growing number of customers are more willing to step outside of the usual salmon, tilapia and cod purchase,” notes Castle. “Value-added items such as salmon burgers, skewers, stuffed and marinated are growing. We have seen success in promoting a fresh catch of the week — bring it in on Friday and sell it out by Sunday — [with] monk fish, cobia and fresh swordfish. Oysters are growing in popularity also.” With regard to the sales of these items, he admits: “I often find that something I thought would never sell actually surprises me, but we find the growth is largely due to having knowledgeable and passionate team members engaging with the customers and explaining selection, preparation, and cooking and serving tips.”

Seafood Department Sales Performance 11.1% 70%

3 0%

9%

Net change

3 8 .9%

Increased Stayed the same Decreased

Projected for Total 2018 YE AR AGO

CURRENT

6 3.9%

70%

3 0%

4.2%

6%

Net change

Net change 3 6.1%

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

Progressive Grocer ’s Retail Seafood Review survey was fielded online by EIQ Research Solutions in October and November 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, seafood represents about 6 percent of their total sales. progressivegrocer.com

5 0.0%

4.7%

Net change

Methodology

56

YE AR AGO

CURRENT


“Sustainability is equally about communities as it is about environment. Industry leaders are proving, what’s good for the environment is also good for people and for business.” - Barton Seaver

We proudly participate in supporting all efforts towards the sustainability of our oceans and communities. By sourcing seafood responsibly, and practicing safe ways to feed our population, we continuously strive to create a growing demand for seafood. We proudly provide the retail, food service, culinary and hospitality industries with the best choices for getting seafood on the plate. Explore our products and services today.

Find us at Seafood Expo North America–Booth #1721

Importer, manufacturer and distributor of quality frozen seafood products from the USA and around the world.

866.950.2378 beaverstreetfisheries.com | seabest.com


FRESH FOOD

2019 Retail Seafood Review Consumer Demand In the past year, here’s how consumer demand has changed: Increased

Decreased

Stayed the Same

Value-Added Products

79%

5%

15%

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

72

8

21

Smaller Portions/Pack Sizes

59

5

36

Value-Priced

59

3

38

U.S. Wild-Caught Seafood

46

8

46

Imported Wild-Caught Seafood

38

10

5

Farm-Raised Seafood

15

21

64

Source: Progressive Grocer market research, 2019

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

Year Ago

BOGOs

4.64

3.97

Temporary Price Reductions

4.50

4.28

Social Media

4.22

3.67

Product Demos/Sampling Events

4.17

4.18

Flash Sales

4.16

3.36

Point-of-Purchase Information

4.12

4.08

Online Marketing

4.00

3.74

Cross-Promotion Within the Store

3.94

3.87

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

3.91

3.08

Direct Mail

3.57

3.28

Source: Progressive Grocer market research, 2019

“The most important aspect of our seafood marketing is our teammates,” agrees Disko. “The vast majority of seafood is sold out of our seafood showcases. Having knowledgeable seafood captains assist our customers with their meal plans and able to answer any of their questions is key.” Noting his company’s partnership with ASMI, Castle says: “We create signs and ads utilizing the Alaska logo. We direct customers to the ASMI website for recipes, and we typically run a sales con-

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test for our seafood team leaders. This year is a trip to Alaska. We will be taking the top eight stores.”   Other successful promotional approaches include “seafood ‘road shows’ where we blast a store with buys [and] media,” according to a respondent to PG’s survey. As Castle puts it: “The best marketing is a combination of telling the story of source, freshness and quality. The best merchandising is getting the focus product in a highly visible location and drawing attention to it.”

Sustainability’s Staying Power

In what by now will seem a familiar breakdown of results, 70 percent of respondents reported having a sustainable seafood program in place, a testament to its importance at retail as a point of differentiation. In fact, 100 percent of respondents with such a program said that they promoted it as such. As for consumer demand for sustainable seafood, 57 percent reported that it had increased, while 39 percent said that it had remained the same and only 4 percent noted a decrease in demand. Adding to sustainable seafood’s appeal for retail is the fact that consumers are willing to pay more for seafood labeled as sustainable, as affirmed by a 2018 paper authored by researchers at NOAA Fisheries Southwest Fisheries Science Center and Mississippi State University. Indeed, retailers are still singing the praises of sustainable seafood. “Our Alaska programs are … successful because of the quality and sustainable image Alaska is known for,” notes Giant Eagle’s Castle.   Schnucks’ Disko points out, however, that to ensure the supply of sustainable seafood, there will have to be “more of a shift toward farmed seafood.” He explains: “To have sustainably managed fisheries, you have to limit what is taken out of them to have a stable biomass. The wild fisheries can’t keep up with growing populations. On top of that, there are things like ocean acidification and rising sea temperatures


FRESH FOOD

2019 Retail Seafood Review

affecting the biomass. Think about it: We aren’t eating wild chickens, hogs and cattle anymore.  We have to get better at farm-raised seafood, and fast.”

Do you have a sustainable seafood program in place at your store(s)?

Plant Power

The greater seafood category hasn’t been immune to the incursions of plant-based alternatives across the store, with such examples as Ocean Hugger Foods’ tomato-based Ahimi being added to the foodservice sushi offerings of Whole Foods Market, and the availability of shelf-stable and frozen fish-free products from Good Catch and Loma Linda. Among those polled by PG, 30 percent said that they currently carried plant-based alternatives to seafood and 39 percent noted that they didn’t but would consider it, while 30 percent responded that they didn’t carry such products and had no interest in doing so. When asked whether they would consider merchandising plant-based seafood alternatives alongside traditional items in the seafood section, a whopping 81 percent said they were open to such placement, perhaps viewing it as a way to bring new consumers, such as vegans and vegetarians, into the department, while 19 percent weren’t interested in placing the different proteins side by side. ASMI’s Rider and Disko, of Schnucks, don’t seem too concerned about any perceived threat to traditional seafood sales from plant-based options, and neither displays much interest in its sales potential within the fresh seafood department. “While there may be a place for plant-based seafood for vegans, most consumers that are cutting back on meat consumption are not eliminating animal proteins from their diets,” contends Rider. “Consumers are primarily focused on cutting back on red meat, mainly due to health reasons, but also for the good of the planet. When it comes to wild-capture seafood like the species in Alaska, we have a very low environmental footprint.”

3 0% No

100%

30%

Has consumer demand increased, decreased or stayed the same for sustainable seafood products in the past year?

Source: Progressive Grocer market research, 2019

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Increased

4%

Stayed the same

57%

Decreased

39%

Source: Progressive Grocer market research, 2019

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

39%

Yes

Source: Progressive Grocer market research, 2019

Are you currently or would you consider carrying plant-based alternatives to seafood products?

30%

70% Yes

Do you promote the sustainable seafood program as a point of differentiation?

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

Are you currently or would you consider merchandising plant-based alternatives alongside seafood in the seafood section of your store(s)?

81% 19% Yes

No


SEAFOOD SUCCESS

POWERED BY ALASKA

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

To make the most of your seafood offerings, the Alaska Seafood Marketing Institute offers training resources, POS, shopper trend data, and more. alaskaseafood.org

#AskForAlaska


FRESH FOOD

2019 Retail Seafood Review

Disko is more succinct in his reply, acknowledging the growth in plant-based proteins, but noting that “it’s still a relatively small segment.” Regarding other industry challenges, when asked to identify one thing they would like to see from their suppliers to make their seafood departments more effective, one

respondent replied that most appreciated would be a “complete line on pedigree … because so many foreign sources are cheaters.” Another issue brought up by respondents was “better pricing.” Even with such headaches, however, retailers have every expectation of smooth sailing in the fresh seafood category this year.

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

Pounds Percent on Promotion

Average Retail Price

Average Retail Percent Change vs. Year Ago

Dollars per Store/Week

Dollar Percent Change

Pounds

Seafood

$5,210,412,905

5.5%

664,322,349

1.8%

37.5%

-1.3

$7.84

Salmon

$1,729,566,461

6.8%

175,410,652

6.8

39.5

-1.0

9.86

-0.0

Shrimp

891,812,162

5.7

117,555,399

7.4

42.4

-3.1

7.59

-1.6

Crab

719,152,452

6.2

90,139,731

-1.8

32.1

-0.5

7.98

8.2

Lobster

265,111,077

-3.4

30,518,292

-7.0

59.7

0.5

8.69

3.9

Tilapia

196,461,190

-9.5

44,979,425

-9.3

41.5

1.6

4.37

-0.2

Cod and Scrod

194,529,736

6.7

24,580,845

-2.4

36.0

-6.4

7.91

9.3

Scallops

Supercategory

Pounds Percent Change

Pounds Percent on Promotion Change vs. Year Ago

3.7%

130,298,859

16.6

9,896,397

14.8

40.1

1.7

13.17

1.6

Tuna

88,723,170

2.7

11,867,098

-7.6

24.2

-8.8

7.48

11.1

Trout

84,275,342

10.2

9,194,960

5.9

26.7

1.4

9.17

4.1

Oysters

57,404,684

5.2

11,126,875

-8.5

20.5

-3.3

5.16

14.9

Clams

44,470,966

8.9

11,283,478

0.2

23.9

-5.9

3.94

8.7

Snapper

35,291,041

23.4

4,056,989

32.5

31.8

10.2

8.70

-6.9

Crawfish/Crayfish

27,309,576

13.4

8,714,830

8.9

57.8

9.9

3.13

4.1

Pollock

18,986,806

20.8

5,058,663

25.3

37.1

8.9

3.75

-3.6

Mahi Mahi

11,227,658

35.6

1,205,001

21.0

35.6

4.9

9.32

12.0

Caviar

5,934,822

-5.1

180,001

-64.1

11.5

-11.2

32.97

164.4

Other Seafood

38,207,438

36.5

4,971,268

15.5

16.1

-0.5

7.69

18.2

Other Shellfish

199,823

1114.7

23,287

562.4

15.3

15.3

8.58

83.4

Misc. Seafood

37,081,135

447.3

2,664,329

252.2

55.4

Total Seafood

$5,247,494,040

6.1%

666,986,678

2.1%

55.6

-1.4

13.92

37.5%

-1.3

$7.87

4.0%

Source: Nielsen Perishables Group

Seeing Seafood Sales Looking at seafood dollar sales for the year ended Dec. 29, 2018, it’s immediately apparent that tilapia, formerly quite a trendy species, experienced another dramatic drop in sales, on top of dollar sales decreases of 10.6 percent and 10.1 percent in 2017 and 2016, respectively. As Nielsen notes, “Tilapia has been declining significantly for years now, as it has lost popularity with consumers.” Meanwhile, snapper, crawfish/crayfish, pollock, scallops, trout and mahi mahi saw considerable dollar sales increases. Nielsen says that snapper experienced an increase in promotions alongside a 7 percent drop in price, while pollock similarly saw more promotions and a moderate price decline. On the other hand, mahi mahi’s dollar sales soared thanks to a hefty 12 percent price

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increase. For its part, crawfish/crayfish benefited from a rise in both promotions and price, with Nielsen further observing, “We have also seen [an] increase in more Creole/Cajun influences.” As for scallops, Nielsen says that their sales “seem to just be driven by consumer interest/availability, as promotion and pricing stayed the same.” On the highest end of pricing, the typically expensive options of lobster and caviar both lost dollar sales, but for different reasons. “Lobster average price rose nearly 4 percent, leading to a decline in pounds of 7 percent,” Nielsen notes. “Caviar prices dropped 11 percent,” but sales didn’t rise as a result, perhaps due to its status as a prohibitively costly luxury item.


FRESH FOOD

Packaging

Great Expectations PERIME TER PACK AGING MUST ALIGN WITH CONSUMER DESIRES, WHICH INCLUDE PERSONAL AND ENVIRONMENTAL HE ALTH, ALONG WITH CONVENIENCE AND LITER AL TR ANSPARENCY.

American packaging at Memphis, Tenn.based Evergreen Packaging, which creates fiber-based packaging solutions, making and supplying paper and paperboard products globally, and is the No. 1 supplier of liquid packaging board in the world. The company’s “2018 EcoFocus Trend Study” of grocery shoppers found that consumers have greater expectations of packaging than ever before, especially for healthy foods and beverages.

By D. Gail Fleenor lean food, transparency and recyclability are all buzzwords for today’s consumers. They want the best food for their families and themselves, and notice more about supermarket perimeter purchases than ever before. A box for fresh food is no longer just a container for doughnuts or peppers or chicken pot pie. Packaging must meet certain criteria for most shoppers, and they will switch stores to purchase what they want. “More shoppers today want packaging that works harder for their health and the health of the environment,” affirms DeWitt Clark, VP of sales and marketing for North

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progressivegrocer.com

Key Takeaways Consumers’ concerns about their own and the planet’s health, as well as convenience and the ability to see items in their containers, are major trends in perimeter packaging. Retailers are increasingly offering the packaging solutions that their customers are requesting. Suppliers are stepping up to the plate with innovations to meet shopper and retailer needs.


FRESH FOOD

Packaging

Trends from the study indicated a need for food and beverage companies to view packaging as an extension of the ingredient list. Shoppers are looking at the total package, and packaging is becoming as important as what’s inside. Following are a few quick findings: 71 percent of grocery shoppers strongly agree or agree that “foods and beverages with healthier ingredient lists should use packaging materials that are healthier, too.” 68 percent say that it’s extremely or very important “to choose foods or beverages that are packaged responsibly.” 51 percent of shoppers strongly agree or agree that “I have changed what I buy due to the type or amount of packaging.” In a similar vein, the Bellevue, Wash.-based Hartman Group’s “Sustainability 2017” research found that Millennials show a preference for reusable and nonexistent packaging, with women more likely than men to scrutinize packaging materials. Women and Millennials are two shopper groups that are critical to success in the perimeter.

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progressivegrocer.com

Meals and snacks in multiple compartments within a single clear, recyclable container from Placon.

Packaging for Customer Convenience

Convenience continues to be an issue in virtually all supermarket departments. Customers are time-crunched, so they stop by the supermarket for a quick snack or meal. Shoppers don’t want packaging that leaks, or doesn’t keep hot foods hot or cold foods cold. Packages with multiple separate items must be designed to keep those items separate, or customers won’t purchase the item again. Ready-to-eat packaging means that those seeking a quick meal should be able to open it up and chow down. Convenience can also refer to the shopping experience. “Packaged product can be very convenient, such as a bagged salad kit versus buying all the items separately,” notes Bridget Winkelman, farmer’s market and floral manager for St. Cloud, Minn.-based Coborn’s Inc. “We are seeing growth in packaged items such as packaged tomatoes and salad kits, as opposed to traditional salad blends.” Says Anna Brown, produce merchandising specialist at Salisbury, N.C.-based Food Lion: “Our customers are pushing us for more convenience and ease with their buying options.” Brown observes that for a wide variety of items, packaged and convenience options are driving sales: “A customer may come in to buy four bulk apples, but enjoys the ease of purchasing an apple pouch and leaves the store with 2 pounds of apples instead.”


Winkelman also likes apple pouches, but has a different view. “Apples in pouches can be almost half the size of bulk apples,” she points out. “The smaller apples still taste the same, but do not display as nicely [as] when they are bulk. The bulk will cost more per pound and per apple, but when you purchase a bag, you will have a larger total dollar ring at the register.” Meanwhile, heat-and-eat items are a component of customer convenience around the perimeter and must have the correct packaging for this use. “For prepared food, it’s got to be a microwaveable or oven-ready container,” asserts Terry Esteve, produce director for New Orleans-based Robért Fresh Market. “There’s packaging out there now that can go either way. That’s what we use for all of the heat-and-eat prepared foods at our stores.” Packaging manufacturers are catering to this customer need. “Convenience and safety continue to be the growing trends for perimeter foods,” notes Sarah Korwek, product manager at Shelton, Conn.-based Inline Plastics. “Consumers continue to gravitate towards product offerings that are both healthy and easy. Freshcut fruits, vegetables, nuts, snacks and prepared meals, displayed in attractive packaging for a clear view of the contents, satisfy that grab-and-go need for people and their active lifestyles.” Shoppers around the perimeter want to see the pie, peppers or pepperoni as they quickly grab a package for purchase. Checking a package for quality inside is a necessary step for most customers, which makes transparent packaging a necessity for convenience. For example, Coborn’s Winkelman says that clear packages are used for produce such as mini peppers or cucumbers so that the product is visible. The clear package helps in quickly identifying whether one of the items inside is “bad,” so produce workers can pull the item or customers can see it before purchase. “I like to see the product inside the bag, not just a giant label, and I think many produce companies have realized this,” she observes. “Produce is attractive, and the product should be seen.”

Treat the Earth Kindly

Customers are more aware than ever that clear containers can be bad for the environment. “For cut fruit and vegetables, we’ve actually had plenty of feedback about making sure packages are made with recycled materials, so we made that switch about a year ago,” explains Esteve. “For my

A customer may come in to buy four bulk apples, but enjoys the ease of purchasing an apple pouch and leaves the store with 2 pounds of apples instead.” —Anna Brown, Food Lion


FRESH FOOD

Packaging Evergreen Packaging makes fiber-based products like cartons and cups that are environmentally friendly.

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salad bars and even for the hot-food bars, the trend seems to be moving towards biodegradable packaging. Customers still use the clear containers for salads, but we’ve made a decision to offer both the clear plastic, made from recycled materials, and a biodegradable container.” For her part, Winkelman sees a trend in packaging toward more bags and containers that are recyclable and environmentally friendly, including plastic clamshell containers. “Less is more,” asserts Jeff Cady, director of produce and floral at Williamsville, N.Y.-based Tops Markets LLC. Packaging is becoming more eco-friendly, with all of the positives that less plastic and fewer packaging materials in landfills mean for the planet, he observes, adding that this trend leads to more environmentally friendly packaging like cardboard and other compostable materials. According to Esteve, packaging at


his stores’ hot-food bars is trending away from Styrofoam toward biodegradable materials. “Our customers are pretty vocal about many things, both good and bad, and that’s what led to the changes in packaging,” he notes. “Even in stores where customers were not as vocal, they noticed and gave us a compliment or two. They notice.”

Placon makes containers that keep hot foods hot and cold foods cold.

On Top of the Trends

Inline Plastics makes a wide variety of packaging for the perimeter. Its Safe-T-Fresh line includes containers in all shapes and sizes that use the company’s patented tear-strip technology. This allows consumers to see inside and know that the product hasn’t been touched since packaging. Safe-T-Fresh packaging can also be

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FRESH FOOD

Packaging

Fresh-cut fruits, vegetables, nuts, snacks and prepared meals, displayed in attractive packaging for a clear view of the contents, satisfy that grab-and-go need for people and their active lifestyles.” —Sarah Korwek, Inline Plastics

stacked easily for display without risking leaks. Additionally, the company’s PagodaWare offers a 360-degree view of the contents, and its SnackWare has multiple compartments so products can be mixed and matched cleanly. For retailers, packaging should play an integral

Know What an RPS is? There’s a trend among U.S. grocery shoppers to consider the package along with the ingredients when judging what’s healthy, according to EcoFocus Worldwide, a consumer market research group. Responsible packaging shoppers, or RPS, are leading this trend. “Just as natural foods shoppers have changed the landscape of grocery stores, RPS are expected to have the same long-term sustaining impact,” says Linda Gilbert, study author and CEO of EcoFocus Worldwide, based in Tampa/St. Petersburg, Fla. RPS make up 59 percent of all grocery shoppers — a growing number. This group of shoppers highly values the recyclable and renewable attributes of responsible packaging. According to Gilbert, the group is 30 percent more likely than all grocery shoppers to think about the environmental impact of packaging before purchasing products, which can also influence where they shop. “The conclusion for grocery retailers: Responsible packaging matters for a growing segment of grocery shoppers whose influence will transform the grocery store landscape,” Gilbert says.

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Consumers can clearly see the fresh products they’re purchasing in these Inline Plastics containers.

part in the marketing of products to consumers, Inline’s Korwek notes, adding that current research shows that consumer demand for delivery and takeout foods is rapidly on the rise. “With this growth, consumers want to know the prepared foods they purchase and eat at home are safe,” she observes. “Retailers are voluntarily responding to these consumer safety concerns by packaging prepared foods in tamper-evident containers.’ As a maker of fiber-based products and technologies such as milk cartons and beverage cups, Evergreen says that it pays attention to customers’ needs so that they can trust and feel good about the products they purchase in the company’s packaging. Placon, based in Madison, Wis., creates custom and thin-gauge thermoformed plastic clamshells, trays and blisters with an environmentally responsible line of recycled PET roll-stock materials used to create flexible and stand-up packaging. The company makes food containers with its EcoStar stock, which is FDA-approved food-grade recycled PET. The material is made from curbside plastic bottles and thermoforms that otherwise would have ended up in a landfill. The materials being used the most in perimeter packaging include PET and polypropylene, according to Placon, which adds that materials like recyclable PET and its EcoStar post-consumer recycled PET provide the clarity needed for packaging solutions. Despite all of this innovation, and although packaged perimeter items such as produce are on the rise, Coborn’s Winkelman thinks that there are some limitations to packaging. “I don’t believe the whole department will ever be completely packaged, because I feel that you can never replace the ‘bulk’ look when it comes to merchandising,” she says. “Bulk produce displays so nicely and looks so pretty.”


TOTAL MEAL SOLUTIONS

Retail Foodservice Q&A

Ask a Chef ARDENT MILLS’ JASON GRONLUND HAS A CROP OF IDE AS FOR PACKING MORE FIBER AND NUTRITION INTO GROCER ANT FAVORITES. By Kathy Hayden

ason Gronlund, chef and technical sales manager for foodservice at Denver-based flour supplier and grain innovator Ardent Mills, has more than 20 years of culinary sales R&D and backof-house operations leadership experience, including stints as VP of culinary at Smokey Bones Bar & Fire Grill and director of ingredients and culinary sales at the McIlhenny Co., maker of world-famous Tabasco sauce. From CPG development to menu R&D, he’s done it all. Here, Gronlund shares some grocerant-ready, grain-based ideas:

Progressive Grocer: Grains have been getting a new look since quinoa came onto the scene. What else is new in this ingredient category? Jason Gronlund: Quinoa really helped chefs think beyond rice in side dishes, and it’s time for more chefs to see that there’s a grain for everything. I recently did ideation sessions with an international grocery store chain, and we worked on frozen foods, CPG and more. Grains are especially useful in the fresh food section, where they can boost fiber and nutrition everywhere, from the salad bar to the pizza oven and the hot-appetizer bar.

PG: What are some of your favorite grains and some favorite ways to use them? JG: I’ve been doing a lot of work with Ardent Mills’ White Sonora Wheat; this heirloom variety had been a staple wheat in the U.S. during the 1700s and 1800s, and today is enjoying a rediscovery. Ardent Mills has individually quick-frozen (IQF) White Sonora Wheat Berries that are soft, flavorful and have a nice buttery color. It’s great in soups, chilis and stews like a pozole de trigo. Pozole usually features hominy corn, but in rural Sonora, where this dish originates, wheat pozole, or pozole de trigo, is a dish that celebrates the yearly harvest of Sonora wheat. I also love barley. Ardent Mills has colored barleys and a higher-fiber, proprietary barley called Sustagrain. People are looking for convenient meals that keep them full and give sustained energy, and barley is great for that. Try serving quinoa-barley bowls with fresh spinach, feta, vegetables and a warm herb vinaigrette. Or top barley with salmon, mushrooms and citrusy sauce for a prepared meal. Barley also works well with curries and Tex-Mex flavors.

PG: What are some other ideas for using grains in grocerant settings? JG: Store hot bars are a great place to get more creative. People are more open to trying new

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tastes and styles in the appetizer or snack category. Consumers also want fail-safe results, so that “crisp” exteriors are crisp, and interiors have a soft, contrasting texture. Grains can play an important role in both of these. I’ve been developing different arancini with mixed grains. Quinoa works really well with rice, or it can completely replace the rice and can be filled with sauce or cheese. The idea of “tots” also translates very well when using grains like barley or quinoa. I like the idea of “dusted and dipped” tots that are finished with a spice mix and offered with sauces for dipping. You can even sneak greens and other veggies into grain tots. Size is important in the appetizer/snack category. For instance, I think savory pastries like empanadas and Jamaican meat patties have huge appeal for people who like pizza rolls or other stuffed-pocket snacks, but I recommend making smaller two-bite versions for hot-bar items. Pizza programs can differentiate by incorporating mixed grains in crusts, like an heirloom five-grain crust. Consumers have heard “heirloom” associated with tomatoes and other vegetables, and the word piques interest in the stories behind ingredients. At the same time, pizza and flatbreads are a great way to get more fiber into popular foods. Whole, mixed and gluten-free grains add nutrient density, satiety, higher protein and more fiber to dough formulations.

Store hot bars are a great place to get more creative. People are more open to trying new tastes and styles in the appetizer or snack category.” —Jason Gronlund, chef and technical sales manager, foodservice, Ardent Mills


PG: What about consumers’ special dietary concerns and nutritional needs, like gluten-free, Paleo, etc.? JG: Fortunately, there are many grains for people who are avoiding gluten, including amaranth, buckwheat, millet, quinoa, sorghum and teff. These work well in things like pilaf, grain bowls and in most

Adding grains like barley, sorghum and quinoa can boost fiber and nutrition in bowl meals, fried treats and more.

dough applications, while also boosting whole grain nutrition and fiber. They are available in a variety of forms, including IQF, custom multigrain blends, mixes, and gluten-free, all-purpose 51 percent whole multigrain flour blend. Another great thing about ancient grains is that they appeal to modern consumers who are interested in eating clean, simple foods. PROGRESSIVE GROCER March 2019

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TECHNOLOGY

Digital Marketing

It’s Personal CONSIDER TAKING THESE STEPS TOWARD MORE CUSTOMIZED DIGITAL MARKE TING SOLUTIONS IN 2019. By Randy Hofbauer oday’s brands exist in an age when every fan wishes to engage on a personal level — and the most beloved brands out there know how to do so. That reality is no different for grocers, which are expected to reach every customer by understanding needs and guiding each person along the path to purchase in the most frictionless way possible.

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Some 90 percent of respondents to a 2017 survey said that they find personalization appealing, and 80 percent said that they would be more likely to do business with a company if it offers personalized experiences, according to “The Power of Me: The Impact of Personalization on Marketing Performance,” a 2018 report from Irving, Texas-based digital marketing firm Epsilon. Moreover, consumers who believe personalized experiences are very appealing are 10 times more likely to be a brand’s most valuable customer — those expected to make 15-plus transactions in one year. And those respondents who believe that companies are doing very well on offering personalized experiences shop more than three times more frequently. The fact is, you can’t be a truly progressive grocer today and not offer personalized marketing to your shoppers, and this reality is only going to become more pressing in the coming years.


To offer more personalized marketing, consider doing the following:

Unifying Data Across Disparate Systems

Understanding the shopper is a data-intensive process, and all too often, there are too many barriers to communication between the people managing shoppers’ data, since it’s siloed across online and offline systems, which are often managed by separate teams with separate priorities and KPIs. “For example, at a large grocer, the loyalty team might be focused on in-store purchase behavior and loyalty-specific promotional tactics, while digital and ecommerce are focused solely on online purchases and digital marketing channels,” says Waleed Ayoub, chief technology officer at Rubikloud, a Toronto-based provider of artificial intelligence software. Having centralized data means that both teams can have a consolidated, full view of the shopper across all touchpoints — from in-store to online, or via mobile apps.

Emailing Personalized Offers

Grocers should be capitalizing on their regular emails sent to shoppers by leveraging loyalty and historical transactional data, and combining them with on-sale and recommended items based on that data that a shopper might purchase, advises Sylvain Perrier, president and CEO of Mercatus, a Toronto-based provider of platforms for grocery ecommerce. This strategy enables a grocer to slowly shift consumers toward new items and move them up in the category or laterally toward adjacent products. Minneapolis-based Target Corp. does this, basing deals off past purchases, according to David Bishop, partner with Barrington, Ill.-based retail consultancy Brick Meets Click. Bishop notes that his household, which signed up to receive special deals, receives offers based on past purchases that his household members have made at the retailer — in their case, both online and in-store, and paid for through Target’s Redcard loyalty program. Additionally, grocers should leverage the same data on their ecommerce platforms, Perrier suggests. “Combined with individual shoppers’ preferences and recommended products that are tied to their lifestyles — vegan, kosher, heart-friendly, etc. — this speeds up discoverability for the shopper and enables a retailer to generate additional revenue,” he observes.

Personalizing the At-Shelf Moment of Truth

Retailers are personalizing shelf tags and channel displays to provide product ingredient transparency, improve “findability,” and communicate their commitment to helping shoppers make healthful choices for themselves and their families, says Rich Coleman, VP at Conversant, a Chicago-based provider of personalized digital marketing solutions. Grocers are doing this through feedback provided by shoppers and loyalty data. “For example, Raley’s recently revamped their entire private label lines by removing many ingredients that have been deemed harmful from their products, based on consumer feedback and the products most often purchased by their shoppers,” Coleman notes. “They are also using their loyalty data to market specific health-and-wellness messages and products based on attributes through their email and direct mail campaigns.” Another example that Coleman points to is the Cincinnati-based grocery giant Kroger Co., which recently launched its electronic shelf technology in partnership with Microsoft. The innovation guides shoppers to products that fit their purchase profile — consumers can actually personalize the icon displayed on the shelf where the product is located. “This is significant because, according to Forrester, 65 percent of surveyed consumers say their purchasing decisions are influenced by words and actions of a company’s leaders, and 76 percent of surveyed consumers say they are attracted to organizations that are committed to using good-quality ingredients,” he says. “Aligning marketing messages and merchandising, and ultimately the retailer’s

Offering a Substitute

All too often when ordering online, shoppers don’t have a real-time view of what’s on shelf or in the fulfillment center, leading to orders of out-of-stock products. Some grocers have a way to get around this, however, including Woodman’s, a Janesville, Wis.-based grocer that operates 16 independent grocery stores in Wisconsin and Illinois. The grocer’s mobile app allows shoppers to identify whether they’ll accept substitutes. “While others will either notify the customer when this happens or confirm the substitution is acceptable when the customer is receiving the order, Woodman’s gives the customer control in the app to identify exactly what items they deem as acceptable alternatives,” Bishop points out. This example isn’t linked to a household’s ID, but it’s still a personalization tactic that, in the end, will help improve the shopper’s experience. PROGRESSIVE GROCER March 2019

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TECHNOLOGY

Digital Marketing

Aligning marketing messages and merchandising, and ultimately the retailer’s customer value proposition, to their customer’s personal values and beliefs will create trust, loyalty and a differentiation from their competitors.” —Rich Coleman, Conversant customer value proposition, to their customer’s personal values and beliefs will create trust, loyalty and a differentiation from their competitors. This spells a growth in market share and maintaining sales and trips to the store.”

Reminding Shoppers About Unfinished Purchases

All too often, we get distracted by a better deal or get cold feet at the last minute, causing us to abandon a site in the middle of building a cart — thus abandoning that cart. In fact, the average ecommerce store loses more than three-quarters of its sales to

cart abandonment, according to New York-based data provider Statista. If, as a grocer, you have this problem — as well as these shoppers’ contact info on hand — you can reach out to them to remind them of their unfinished transactions, and even drive some additional sales in the process. Be honest and let them know whether a product in their cart is almost sold out. Or remind them that something in their cart is now — or still — on sale, but only for a limited time. Pointing to Target again, Bishop notes something similar he experienced at the mass merchandiser, only instead of focusing on the cart, it involved an individual product he scanned via Target’s mobile app to take advantage of any special deals. “I scanned a bottle of Nature’s Best Melatonin, but elected to buy another brand that was a better deal without scanning it with the app,” he recounts. “Today, I received an email, asking if I still wanted the Nature’s Best — and it offered a deal, e.g., ‘Buy One and Get One 25 Percent Off.’ Clearly, to me at least, their process didn’t analyze whether I purchased a different, but still similar type of, product. However, I’m assuming that will be done in the near future.”


Track Their Movements

This is arguably the most intrusive suggestion for personalizing shopper marketing, but it’s also the one most in its infancy at the grocery level: eye tracking and sensor technology. As an example of this, David Rich, CEO of Chicago-based simulation software provider InContext Solutions, points to a test by Deerfield, Ill.-based drug store chain Walgreen Co. “Walgreens recently piloted a technology at six of its stores that equips commercial refrigerators and freezers with cameras and eye-tracking technology,” he notes. “As customers walk past the store’s glass beverage cases, the surface of the glass actually changes via an LED screen display to highlight a specific product in the case.” In this pilot — and for any grocer choosing to try something similar — the technology chooses which product to highlight based on a shopper’s characteristics, such as age and gender. Walgreens even tested the ability to track emotional response to products, which the technology also picks up, for an even more personalized experience.

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EQUIPMENT & DESIGN

Kiosks

Step Right Up AIDED BY CRE ATIVE DESIGN MODIFICATIONS, KIOSKS ARE BECOMING UBIQUITOUS IN SUPERMARKE TS. By Bob Ingram

n the past decade, supermarket kiosk use has grown almost incrementally as the stand-alone devices have become more sophisticated and even eye-catching. Case in point: Casey’s Foods, an independent grocer in Naperville, Ill., a western suburb of Chicago, has had a kiosk system in place since 2015. “We have two in-store kiosks and online ordering capabilities,” owner Dan Casey says of the system and support provided by Troy, Mich.-based Nextep Systems. “They were the best fit for our business at the time.” Though Casey says it’s difficult to quantify return on investment, some of the “obvious benefits have been the convenience factor for our customers, a bit of efficiency on the labor end, and the image of keeping up with technology.” And perhaps best of all, “customers love it,” Casey asserts. “We are doing around 5 percent of deli business through the kiosks,” he continues, noting that Sunday is the store’s biggest day for kiosk orders.

Key Takeaways To remain competitive, grocers should avoid potentially long checkout and deli lines in their stores by implementing kiosks to provide a more efficient, convenient and time-saving experience. Beyond purely grocery-related functions, in-store kiosks can enable supermarket shoppers to cash in coins or sell old jewelry more easily than ever before. Evolving features of kiosks include smaller footprints, ADA compliance, security safeguards, improved performance, multifunctionality, and a more attractive, welcoming appearance.

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EQUIPMENT & DESIGN

Kiosks

“I thought it would be more, but customer familiarity with our staff will have people waiting in line to get served at the counter by someone they know. I think the percentage of sales would be higher if I didn’t have such a well-staffed service counter.”

Friction-Free Shopping

To stay competitive, grocers need to remove friction points for shoppers, like checkout and deli lines, says David Anza, SVP of sales at Frank Mayer and Associates, in Grafton, Wis. “These spaces are where we’re seeing more kiosks being implemented to provide the solutions.” Anza’s company has designed and produced a transactional kiosk that can be used in a variety of supermarket venues, as well as a kiosk for a partner to aid in self-checkout with handheld devices. As technology has improved, smaller kiosks can house just as much “punch” as a larger unit, but with a smaller footprint in a store’s valuable real estate, Anza says, adding, “We’re always mindful of ADA requirements, ensuring our kiosks are accessible to all.” Last year, Frank Mayer partnered with The Kroger Co. to produce the grocer’s Scan, Bag, Go kiosks, which allow customers to shop and check out using handheld devices provided in-store. The supplier also offers a self-service kiosk called Approach that can be used in various departments throughout the supermarket.

Go for the Gold

“As machines become smarter and incorporate more artificial intelligence (AI) features, we will see continued rollout of smart kiosks nationwide,” predicts Kevin Miller, co-founder and COO of Newport Beach, Calif.-based

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Kroger’s Scan, Bag, Go kiosks are from Frank Mayer and Associates.

Goldstur, whose single kiosk model can analyze precious metals in minutes and offer a bid to buy an item on the spot. “Annually, Americans spend between $60 billion and $70 billion on jewelry, excluding watches,” Miller notes, “so we will have our hands full for quite some time. Our aim is to make it convenient and trustworthy for the consumer to get an appraisal and sell their old jewelry without it ever leaving their possession or having to drive to a less-than-desirable part of town.” Miller continues, “As we deploy these kiosks throughout the country, we are offering valuable service to the consumer and the grocer all in the safe and trustworthy confines of a grocery store.” Goldstur has implemented biometrics and AI features in its kiosks to make them more efficient and add another layer of security and trust in the marketplace. “We want to be on the cutting edge of technology and ahead of the curve when it comes to compliance,” Miller says.

Make it Count

Peerless-AV’s charging station at a Whole Foods Market features avertisements.

Supermarkets are ideal locations for self-service kiosks, says Jim Gaherity, CEO of Bellevue, Wash.-based Coinstar LLC, a division of Apollo Global Management, “given consumers’ frequency of visits and the ability to take care of multiple errands with one convenient stop.” Letting Coinstar manage self-service coin counting at the store eliminates any need for capital expenditures, store labor, risk management, or costly service plans to deploy and maintain the kiosk network, Gaherity observes. “Coinstar’s turnkey service lets [retailers] focus on their customers and invest capital and talent where it matters most,” he says, noting that kiosks provide added value for retailers, because customers cashing in coins have extra cash on hand and are likely to purchase additional items or upgrade purchases, for a higher basket ring. “The Coinstar kiosk was built from the ground up to be a consumer-facing self-service coin kiosk,” he explains. “Our proprietary filtering and coin-cleaning technology translates to higher machine accuracy and reliability. The kiosk filters out foreign objects like paper clips, dirt and debris that might be found in a coin jar. This robust technology, while invisible to the consumer,


creates a positive experience at the kiosk.” The Coinstar technology platform has been updated to allow the addition of new products like an option that enables consumers to convert their change to an eGift card from such retailers as Amazon.com, Home Depot or Starbucks, and pay no fee. Some kiosks also feature bill acceptors, allowing Coinstar to broaden its offerings to include products like Amazon Cash, which lets consumers add to their Amazon balance by inserting paper currency into the bill acceptor. The company’s latest offering, announced last month, allows consumers to purchase Bitcoin from Coinme at select Coinstar kiosks. “Currently, this feature is available in a few states,” Gaherity says, “but is expected to expand based on the acceptance of the offering.” He adds, “Our partnership with Coinme is just one of hundreds of use cases for that physical-to-digital exchange.” Meanwhile, Cummins Allison, in Mount Prospect, Ill., offers several options that enable grocers to keep a significantly greater percentage of self-service coin redemption revenue — up to 7 percent profit potential. Jim Weaks, VP of the company’s self-service coin business unit, says that its Money Machine 2 offers speed of transactions, high availability, a smaller footprint and quiet performance. Additionally, its enhanced coin discrimination technology differentiates coins more precisely and provides more accurate counts. Cummins Allison recently launched a rent-to-own program designed to help grocers preserve capital, delivering flexibility in product and lease terms. “We anticipate that grocers will continue to implement kiosks as a fresh way to differentiate, drive incremental revenue and add in-store value,” Weaks predicts.

Adapting to Customer Habits

The increased popularity of supermarket kiosks is largely attributable to the role of Millennials in today’s society, asserts Rob Meiner, kiosk business unit manager at Peerless-AV, in Aurora, Ill. “They are plugged in to their devices and are disrupting traditional purchasing patterns,” says Meiner, whose company produces interactive floor or wall kiosks with facial recognition software, and wayfinding kiosks. “To retain this audience, supermarkets must be able to provide streamlined, user-friendly systems and processes.” Peerless-AV’s kiosks save space, are non-intrusive, can be easily installed in a few hours so as not to affect shoppers, and require a minimum of maintenance by supermarket staff, Meiner notes. “Our kiosks’ designs have changed with the trends of fashion and supermarkets’ operability,” he says. “We started off with boxy, square-looking kiosks. We migrated to softer lines and corners; utilized different

Smaller-footprint kiosks are becoming a much more attractive alternative to larger-screen kiosk models that accompany a higher capital expense.” —Karla Guarino, Kiosk Group Inc.

Frank Mayer’s grocery kiosk displays vivid images to entice grocery customers.

materials such as plastic, wood and stainless steel; and worked to partner with other hardware companies to incorporate the best components for a kiosk. These additional components include camera, barcode scanners, printers, routers and media players.” Meiner believes that future interactive kiosk solutions will allow supermarkets to offer a three-dimensional experience rather than simple self-service. An example he provides is that a kiosk can promote a special or mimic the shopping experience, projecting specific items on a wall or through virtual reality. “A big focus for Peerless-AV centers around outdoor solutions,” Meiner says. “For example, we have created a kiosk with Volta Charging that provides electrical vehicle-charging capabilities while customers are inside the store.” In Frederick, Md., at Kiosk Group Inc., Director of Sales Karla Guarino notes that users are on their smartphones almost three hours a day, citing information from BankMyCell, and that “this justifies using smaller screens in retail spaces for iPads and tablets, and these smaller-footprint kiosks are becoming a much more attractive alternative to larger-screen kiosk models that accompany a higher capital expense.” These kinds of kiosks, she contends, offer easier field service by simple component swapouts, eliminating many external field-service calls for support. “Our kiosks are multifunctional, and models can include stand-alone, countertop or customized wallmount models with brackets to attach to existing counters and other fixed grocery shelving,” Guarino says. She notes that kiosk design refinements include more customization for special add-on components such as Ingenico and Square pinpad devices, printers, scanners, and a greater selection of graphic, branding and custom-finish options. “We are also expanding our facility to support full turnkey integration for larger companies that want us to ship a fully turnkey solution to their stores for easy unpack, plug and play,” Guarino adds. Other projects in the works at the company are a new ADA sliding tablet kiosk for automatic height adjustment, new enclosure edge finishes and material finishes. PROGRESSIVE GROCER March 2019

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Epidemic Proportions GROCERS ARE JOINING THE BAT TLE AGAINST THE SCOURGE OF OPIOID ADDICTION, ARMED WITH A R ANGE OF INITIATIVES. By Barbara Sax 82

progressivegrocer.com

Key Takeaways As trusted health care professionals, pharmacists — including those at supermarkets — are uniquely positioned to engage their patients on the critical issue of opioid abuse. Many supermarket pharmacists are undergoing training to enable them to answer consumers’ questions about opioids and provide counseling.


HEALTH & WELLNESS

Pharmacy

Grocers’ programs include educating schoolchildren; takeback programs to collect unused drugs, many in partnership with the DEA or local law enforcement authorities; systems that allow for safe disposal of medications at home; and making naloxone, which can reverse opioid overdoses, easily available.

he United States is facing an unprecedented opioid epidemic that has become a public health emergency. The U.S. Department of Health and Human Services estimates that 2.1 million people in this country struggle with an opioid-use disorder, while 116 people die from opioid-related drug overdoses every day, according to the Health Resources and Services Administration. This widespread issue demands grassroots community action, and grocery chains are stepping up their efforts to involve their pharmacists in the fight against opioid abuse through programs to educate consumers, methods to control access to unused opioids, and providing drugs that can combat overdoses. “As trusted health care professionals, pharmacists are uniquely positioned to engage their patients on this critical issue,” says John Parker, SVP of communications for the Arlington, Va.-based Healthcare Distribution Alliance, a national organization representing primary pharmaceutical distributors. “Allied Against Opioid Abuse (AAOA) commissioned a poll that showed many patients do not know about prescription opioid safety, but would like to learn more from their pharmacist. We are working with our pharmacy partners As a to make sure pharmacists have tools and community health resources to educate their patients about care provider, we’re the rights, risks and responsibilities assocommitted to doing ciated with these pain medications.” Launched in February 2018, AAOA our part to help created the AAOA Pharmacy Toolkit to address drug abuse help pharmacists navigate difficult but and misuse.” important conversations to help prevent —Leigh Shirley, opioid abuse and misuse. Giant Food Stores “More than 9 million customers visit our family of stores every day, providing us the opportunity to influence and educate about the opioid epidemic and how we can partner to solve the epidemic,” notes Colleen Lindholz, president of Kroger Health for the Cincinnati-based Kroger Co. “In 2019, we are requiring our pharmacists to take three-plus hours of opioid education, ranging in topic from helping patients with addictions, to reviewing acute and chronic pain management guidelines, to pathways on safer opioid use. Additionally, pharmacy technicians will also be required to participate in select opioid education programs.” Kroger partnered with Washington, D.C.-based education technology company EverFi in 2018 to provide a computer-based program available to high school students in nine cities. Aligned with the Centers for Disease Control and Prevention’s national health education standards and state academic standards, the program teaches students how to properly read a prescription drug label, and also communicates the dangers of misusing prescription medications. “In the 2018-19 school year, we expect more than 13,500 students to receive this training,” says Lindholz. PROGRESSIVE GROCER March 2019

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HEALTH & WELLNESS

Pharmacy

Albertsons Cos. is educating students as well, with a program targeted to middle schoolers. “We’re most proud of our outreach efforts to educate middle school children on medication safety and smart medication use,” says Mark Panzer, SVP of pharmacy, health and wellness at Boise, Idaho-based Albertsons. “Our pharmacy residents and pharmacists presented information to students on the benefits and risks associated with medication use; misuse; impacts of misuse; identifying opioids; commonly used products and ‘slang’ terminology; current trends and dangers associated with opioid misuse; how to safely use medications, specifically opioids; the signs of an opioid overdose; steps to take if an overdose is suspected; and the importance of talking with a pharmacist about medication-use questions.”

Takeback Services Expand

Unused and expired medications that remain in homes can pose significant public health and safety concerns, due to their high susceptibility to diversion, misuse and abuse. Studies show that more than half of all people who first misuse prescription drugs get them from their friends or relatives, or take them without asking. Takeback services can play an important part in giving patients the opportunity to securely dispose of potentially dangerous expired, unused and unwanted prescription drugs, and may help limit the misuse of such drugs. “Removing unused medication from patients’ homes is a key to solving the opioid epidemic,” asserts Kroger’s Lindholz. “According to the 2016 National Survey

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Kroger hosted more than 300 drug takeback events last year in an effort to help consumers properly dispose of unused opioids.

on Drug Use and Health, 53 percent of respondents obtained the last opioid they misused from a friend or relative.” In April 2018, Kroger hosted 107 drug takeback events and collected more than 17,500 pounds of unused prescription drugs, and this past October, the chain hosted 203 drug takeback events, during which it collected about 24,000 pounds of unused prescription drugs. According to Lindholz, the company will continue its efforts in 2019. “The opioid epidemic is a serious public health issue, one that requires action and efforts by everyone,” says Leigh Shirley, RPh, director of pharmacy for Carlisle, Pa.based Giant Food Stores. “As a community health care provider, we’re committed to doing our part to help address drug abuse and misuse. Participating in drug takeback events with the DEA and local law enforcement agencies is one way we are able to help combat the opioid epidemic in the communities we serve. Our pharmacists are also able to direct patients to other drug disposal sites throughout the year and answer questions they may have about … other topics related to the opioid crisis.” For its part, Albertsons offers patients medication takeback counseling services year-round in all of its pharmacies. To further promote this service, the chain participates with the DEA’s National Prescription Take Back program and teams with Consumer Reports for National Check Your Meds Day. “By offering and promoting this service, our pharmacists not only follow through with their commitment to taking care of their patients, but they increase the pharmacist-patient trust and their accessibility as a health care provider in the community,” says Panzer. “We also offer patients home medication disposal instructions created by the FDA for the specific drugs that can be safely disposed of at home.” Albertsons’ takeback service also includes pharmacist counseling on doses that are too high, the possibility of adverse interactions, whether taking some medicines is worth reconsidering — certain drugs are taken to control side effects of other drugs, when a lifestyle change might work better or just as well — and recommendations about what to discuss with a patient’s doctor, such as lowering a dose or stopping a medication. Rochester, N.Y.-based Wegmans Food Markets has partnered with local law enforcement agencies across its six-state footprint to host community prescription medication drop-off events. Meanwhile, South Bend, Ind.-based Martin’s Super Markets has joined forces with the 525 Foundation, an organization in the gro-


cer’s hometown dedicated to raising awareness of the dangers of prescription drug abuse, to place secure drop boxes for expired or unneeded medications at three of its locations.

Safe Disposal at Home

In addition to takeback events, supermarkets are giving consumers the option of using systems at home that render their leftover prescription medications inactive. Sanford, N.C.-based DisposeRx offers a solution containing ingredients that, when emptied into a pill bottle with warm water, enable patients to responsibly dispose of leftover medications in their trash, according to the manufacturer. At Bentonville, Ark.-based Walmart, patients filling any new Class II opioid prescription receive a free DisposeRx packet and an opioid safety informational brochure when they pick up their prescription. Patients with chronic Class II opioid prescriptions are offered a free DisposeRx packet every six months. Kroger also offers its customers DisposeRX, providing a free packet with certain acute-care opioid prescriptions. Meanwhile, Big Y Pharmacy and Wellness Centers, operated by Springfield, Mass.-based Big Y Supermarkets, have adopted the Deterra Drug Deactivation System, from Minnetonka, Minn.-based Verde Technologies, offering consumers the in-home drug disposal system to permanently deactivate unused drugs.

Combating Opioid Overdoses

More supermarket pharmacies are stocking naloxone, a lifesaving medication that can reverse the effects of an opioid overdose. The drug, which can be administered as a nasal spray or an injection, must be given while also calling 911 for medical assistance. “We know the availability of this medication has the potential to save lives,” says Kristin Williams, SVP and chief health officer for West Des Moines, Iowa-based Hy-Vee. “It’s vital to do everything we can to assist a loved one who may encounter an opioid

From the beginning of this year to mid-October, our pharmacies dispensed nearly 14,000 doses of naloxone — each dose may have saved a life.” —Colleen Lindholz, The Kroger Co.

overdose by combining medications or by accidentally taking too much of a medication, being unaware of the life-threatening results.” Hy-Vee offers naloxone without a prescription in the eight states where it operates pharmacies: Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin. Kroger offers naloxone in each of the company’s nearly 2,200 pharmacies, dispensing the medication without a prescription where allowable by state law. “From the beginning of this year to mid-October, our pharmacies dispensed nearly 14,000 doses of naloxone — each dose may have saved a life,” notes Lindholz. All of Giant/Martin’s 138 pharmacies and all Big Y locations also provide naloxone, and pharmacists at those chains dispense the drug without a prescription where allowed. “All pharmacists have received broad training on naloxone, covering topics like the proper use of various products, the various forms available, ways to identify patients most at risk for an accidental overdose based on their prescriptions and other risk factors, and more,” explains Giant’s Shirley. More than 1,600 Albertsons pharmacies across 21 states carry Narcan, an FDA-approved naloxone nasal spray. “We’ve specially trained over 4,000 pharmacists to administer the FDA-approved Narcan nasal spray and counsel patients on the treatment of this medication,” says Panzer. Training includes how to counsel patients on the availability and appropriateness of naloxone therapy, how to privately consult with a patient or caregiver to determine eligibility for Narcan, how to use the product, and what to watch for after use. PROGRESSIVE GROCER March 2019

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EDITORS’ PICKS

Food, Beverage & Nonfood Products

Delish Fish

”A growing number of people are looking to eat more healthfully, with seafood being a great source of lean protein. But since cooking fish at home can be an intimidating affair, LoveTheWild has relaunched its sustainably farmed fish kits, which are just what health-conscious consumers seek: a line of easy-to-prepare seafood-based meal solutions designed for foodies concerned about the environment. Varieties include such new offerings as Barramundi with Mango Sriracha, Shrimp with Cajun Crème, and Rainbow Trout with Salsa Verde, which join Red Trout with Salsa Verde, Salmon with Maple Mustard, Shrimp with Coconut Red Curry, Barramundi with Red Pepper Almond, Shrimp with Tomato Butter, Salmon with Miso Honey Ginger, and Barramundi with Cajun Crème. In addition to offering easy-prep, farm-raised fish products from top sources worldwide, LovetheWild has implemented further eco-friendly measures by overhauling its packaging to be more sustainable, and reducing portion sizes to align with the USDA-recommended serving size and eliminate leftover waste. Those initiatives, coupled with other efficiencies, have reduced each product’s cost by 30 percent. The SRPs are $6.99 per meal and $5.99 per bowl. https://lovethewild.com

Old Brew Meets New

Beer connoisseurs have widely varying tastes, and are often faced with the difficult choice of a tried-and-true import versus a more contemporary American craft brew. So what happens when you pair a present-day craft brewer with an old-guard international brand? You get the new Newcastle Brown Ale. The result of a partnership between Lagunitas Brewing Co. and Heineken USA, the beverage brings together a unique blend of pale and roasted malts with American hops — specifically, American Centennial and Chinook hops — and is fermented using Lagunitas’ English house-ale yeast. The medium-colored brown ale is said to be smooth, crisp and slightly roasty — complete with a hoppy twist. The beer retails for a suggested $7.99 per 6-pack. www.heinekenusa.com

Coffee Time

While most Americans turn to coffee for a morning pick-me-up or post-meal beverage, there are those who understand its power to truly bring out bold flavors in the most unlikely dishes. George DeLallo Co. gets this and is now offering DeLallo Instant Espresso Powder, said to provide a suitable boost of flavor to dishes both sweet and savory — from richer chocolates to more complex meat rubs. A few tablespoons can add rich notes of flavor, pairing perfectly with spices such as cumin and paprika as it balances the spicy, acidic and smoky flavors in chili recipes, sauces, stews and salsa dips. Each 1.94-ounce jar retails for a suggested $5.09. www.delallo.com

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A Spoonful of Magic

Like it or not — trend or fad — unicorns are back in style. You’ll find them in many products, even foods, from cereal to the Starbucks Unicorn Frappuccino that was available for a limited time. Now Conagra Brands has jumped on the bandwagon of unicorn-themed treats, launching Unicorn Magic pudding cups under its Snack Pack brand. Featuring a sweet flavor and pink and blue hues, the shelf-stable yogurt is intended to add a “vibrant pop” of color to dessert or snack time. The cups retail for a suggested $2.79 per 6-pack. www.conagra.com


Time-Saving Taters

Potatoes aren’t that difficult to prepare, but when you’re pressed for time, any minutes saved are much appreciated. Enter Bob Evans Farms’ Steamables steam-inbag sides, which come in three varieties: Sea Salt Red Potato Wedges, Steak House Red Potato Wedges and Garlic Red Potato Wedges. Each variety comes in a 22-ounce bag and contains 100 calories or fewer per serving. The refrigerated sides are ready after just five minutes in the microwave, and each bag features a resealable zipper so consumers can add their choice of cooking oil prior to cooking. Each bag retails for a suggested $3.49. www.bobevansgrocery.com

Bountiful Bowls

It’s not often that a brand develops a new category, but when it does, grocers and consumers alike take notice. Worthy believes it has done just that, claiming to have created an “entirely new category of plant-based snacks” with its Blendie Bowl combinations of fruits, veggies, legumes and chia together in a bowl that can be sold either shelf-stable or chilled. Available in four varieties — Strawberries & Greens (strawberry rhubarb pie), Dark Cocoa Cherry (chocolate brownie with a cherry on top), Vanilla Orange (creamy orange-vanilla popsicle), and Green Tropics (piña colada) — the bowls provide two servings of vegetables and fruit, along with 8 grams of fiber, 8 grams of protein and only 150 calories per serving. Additionally, the bowls are nondairy and contain no soy, gluten or nuts (as appropriate), and provide 250 milligrams of omega-3s and -6s. They retail for a suggested $2.99 each. www.theworthycompany.com

Steering Toward Purity

As more consumers take interest in what they’re eating and where it comes from, they’re increasingly seeking single-origin, traceable products. That holds true not just for coffee or chocolate, but also for beef: Nurture Ranch 1 Steer Ground Beef is said to be the only packaged grass-fed ground beef made up of meat from just one steer per pack, and features a code tracing the nurturing history from birth to harvest. Processing each package from a single steer is said to be 100 percent cleaner than industry standards, meaning that average acceptable standards for potential bacteria in ground beef are 100 percent higher than in Nurture Ranch 1 Steer and 1 Cow ground beef. The beef is also claimed not to have a heavy, rich aftertaste due to its being cleaner. The 100 percent grass-fed product retails for a suggested $9 per 1-pound package. www.nurtureranch.com

For the Plant-Based Sweet Tooth

As more people adopt so-called “flexitarian” diets and seek plant-based alternatives to their favorite foods, it’s only natural that they’re going to want something to satisfy their sweet tooth, too. Thankfully, Unilever has officially entered the vegan sector with its Magnum frozen treats. Magnum Non-Dairy frozen dessert bars combine Belgian chocolate — made from cocoa beans from Rainforest Alliance Certified farms — with a creamy vanilla base composed of a blend of coconut oil and pea protein. Available in two varieties — Classic and Almond — the frozen treats have an SRP range of $4.99-$5.49 per 9.12-fluid-ounce box, each of which contains three bars. www.magnumicecream.com PROGRESSIVE GROCER March 2019

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We’re looking for the most innovative meal solution concepts!

CATEGORIES INCLUDE: Cross-Merchandising Concept Dine-In Concept Grab & Go Concept Meal Kit Ready-to-Cook Program Shopper Engagement Snacking Program Signature Chef Creation

DEADLINE TO ENTER:

May 20, 2019 Winners will be honored in our August issue and in a ceremony at our

TOTAL MEAL SOLUTIONS SUMMIT September 9 & 10 in Austin, TX

Enter at:

progressivegrocer.com/TMSAwards


ADVERTISER INDEX

UNITED STATES MARKETS • Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Technology • Hospitality • Apparel CANADIAN MARKETS • Convenience • Pharmacy • Foodservice ADVERTIS ING SALES & BUSINES S STAFF EXECUTIVE CHAIRMAN Alan Glass aglass@ensembleiq.com CHIEF EXECUTIVE OFFICER David Shanker dshanker@ensembleiq.com PRESIDENT, CANADIAN DIVISION & NORTH AMERICAN GROCERY Jennifer Litterick jlitterick@ensembleiq.com SOUTHEAST ACCOUNT EXECUTIVE Larry Cornick (NEW ENGLAND, SOUTHEAST) 224-632-8248 lcornick@ensembleiq.com SENIOR SALES MANAGER Judy Hayes (CA,PACIFIC NORTHWEST) 925-785-9665 jhayes@ensembleiq.com SENIOR SALES MANAGER Theresa Kossack (MIDWEST) 214-226-6468 tkossack@ensembleiq.com WESTERN REGIONAL SALES MANAGER Rick Neigher (SOUTHWEST) 818-597-9029 rneigher@ensembleiq.com ADVERTISING MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com

8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 800-422-2681 Fax: 978-671-0460 www.ensembleiq.com PROGRESSIVE GROCER (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Chicago, IL 60631 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to brand, PO Box 3200 Northbrook IL 60065-3200. Copyright ©2019 EnsembleIQ All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

Alaska Seafood Marketing Institute

61

Beaver Street Fisheries

57

Biro Manufacturing

32

Campbell Soup Company

Inside Front Cover-3, 15

CA Tobacco Control

39

Creekstone Farms

Inside Back Cover

Enjoy Life Natural Brands, LLC

7

Essentia Water

50-51

Forte Products

68

General Mills Inc.

19

Hughes Network Systems

35

Inline Plastics Corp.

71

International Dairy Deli Bakery Association Iovate Health Sciences Int’l Inc. Litehouse

Cover Tip 33 4

Loomis

79

MasonWays Indestructible Plastics

44

Mettler Toledo

13

Mondelez International

27

Nestlé-Purina

11

Norwegian Seafood Council

59

OMI Industries

31

Premier Nutrition

21

Request Foods

45

Salesforce Commerce Cloud

63

Sealed Air Corporation

65

Sopexa USA

69

Spindrift Beverage Co

9

Supervalu Inc.

77

The Wonderful Company/Fiji Water

49

Trion Industries

17

U.S. Payments

76

Unilever North America

Back Cover

UPEMI

67

Volk Enterprises

47 PROGRESSIVE GROCER March 2019

89


TECH TALK

By Randy Hofbauer

Kroger CEO Rodney McMullen’s 8 Keys to Grocery Retail Transformation NRF 2019 IS LONG OVER, BUT THE GROCERY GIANT CHIEF’S INSIGHTS ARE E VERGREEN. etail’s Big Show 2019 in January might feel like ages ago, but so many of the learnings I gathered at the National Retail Federation event are evergreen — particularly those I walked away with after watching Rodney McMullen, CEO of The Kroger Co., in an on-stage interview with Sara Eisen, anchor of CNBC’s “Squawk on the Street” and “Closing Bell,” the morning of the show’s opening day. In my blog post covering the keynote at the event, which took place Jan. 12-15 at the Jacob K. Javits Center, in New York, I documented eight points that McMullen made on what grocers need to do — and how they can learn from Kroger’s own story — to succeed on the path to retail transformation. After posting the blog, I watched the page views shoot up — it quickly became the most-read piece of content on Progressive Grocer’s website that month. So I’d be an idiot not to share those insights with the folks who read PG’s print publication each month but missed the report on — or rarely, if at all, visit — www.progressivegrocer.com, right? (Though you probably should go bookmark PG’s website and subscribe to the newsletter at the URL above, in my humble opinion!) In McMullen’s mind, grocers seeking to transform in this new age of commerce must know that: It’s important to know when to go it alone with a plan — and when to get a partner. In Cincinnati-based Kroger’s case, partners have included U.K. online grocer Ocado for automating ecommerce, Alibaba Group to distribute Simple Truth organic private label products in China through its Tmall platform, and Mountain View, Calif.-based Nuro to deliver groceries via autonomous vehicles in Scottsdale, Ariz.

1

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They don’t have to know exactly what your customer wants from the get-go, but they do have to build something that lets the customer respond, and show them where to go.

2

The future of grocery retail won’t be digital, and it won’t be physical, either. It will be problemsolving and purposedriven.

Retail isn’t going away. Sure, it won’t look like it does today, but it won’t disappear. Maybe it will involve ordering from in-store screens. Maybe it will involve technology telling shoppers what they want for dinner when they scan a loyalty card. McMullen assured attendees that whatever the changes are, they’ll ultimately be “super fun.”

3

The future of grocery retail won’t be digital, and it won’t be physical, either. It will be problem-solving and purpose-driven.

4

Retail is incredibly important. What other field is known to give so many people their first job — and to provide such an opportunity to take on so many responsibilities in that role?

5

When positioning your company for the future, focus on what’s next rather than what’s there.

6

The store of the future might be the same size as a traditional grocery store today — but half might be experience-based, while the other half might be efficiency-based.

7

While Amazon’s entrance into grocery certainly has lit a fire under a lot of grocers, it isn’t what ultimately led Kroger to begin its transformation. McMullen stressed that Kroger’s transformation journey began not because of what any other retailer did, but rather because of what it thought other retailers were going to do, although it did suspect that Amazon was going to enter brick-andmortar grocery retail.

8


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FOOD THRIVES WHEN THERE’S

WITH PURPOSE

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Progressive Grocer - March 2019  

Progressive Grocer - March 2019