Progressive Grocer - April 2016

Page 1

April 2016 • Volume 95 Number 4

$10 •

April 2016 • Volume 95 Number 4

$10 •

THIS BUD’S FOR YOU AND EVERY ONE OF YOUR CUSTOMERS HERE’S WHY 3-day weekends are key beer selling periods for retailers. · In 2015 the week-long periods leading up to 3-day weekends generated over $4 billion in total beer sales and $400 million in incremental sales.*

Premiums outperform every other segment over 3-day weekends. · The Premium segment accounted for 41% of all beer sales and 49% of all incremental dollars.*

Budweiser: King of the 3-day weekend. · Among full-flavored beers, Budweiser was the top selling 3-day weekend brand with over $250 million in sales.* · Among ALL brands Budweiser is the top performer on display with 60% of Budweiser customers recalling displays from their most recent trip.**

* Source: IRI-MULC TUS – Year Ending 12-27-15 ** Source: IPSOS ABI Shopper Poll TUS 2015

© 2016 Anheuser-Busch, Budweiser® Beer, St. Louis, MO


Utilizing insights and channel knowledge to

MEET EXPANDED SNACKING OCCASIONS of your customers. Another way we’re committed to creating shared success every day. SUCCESS IS AN EVERYDAY THING.


April 2016


Volume 95, Issue 4

cover story

fresh food 100

SuMMer grilling Planner

Sustaining the Sizzle Still important for summer sales, grilling stretches its traditional seasonal boundaries.



2016 annual Meat ConferenCe

Store of the Month

Market Forces From local produce to instore dining, fresh is driving Hy-Vee’s Bloomington, Ill., beachhead.

refrigerated & frozen

80 refrigerated Category ManageMent

Cold Plays Efective merchandising of chilled items involves zeroing in on shoppers’ needs.


frozen MealS

Taking the Heat Frozen meals change with the times through innovative products and packaging.

Meat for a Changing World Grocers must address new generations, tastes and attitudes to stay proftable.


83rd annual rePort of the groCery induStry



Points of Sale PG’s annual dialogue with retailers rounds up a medley of special concerns, hot sales trends and limited-time windows of opportunity.

Picking a Pack As retail prepared and fresh food programs become more sophisticated, packaging needs to keep pace.

grocery 94


Taste Makers Spicier favors, cleaner ingredients dominate today’s condiment aisle.



Exotic Destinations Produce departments are the latest hotspots for adventurous eaters.

April 2016 | |


fresh food 132

Produce category SPotlight

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 224 632-8200 •

Passion for Pineapples Tropical favors are a top trend made hotter still by alluring health benefts.

VP, Brand Director 201-855-7621

EDITORIAL Editorial Director Joan Driggs 224-632-8211 Chief Content Editor Meg Major 724-453-3545 Editor-in-Chief James Dudlicek 224-632-8238 Managing Editor Bridget Goldschmidt 201-855-7603 Technology Editor John Karolefski 440-582-1889 Senior Editor Katie Martin 224-632-8172 Senior Editor Anna Wolfe 207-773-1154 Digital Editor Kyle Shamorian 224-632-8252 Art Director Bill Antkowiak Contributing Editors Kathy Hayden, Bob Ingram, Jenny McTaggart, Lynn Petrak and Jennifer Strailey


Produce category SPotlight

Kernel of Truth Fresh corn signals shoppers to buy for barbecue season — when the price is right.

technology 134

Predictive analyticS

Not Ready for Prime Time Widespread use of data mining remains modest among grocers.


digital dialogue

Balancing the Creep Factor How to deliver personalization without getting too close for comfort.

operations 140

SuPPly chain

Platform for Progress Today’s pallet companies are doubling as supply chain service providers to help cut costs and design new solutions.

equipment & design


All Access Retailers ofer stores that accommodate the elderly and others with physical limitations.



| Progressive Grocer | April 2016

ADVERTISING SALES & BUSINESS Midwest Marketing Manager John Huff 224-632-8174 Western Regional Sales Manager Elizabeth Cherry 310-546-3815 Eastern Marketing Manager Maggie Kaeppel 630-364-2150 • Mobile: 708-565-5350 Northeast Marketing Manager Mike Shaw 201-855-7631 • Mobile: 201-281-9100 Marketing Manager Janet Blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 Account Executive/ Classified Advertising Terry Kanganis 201-855-7615 • Fax: 201-855-7373 Advertising/Production Manager Jackie Batson 224-632-8183 • Fax: 888-316-7987 Classified Production Manager Mary Beth Medley 856-809-0050

EvEnts • MarkEting • Digital • rEsEarch • circulation

adaPtive deSign


Jeff Friedman

VP/Custom Media Division Pierce Hollingsworth 224-632-8229 Production Manager Anngail Norris Corporate Marketing Director Bruce Hendrickson 224-632-8214 Promotion Director Robert Kuwada 201-855-7616 Director of Events Ken Romeo 224-632-8181 Director of Digital Strategy Matt McGuire 224-632-8180 Director of Market Research Debra Chanil 201-855-7605 Audience Development Manager Shelly Patton 215-301-0593 List Rental The Information Refinery 800-529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media 877-652-5295 Subscriber Services/Single-copy Purchases 978-671-0449 or email at CORPORATE OFFICERS President & CEO Kollin Stagnito Chief Financial Officer Kyle Stagnito Chief Revenue Officer Ned Bardic Chief Brand Officer Korry Stagnito






T. 1 9 6 5

A Technology Partner Dedicated to the Success of Grocery Retailers While it is the Westside team’s dedication to catering to the communities they serve, and their incredible focus on detail that ultimately creates the market’s “wow” factor, their store systems and processes must keep up with the success they’ve created. On average, over 20,000 transactions are processed daily within their stores - with numbers like that, you’d better have a point of sale system robust enough to keep up. For over 10-years, the Westside Market enterprise has relied on CATAPULT® retail automation, developed by ECRS®, to efficiently process rapid-fire customer checkouts, data analytics for better decision making, and enterprise-wide management. The CATAPULT platform has provided Westside Markets with the tools to manage their existing business while providing flexibility for future growth. ECRS has been optimizing the performance of grocery and natural grocery retailers since 1989. Contact us to learn more.


Trion WonderBar ®


The System That Sells ™

Storewide Applications

Oversize Packages

Vac-Pack Meat

Dual Lane Merchandising


Maximize Your Merchandising Space. ■

Increases product facings and rows, lifts sales as much as 20%.

Maximizes visibility and shopability and billboards package design. Auto-feed trays and hooks assure a continuously well-faced display.

Simple design allows one-man installation in as little as one-tenth the time of traditional systems. Reset 48 facings in as little as 15 minutes. Replanogramming any product is a snap.

Easy tray dismount and rear-loading reduce labor, speed restocking, ensure product rotation, and reduce shrinkage.

Designed for center store, perimeter, general merchandise, soft goods, cooler and freezer use. Tool-free universal mount adapts to all major gondola and upright configurations.

Four bar profiles in both 3' and 4' lengths accommodate trays and baskets, bar-mount and plug-in hooks, auto-feed and security hooks, and horizontal and vertical sign and label holder systems.

System design options allow choice of 1" or 1/2" vertical adjustment and increased usable tray and hook depth for even greater display capacity.

Eleven standard tray depths available with width adjustment from 2-3/4" to 17-1/2." Mini system, oversize product trays, vac-pack deli trays, dual lane trays and others address all product needs.

A store tested solution. Over 5,000,000 trays sold and in use across retail. Proudly Made in the U.S.A.

Cheese and Fresh Pasta

Frozen Food

Candy and Gum

Tall Products

©2013 Trion Industries, Inc. Toll-Free in U.S.A. 800-444-4665 Note: Product photography is a simulation of a retail environment and is not meant to imply endorsement by or for any brand or manufacturer.

editor’s note by Jim Dudlicek

Be Prepared


ome for the insights, stay for the food. Our jobs at Progressive Grocer are a lot like that: If we’re not at trade shows learning about the latest new products, or conferences learning about the latest shopper insights, or back at the ofce producing the magazine, we’re quite often visiting the latest and greatest grocery stores. Store directors are tuned in to their local communities. Tey can tell you what their shoppers are buying, what they’re asking for, what they’re cooking for dinner that night and the motivations behind it. Store visits really are the front lines for shopper insights. And, of course, stores are about food – increasingly, fresh prepared food, more often in bigger, better and fancier ways. Folks want to eat out, but they don’t want the implicit guilt and extra cost. Te answer: grocery stores. One retailer recently told me he considers fresh prepared foods “our new private label,” with unique, chef-inspired oferings a point of diferentiation from the store down the street. We know this is huge – that’s why PG launched the Grocerant Summit, scheduled for its second installment this coming October. Tat’s why we’re focusing more of our coverage on this increasingly important category. So it was no surprise when our retailers told us that prepared foods are driving their future plans. Responding to our survey for PG’s 83rd Annual Report of the Grocery industry, three-quarters of you said prepared foods was most important to your merchandising strategy this year. Respondents listed it among their top three highestperforming departments, as well as one of the top three things most infuential to their brand image and competitive diferentiation. Among those leading the grocerant pack: Hy-Vee, which features Market Grille full-service restaurants at more than 80 of its 230-plus supermarkets across eight Midwestern states. Tese casual eateries feature sophisticated décor, full bar service and a chef-driven menu of dishes created using fresh ingredients sold under the same roof. Chefs drive all of Hy-Vee’s fresh prepared selections, from pizza and sushi bars to sandwiches, salads, entrées and sides. “Customers lead busy lives, and the Hy-Vee Market Grille is just another way in which Hy-Vee can make our customers’ lives more convenient,” says Andrew Cochran, store director of the Hy-Vee in Bloomington, Ill., our Store of the Month in this issue — read more about it, starting on page 70.


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

Are grocerants the new private label? Promo Power Speaking of the Annual Report, grocers are telling us they’re prepared for more than just food trends. Wages and benefts are the top things keeping you up at night, and are what you most expect to increase in cost, according to our Annual Report survey. Keeping up with advancements in technology is eighth on that list, down from sixth last year, which may explain why slightly fewer than half of our respondents reported launching any sort of omnichannel initiatives, be it click-and-collect, home delivery or shopping apps. Tat means slightly more than half have done nothing, and that’s troublesome. But there’s hope — you do see the value in digital initiatives to engage your shoppers more deeply. A new study by Kantar Retail says while manufacturers are increasingly focused on promotion through retailer websites, retailers are de-emphasizing their own sites in favor of social media, email and mobile couponing. And retailers are outpacing CPGs with dedicated e-commerce budgets. “What the study clearly shows is that the industry knows the shopper remains boss,” says Brad Golden, VP of consulting at Wilton, Conn.-based Kantar. “In an increasingly omnichannel world, both manufacturers and retailers believe the shopper will continue gaining power. However, more work is needed to understand how trade promotions afect shopper behavior longer-term.” Kantar advises manufacturers and retailers to work together more efectively to fnd the right combination of strategies and tactics to achieve common goals; combining trade promotion activity and shopper marketing insights with individual customer strategy is the next frontier for optimization. In this age of shopper-centricity, such collaboration is essential. From fresh prepared to the perimeter to center store, be prepared to sell solutions. PG’s Annual Report starts on page 29. PG Jim Dudlicek Editor-in-Chief Twitter @jimdudlicek

We’re not afraid to put the words growth and cereal in the same sentence.

Are we crazy? Not so much. Nobody is more focused on growing the cereal business. That includes showing you how our Malt-O-Meal® brand RTE cereals can be incremental to your category. And how you can grow with our bestselling iconic brands like Honey Bunches of Oats,® Great Grains® and Pebbles.™ Call us bold. Call us a fresh voice. Just don’t call us late for breakfast. Talk to your rep and visit to learn more.

What’s trending on …

Three of the most widely read stories on Progressive Grocer’s website during the Feb. 15–March 15 timeframe centered on the nation’s leading food retailer, The Kroger Co. Also ranking among our site’s most highly trafficked stories during the same period were shareholder approvals of the soon-to-be finalized merger of Ahold and Delhaize, Ritchie Casteel’s recent departure from Save-A-Lot, and Meijer’s 2016 capital expenditures purse.

Kroger Pursuing Israeli Grocery Chain?

Kroger’s Marnette Perry to Retire p://bit. ly/1P y/1PIzu

Ritchie Casteel Leaving Save-A-Lot

Ahold, Delhaize Shareholders OK Merger

Kroger’s McMullen Describess 2015 Highlights: ‘What A Year!’

Whole Lotta Shakin’ Going On

Ahold USA Touts Vendorr Collaborationn Program m

Hy-Vee Issues Warning About Social Media Scam


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

Meijer Planning $400 Million in Cap Ex for 2016

Š2016 Goya Foods, Inc. *Top selling coconut water SKU (in Grocery outlets) Source: Nielsen Strategic Planner, Total US (unit sales), 52 weeks ending 12/19/15

What’s Keeping You From Ofering Upscale Take-Out?

· · · ·

Fine Dining Experience -Table Ready Solutions All products are BPA-free and eligible for recycling - ©2016 Anchor Packaging, Inc - St. Louis, Missouri

...Absolutely Nothing

June 2016 is... National Candy Month National Dairy Month National Fresh Fruit and Vegetables Month National Iced Tea Month National Papaya Month






National Say Something Nice Day. Share the spirit of the occasion.



National Rocky Road Day National Rotisserie Chicken Day



National Doughnut Day. Make sure the bakery is ready.



National Cheese Day. Offer samples of specialty cheeses.

National Egg Day



National Ketchup Day

National Gingerbread Day. Ask customers to pin their favorite recipes on your Pinterest page.



Dairy-Deli-Bake Seminar and Expo begins in Houston and continues through the 7th.

International Falafel Day. Crosspromote falafel mix, tahini and pita. National Peanut Butter Cookie Day

Ramadan begins

National Kitchen Klutzes of America Day. Offer specials on sponges, cleaning aids, adhesive bandages, mops and brooms.


National Chocolate Ice Cream Day. Set up tasting stations all around the store.


Flag Day National Strawberry Shortcake Day


For World Oceans Day, list your sustainable seafood selections in your weekly flier.


National Lobster Day


National Jerky Day. Sample all of the jerky varieties you offer.


World Tea Expo begins in Las Vegas and continues through the 18th. National Fudge Day

Cupcake Lovers Day


As Father’s Day and National Martini Day fall on the same date, perhaps an online contest to find the perfect (read: dry) version of dear old dad’s favorite after-work cocktail is in order.


Summer Fancy Food Show begins in New York and continues through the 28th. National Chocolate Pudding Day



National Vanilla Milkshake Day. Share a recipe for this classic treat on your Facebook page.


Sunglasses Day. Encourage your staff to wear cool shades at work.


Check your supplies for summer grilling season. National Peaches and Cream Day


Make sure you’re adequately stocked for Independence Day promotions next week.


National Chocolate Eclair Day National Onion Ring Day


National Almond Buttercrunch Day

National Tapioca Day

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


National Public Service Day. Honor your local first responders.


National Iced Tea Day


National German Chocolate Cake Day National Corn on the Cob Day





Can it be both National Apple Strudel Day and National Eat Your Veggies Day? Yes, it can. Remind shoppers to eat their veggies first, though.

National Pralines Day. Share recipes on your Facebook page.

National Pecan Sandy Day

International Picnic Day

National Strawberry Parfait Day National Catfish Day


Social Media Day. Tweet, pin, share photos and reach out to customers online.

Email your calendar submissions to

National Ice Cream Soda Day

Strongbow Hard Apple Cider, the #1 selling hard cider in the world1, is marking the start of summer with its Made For Ice program featuring the brand’s range of favors. Tap into Strongbow’s higher rate of sale3 and tap into increased sales and profts this summer.












NEW • NEW Cherry Blossom Flavor • +40% higher repeat rate vs. hard sodas 4

• ‘Best Tasting Cider’ Recognition 5

CONTACT YOUR DISTRIBUTOR REPRESENTATIVE TODAY Enjoy Our Products Responsibly. ©2016 STRONGBOW® Hard Apple Ciders. Produced by Stassen SA. Imported by Bulmers Cider Company, White Plains, NY 1. Canadean, based on 2015 global sales volume of largest single cider brands 2. Nielsen Scan Fy 2011-2015 CAGR 3. Nielsen YTD 2016 w/e 3.5.16 4. Nielsen Homescan AOC L52 w/e 1.30.16 5. Strongbow Gold Apple awarded the 2014 & 2015 highest-rated common cider by Strongbow Honey awarded a Gold Medal in 2015 in the specialty cider category by Strongbow Ginger awarded a Silver Medal in 2015 in the specialty cider category by

Front End

Market Intelligence By The Numbers

Shelf Stoppers


General Merchandise Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Jan. 16, 2016)

Telephone and Accessories Cooker, Steamer and Dehydrator Appliances Markers Mouse, Rat and Mole Traps Kitchen Accessory Products Measure Mixing Utensils and Containers Lamps-Incandescent Insecticide-Wasp and Hornet Fan and Ceiling Fan Appliances Insecticide-Rem. Misc. Products Total Category

Sales % Change Dollars (Millions) 2016 2015 $24.0 28.2% 9.8%

% Change 2016 29.7%

Units 2015 16.8%

20.3 48.2 14.7 24.0

13.3 13.0 12.1 11.5

7.7 9.7 3.1 -10.6

7.4 12.6 9.2 15.4

15.8 9.4 3.9 -4.7

30.9 280.5 15.3 21.0 35.7

10.2 9.8 9.7 8.9 8.6

5.6 5.3 2.2 5.8 -8.0

5.8 -5.3 6.0 4.8 6.6

2.6 -12.1 2.5 12.2 -5.8






NielseN’s Spotlight

Consumption Index: Kitchen Accessories

CRoSS-MERCH Candidates

LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Households comprising empty nesters and senior couples account for the largest portion of consumers buying kitchen accessories, together accounting for 29 percent of purchases. These couples, while potentially on fixed retirement incomes, usually have a larger amount of disposable income than their younger counterparts. Meanwhile, startup families in affluent suburban spreads purchase the largest amount of kitchen accessories. These families have young children and may use the kitchen accessories to speed up meal preparation.

Modest Working Towns

Plain Rural Living


WITH CHILDREN: startup Families








small-scale Families








Younger Bustling Families








Older Bustling Families








Young Transitionals








independent singles








senior singles








established Couples








empty-nest Couples








senior Couples
















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

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

Very High Consumption (150+)


High Consumption (120-149)

Average Consumption=100

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

• Nuts • Fresh Produce • Stationery and

School Supplies • Vitamins • Coffee • Household Supplies • Yogurt • Batteries and Flashlights More oNLINE Dig up actionable e research and additional al intelligence at

Drive traffic and sales with innovative and exciting items from Pillsbury . TM

Shoppers know they can celebrate any occasion with Pillsbury. With the bright colors and unique flavors your shoppers look forward to each season, we’re making the bake aisle a destination for inspiration all year long.

Innovation brought to you by The J.M. Smucker Company family of brands. ©/TM/® The J.M. Smucker Company. Pillsbury, the Barrelhead logo and the Doughboy character are trademarks of The Pillsbury Company, LLC, used under license.

Mintel Global New Products Database Category Insights For more information, visit or call 800-932-0400.

Cheese Market Overview The United States is the standout growth market in the North American cheese category, with a predicted average value growth of 4.5 percent over the next five years. Meanwhile, Canada offers promising growth of 3.4 percent during the same period. key issues Snacking is a major consumer trend in today’s fast-paced, conveniencedriven society. This has led to a strong demand for healthy and nutritious

snacks that still deliver on flavor and taste.

launches in the 12 months to October 2015.

Manufacturers have therefore recognized the importance of balancing both health and indulgence in smaller formats or portions.

Consumers’ desire for identifiable ingredients is increasing the demand for products free from artificial

colors, preservatives and flavors. This can be reflected in the 51 percent of U.S. cheese eaters who cite that an additive-/preservativefree cheese would be the top variety they would go for when purchasing a natural cheese.

Cheese products positioned for on-the-go consumption have fallen short in the category, however, accounting for just 2.6 percent of North American total new product

What Does it Mean? The snacking occasion opens up new growth opportunities for the cheese market. Brands offering products suitable for snacking (e.g., mini formats) could attract new users and help boost consumption frequency among existing ones. Given that 25 percent of U.S. consumers rate single-


serve packaging the most important attribute when eating a snack, there’s potential for cheese brands to explore. Co-branding between salty snack producers and cheese brands could also offer opportunities to help increase snacking, particularly among children.

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

Cheese producers can do more to meet the demand for natural cheeses. This can be achieved by applying clearer packaging labels that emphasize natural credentials such as organic or all-natural claims. Highlighting authenticity of ingredients or production methods can also add natural cues

to the innovations. Products with simple messaging, like “free from additives” and “free from growth hormones,” that has been highlighted explicitly on-pack is likely to appeal to consumers looking for more natural and safer cheeses made with ingredients they recognize.

The Essential (HAVE-TO-BE-THERE)

Seminar and Expo For Dairy, Deli and Bakery Professionals

NETWORKING • 9,000 Professionals • 700 Exhibitors • 1,900 Booths SHOW & SELL CENTER CAKE DECORATING CHALLENGE



June 5 - 7 | Houston

JJ Watt

Randi Zuckerberg Anthony Bourdain




Lidia Bastianich

Lori Greiner

Simon Sinek


Topical educational sessions and resources!

Offer dietitian-led store tours to help consumers find healthful meal ingredient staples throughout the aisles.

All’s Wellness By Karen Buch

Beyond Fresh

Get wellness-seeking shoppers to look at center store.


hrough all of my years working as a registered dietitian and director in the grocery industry, it always bothered me to hear a nutrition professional advising clients to “shop the perimeter of the store.” While there are certainly many nutritious options sold on the perimeter — fresh produce, fresh fsh, eggs, lean meats and reduced-fat dairy, for example — iced bakery cakes and seasonal candy are typically sold on the perimeter, too.

Center Store Shopping Guide*

fruits Frozen, canned and dried forms of juice ent perc 100 and es tabl vege and canned Pulses or legumes, including dry or ame edam en froz and ils lent , beans, peas grains), le who are h Grains (at least half of whic ds brea rice, a, past oa, including oats, quin and cereals ood, Canned or pouched poultry and seaf on salm and ken including tuna, chic k or green Canned milk , dried milk powder, blac r or wate ed cann tea leaves, and bottled or r wate flavored and sparking chocolate Nuts, seeds, nut butters and dark corn, olive, Plant-based oils, including canola, r, soybean lowe saff me, sesa ut, avocado, pean and sunflower gs, Flavorful herbs, spices and seasonin e, thym y, mar rose er, ging ic, including garl , eric turm e, clov n, amo cinn ano, oreg smoked paprika and onion powder

*abbreviated sampling

Back in 1995, I started ofering guided shopping tours for consumers to point out nutritious options sold throughout the grocery store, including in center


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

store. Since then, interest in health and wellness has gained considerable momentum due to consumers’ increasing desire to live longer, healthier lives. Te current 2015-20 Dietary Guidelines for Americans emphasize following a healthy lifelong eating pattern, along with regular physical activity to help reduce the risk of chronic disease. Te fact is, many of the nutrient-dense foods that appear in Te U.S., Mediterranean and Vegetarian Healthy Eating Patterns can be found right in center store grocery aisles. Decades ago, grocery shoppers stocked their home pantries with foods to make home-cooked meals. Today, fewer shoppers are stocking up because they view the local grocery store as a direct extension of their own pantries. While some consumers are still willing to prepare meals at home, advanced meal planning is on the decline, with a whopping 63 percent of eating occasions being decided within just one hour of consumption. Retail dietitians can provide consumers with meal ideas that are quick, easy, delicious and nutritious. One way to encourage a resurgence of pantry stocking is through the national campaign Cans Get You Cooking. Tis canned-food campaign ofers

®, ™, © 2016 Kellogg NA Co.

High-energy consumers are demanding high-performance cereals. Fitness-conscious consumers want nourishing ingredients they can see and taste. Which is why Kellogg is making such a big splash with amped-up versions of proven performers like Special K® Nourish™ and Mini-Wheats® Harvest Delights. See the entire lineup for 2016 right now at It’s worth the effort.

All’s Wellness wholesome recipes that span all meal categories, from appetizers, salads, soups and chili, to main dishes, sandwiches, sides and desserts. Or you can develop your own unique healthy-stock-up campaigns that feature “ft-friendly” frozen foods or “health-on-theshelf” nonperishable items to tie into recipes. Provide your shoppers with enticing meal ideas through timely social media posts delivered at mealtime and featuring appetizing recipes and appealing imagery, or short cooking videos. Support these messages in-store with related signage, samplings,

promotions and displays, and ofer dietitian-led store tours to help consumers fnd healthful meal ingredient staples throughout the aisles. PG Karen Buch RDN, LDN, is a registered dietitian/ nutritionist who specializes in retail nutrition marketing and communications. One of the first supermarket dietitians, she is now founder and principal consultant at Nutrition Connections LLC, providing consulting services nationwide. You can connect with her on Twitter @karenbuch and at

Stagnito + Edgell Named Accredited Continuing Professional Education Provider for RDs Prestigious credential granted by the Commission on Dietetic Registration. Progressive Grocer parent company Stagnito Business Information + Edgell Communications has earned Continuing Professional Education (CPE) Accredited Provider status from the Commission on Dietetic Registration (CDR), the credentialing agency for the 75,000-member Academy of Nutrition and Dietetics, the world’s largest organization of food and nutrition professionals. Stagnito + Edgell earned the credential following a rigorous application process demonstrating that it successfully met 12 educational and ethical standards for content provided at its annual Progressive Grocer Retail Dietitian Symposium. “Stagnito + Edgell is delighted that CDR recognizes our commitment to providing the best-quality educational offerings to retail dietitians,” says Jeffrey Friedman, VP group brand director for PG. “Our goal is to help registered


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

dietitians excel in the retail arena, and the Accredited Provider credential is a strong sign that we’re on the right track.” As a CPE Accredited Provider, Stagnito + Edgell is recognized not only by CDR, but also by dietetics professionals and licensure and certifying agencies as a provider that meets CDR’s standards for continuing professional education. “Gathering information from our advisory board of retail dietitians, consulting dietitians, our annual retail dietitian survey and attendee evaluations from past symposia are key steps that help us plan relevant educational events,” notes Friedman. “Tapping into these resources is a key reason we succeeded in securing the Approved Provider credential.” The next Progressive Grocer Retail Dietitian Symposium will be held May 23-24 in Chicago, with retail dietitians from around the country expected to attend.

Pay disparity persists, and discrimination is the cause.





By Joan Toth

Bridging the Wage Gap How to achieve gender pay parity in two bold moves.


t’s been more than a half-century since President John F. Kennedy signed the Equal Pay Act, and seven years since President Barack Obama signed the Lilly Ledbetter Fair Pay Restoration Act. But the gender pay gap stubbornly persists. Full-time women workers earn about 78 percent of their male counterparts’ earnings. Te pay gap is even greater for African-American and Latina women, who earn just 64 cents and 56 cents on the dollar, respectively, compared with white non-Hispanic men, according to White House fgures. Critics have tried to explain away the pay gap by pointing to diferences in occupations and career/life choices. Not so fast: According to an American Association of University Women study, women one year out of college still make 7 percent less than men, even when you factor in variables like college major, occupation, industry, hours worked, GPA, type of college, age, geography and marital status. Te pay gap is persistent — and all signs point to discrimination as the cause. Te wage gap isn’t just bad for women, it’s also bad for your bottom line. It hurts your female employees and pinches the pocketbooks of women who shop your stores and buy most of your products. Te pay gap is hurting our industry’s ability to recruit and retain, too. Pay and benefts are the top reasons that Millennials choose an employer, so it stands to reason that organizations that close the gender pay gap will attract the best talent and have a stronger, better-motivated workforce. Te Network of Executive Women believes that the retail industry — with its large female workforce — is especially well positioned to close the gender pay gap and become a leading talent destination. Closing the pay gap may not be as difcult as you think. A recent article in Te New York Times, by Claire Cain Miller, suggested two strategies worth considering:


| Progressive Grocer | April 2016

Publish everyone’s salaries. Tis bold move would shine a light on pay discrepancies and, according to research by Washington University, result in higher pay levels by giving employees a stronger hand in negotiating. In the study, workers who reported that their managers were “very good” at sharing organizational fnancial information out-earned those who reported that their managers were “very poor” at fnancial disclosure, by 8 percent to 12 percent. Treat women the same as men during salary negotiations. Research by Carnegie Mellon’s Linda Babcock shows that men are four times as likely as similarly qualifed women to ask for higher pay. When women did ask for more, they asked for 30 percent less than their male peers. One underlying factor: Women who negotiate for higher salaries are perceived — by both male and female managers — as “less nice.” In April 2015, Reddit interim CEO Ellen Pao addressed this by banning salary negotiations as a part of recruiting eforts. At the time, she told Te Wall Street Journal that “men negotiate harder than women do, and sometimes women get penalized when they do negotiate. We come up with an ofer that we think is fair. … we aren’t going to reward people who are better negotiators with more compensation.”


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NEW Catherine Tinsley, a management professor at Georgetown University who has studied the gender pay gap, says “being authentic” is the key to getting the best deal in negotiations. “If you’re not, it comes of as being disingenuous — and people get skeptical about it,” she told Bloomberg Business. Te greatest gender disparities in negotiations, according to Tinsley, are in areas where there’s ambiguity around what’s negotiable, such as bonuses and the dates of performance appraisals. “You have to brainstorm all the possible things you can get from the company,” she notes. “It’s much more than just salary negotiations.” You also “have to practice,” Tinsley advises. “As goofy as it sounds, you have to get up and practice with someone, because negotiation is a behavior — and in order to get better at a behavior, you have to engage in it.” A study by PayScale found that signifcantly


more women than men (31 percent versus 23 percent) are “uncomfortable negotiating salary.” My advice to women? Grab a friend and practice “the ask.” If you’re told a positon’s salary is non-negotiable, ask whether there’s wiggle room on vacation time or bonuses. If your manager says that your requested salary requires “more experience,” know your true market value and be prepared to summarize all of your experience and accomplishments. My advice to managers — male and female — sitting on the other side of the table? Ask yourself what you would ofer a similarly qualifed man. Ten ask how much it will cost you to replace a highly trained and motivated female employee. Te pay gap doesn’t just hurt her, it hurts your organization’s future, too. PG Joan Toth is president and CEO of the Network of Executive Women, a learning and leadership community with nearly 10,000 members representing 750 companies, 100 sponsors and 20 regions in the United States and Canada. For more information, visit

April 2016 | |


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83rd AnnuAl report of the Grocery Industry

Points of sale PG ’s AnnuAl diAloGue with retAilers rounds uP A medley of sPeciAl concerns, hot sAles trends And limited-time windows of oPPortunity. Analysis by Joan Driggs, Jim Dudlicek, Bridget Goldschmidt and Meg Major / Research by Debra Chanil


re you optimistic about the way things are going? Not quite as much as a year ago, according to results of Progressive Grocer’s 83rd Annual Report of the Grocery Industry, which gauges the temperature of the nation’s retail food climate, courtesy of the direct input of retail executives charting the prevailing trends. In 2015, just about half of the retail executives responding to our exclusive survey said they were more optimistic about the retail climate versus a year earlier, with about one-ffth expressing less optimism. Tis year, there was a fairly even three-way split among bad, good and indiferent attitudes regarding the retail food tempo. Te most trying factors singled out as weighing most heavily on our executive survey participants’ minds were perennial retail industry hot buttons: wages and benefts, data security, and price increases, all of which are taking a toll on retailers’ outlooks for the months ahead. Te tepid mood also suggests that the competitive landscape shows no signs of leveling out as the omnichannel environment continues to evolve. Conversely, this year’s results simultaneously depict an increasing focus on remaining relevant with more sophisticated customer relationship marketing tactics, greater emphasis on prepared foods, and more dedicated community outreach as key Continued on page 34 April 2016 | |



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83rd AnnuAl report of the Grocery InduStry SuPermarket SaleS by format Number of StoreS

PerceNt of total

SaleS PerceNt ($ millioNS) of total

ToTal SupermarkeTS ($2 million or more)




















SupermarkeT-naTural/GourmeT FoodS





WarehouSe GroCery





miliTary CommiSSary





ConvenTional ConvenienCe





GaS STaTion/kioSk


















PerceNt of total

SaleS ($ millioNS)

PerceNt of total

oTher Food reTail FormaTS

ConvenTional Club miliTary ConvenienCe STore

Source: Nielsen TDLinx; Progressive Grocer Market Research, 2016

SuPermarket SaleS by SaleS raNge Number of StoreS SupermarkeTS ($2 million or more)





Chain (11 or more SToreS)





$2,000,000 To $4,000,000





$4,000,000 To $8,000,000





$8,000,000 To $12,000,000





$12,000,000 To $20,000,000





$20,000,000 To $30,000,000





$30,000,000 To $40,000,000





$40,000,000 To $50,000,000










independenT (10 or FeWer SToreS)




$2,000,000 To $4,000,000




5.5% 1.1

$4,000,000 To $8,000,000





$8,000,000 To $12,000,000





$12,000,000 To $20,000,000





$20,000,000 To $30,000,000





$30,000,000 To $40,000,000





$40,000,000 To $50,000,000










Source: Nielsen TDLinx; Progressive Grocer Market Research, 2016


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

$649,087 ToTal SupermarkeT SaleS

ThiS iS a 1.7% inCreaSe over laST year, addinG $10.7 billion in SaleS

Continued from page 31

factors in making brands unique and loyalty-inspiring. A closer look at these statistics — and many more — unfolds on the following pages, underscoring both the expected and unexpected changes unfolding across the industry. New to this year’s report is a more user-friendly, visually enhanced treatment of some of the hottest industry trends and issues, such as leading advertising, marketing and engagement tactics; most valuable merchandising schemes; most productive uses of capital investments; most efective ways grocers are connecting with consumers; and most impactful store departments and services. Amid an active arena of mergers and acquisitions over the past year, grocery’s brick-and-mortar business is relatively fat — overall sales rose only 1.7 percent at supermarkets with sales of at least $2 million, with an overall net increase in store count of just less than 300. Retail execs probed in this year’s study were also gradually picking up on ways to enhance the physical store with digital, from shopping apps to click-and-collect, both of which are essential to the future of traditional grocers, along with specialized services designed to meet shopper needs. It’s a trend that continues to expand with newer players like San Francisco-based Instacart, which is steadily expanding its delivery service



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83rd AnnuAl report of the Grocery InduStry


AverAge Per-Store SuPermArket PerformAnce meASureS 2015



SaleS Volume ($ millionS)




Selling area (Square Feet)










number oF CheCkoutS aVerage Weekly SaleS DollarS per Store DollarS per Square Feet DollarS per CheCkout







Progressive Grocer’s 83rd Annual Report of the Grocery Industry is based primarily on an exclusive survey conducted among executives at supermarket chain and independent operators across the United States. Among this year’s 131 retail executive participants, 67 percent classify themselves as independent retailers, while 33 percent are selfdistributing chains. Of the total respondents, 57 percent operate one to 10 units, while 43 percent operate 11 or more units. The average number of stores operated by 2016 Annual Report panelists is 335. Additional store count and sales data are provided by Nielsen TDLinx, which maintains a national database of supermarket and other retail format locations.

Source: Nielsen TDLinx; Progressive Grocer Market Research, 2016

into new markets, and traditional retailer powerhouses like Te Kroger Co., in Cincinnati, which is testing online ordering programs and its “endless aisle” oferings. Hybrid alliances are also popping up with smaller regional grocers, such as Seattlebased PCC Natural Markets, which had an existing alliance with Instacart, but took its digital ofering one step further through a dual-delivery

option including Amazon’s Prime Now one- or two-hour delivery service for PCC’s local, organic, sustainably sourced food. Consequently, it’s understandable that grocery executives’ “cautious optimism” is growing even more guarded, as costs and regulations make delivering on brand promises more challenging in a cutthroat multichannel world.



Talking with…

Matthew Prescott Senior Food Policy Director, The Humane Society of the United States

Progressive Grocer: Why are so many companies switching to cage-free eggs? Matthew Prescott: The way companies interact with the world around them can have major bottom line implications. Today’s consumers are seeking products that come at a value and align with their values— including on issues like animal cruelty; they want animals to be treated well, and want to support companies that agree.

“As our customer base has been moving to cage-free at an increasing rate, Kroger’s goal is to transition to a 100% cage-free egg supply chain by 2025,” states the country’s largest traditional grocery operator. Reports Ahold, “Animal welfare is an issue that we care about greatly and we believe that cage-free environments are a more humane way to treat hens.”

But there’s a gap between the way consumers want animals to be treated, “Consumers have responded positively to the and what’s happening in some areas of expanded choices in the egg aisle,” says Albertsons agribusiness. It’s within that gap that about its growing cage-free assortment. “Albertsons we see egg suppliers locking chickens in Companies…will be working with its suppliers cages so tightly the animals can’t spread toward a goal of sourcing only cage-free eggs for its their wings. Imagine being in a packed store operations by 2025.” elevator that breaks down. People are As the Food Marketing Institute reports: “Shopper frantically trying to escape, but the door interest in animal welfare has been consistently never opens. That’s what life is like for growing,” and “shoppers want food retailers to caged hens—and it’s simply out of step prioritize animal welfare” even over other issues, with what consumers want. To narrow Cage-Free Egg Barn like the environment. that gap, many companies are shifting to 100% cage-free eggs. Birds can walk, PG: How would a company go about switching to cage-free eggs? fap their wings, lay their eggs in nests in cage-free facilities, which are large scale, automated production systems that churn out massive MP: Many egg producers have committed to a cage-free future, so the volumes of eggs while giving animals a better quality of life. It’s a wintransition easier than ever. For example, Rose Acre Farms—the second win for birds and buyers. largest table egg producer—has said it’s switching to 100% cage-free production. Retailers interested in moving in this direction can contact PG: Is there support for shifting to cage-free eggs? me at The Humane Society of the United States is proud to partner with the world’s largest food companies, helping MP: Dozens of the world’s largest food companies have pledged to them navigate these issues and crafting policies and programs to shift to 100% cage-free eggs. Those companies include Kroger, create a more humane supply chain, and more humane world. Albertsons, Ahold, Delhaize, Costco, Target, Trader Joe’s, BJ’s Wholesale Club, CVS, Wawa, McDonald’s, IHOP, Denny’s, Kraft Heinz, *Detailed in full at Unilever, ConAgra Foods and many more.*


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

“ Costco is committed to going cage-free for its egg

procurement…In calendar 2016 we expect to sell over one billion cage free eggs.”

“ Albertsons Companies sets goal for cage-free eggs ”

“ Kroger’s goal is to transition to a 100% cage-fr ”

work with suppliers to reach a 100% cage-free

arget announces national transition to 100% “ Target cage-free shell eggs.”

The Humane Society of the United States offers our appreciation to the dozens of major grocers with policies to source 100% of their eggs from cage-free hens. To Kroger, Albertsons, Costco, Ahold, Delhaize, Target, BJ’s Wholesale, Trader Joe’s, The Fresh Market, CVS, ALDI, Whole Foods and all the others: Your work addressing this important social concern is creating a cage-free future, a mor

83rd AnnuAl report of the Grocery InduStry

ReTaiL CLimaTe

compared witH a year ago, are you more or less optimistic about tHe retailing climate for supermarkets?


less optimistic


no cHange


more optimistic

The BoTTom Line

How was 2015? How are prospects for 2016? Rated on a scale of 0-100, where 0=Awful, 100=Sensational







68.1 59.4 65.2

Source: Progressive Grocer Market Research, 2016


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

83rd AnnuAl report of the Grocery InduStry

Battling the FormidaBle Foes


hile the federal minimum wage debate has long been a hot button with supermarket executives, the issue has become especially thorny in the past 12 months amid a nationwide push to raise federal and state minimum wages, as well as hourly wage hikes recently implemented by some of the industry’s largest players. Following Bentonville, Ark.-based Wal-Mart Stores Inc.’s recent phased-in wage increases to $13.38 an hour for the average full-time hourly worker and $10.58 an hour for part-timers, Costco followed suit, raising minimum wages by $1.50. Te Issaquah, Wash.-based club store retailer’s lowest hourly wages are now $13-$13.50 an hour, up from the previous $11.50-$12 an hour. Despite the fact that most grocery stores pay their average hourly workers more than the federal $7.25 minimum, the looming threat of federally mandated higher wages fnds many grocery executives deeply concerned about how such a change will afect their overall operations. Accordingly, wage costs (89.5) once again topped the hit parade of factors most expected to increase among this year’s panelists, paced closely at No. 2 by the everescalating price of benefts (86.7), both of which retain their rankings as top-of-mind concerns.

expected 2016 change in company operational Factors sCoRe: 100=inCRease; 50=no Change; 0=deCRease current


last year


Wage Costs





Benefit Costs










teChnology spending





Retail pRiCes





peRCent gRoss maRgin





Capital expendituRes





peRCent net pRofit





employee tuRnoveR





eneRgy/fuel Costs





Source: Progressive Grocer Market Research, 2016


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

89.5 Wage Cost

Ranked no. 1 in expeCted 2016 Change in Company opeRational faCtoRs

Aside from wages and benefts, other obstacles cited as posing major threats to operational stability include two of the most often discussed industry topics: competition (73.6) and technology spending (73.3). In terms of the latter, while low margins and high fxed costs are givens, the escalating level of competition that today’s food retailers are forced to contend with is undeniably unprecedented. During the past year, online and hard-line discount-format operators made marked gains, providing afrmation that the reshufed landscape will become even more congested and complex going forward. To that end, technology is paramount to driving growth and enhancing customer engagement for grocers. But it’s also costly, as evidenced by its fourth-ranked standing on the key operationalobstacles lineup. Capital costs and the complexity of technology outlays and upgrades reside as retailers’ foremost considerations, alongside related necessary investments in personnel, processes and procedures across nearly all aspects of their operations. And though they’re managing many changes, the one constant that supermarket leaders can never escape is the age-old conundrum of retail prices (70.9), which ranked as the ffth most watch-worthy operational issue. Indeed, during a year of fairly tumultuous variations in key categories, it’s little wonder that retail price uncertainties were cited as an operational hindrance by this year’s panelists. To wit: Lower retail prices for several items, including salad, orange juice, shredded cheddar cheese, ground chuck, sirloin tip roast, vegetable oil, white bread, and deli ham, posted slight decreases in the American Farm Bureau Federation’s (AFBF) Spring 2016 Picnic Marketbasket Survey, released as PG went to press with this issue. Te informal survey shows that the total cost of 16 food items that can be used to prepare one or more meals was $53.28, down 59 cents, or about 1 percent, compared with the year-ago AFBF survey. Of the 16 items surveyed, 10 decreased and six increased in average price. Egg prices are up sharply from the frst quarter of 2015, due to the efect of the High Pathogenic Avian Infuenza event last year, but are working their way back down as increasing production has Continued on page 44

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83rd AnnuAl report of the Grocery InduStry

Last year

Continued from page 40

What are the

n0. 1

big issues


keeping you up at night?

Wages and benefits


no. 2

data protection/security

no. 5


Market saturation

data protection/ security



price increases



Wages and benefits



food safety



(recruitment, retention, diversity, training)



market saturation



keeping up With advancements in technoLogy





increasing overhead costs

no. 4

price increases

no. 6




n0. 3


35.5% food safety

(energy, infrastructure maintenance, etc.)

Source: Progressive Grocer Market Research, 2016

31.5% Labor

(recruitment, retention, diversity, training)

no. 7


increasing overhead costs

no. 8


keeping up With advanceMents in technoLogy

Source: Progressive Grocer Market Research, 2016


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

(energy, infrastructure maintenance, etc.)


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83rd AnnuAl report of the Grocery InduStry Consumer marketing/advertising Percent of resPondents rating each strategy as extremely or very imPortant PerCent in-store signage/digital media


digital marketing


newsPaPer inserts


mobile marketing


direct mail (circulars, etc.)


newsPaPer ads (roP)


tv advertising


radio advertising


custom magazines


Source: Progressive Grocer Market Research, 2016

started to catch up with demand. Retail beef prices also peaked in early 2015 at record high levels, but a combination of increasing beef production, weaker

exports and lower competing meat prices has led to modest price declines since. While defation afected sales in several key categories, price declines ofer a silver lining, with ripe opportunities for higher incremental and impulse purchases around the store, particularly in the allimportant fresh food categories. A contextual illustration of the same was discussed by Kroger EVP/CFO Mike Schlotman in the company’s recent fourth-quarter and fscal year investors’ call. “Tere is a lot of speculation about infation or defation or disinfation,” Schlotman observed. “We believe a deeper dive is required when the operating environment has increased volatility. When you look at identical-supermarket sales, you should not come to the conclusion that less infation is fundamentally a bad thing. In fact, if you look at our real growth in the fourth quarter — that is, identical-supermarket sales less infation — this year’s fourth-quarter result was stronger than last year’s fourth quarter, when identical sales were over 6 percent.” Noting that all but one department had positive same-store sales during Q4, with natural foods, deli and produce leading the way, Schlotman said that while meat sales were slightly negative, due to 5



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percent defation in the category, “the defation has allowed retail prices to return to levels where more customers can re-enter the category or increase their purchases in the department. As a result of strong tonnage, the meat department had a great quarter, with strong FIFO [frst-in/frst-out] gross-proft dollar growth and a nice contribution to margin. Tis is what we often refer to as ‘good defation.’” Aside from the top fve culprits discussed above, the familiar foes rounding out the list of growing operational issues include gross margins (64.7), capital expenditures (63.5), net proft (57.4), employee turnover (52.8) and energy/fuel costs (42.8).

PaPer Chase

In the grand scheme of the most efective tactics to capture shoppers’ attention, the tried and true tactics of in-store signage and, more recently, digital media, remain invaluable elements of helping engage and inform shoppers as they navigate the aisles. Tat’s why nearly two-thirds (62.7 percent) of 2016 Annual Report panelists ranked both traditional and digital POS as their most important consumer marketing/advertising strategies.

Meanwhile, in the present age of “e” and “m” everything, it’s no mystery that digital (42.6 percent) and mobile (35.8 percent) marketing are making inroads as top shopper engagement and educational strategies. Interestingly, however, the prevalence of newspaper inserts (42.4 percent), direct mail (32.4 percent) and newspaper ROP/print ads (29.9 percent) remain ingrained as steadfast marketing/advertising mainstays for food retailers. To this point, reviewing the traditional paper circular at home or in the store factored as the top money-saving behavior among shopper panelists in Retail Feedback Group’s (RFG) most recent “U.S. Supermarket Experience Study.” But Cheryl Black, CEO of Brisbane, Calif.-based You Technology, notes that e-coupons will become a more integral piece of retailers’ promotional mix. “Because of the security and fexibility that they ofer, they will be used to provide the sharpest of price points to loyal consumers,” she says. “Retailers and CPGs can track, at a very granular level, what is happening with digital coupons.” Continued on page 50

April 2016 | |


83rd AnnuAl report of the Grocery InduStry Continued from page 47

Consumer engagement Percent of resPondents rating each strategy as extremely or very imPortant

In an era when folks have more options than ever about where to spend their food dollars — along with more ways to share and amplify their opinions of the same — showing customers love and admiration with more purposeful, impactful consumer engagement strategies has never been more critical.

5oC7ia.l6me% dia


Customer relationship marketing


23Blo.g9s %


loyalty inCent ive programs

21o.n2lin% e



Comment Cards

12.1% toll-free hotlines

Source: Progressive Grocer Market Research, 2016


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

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83rd AnnuAl report of the Grocery InduStry

ThaT’s EnTErTainmEnT


he ease and increasing reliability of ecommerce and m-commerce mean that traditional grocery retailers must fght harder than ever to get shoppers into their stores. Why visit the local supermarket when products can be delivered at a time convenient to the customer? If the “chore” of grocery shopping is removed, that means more time for leisure activities. Brick-andmortar retailers are fghting back by recognizing that they’re competing not just with other channels, but with other forms of entertainment as well. Teir focus is increasingly turning to enhancing the instore experience: a culmination of physical design, curated assortment and professional stafng. PG’s Annual Report survey breaks out experience into three buckets: Merchandising/brand enhancement, customer interaction and in-store services. Respondents rated the degree of importance of each strategy, from which it’s clear that retailers are gaining an appreciation for the emotional and physical experience they must deliver to meet consumer expectations. In the merchandising/brand enhancement bucket, more than three-quarters (76.1 percent) of respondents cited prepared foods as extremely or very important. Grocery retailers recognize that Americans don’t want to give PrePared Foods up quality meal experiences, but Percent oF resPondents they’re hard-pressed to prepare that cited PrePared Foods meals on their own, whether due to time or talent constraints. Te as extremeLy or very growing grocerant segment is the imPortant new reality. While grocerant programs vary widely among grocery operators and are still in the early stages for many, the most progressive grocers are building programs that press other experiential hot buttons, with initiatives that feature signature dishes and seasonal and special-event programs, as well as boosting community engagement with dedicated dine-in areas. Retail execs in this year’s study further indicated that locally sourced (65.7 percent) and private label products (61.2 percent) are extremely or very important to their banners, as are crossmerchandising (59.7 percent), store-within-astore specialty departments (54 percent) and signature products (52.2 percent), all of which



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

provide a unique in-store experience. Customer-centric strategies and services are where retailers can tap into the emotional needs of shoppers — connections that e-commerce providers aren’t able to create. Retailers indicated that customer interactions around community involvement (74.6 percent), seasonal events (57.6 percent) and sampling/demonstrations (50.7 percent) are extremely or very important. In-store services that ranked high include on-site butchers (71.2 percent), community programming (40.9 percent) and seafood specialists (36.4 percent). Tese are also major pain points for grocers, challenged as they are by labor costs associated with highly trained and engaged experts. E-commerce solutions can fght back with “endless” aisles, but too many — or the wrong — choices in-store will only frustrate shoppers. When the right talent designs smartly curated and merchandised oferings, the connection between store and shopper will keep happy consumers coming back for more.

mErchandising/Brand EnhancEmEnT PErcEnT PrePared Foods


LocaLLy sourced Products


Private LabeL




store-within-store sPeciaLty dePts.


signature Products


cooking/meaL PreP stations




in-store Pharmacies


Free wi-Fi


Source: Progressive Grocer Market Research, 2016

cusTomEr inTEracTion PErcEnT community invoLvement


seasonaL sPeciaL events


samPLing, demos


weLLness events


in-store restaurants


heaLth screenings


heaLthy-eating store tours


cooking cLasses


Source: Progressive Grocer Market Research, 2016

83rd AnnuAl report of the Grocery InduStry

In-store servIces

Percent of resPondents rating each strategy as extremely or very imPortant

on-site Butchers community Programming seafood sPecialists event Planners service-Based KiosKs Wellness exPerts informational KiosKs certified chefs Wine consultants cheesemongers children’s/student Programs registered dietitians Source: Progressive Grocer Market Research, 2016


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

71 2% 40 9 36 4 25 8 21 2 21 2 20 0 19 7 18 2 16 7 15 2 10 6



83rd AnnuAl report of the Grocery InduStry gRade OF cOmpany’s sTRaTegy FOR cOnnecTing wiTh cOnsumeRs TOTal

a: We have a fully integrated strategy using in-store, online and digital channels (omnichannel)

The Omnichannel Tide is Rising


rom home delivery to click-and-collect to the new “smart fridge” that allows consumers to place grocery orders right from their kitchens, omnichannel retailing is a reality that all retailers must embrace to remain relevant in the years ahead. Category blurring rages on with


B: We’ve got a strategy that we’re executing


c: We’re just getting started


d: We’re barely there


F: What’s omnichannel?


Source: Progressive Grocer Market Research, 2016

abandon across all retail channels. According to the third annual Consumer Insights research survey conducted by Eugene, Ore.-based retail design frm King Retail Solutions (KRS), 54 percent of U.S. shoppers fnd the option to buy merchandise online for in-store pickup “appealing,” and have shopped this way in the past


Talking with…

Karla Radtke Vice President of Category Commercial Operations The Coca-Cola Company

Contoured Solutions for

Your Success

Karla J. Radtke leads the development and implementation of product and package initiatives for the sparkling, water, tea, coffee, Glacéau, POWERADE® and venturing and emerging brands categories across the United States for the Atlanta, Ga.-based Coca-Cola Company. She was named one of Progressive Grocer’s Top Women in Grocery for 2015. Progressive Grocer: What are some easy ways for grocers to increase overall beverage sales? Karla Radtke: There are a lot of easy opportunities to pair beverages with complementary food items, such as a water rack or coconut water rack near produce, or offering cold availability at the front end and around the perimeter of stores to drive proftable sales.

KR: They can promote fll-in trip items such as milk, bread and bananas and immediate-consumption items such as sparkling beverages, water, tea, and sports and energy drinks. Another opportunity is to offer refrigerated sparkling beverages to pair with the party occasion — especially in glass bottles. PG: How can grocery stores be positioned as a go-to destination for meal planning? KR: Grocers can set themselves apart by offering choice, as well as fast, easy, in-and-out “meals in minutes,” ready-to-serve meals and meals to grab and go. PG: What elements are important in converting shoppers into buyers? KR: Easy-to-locate, shoppable displays that fulfll a shopper occasion or need. Always offer clear pricing and inspiring messaging. And it’s crucial to have product in stock all the time. For more information on The Coca-Cola Company and its brands and products, visit

PG: How can grocers increase traffc during off-peak hours?



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


Congratulations to Sandy Douglas, Executive Vice President, The Coca-Cola Company, and President, Coca-Cola North America, on being honored with the 2016 William H. Albers Award for Industry Relations from the Food Marketing Institute (FMI)!

Š 2016 The Coca-Cola Company

83rd AnnuAl report of the Grocery Industry work harder than ever before to demonstrate their relevance and earn shopper loyalty. For grocers, this means embracing mobile technology to engage shoppers at every point along the path to purchase, while leveraging historic competencies with food. Grocery chains across the spectrum — from Kroger to Meijer to Hy-Vee to Buehler’s — are fnding success with this strategy. According to the results of this year’s Annual Report survey, grocery retailers are doing better, but still have a ways to go. Just 9 percent of respondents said they have a fully integrated omnichannel strategy. However, nearly 45 percent said they at least have a strategy that they’re executing, up from about a third of respondents a year ago. A quarter said they’re “ just getting started,”

12 months; 34 percent said they’d buy groceries online for in-store pickup (40 percent of men, 29 percent of women). For Millennials, that jumps to 47 percent, versus 33 percent of Generation Xers and 21 percent of Baby Boomers. Meanwhile, 65 percent of U.S. shoppers bought groceries from a non-grocery store in the preceding 12 months, and 91 percent would consider doing so in the coming 12 months. Tat means traditional grocery retailers must


Store-Supported home delivery

Nearly 48 perceNt of reSpoNdeNtS offer Some type of omNichaNNel ServiceS, with mobile ShoppiNg appS moSt prevaleNt


Korean flavors, trending mushrooms and heirloom ingredients lead new product introductions from Dr. Praeger’s Dr. Praeger’s Sensible Foods now ofers 11 new items in its growing 40 product portfolio. Their three new veggie burgers include: Bibimbap, with spicy Korean Gochujang and brown rice; Heirloom Bean showcasing six varieties of beans, lentils and delicate herbs; and Mushroom Risotto, featuring roasted mushrooms and simmered Arborio rice with a hint of trufe oil. A leader in better-for-you snacks for kids, Dr. Praeger’s also released new Kale Littles, kid-friendly bites in fun shapes with kale as the frst ingredient. There are also four new Hash Browns and three veggie Pufs available, too.

Dr. Praeger’s Sensible Foods was founded in 1994 by two practicing cardiothoracic surgeons. The doctors set out on a simple mission to make eating healthfully delicious. Today, the family owned and operated company is a leader in the all-natural, vegetarian, vegan, gluten free, and kosher frozen food categories, and is the exclusive veggie burger provider for White Castle. The company’s wide ranging line of products includes veggie burgers, cakes and pufs, hash browns, sustainable seafood items, Kid’s Littles, and more.

Its new products coincide with a revitalization of the Dr. Praeger’s brand, a signifcant investment that includes: new packaging with clean graphics that emphasize mouthwatering modern photography; a new logo featuring a mortar and pestle to refect the company’s long-standing commitment to healthy ingredients, and an updated website at featuring the same fresh, real-world photography and a gallery of recipes.


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


NEW Items!

Veggie Burgers

Veggie Puffs

Hash Browns

Kids Littles

83rd AnnuAl report of the Grocery InduStry with the rest either barely there or oblivious to the existence of omnichannel — in our view, a sure way not to stay in business. Nearly 48 percent of respondents told PG they ofer some type of omnichannel services, with mobile shopping apps, store-supported home delivery and click-and-collect the most prevalent. Lesser numbers ofer their shoppers in-store product scanning with mobile devices, third-party home delivery services (through such vendors as Instacart or MyWebGrocer) and ordering kiosks. To be sure, most omnichannel services are possible because of the ubiquity of smartphones, which can be used for any number of tasks related to the grocery shopping trip. Just more than half of survey respondents named accessing Facebook as the leading beneft of mobile devices, suggesting that social media continues to be a popular mode of consumer engagement for retailers. In fact, respondents named social networks as the second-best way to engage with customers, followed by digital surveys, loyalty card data, a customer service hotline, thirdparty data, outside agencies and focus groups. The top customer engagement tool, according to our survey? Associate feedback — and to those encouraging greater interaction between associates and shoppers, well done! Despite embracing digital technology, shoppers still crave the human touch and continue to look to store associates to answer their questions on subjects like food preparation, origin and nutrition. Other top assets of smartphones: using e-coupons, visiting interactive websites, reading digital circulars, and accessing meal-planning and shopping list apps, all at various points along the path to purchase: pre-shop, in-store and post-visit. In just two years, the percentage of shoppers who’ve bought groceries online in the


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

past 30 days has doubled, according to a new report from Brick Meets Click, “How Consumers Are Using Online Grocery and What It Means for Retailers in 2016,” which highlights what’s at stake for the grocery industry. “One in five U.S. consumers is now an active user of online grocery services, and these shoppers are a valuable group,” says Bill Bishop, chief architect of Barrington, Ill.-based Brick Meets Click and primary author of the study. “Active users spend an average of 16 percent of their weekly grocery dollars online, and that grows to 64 percent on weeks they do a major online grocery trip.” Grocers not already embarked on the omnichannel boat would be wise to climb aboard before the tide washes them and their profts out to sea.

Omnichannel ServiceS Offered Any omnichAnnel service (net)


mobile shopping Apps


store-supported home delivery




in-store mobile product scAnning


curbside delivery


third-pArty vendor home delivery

(e.g., instAcArt, myWebgrocer, etc.)


ordering kiosks


other mentions




Source: Progressive Grocer Market Research, 2016

tOOlS emPlOyed tO engage with cuStOmerS Percent AssociAte feedbAck


sociAl netWorks


electronic communicAtions/ digitAl surveys


loyAlty cArd dAtA


customer service hotlines


third-pArty dAtA provider/vendor


outside Agencies


focus groups/intercepts


Source: Progressive Grocer Market Research, 2016

New Innovation with Purpose ™ Baked Snacks Made With Beans

The unique benefit segment for toddler pouches is growing.

Bean-based snacks are becoming a part of a snacking revolution!

New Grabbers made with four food groups:

Out-of-Aisle Bean-Based Snack Growth vs Total Out-of-Aisle Category 1








Strongly performs and communicates on nutritional claims that mom is looking for! Brand



Whole Grain







10% DV

Claim on Label

ies! Variet

4.3X Growth


1 Serving of Fruit & Veggie

Good Source of Calcium


7.6X Growth



6% 2014 Growth

YTD 2015 Growth

■ Total Snacks

■ Bean Based Snacks

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1 Source: Nielsen out of aisle Snack category 2014 & YTD 2015 W/E 6/20/2015 © 2016 Société des Produits Nestlé S.A. Vevey, Switzerland

83rd AnnuAl report of the Grocery InduStry

Benefits of smartphones/moBile Devices Percent of resPondents rating each strategy as extremely or very imPortant Source: Progressive Grocer Market Research, 2016


50.7% faceBook



37.7% interactive weBsite

Digital circular

23.2% meal planner app



shopping list app

paper circular

21.7% Delivery of online orDer


personal shopping assistance



pos loyalty carD

orDer online/ pick up in-store

15.9% Source: Progressive Grocer Market Research, 2016


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

Direct mail

New Organic Green Valley... offers healthy advantages to your shoppers with a line of organic products in cans and pouches. Priced for everyone, every day. • Certifed Organic • Non-GMO and Gluten-Free • Vegetables, Dry Beans, and Pumpkin

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83rd AnnuAl report of the Grocery InduStry Best coMpany investMents past 5 years

next 5 years

Remodeled/invested in existing stoRes



social media stRategy



Built new stoRes



technology upgRades/new investments



invested in pRivate laBel/stoRe BRands



tRaining and Retention pRogRams



expanded assoRtments, i.e., fRee-fRom section, oRganic section



changed foRmat (smalleR, BiggeR, diffeRent)



upgRaded infRastRuctuRe to Be moRe efficient



oveRhauled loyalty pRogRam



stReamlined assoRtments/tRimmed sKus



geogRaphic expansion



developed and/oR expanded fResh pRepaRed food pRogRam



developed sustainaBility pRogRam



closed undeRpeRfoRming stoRes



new pR campaign to pRomote stoRe to community



tRansitioned to employee-owned company



Source: Progressive Grocer Market Research, 2016

Exciting things are happening!

You’re going to notice some changes at 5 Generation Bakers. Our new, state-of-the-art facility will be up and running in May with new equipment, more efcient production and a deepened commitment to food safety. That means improved quality and consistency in every loaf of Jenny Lee Swirl Bread. But one thing that hasn’t changed is our promise to make the best cinnamon swirl breads on the market. Delicious, all-natural ingredients and our signature cinnamon taste in every bite. You’ll love it… guaranteed.

Most Bang for their Buck


hen considering the best investments in their respective businesses, survey respondents overwhelmingly deemed pouring funds into the renovation and upkeep of their stores a winning move, with 30.1 percent choosing it as such over the past fve years, and 26.9 percent indicating that they intended to direct their money that way, with every expectation of success, in the next fve years. Other investments that respondents considered solid were rolling out a social media strategy, building new stores, upgrading technology and beefng up their private label/store-brand programs. Some items showed a dramatic rise in terms of their perceived future efectiveness: For instance, only 3.9 percent of respondents found training and retention programs to be their best investment over the past fve years, while fully 10.1 percent anticipated such initiatives would be so over the next fve. Other items diminished in importance: Expanded assortments were the best investment over the past fve years for 7.3 percent of respondents, but just 3.6 percent expected them to be so in fve years’ time.



GROUND PORK As the summer grilling season heats up, shoppers are looking for ways to add favor to their backyard barbecues. Our signature ground pork is unmatched in its superior taste and color, and we know your consumers will love it. Tat’s why we stand behind every package with the Smithfeld 100% money back guarantee. And why no one will ever have a beef with Smithfeld Signature Ground Pork.

For more information about Smithfeld Signature Ground Pork, contact your Smithfeld Sales Representative or email Visit Ofer valid in USA, 18+, from 12/01/15–9/5/16. Limit one refund (up to $4) per household. Ofer good only with a qualifying purchase of a Smithfeld Signature Ground Pork 16 oz. product. Void where prohibited. ©2016 Smithfeld Foods

83rd AnnuAl report of the Grocery InduStry

Most successful DePartMents

DrivinG traffic Percent of resPondents citinG dePartMent as Best at GeneratinG traffic Percent Meat


deli/PrePared foods




fresh Bakery




Private laBel
















General Merchandise




center store


frozen food


health, Beauty & wellness


Source: Progressive Grocer Market Research, 2016


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

GeneratinG sales Percent of resPondents citinG dePartMent as Best at GeneratinG sales Percent Produce




deli/PrePared foods






center store


Private laBel


frozen food


fresh Bakery




General Merchandise






health, Beauty & wellness











Half of all energy consumers said avor most impacts their choice of an energy drink. The Red Bull Editions contributed +29% of category dollar growth in the food channel and give consumers the avors they are looking for. Imagine what The Red Bull Editions could deliver in your store! Source: Mintel Energy Report May 2015; IRI Total US-Food Latest 52 Weeks Ending 2-21-16

83rd AnnuAl report of the Grocery Industry

Fresh success


ith the popularity of the perimeter so much in the news of late, it’s no surprise that the produce, meat and deli/prepared food departments topped the rankings of the most successful departments, with produce generating the most sales, according to 55.1 percent of respondents, and meat overwhelmingly driving trafc, as indicated by a


Most InFluentIal Dept In DrIvIng stores overall BranD/IMage/ poInt oF DIFFerentIatIon current








DelI/prepareD fooDs



fresh Bakery



health, Beauty, wellness



center store



prIvate laBel






source: Progressive Grocer Market Research, 2016


Most InfluentIal DepartMent In DrIvIng stores’ overall BranD/IMage/poInt of DIfferentIatIon

whopping 69.2 percent of those surveyed. Additional sales-generating giants included beer/wine/liquor (chosen by 46.4 percent), dairy (43.5 percent), center store (42 percent) and private label (37.7 percent), while among the major trafc drivers were fresh bakery (44.2 percent) and organics (36.5 percent). Less successful at generating sales were ethnic foods, selected by just 11.6 percent of respondents, while health, beauty and wellness was chosen by only 13.5 percent as a top trafc driver. pG

Outpacing Category Performance in All Channels Sales Up23.8% dollar sales % change vs. prior year, total gum category up 0.6% vs. year ago

avors NEW fl ottles! b & NEW

*IRI data 24 Weeks Ending Feb 14, 2016


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

Mentos Gum pocket bottles now in Cinnamon & Sweet Mint!

Store of the Month

Hy-Vee, Bloomington, Ill.

Market Forces From local produce to in-store dining, fresh is driving Hy-Vee’s Bloomington, Ill., beachhead. By Jim Dudlicek


y-Vee may be an institution throughout much of the Midwest, but in Bloomington, Ill., amid a sea of established competitors, the West Des Moines, Iowa-based grocer is the new kid on the block. But within just a year of its opening, Hy-Vee’s lone outpost in this central Illinois college town is a force to be reckoned with. Te 108,000-square-foot market — Hy-Vee’s largest — created out of long-vacant retail space along a busy section of historic Route 66, is wowing shoppers with, among other things, a full-service Market Grille restau-


rant, complete with bar and outdoor dining; in-store chefs and cooking demonstration stations; an extensive beer and spirits department with a wine-tasting room; an emphasis on local produce; two in-store dietitians; a dedicated wellness department; and a drive-up pharmacy. “Everything we’re trying to promote is fresh,” declares Andrew Cochran, Bloomington store director and a HyVee employee since age 15. “Te Bloomington Hy-Vee is designed to enhance the customer experience.” Te Bloomington team includes six chefs, who start each day roaming the store with shopping carts, gathering ingredients and inspiration for their latest creations aimed at exciting and delighting Hy-Vee shoppers.

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

BLOOMINGTON TEAM Back row, from left: Carrie Elliot, product manager; Tim Schwier, assistant manager, store operations; Andrew Cochran, store director; Tony Hazell, manager, perishables; Lexi Arndt, HR manager; Ashely Bigelow, restaurant manager. Front row, from left: Ryan Griffen, manager, general merchandise; and Roman Teig, produce manager.

Photography by Vito Palmisano

April 2016 | |


Store of the Month

Hy-Vee, Bloomington, Ill.

fooD feSt Store Director Andrew Cochran guides PG editorin-Chief Jim Dudlicek through the extensive prepared food selections; the housewares department features cooking demos.

Customers lead busy lives, and the Hy-Vee Market Grille is just another way in which Hy-Vee can make our customers’ lives more convenient.” —Andrew Cochran, store director

Winner Winner, Lunch or Dinner Nailing the grocerant concept is important for any grocery store these days, but for this Hy-Vee store, it’s a must. As Cochran notes, the BloomingtonNormal metropolitan area has the highest number of chain restaurants in the United States, so competition abounds for the dining-out dollar. “Wednesday is our busiest day, with half-price sushi,” Cochran says during PG’s recent visit in the midst of the busy 11 a.m.-to-2 p.m. lunch period, with employees from nearby businesses like Country Financial and State Farm Insurance, along with midday shoppers, converging on the Market Grille, food court seating and grab-and-go counters. Te salad bar sees its heaviest trafc at lunch, Cochran says, noting that “in the morning, people stop on the way to work and get their salad for the day.” Dinnertime brings renewed bustle and excitement, from daily specials teaming family entrées with sides, to the Kitchen’s “grand buffet” ofering all you can eat for $14. “Tonight, it’s dinner for four; come in and feed your family,” Cochran says, pointing to occasions like Sunday chicken dinner

on tAP the store’s Market Grille features a full bar with a diverse selection of beers and wines.


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

specials and Wednesday pasta nights, for eating in or taking home. Te Market Grille ofers a large casual-dining menu and a full bar in a contemporary atmosphere. Tose looking to linger awhile can enjoy a predinner cocktail before tucking into a signature appetizer like pepperoni pinwheels (a best-seller, according to Cochran, that’s also sold at the pizza bar), followed by a chef-created entrée or gourmet

Photo by Jim DuDlicek

With no antibiotics ever and no added hormones**, Open Prairie™ Natural Pork delivers shoppers a wholesome eating experience.

burger, paired with a glass of wine. On Sundays, the Market Grille ofers brunch from 9 a.m. to 2 p.m. at $19.99 for adults and $6 for kids. “Customers lead busy lives, and the Hy-Vee Market Grille is just another way in which Hy-Vee can make our customers’ lives more convenient,” Cochran says. “We also allow customers an opportunity to sit and relax, or to quickly grab a meal and take it home through curbside pickup.” Just outside the Market Grille entrance is the chef-stafed sushi station, the head end of a curving fresh-prepared counter that winds its way around the perimeter. Pizza is next, in traditional, thin and “Tuscano” crusts. Te local favorite is the Redbird, topped with boneless hot wings and hot sauce; a portion of these sales is donated to hometown Illinois State University. Tere’s also take-and-bake pizza, plus ingredients for scratch pies merchandised in the same case. Made-to-order deli sandwiches boast DiLusso meats — a sign urges shoppers to “get it toasted” — with grab-and-go sammies and salads also carrying this brand. Soups are chef-made, frequently using odds and ends from other recipes. One example of this practice is barbecue soup, described by its creator as “summer in a bowl,” Cochran reveals. Fresh prepared leftovers and surpluses also often inspire the store’s Chef Creations entrée and side dish recipes, he explains. Heat-and-eat selections include “mile-high” lasagna (“We can’t keep it on the shelf,” Cochran boasts), trays of enchiladas (“Pop it in the oven, and dinner’s done”), ribs and Asian entrées. Tis case is braced by

Not only does Open Prairie Natural Pork bring you the highest quality natural pork, our team also provides the expert support you need to build your natural pork sales.

Naturally good pork.


Store of the Month

Hy-Vee, Bloomington, Ill.

end caps featuring salsa and hummus on one end, and wings and mac and cheese on the other. Also popular are deli trays featuring meats, cheeses and sandriSiNG Tide wiches. “On weekends, we can’t The store’s scratch bakery keep them full,” Cochran says, has garnered noting additional demand during a devoted football season. Handcommunity following for its packed deli salads, made artisan breads, fresh every morning, are rolls and pastries. “huge in the summer with people going to barbecues,” he notes. Inspired chefs are key to the store’s prepared food oferings, and each one brings unique talents and specialties. When he was interviewing chefs for the new store, Cochran asked one culinary candidate, “If you had to make one dish for me to hire you, what would it be?” Her answer was gumbo, and Hy-Vee containers of this rich soup at the BloomThe response ington store now carry her name as its creator.

and acceptance within the Bloomington community has been by far the most rewarding aspect of opening a store in this town.” —Andrew cochran, store director

The Wow Factor “What sets us apart is the wall,” Cochran says, pointing to a line of cases that breaks at a 90-degree angle bordering the fresh produce department. “We want that stocked up and running by 8 a.m. so our frst shoppers get that experience.” Tat’s after shoppers are hooked by the “wow” display at the front of the store. “It might be apples in fall or strawberries in summer,” Cochran notes. On the day of PG’s visit, it was a tropical fruit promotion featuring exotic gnarly Buddha’s hand and boulder-size jackfruit. According to Cochran, 12 percent of the store’s

total produce sales are organics; the organic product count is posted daily. “We monitor that number a lot,” he explains. “It’s seasonal, based on what’s available, but we try to ofer all that’s available to us.” Te store has established good partnerships with local growers, who are invited to set up seasonal farmers’ market-style booths outside the store to help grow shopper awareness. “Tere’s a group of 12 farmers that come out and sell,” Cochran says. “Tey come out and tell their story. People are willing to pay for that story — and when it’s grown 5 miles from the store, it’s even better.” Also featured in produce are Short Cuts — cut fruit and vegetables for convenience — and Next Step, featuring mixed cut-fresh veggies, each line designed to get shoppers “one step closer to cooking,” Cochran says. Fresh-squeezed juices are another daily favorite, he adds: “People have really enjoyed that since we opened. How else to set the tone for fresh?”

Not by Bread Alone While training new bakery associates in the lead-up to the store opening, Cochran recounts, the store generated a number of “training loaves” that it decided to give away. Despite the fact that they were baked as practice, he says, the bread turned out to be so good that people lined up outside the store to get it. Te Bloomington store’s reputation for excellence in baked goods continues, with in-store bakers putting in long

SeA chANGe hy-Vee’s sustainable seafood policy has won the hearts of shoppers, who also enjoy the daily fresh selections offered by the Bloomington store.


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

hours to maintain high standards. “We have a baker that works midnight to 8 to fll that case,” Cochran says on a visit to the artisan bread department. Notes Julie Grote, the bakery manager, “All our breads start with a two-day starter, all from scratch.” Tere are also fve cake decorators on staf. Over in the service deli, Hy-Vee’s point of diference in merchandising is displaying sliced meats in the deli case, creating a bold visual display. “It’s a talking point with customers — we can hand samples over the counter,” Cochran says, noting that shoppers can still get meats and cheeses sliced to order. “And it’s not sitting there — it really turns, I’ll tell you.” Daily specials include a loaf of bakery bread for 99 cents with a 1-pound deli meat purchase. A curated gourmet cheese department really gives this store an edge, according to Cochran: “In this town, it’s a big point of diference. No one else has this.” Specialty varieties abound, with many randomweight items. Hy-Vee partners with gourmet cheesemakers for special promotions and exclusive oferings. “Sampling is key,” Cochran asserts. “We want the show, so we buy whole wheels and cut them.”

Surf and Turf Culinary touches extend into the meat and seafood department. Prominent at the seafood counter is the Chef ’s Grill, which will cook any seafood item for shoppers. Tis cooking station also hosts multicourse themed dinners with beverage pairings and dessert. “We have whole fsh coming in, and we’ll slice it right here,” Cochran says, noting the cutting table on the sales foor, fanked by two full-size rowboats flled with ice to merchandise product. Signage calls out Hy-Vee’s corporate sustainable-seafood policy. Notes Cochran, “Consumers here really care about that, so it’s a great talking point for us.” Te full-service butcher shop features prime and dry-aged beef as well as an extensive selection of seasoned, marinated and value-added items. “It’s what people want — there’s not much they haven’t gone for,” Cochran says. Sausages are made by a Hy-Vee manufacturing subsidiary, “but most of the favors were created instore,” Cochran notes, naming pineapple bratwurst as a best-seller. Te meat case includes heat-and-eat items created by in-store chefs and labeled as exclusive to the Bloomington store. Te cooking station in the upscale housewares department further taps into “our mission of culinary expertise,” as Cochran calls it. “It’s really done well since we opened. It’s nice to be able to demo a product, and turn and say, ‘Here’s what you need to prepare it.’ It’s a nice tie-in.”

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Take A Look Outside:

Continued on page 78


Store of the Month

Hy-Vee, Bloomington, Ill.

Bloomington Hy-Vee 1403 N. Veterans Parkway Bloomington, IL 61704 Grand opening: March 10, 2015 Total square footage: 108,000 Number of Items: Nearly 55,000, including more than 9,200 specialty, 8,200 HealthMarket and 1,200 fresh produce SKUs (145 organic and 55 home-grown) Employees: 514 Checkouts: 15 Hours: 24 hours a day, seven days a week Designer: Hy-Vee Inc.


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

April 2016 | |


Store of the Month

Hy-Vee, Bloomington, Ill.

Continued from page 75

wellneSS watch Store dietitians Dawn Blocklinger and Stefanie Djuvic share some of the “Dietitian’s choice” products they recommend to shoppers.

Destinations Nuts, grains and candies are popular choices in the store’s vast bulk food department. “Bulk foods have been a huge deal, and a learning experience,” Cochran says, observing what shoppers like best: “a lot of quinoa, a lot of couscous, trail mixes and dried fruit.” Several bulk bins, as well as other products throughout the store, are labeled with “Dietitian’s Choice” stickers, demonstrating Hy-Vee’s commitment to wellness guidance by placing retail dietitians at every store. “We have two onstaf dietitians, and they add to everything we do,” Cochran afrms. Store dietitians Dawn Blocklinger and Stefanie Djuvic are based in an ofce behind the HealthMarket, Hy-Vee’s dedicated better-for-you, free-from and wellness department. Te dietitian team hosts numerous wellness events at the store and of-site; the day of PG’s visit, they welcomed a group of high school students for a cooking demonstration.

HealthMarket features organic and natural products, as well as an entirely gluten-free aisle. “Tis continues to grow,” Cochran says. “We’re adding items every week, based on what people are asking for. People shopping this area have specifc needs, and it’s another element of service we can provide. It’s kind of a small spot in the corner, but

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it’s a huge department for us.” Nearby is the pharmacy, with an inside counter, outside drive-up window and space for a clinic expected to open in the future. Interestingly, the path through the HealthMarket is also the gateway to the store’s wine and spirits shop, complete with a beer cave and a tasting room that hosts regular events. With its own outside entrance and dedicated checkstand, the spirits department will soon ofer mixed 6-packs of craft beer. Te store has created another destination with its pet care section, a doublewide aisle with a center island and end caps featuring bulk pet treats and specialty products. “When we frst opened, we were getting loads every day for the pet aisle,” Cochran recalls.

Customer Service Te Bloomington Hy-Vee was the third store in the company to ofer Hy-Vee Aisles Online, the grocer’s online shopping service that includes click-and-collect as well as home delivery. According to Cochran, Aisles Online has been a raging success, embraced by Bloomington shoppers. “By the third week we were opened, it was a department,” he says, “and now there’s six full-time people.”

Further amenities aimed at enhancing the shopper experience include foral design, dry cleaning, postal services, mothers’ rooms and electric car-charging stations. Despite the store’s early and ongoing success, Cochran and his team continue to refine their mix of products and services to best meet their shoppers’ needs. “When we frst opened the Bloomington Hy-Vee store, we stocked it with nearly 55,000 items. In order to better serve our customers and the community, we have been working diligently to fnd out what specifc products our customers want,” he explains. “Discovering these requests and stocking our store so that it is best tailored to the local community has been something we’ve been working to perfect over the past year.” In the year since the store opened, it has stayed true to Hy-Vee’s mission of being a committed community partner. “Te store has been very involved with nonproft organizations such as the Midwest Food Bank and Home Sweet Home Ministries, as well as sponsorships with local high schools and Illinois State University,” Cochran notes. “Te response and acceptance within the Bloomington community has been by far the most rewarding aspect of opening a store in this town.” PG

Stocking our store so that it is best tailored to the local community has been something we’ve been working to perfect over the past year.” —Andrew Cochran, store director

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Refrigerated & Frozen

Category Management

Cold Plays

Effective merchandising of chilled items involves zeroing in on shoppers’ needs. By Bridget Goldschmidt


ith more consumers than ever shopping the perimeter departments of the supermarket, refrigerated foods of all kinds stand to benefit, but making sure that store customers have easy ideas on hand for how to use products is key. “We’ve done a lot of work around occasions and dinner to better understand what goes together,” notes Jef Mayrose, senior director, category leadership at Omaha, Neb.-based ConAgra Foods, manufacturer of a range of refrigerated and frozen products. “Our goal is to help our customers create solutions for consumers. For example, we recently paired Marie Callender’s frozen pies


with [refrigerated] Reddi-wip. It’s a great example of us reaching across diferent departments to create a customer solution that wouldn’t have existed in solely one department or the other. Te pairing is a natural one, and has been extremely successful in driving increased basket size per shopper, increasing cross-purchase and providing simple solutions for the shopper.” When it comes to cross-promotions, ConAgra is determined to think outside the box. “Old category defnitions and locations can be limiting and prohibit incremental sales,” asserts Mayrose. “It’s important to include refrigerated foods where people expect to fnd them and where they’ll buy them. For example, Reddiwip could be included in the cofee aisle, near hot

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


Nonfoods RefrigeratedCategory & Frozen

Category Management

chocolate, by fresh fruits and refrigerated pudding, etc.” Of course, this sort of merchandising can be applied across the company’s refrigerated product portfolio. “Creating merchandising options like pairing items on shelf around occasions or based on shopping behavior [is] critical,” he says. “We will also be focused on developing optimal product shelving locations for healthy, natural or organic items. Tis will not only help the retailer drive sales, but also provide solutions to the shopper and aid the shopper in fnding the foods they are seeking.”

It’s important to include refrigerated foods where people expect to find them and where they’ll Pure and Simple buy them.” ConAgra’s plan to focus on healthy, natural and —Jeff Mayrose, ConAgra Foods

organic dovetails with the growing trend toward wholesome, clean-label products. “Consumers are looking for options with simplifed ingredient state-


m ments,” afrms Mayrose. “For Reddi-wip, real dairy cream R iis our No. 1 ingredient. Some oother whipped toppings are made with hydrogenated oils.” m “Demand has never been higher for real foods [and] high h quality standards,” notes Mary q Shepard, director of sales for S Kirkland, Wash.-based Fortun K Foods, a maker of refrigerated F ssoups and sauces for retail and ffoodservice. “Real foods equal ffresh foods — not shelf-stable oor frozen.” Shepard points to tthe fact that Fortun ofers “the best refrigerated shelf life in b tthe industry. No shrink, no waste, no short shelf life. We w provide id a d double bl tamper-proof container and seal in our fresh ingredients.” Te reason that freshness is so critical in supermarket refrigerated foods, she contends, is that such items “are competing with … restaurant fare, [and] many consumers are choosing to go to their grocery


Speaking with…

Genevieve Poirier-Richards Senior Vice President, Milk Processor Education Program (MilkPEP)

Progressive Grocer: Protein has been powering the food and beverage market for the past several years. In fact, research shows it has moved from being predominantly popular with body builders into the mainstream. Has MilkPEP seen this “Protein Trend”reaching consumers from all walks of life? Genevieve Poirier-Richards: We are seeing that trend span a wide reach of consumers, and it shows no signs of slowing down, as more and more consumers realize how important protein is to their health and well-being. Not only are 75 percent of shoppers already aware that protein contributes to a healthy diet 1, but almost 60 percent of Americans consider protein when shopping for packaged foods and beverages, and most are trying to add more to their diet.2 PG: What are some ways consumers can pack their diets with protein without over-indulging? GPR: Milk is a great way to easily add protein. But many people don’t realize that every 8-ounce glass of milk contains 8 grams of high-quality protein. Educating shoppers about that fact could have huge potential to positively impact milk consumption, according to recent proprietary consumer research from MilkPEP.3

powerhouse. Our turnkey assets help retailers tap into the protein trend and implement it as a part of their long term strategies. Retailers can use our recipes, photos, videos, and more to highlight how versatile milk can be—paired with food and as an ingredient, too. We also ofer POS materials, ideal for the dairy aisle, that highlight milk’s 8 grams of protein per serving and highlight protein pairings as an opportunity to cross promote. PG: Should retailers consider cross-merchandising milk in areas outside of the daily aisle? GPR: The short answer is ‘Yes!’ Recent research3 suggests that consumers are motivated by specifc protein meal goals (experts recommend 25 to 30 grams per meal), and by ideas that will help them achieve those goals. Out of almost 40 concepts, a protein pairing message (milk + eggs = 25 to 30 grams of protein, for example) ranked among the highest in driving consumer demand. Showcasing protein pairings in-store can help build basket size. For more information on MilkPEP’s campaigns, partnership opportunities, tools and resources, or how to get involved, contact us at retailers@milkpep. org or 1-800-945-MILK

PG: What role can grocery retailers play in helping their customers understand milk’s protein content? Can MilkPEP help them deliver that message? GPR: Retailers are key to educating consumers and to driving milk sales. That’s why MilkPEP has developed programs such as My Morning Protein, an integrated 360 degree approach that reinforces milk as a protein


1 2 3

NPD Group: Protein Perceptions and Needs, 2014. Datamonitor Consumer’s Product Launch Analytics database. MilkPEP Proprietary ConsumerStudy, 2015

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

© 2015 America’s Milk Companies.®

WITH PROTEIN Consumers are looking for ways to add protein to their diets. MilkPEP’s new protein pairing toolkit will help them do just that—driving sales across your whole store by cross-merchandising protein-rich food and milk. Call for your protein solutions activation toolkit today. 1-800-945-MILK |

Refrigerated & Frozen

Category Management

FoRTun’S FavoReD Fortun Foods offers retailers a rack to display the company’s refrigerated soups and sauces.

Developing digital and social media strategies … and designing programs that target the changing shopper base will be an important part of the future of refrigerated foods.” —John Pauley, Smithfield Foods

store versus a restaurant. Te retailers have stepped up their game. It’s a win/win destination for shopping and delicious meals to take home.” Product ingredients are also among the top priorities of Austin, Minn.-based Hormel Foods, where, according to Mark Tompson, director of category management for consumer products sales, “our approach is shopper-based. We focus on our categories that ft within our company’s growth pillars of healthy/holistic, on-the-go and multicultural. A good example of this is refrigerated snacking, where we have focused on the snacking needs of consumers and have built actionable strategies that we are sharing with retailers.” Hormel’s approach works well with this particular segment, Tompson maintains, because “changes in the way people are eating, such as smaller meals and snacks as meals, have brought shoppers to the center of the discussion.” As a result of its category management endeavors, Hormel has found “that retailers are embracing our snacking insights, and many retailers are developing refrigerated snacking destinations as part of their packaged meats wall,” Tompson points out.

The Whole Package Speaking of animal proteins, a look at one major supplier reveals an all-encompassing category management strategy. “Smithfeld Foods has developed a comprehensive approach to supporting our retail partners to continue to drive sales and proft growth from refrigerated meat,” notes John Pauley, EVP of retail sales for the Virginia-based meat-processing company, the leading supplier of packaged pork in the United States. “Fueled by extensive consumer and shopper research, we have developed winning products and package sizes geared to meet the evolving


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

needs of shoppers, and have helped retailers optimize their assortments. We support all these eforts with strong marketing programs. Tis integrated approach benefts retailers as well as our brands.” Te strategy has made Smithfeld Foods “one of the fastest-growing consumer packaged goods manufacturers in the country,” says Pauley, adding that the company teams “with many regional and national retailers to improve refrigerated meat case assortments and share shelving best practices. Marketing and promotional programs of Smithfeld Foods’ brands, such as Smithfeld, Eckrich and Nathan’s Famous, help to drive trafc to the stores as well.” Pauley believes the company’s breadth of products makes it “uniquely positioned to leverage the power of pork across all relevant categories, providing our customers with industry-leading sustainability, traceability and high-quality programs.”

Delivering in Dairy Te burgeoning yogurt segment of the dairy department presents a current example of refrigerated category management activity. “Our category management strategy begins with understanding the overall Lala brand strategy,” observes Desiree Johnson, director of marketing for the Lala brand at Dallas-based Borden Dairy. “Specifcally, Lala delivers against a consumer need that wasn’t being met in the yogurt category: healthy plus hyper-convenience. Our portable Yogurt Smoothies not only deliver against better-foryou trends, but are also extremely easy to consume on the go. Consumers are time-starved yet want to eat healthy, and Lala Yogurt Smoothies deliver strongly against these consumer trends.” To that end, according to Johnson, the brand has “embarked on a national expansion which includes growing distribution from 29 percent … to 57 percent

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Refrigerated & Frozen

Category Management

by the end of Q1 2016, and to 70 percent by Q3 of this year.” How does Borden propose to achieve this? “At the retail level, we have focused on our core assortment platform,” explains Johnson. “In other words, we place our best-selling favors of core drinkable product with the highest appeal against the target consumer, and build from there. We fll in the gaps with size oferings and product benefts for various consumer needs. Tese include our best-selling 4-packs and 10-packs that are a huge hit with busy families. We also ofer a variety of products, from core yogurt smoothies with 5 grams of protein to our new Greek Yogurt Smoothies with 12 grams of protein. All are low in fat and contain no high-fructose corn syrup [and] no artifcial colors or favors.” Additionally, since “drinkable yogurt, while well established in many other parts of the world, is an emerging category in the U.S.,” Lala is “partnering on an initiative with several large chains to implement ‘drinkable only’ sets within their yogurt sections,” notes Johnson. “Tis will begin in the next

few months, and represents an easy way to attract Millennials and others to the category by highlighting drinkables and the important consumer beneft of hyper-convenience.”

Harnessing Consumer Power How will refrigerated category management proceed in the near future? By most accounts, the discipline will only increase its attention to the shopper, with a growing reliance on technology. “Te manufacturer community can continue to


The 4th Generation of Dietz & Watson Introduces the

Next Generation o Deli

Dietz & Watson is proud to introduce Originals. A collection of favorful No Antibiotics Ever, Organic deli meats and franks and rBGH-free cheeses. The Dietz & Watson Originals line refects the company’s 75-year philosophy, “Quality Above All Else.” Lauren Eni, VP of Brand Strategy and greatgranddaughter of the company’s founder explains, “Being a family business, we’ve always been motivated by two basic principles: providing consumers quality and choice. We strive to prepare the highest quality deli products, while also providing consumers with a vast assortment of options. We’re the leader in deli, ofering unique favors as well as healthier


options. Now we’re preparing to be the leader in the ABF and Organic deli market.” Recognizing the changing consumer defnition for ‘better-for-you’ foods, Originals features antibiotic-free ham, turkey breast, roast beef, all beef hot dogs; organic chicken, turkey and hot dogs; and rBGH-free Swiss, Cheddar and Provolone cheeses. Dietz & Watson only works with responsible supply partners. Their supply is humanely raised on farms without the use of hormones and from partners who limit their use of antibiotics to only at the time of illness. The new Originals line is unique from Dietz & Watson

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

legacy products in that they have partnered with farms that provide raw material that never receive antibiotics–ever. “When my great grandfather talked about quality, he believed the most important aspect of superior taste was in the raw materials and ingredients. We are proud that the Originals line continues this tradition.”, says Eni.

Refrigerated & Frozen

ConsumeRCentRiCity Aided by technology, category management of refrigerated foods is focusing more intensively than ever on the shopper.

Category Management

drive successful implementation by partnering with retailers to identify opportunities to reach more consumers and to fll unmet consumer needs,” notes ConAgra’s Mayrose, adding that the company’s goals are “to provide retailers category solutions that are consumer-centric and shopper insights … that build baskets, brand loyalty and improve shopping experience. Tese solutions should be based on the need states of the shopper.” For its part, Hormel has adopted a similar stance in response to rising consumer infuence at retail, which the company expects to strengthen. “In recent years, we have worked to put the shopper at the center of all decisions, and e-commerce will magnify their power going forward,” Tompson notes. Coming up, he sees “Big data, targeted and personalized. With the transfer of power to the shopper, they are becoming more demanding and diverse. Tis will require advanced capabilities to get the right products, priced right, on the right shelves at their choice of point of purchase, with

personalized communications near the point of purchase that can entice trial and expand usage.” Asked how refrigerated category management is likely to develop going forward, Smithfeld’s Pauley replies: “Developing digital and social media strategies … and designing programs that target the changing shopper base will be an important part of the future of refrigerated foods. Tis is an ongoing challenge that continues to require the latest in insights, research and shopper analytics to stay one step ahead of the changing landscape.” PG


Consumers Sweet on Delizza Patisserie’s Mini Desserts The desserts may be small, but the appeal – and the sales – of Delizza Patisserie’s European-inspired pastries is big. According to Fred Liggero, vice president of sales for the Battleboro, N.C.-based Delizza, the products have continued to broaden in popularity and strength in the grocery freezer case. In 2015, industry data confrmed that the category was trending down 1.5 percent in sales, but the Delizza brand was up over 3.5 percent in sales. Moreover, the Delizza brand is comprised mainly of three SKUs while competing dessert companies offer multiple items. Ranked #4 nationally, Delizza is driving this category and has been for more than 15 years. Delizza Patisseries offers several dessert snacks made from traditional Belgian recipes, using quality ingredients like real dairy cream, Belgian-style chocolate and Bavarian fllings. Its portfolio of convenient, thaw-and-serve desserts includes Belgian Mini Cream Puffs, Belgian Mini Chocolate Dipped Cream Puffs, Belgian Double Chocolate Mini Eclairs, Belgian Custard Cream Mini Eclairs and Belgian Strawberry Mini Eclairs, in addition to seasonal Eggnog Cream Puffs and Pumpkin Spice Cream Puffs. The desserts can be as guilt free as they are delectable: all of the desserts are only 50 calories each.


Delizza shares recipes with its customers to show the many ways the dessert can be savored at home, through its website and blog. Recipes include complementary dips that can be paired with the mini cream puffs and eclairs, such as raspberry sauce and key lime dip, among others. For more information on Delizza Patisserie, visit

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

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Refrigerated & Frozen

Frozen Meals

Taking the


Frozen meals change with the times through innovative products and packaging. By Lynn Petrak


V dinners may have gone the way of rabbit ears, but today’s frozen meals are akin to smartphones and other highlights of personalized technology. Just as providers of communication tools have innovated and adapted to refect and meet the needs of users, so have frozen meal companies. Today’s freezer cases now include a growing variety of meal oferings, from organic, natural, free-from and better-for-you items, to gourmet and upscale oferings, to diferent portion sizes. “Consumers’ expectations are changing in regards to all formats, whether in fresh or frozen. Tey want more authenticity in dishes and bigger favors,” asserts Michael Gunn, director of culinary, research and development for Te Schwan Food Co., based in Marshall, Minn. Data published in the 2015 State of the Industry Report from the National Refrigerated and Frozen Foods Association (NFRA) show that frozen entrées are the largest category in the frozen area, SimPLy ORGaNiC with $10.7 billion in sales.

Conagra’s latest Simply Café steamers feature USDa certified-organic ingredients.


Nature Calls A bright spot within frozen meals is the addition of more organic, natural, free-from and betterfor-you products.

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

Julie Henderson, VP of communications for Harrisburg, Pa.-based NFRA, says that this segment is driving innovation and contributing to the growth of the overall frozen meal segment. “Health-conscious consumers are a large and growing segment of shoppers today, and manufacturers, big and small, are ... producing products that will appease those shoppers’ preferences,” she notes. Te notion of better-for-you is evolving across the food marketplace, afecting frozen meals “Today, consumers’ defnition of health goes beyond the facts about the nutrition content or portion size of the food,”´ observes Kristin Reimers, director, nutrition for Omaha, Neb.-based ConAgra Foods, who cites examples like Blake’s pot pies, casseroles and entrées. “While these aspects are still fundamental to health, health now also encompasses their values and emotions around how the food was grown, the ingredients, and where and how the food was prepared.” Smaller, regional and startup brands have done well with healthy and better-for-you frozen meals. “As consumers, and particularly Millennials, are gravitating toward more natural and organic products, it has created a great opportunity for small and niche manufacturers whose focus is solely on those attributes,” notes Henderson, Many of these boutique brands, including Amy’s Kitchen, Better4U Foods, Cascadian Farm Organic,

Evol, Kashi and Cedar Lane Foods, have upped their profles, both in new product launches and sales. Te gap in such products was the impetus for Better4U Foods, according to founder Amy Lotker. “It’s as if for many years, the health-oriented consumer had few options, if any, in the frozen section of a market,” she recalls. “Tis is exactly what prompted us to launch our business.” Te Delray Beach, Fla.-based company continues to grow and innovate, introducing two new lines: USDA Certifed Organic ancient grains pizzas in three varieties and Bread Bowls in four varieties. “To provide a larger audience of consumers with healthy organic products, Better For You Foods LLC is now ofering private label product development for other companies seeking to create USDA Certifed Organic,” adds Lotker. “We are really excited to see consumers and the industry shifting their focus beyond the niche diets that only serve a small percentage of the population, to instead address the basic building blocks everyone needs in the pursuit of good nutrition — fruits and veggies, whole grains, and lean protein with less sugar and sodium — especially in convenience foods,” says Amanda Luke, VP of brand strategy at Schaumburg, Ill.-based Luvo. “We’re encouraged by the growth specifcally in frozen premium foods and see this as just the beginning in helping reinvent the perception of the frozen category.” In the past year, the company has added to its menu of oferings Chicken with Harissa and Chickpeas, Vegetable Bibimbap, Vegetable Coconut Curry, and Chicken in BBQ Sauce with millet grits and collard greens. According to Luke, ongoing education and marketing eforts are pivotal in sustaining the growth of natural, organic and wholesome frozen meals. “We believe there is a great opportunity for retailers to capitalize on this increasing demand by promoting the benefts of frozen meals to consumers not currently shopping the category,” she notes. Likewise, the category’s biggest names and brands have gone au naturel, so to speak, by adding more natural, organic, free-from and otherwise better-foryou items to their large portfolios, as with Stoufer’s Fit Kitchen and Heinz’s Weight Watchers Smart Ones. ConAgra’s Healthy Choice brand has expanded its Simply Café Steamers line to include new meals made with USDA-certifed organic ingredients, including a Sweet & Spicy Asian Style Noodle Bowl, Unwrapped Burrito Bowl, Creamy Spinach & Tomato Linguini, and Tree Cheese Tortellini. “Te meals with organic ingredients will begin rolling out this spring and reach full national distribution by July. Pricing will be consistent with the other Healthy Choice Simply Café Steamers recipes, so Healthy Choice eaters won’t have to pay premium prices to eat organic ingredients,” notes Kat Hrabovsky, senior brand manager for Healthy Choice.

Other major brands have boosted their portfolios of healthy/organic/natural entrées, too. At Schwan’s, Gunn emphasizes consumers’ growing interest in knowing where their foods come from. “People want ingredients with a purpose — that have a story and a reason for being — in addition to adding something to a dish. Organic is more important, too, in bringing something new to frozen,” he remarks. NFRA and other industry groups, along with frozen food companies, have been working to share information with consumers about the wholesomeness of frozen meals and, along the way, dispel any misperceptions about heat-and-serve items from the freezer. “Frozen foods are made from real ingredients picked at the peak of ripeness and fash-frozen to lock in all the benefcial nutrients,” Henderson asserts. NFRA is continuing its Real Food. Frozen marketing campaign and recently wrapped up its National Frozen Food Month eforts in March focusing on the convenience and variety of real food in the freezer section.

As consumers, and particularly Millennials, are gravitating toward more natural and organic products, it has created a great opportunity for small and niche manufacturers whose focus is solely on those attributes.” —Julie Henderson, NFRA

Big World of Flavor Much of the innovation in frozen meals is tied to favor, to deliver diferent eating experiences to consumers. As a result, frozen meals increasingly

Get Your Products

Off the Floor!





Refrigerated & Frozen

People want ingredients with a purpose — that have a story and a reason for being — in addition to adding something to a dish.” —Michael Gunn, The Schwan Food Co.

Frozen Meals

feature bolder, spicier or more unusual ingredients. “When you look out across the frozen category, everyone, from the most basic providers to higherend organic brands, [is] putting chilies in mac and cheese, sweet chilies in garden burgers, and a variety of other favors that you can now fnd in frozen meals,” says Gunn. As part of its work to ramp up favor — and in step with its overall R&D initiatives — Schwan’s has started a Chef’s Collective program with rising culinary professionals. “We are partnering with young chefs who are stars in their communities and states who have diferentiated themselves and been successful,” notes Gunn. “We’re learning from them and including them in our product innovation and renovation.” Indeed, according to Rob Johnson, senior brand manager for ConAgra’s Alexia brand, favors in today’s frozen meals refect foodservice trends. “We’ve taken a lot of our cues from what consumers see in high-end restaurants — there are really cool things happening with bold favors out in the restaurant world, and we’re harnessing those for consumers to enjoy at home in a really convenient format,” Johnson says. “Heat and spice is ... a current trend,” afrms Rachel Cullen, president and CEO of Dinuba,

Calif.-based Ruiz Foods. “Today, consumers can’t seem to get enough.” As evidence of this, she points to the current popularity of such items like Ruiz’s El Monterey Jalapeño, Bean and Tree Cheese Burrito; Cheesy Pepperjack Tornados; Egg, Cheese and Jalapeño Breakfast Burrito; and Southwest Chipotle Chicken Signature Burritos. Afrming Cullen’s observations, ethnic foods in particular are performing well in the frozen section. According to research from Chicago-based Mintel, sales of ethnic foods in grocery stores are estimated to grow more than 20 percent between 2012 and 2017, with Middle Eastern and Mediterranean products expected to increase the most in that time. NFRA’s Henderson underscores the continued potential of globally inspired frozen meals. “Frozen ethnic foods let consumers be their own chefs without having to buy all the ingredients and do all the preparation, and allow consumers to take risks trying ethnic foods without the potential waste,” she points out. PG For more about frozen meals, visit


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Taste Makers


o, it’s Dijon Mustard, both not just launched last September. you: It’s “Sriracha has been one of the defnitely getting biggest trend success stories on menus in Spicier flavors, hotter in supermarket cleaner ingredients recent years,” notes Snoddy. “In the prolifercondiment sections. ation stage, this trend has become a maindominate today’s In response to consumer interest in spicier stream favor, with a wider range of consumcondiment aisle. cuisines, product oferings — even allers now familiar with the ingredient.” American stalwarts like ketchup and musAlso riding the continuing sriracha wave By Bridget Goldschmidt tard — are sporting spicier favor profles. is Red Gold, a tomato processor in Elwood, Crystal Snoddy, associate brand Ind., which has created co-branded ketchup manager at Omaha, Neb.-based ConAgra and salsa products featuring the super-hot chili Foods afrms that “consumers … are looking for more sauce from Irwindale, Calif.-based Huy Fong Foods that exciting and bolder condiments. Tey want to try things started it all. Te ketchup is already on store shelves, while that are new and diferent. We are also seeing spicier the salsa is scheduled to hit retail in May. favor innovation used to capture the Millennial consumer And speaking of hot sauce, Texas Pete, a brand of TW that desires more from their condiments.” Garner Food Co., which a few years back introduced the ConAgra’s latest items to address this desire for bold successful Cha! by Texas Pete Sriracha Sauce, has come favor are Gulden’s Sriracha Mustard and Stone Ground out with another entry in the spicy condiment derby:


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


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Consumers are looking for their favorite brands to provide products that are wholesome, yet accessible and convenient to fit their busy lifestyles, and, most importantly, deliver on taste and quality.” —Hellmann’s Representative



¡Sabor! by Texas Pete, also due in supermarkets by May. “Te growth in demand for spicier foods and consumer requests for a hot sauce inspired by Mexican favors were behind the development of our latest innovation,” says Ann Riddle, CEO for Winston-Salem, N.C.-based TW Garner, while according to EVP of Sales Steve DeCorte, the new sauce’s “bold, balanced favor … was crafted through [a] combination of Mexican spices, sea salt, sautéed garlic and aged peppers that is ideal for any meal or cuisine.” Since sriracha’s run can’t last forever, what will be the next favor to add zing to condiments? Some are predicting harissa, a North African hot sauce or paste made from chili peppers, paprika and olive oil, which is currently available in such products as Safron Road’s Harissa Simmer Sauce, from Stamford, Conn.-based American Halal Co. Regardless of where it will come from next, spicier fare looks to be here to stay. “More ethnic favors will appear on the market, as well as spicy favor imparted in other forms,” asserts DeCorte, noting that as a result, “[y]ou will see a greater emphasis on displaying condiments at store perimeters near proteins and on fresh prepared foods.”

Promises to Keep Chester, N.J.-based French’s Food Co. has a new spicy ofering, too — French’s Bufalo Ketchup made with Franks RedHot Sauce — but the longtime condiment purveyor is just as concerned with another major trend in the condiment category, as illustrated by the French’s Promise Seal on all product packaging. “It’s our commitment to always use the best ingredients and create the best possible products and recipes,” explains French’s President Elliott Penner. Two recent products exemplifying this stance are French’s Super Yellow Mustard and French’s Ketchup with No High Fructose Corn Syrup. “We have always listened to our consumers, changed our products in the way of diverse favors [and] easier-to-use bottles, and provided value and innovative uses,” notes Penner, pledging “[c]lean ingredients across 98 percent of the [company’s] portfolio, which also includes French’s Fried Onions, French’s Worcestershire sauce and Franks RedHot Sauce.” Hellmann’s, a brand of

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

Englewood Clifs, N.J.-based Unilever, has also been busy developing cleaner-ingredient products. Te brand’s new eggless dressing and sandwich spread, Hellmann’s Carefully Crafted, “was developed for anyone who wants the rich, creamy taste of Hellmann’s, but wants to avoid GMO-sourced ingredients, eggs, cholesterol, and artifcial colors and favors,” says a company representative, while Hellmann’s Organic Mayonnaise marks “the frst time Hellmann’s will be ofering an organic mayonnaise, and it will be sold on a mass scale, making it accessible to families across the country.” Te company rep adds: “Our Organic Mayonnaise has been certifed organic by the USDA, so it contains no artifcial favors or preservatives, and is made with only the fnest organic ingredients, including organic cage-free eggs and organic expeller-press oil. Plus Hellmann’s Organic [comes] in three delicious favors: Original, Roasted Garlic and Spicy Chipotle.” Both new products began appearing on shelf in February, with full nationwide distribution expected this month. “More and more, consumers are looking for their favorite brands to provide products that are wholesome, yet accessible and convenient to ft their busy lifestyles, and, most importantly, deliver on taste and quality,” notes the rep. “When developing Hellmann’s new organic and eggless products, we kept our consumers at the heart of every decision we made. ... After signifcant research and testing, we’ve developed products that are consistent with Hellmann’s great taste. Te feedback to date has been fantastic.” Additionally, in response to what Snoddy refers to as the “all-natural and organic movement in condiments,” ConAgra’s latest Gulden’s products are all natural, as well as being fat-free.

Heating Up Sales To move their products of shelves and into shoppers’ carts, condiment makers are employing a range of promotional and merchandising tactics. “Retail marketing programs that we use to support our condiments include ... must-buys, summer/grilling seasonal pricing programs and various merchandising activities,” observes ConAgra’s Snoddy. “We also execute cross-promotions with other ConAgra brands, for example, ‘Buy Hebrew National, save $1 on Hunt’s Ketchup or Gulden’s Mustard.’ One of our largest promotions from last year was our seasonal pricing program at Kroger that also featured merchandising display for our Hunt’s Ketchup. Tis Kroger seasonal pricing program drove positive sales

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More ethnic flavors will appear on the market, as well as spicy flavor imparted in other forms.” —Steve DeCorte, TW Garner Food Co.


for our business during our peak summer season. We also executed a rollback at Walmart on our 28-ounce Natural Ketchup during the start of the summer season. In ofering our 28-ounce at a lower price, we were able to drive positive volume gains for this particular SKU.” Continues Snoddy: “We fnd that our seasonal pricing programs work best, as condiments are in high demand during the summer months and see large consumption spikes that we are able to capitalize on. Our targeted seasonal merchandising and focused promotional activity starts in March and extends out to Labor Day weekend, with the Fourth of July being the peak of the season. We have found that it is important to engage consumers early in the season, and capturing Memorial Day is key to capitalizing on the summer/grilling season. We also aim to have our consumer load up on larger sizes at the beginning of the season and have seen some of our highest volume lifts on the 35-ounce display activity. Tis seasonal approach is also taken by Red Gold, which mentions “[q]uality merchandising around peak consumption periods like Memorial Day and

events such as the Super Bowl,” and Hellmann’s, whose rep notes “two national shopper marketing programs through Catalina and News America to help us raise awareness in a targeted and meaningful way that resonates with our consumers. Tis is a key time for Hellmann’s as our fans look to us for ways to add unique twists to spring and summer dishes.” TW Garner, meanwhile “is heavily engaged in retailer-centric promotions across the nation throughout the year,” says DeCorte. “Tese partnerships range from shelf and store fier promotions to those tied to causes, including helping wounded veterans.” In particular, he notes that “[o]n-shelf promotions, such as shelf talkers, with or without promotional couponing, have proven successful, along with recipe cards and automatic coupons.” PG For more about condiments, visit

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Fresh Food

Summer Grilling Planner

Sustaining the



Still important for uch like diehard most favored cooking devices, according to summer sales, golfers, who are Te NPD Group’s David Portalatin, who dusting of their presented earlier this year at the Annual grilling stretches clubs as soon as Meat Conference, hosted by the North its traditional they see the frst Meat Association (NAMI) and seasonal boundaries. American blades of grass Food Marketing Institute (FMI). poking up through the late-winter snow, Still, summer reigns as a key sales period By Jim Dudlicek dedicated outdoor chefs start itching to for grocery retailers, from meat and vegfre up their grills as soon as weather foreetables to sides and accessories. According to casts start heralding warmer temperatures. the Acosta study, hamburgers and chicken But according to the latest consumer trend studies, are the most popular foods to grill. Grocers looking to savvy grocers should cast a wider net with their grilling maximize American consumers’ love for outdoor cooking promotions. should keep that in mind, as well as leverage this year’s key “Te grill is not just a summer pleasure anymore,” astrends, including bold favors, creative recipes, unique cuts serts the 2015 edition of Acosta Sales & Marketing’s “Te and renewed attention on an old favorite, beef. Why? Behind the Buy” report. Te 12th installment from Jacksonville, Fla.-based Acosta reveals that 61 percent of Going Boldly shoppers who grill reported that they’re doing so eight or “Tis year, we expect to see a twist on traditional summore months of the year, with that fgure jumping to 68 mer grilling favors,” says Adam Golomb, director of percent for the all-important Millennial demographic. marketing for Pittsburgh-based supermarket chain Giant Indeed, grills are near the top of the list of Millennials’ Eagle. “Look for smokers to grow in popularity, and


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

Build Trust with Transparency Explore How To Connect with Your Consumers

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Fresh Food

One of the most important factors in a successful promotion is to ensure a storewide execution. Partnering with multiple vendors and featuring a variety of products make the promotion more engaging and appealing to different customers.” —Adam Golomb, Giant Eagle


Summer Grilling Planner

for barbecue sauces and dry rubs to feature bold favors like bourbon and bacon.” Tat trend is also anticipated by Wichita, Kan.based meat supplier Cargill Inc. “Consumers are looking for a range of bold favors, and there are many seasoning options they can use for turkey and beef that will deliver delicious and diverse eating experiences straight from the grill,” says Mike Martin, Cargill’s director of communications. More shoppers are seeking assertive, international favors such as those from Asian and African spices, Martin confrms. “Tese favors are perfect for beef and turkey marinades this grilling season,” he says. “In a recent study of fresh meat consumers, Cargill identifed an important consumer group which represents approximately 25 percent of red-meat sales. Sixty-four percent of this consumer group reported they want meats seasoned with international sauces.” Martin advises retailers to launch promotions that “highlight beef and turkey cuts together with displays for bold seasonings, favorful sauces, and bright, fresh produce.” Tose favors and colors will help enhance another trend Cargill has identifed: foodie photography. “Food-centric photo sharing is on the rise in

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

social media, as reported by a 2015 Mintel study. Tis growing trend has increased the importance of visually appealing meals with bold colors and artful plating,” Martin says. “Inspiring point-of-sale materials help sell ready-to-grill meats, and free grilling recipes enable shoppers to prepare fabulous, Instagram-worthy dishes at home.” Tracy Sinclair, chief marketing ofcer for Chicago-based grass-fed beef purveyor Pre Brands, views original recipe content featuring unique ideas to be the key to grilling season for retailers. “Shoppers are always looking for ways to up their grilling game,” she says. “Retailers can win with shoppers by creating the content with a partner brand like Pre to provide quick and easy recipes utilizing new ingredients.” Consumers are increasingly moving beyond burgers and steaks into experimenting with all kinds of cuts and foods on the grill, according to Christine Tanner, marketing brand manager for Creekstone Farms, based in Arkansas City, Kan. “As more and more people purchase grills every year,” she says, “this sector will continue to grow, and it is important that retailers formulate a strategy to take advantage of this opportunity.”



Shorty Sausages ®



Fresh Food

Summer Grilling Planner

other dishes. “Modern solutions for packaging also bring new ways for customers to enjoy signature grilling steaks with added convenience,” he says.

Knowledge of preparation is one of the key barriers to meat purchases, so a retailer who can offer advice and resources for their customers will stand to benefit.” —Christine Tanner, Creekstone Farms


Cuts Above With beef prices stabilizing after several years of limited supply, the Denver-based National Cattlemen’s Beef Association (NCBA) expects the wider availability of beef to be this summer’s biggest trend. “In general, when it comes to summer grilling season, all of the focus is on ground beef and steak,” says Lance Zimmerman, market analyst with Centennial, Colo.-based CattleFax. “Meat buyers should expect their wholesale costs to be similar or cheaper than a year ago for most of those items.” Cuts like ribeyes and strip steaks will likely be priced closely to year-ago levels, Zimmerman predicts. “Te same could likely be said for top butts,” he adds. “Items like fat irons are going around 10 cents a pound cheaper, and the tri-tip might be the bargain of the middle meats for retailers.” Te NCBA’s Beef Checkof is employing digital marketing eforts that help inspire more beef meal occasions throughout the entire purchase lifecycle and drive trafc to stores, explains Lindsay Kearns, the association’s coordinator. “Some partnerships involve couponing to lead to beef purchases and redemption data, and others ofer metrics on purchase intent,” she says. For example, the North East Beef Promotion Initiative (NEBPI) has an upcoming retail partnership with Ahold USA banner stores and digital coupon app Ibotta. In the May-June-July promotion, featuring strip steak and ground beef, Ibotta users complete educational tasks for meal inspiration in exchange for purchase incentives. Te folks at Wooster, Ohio-based Certifed Angus Beef (CAB) also anticipate a good summer for beef. “Te market will allow retailers to be quite aggressive on particular subprimals, so a lot of beef will be featured on front-page ads,” says David MacVane, CAB’s assistant VP for business development. “Some outside cuts for grilling — like London broil and western griller — should join all-time favorite steaks and burgers as grilling solutions.” Premium ground beef has also become a key point of diferentiation for retailers, MacVane notes, as consumers seek restaurant-quality burgers and

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

Getting the Message Grocers and suppliers would be wise to team up for a multichannel promotion targeting grilling consumers on multiple fronts. “We have created a Summer Grilling Event that provides our supplier partners the opportunity to reach millions of Giant Eagle customers during the key summer months through incremental in-store display, radio, circular presence, digital activation, targeted direct mail, and more,” Golomb says. “One of the most important factors in a successful promotion is to ensure a store-wide execution. Partnering with multiple vendors and featuring a variety of products make the promotion more engaging and appealing to diferent customers.” CAB’s MacVane advises retailers to stay close to the market and work with packers to take advantage of feature opportunities. “Te last two years have been challenging for all retailers because of beef pricing and availability,” he notes. “Now is the time to drive meat department sales with beef again. We’re helping our retailers develop comprehensive marketing tools, from meat case signage to social media content, to explain the benefts of high-quality beef.” Cargill’s Martin advises cross-merchandising strategies targeting busy, convenience-minded consumers. “For example, setting up a special cheese and fresh produce display near the meat case ofers a convenient opportunity to inspire customers while encouraging additional purchases,” he says, also recommending seasonal tie-ins and themes. Creekstone Farms works with its retail customers to pull together individual marketing plans that raise awareness of diferent cuts and how they can be used on the grill, via print ad promotions, grillgiveaway sweepstakes and coupons. “Education and communication are key to successful promotions,” Tanner asserts. “Knowledge of preparation is one of the key barriers to meat purchases, so a retailer who can ofer advice and resources for their customers will stand to beneft. “In addition, we provide educational support for consumers through grilling how-to videos on our website,” she continues. “Another strong trend is consumers looking for more information on where their meat comes from. We ofer transparency to consumers, and our variety of products, from subprimals to sausages to case-ready cuts, gives retailers added options to really appeal to consumers across all segments.” PG Read more about grilling at

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A truck, a tater and a mission

The Big Idaho® Potato Truck has logged more than 92,000 miles nationwide in the past four years.

Emotional connection lies at the heart of the Idaho® potato brand’s long-term success, and the Big Idaho® Potato Truck has proven to be a perfect vehicle for leveraging that link between consumers and the premium spud. Now in its fifh year of touring the United States from April through September, the Big Idaho® Potato Truck serves as part brand ambassador, part mascot all year long, says Idaho Potato Com-



mission (IPC) president and chief executive oficer Frank Muir. “Our national advertising featuring the truck runs from October to January, so our advertising and our truck tour are never actually going on at the same time. That has the efect of leveraging and lengthening our advertising,” says Muir. “People are so engaged with helping us find our truck [as suggested in the advertising storyline of the ‘missing’ Big Idaho® Potato Truck]. Half of them think we’re really looking for it! We have many, many anecdotal experiences

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that show consumers are connecting and relating to this truck and the whole story of it being missing.” Over the years, the IPC has even added a truck tracker website ( so consumers can follow the truck in real time, and a toll-free number to report a sighting of the “missing” truck (844-BIGIDAHO). In addition, the Big Idaho® Potato Truck’s fan base on social media has been increasing by about 3,000 each year of the tour.

In-store trucking That kind of real-life involvement with the Idaho® potato brand carries over in-store, where many retailers include images or models of the Big Idaho® Potato Truck in their displays for Potato Lover’s Month in January and February, and at other times of the year. “They have fun building [the truck] out of potatoes, and some have kids color or make posters. There are all sorts of versions of the truck, but all eyes are on the potato,” says Muir. “Retailers know that consumers are seeing the truck on television,” he adds. “When the consumers see the Big Idaho® Potato Truck in a store display, it’s a really clear link between the retailer and our program.”

Big Idaho® Potato Truck Tour by the numbers First tour: 2012 Average tour length: 5 months Total miles traveled: 92,886 States visited: 48 Cities and towns that have hosted events: 369 Retailer events: 151

A good cause Muir says the truck’s annual tie-in with a cause marketing program also boosts visibility and adds to the Idaho® potato brand’s feel-good image while providing much-needed assistance to diferent non-profit organizations. For 2016, the IPC will continue its program called A Big Helping, designed to raise awareness for local issues during the truck’s appearance at a community or store event. Continued on page 4

Twitter: @bigidahopotato

Tater Team members Ellis Nanney, left, and Adam Branstetter travel with the truck to spread the word about Idaho® potatoes.



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The truck waits patiently for its turn in Seattle’s Seafair festival parade.

Website: Continued from page 3

“We contact the community before we head into that city, to find out what issue the community is concerned about,” says Muir, such as building a new park. “We can raise awareness for them during the truck appearance, and it gives us free media too. We have a signing board where we donate $1 to their cause for each signature [up to $500], and then we leave behind the sign with our logo and pictures of the truck.” In fact, the truck events are the biggest and most efective local media driver for the Idaho® potato brand, with 85 percent of the stops covered by media. The Big Idaho® Potato Truck appearances also provide an opportunity to communicate messages of health and nutrition, the diference between Idaho® potatoes and potatoes grown in other states, and the importance of looking for the “Grown in Idaho” seal. Consumers of all ages love a photo op with the super spud.

Facebook: Big Idaho Potato Tour



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SALUTING SPUDS: Maxwell Air Force Base commissary, Montgomery, Ala. It was a mutual love afair when the Big Idaho® Potato Truck showed up at the Maxwell AFB commissary parking lot on a Saturday in July 2015. “The military bases and commissaries love having [promotions] like that . . . and the [Tater Team] were two really good guys to be doing the promotion,” says Scott Davis, produce specialist for Military Produce Group, which supplies produce for commissaries in the Eastern United States. “The two young guys were very professional, very fun, and had a lot of knowledge. They did a bunch of giveaways and other [activities].” Davis says the store created a large Idaho® potato display inside with special pricing on some bagged products, in addition to displaying Idaho® potatoes outside while truck activities were going strong and customers were lining up to pose for selfies with the giant spud. He also arranged for the commissary store director to promote the truck’s visit on their outside billboard so that Saturday shoppers had an additional incentive to make a stop at the store.

Tater Team member Ellis Nanney got some R&R on base.

“The [Tater Team] guys were very professional, very fun, and had a lot of knowledge.” —SCOTT DAVIS, MILITARY PRODUCE GROUP PRODUCE SPECIALIST

“I was very pleased [with the event], and it was very successful,” says Davis. “Everybody loved having the truck there!” The commissary displayed Idaho® potatoes both outside and in-store. P O TAT O R E TA I L I N G T O D AY


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Surf and turf: Wholey’s, Pittsburgh

Idaho® potatoes go equally well with both steak and seafood, so Wholey’s market was happy to welcome the Big Idaho® Potato Truck to its steakand-potatoes promotion on a Saturday in August 2015, says marketing manager Michael Blicha. “The truck was here for our full day—about eight hours. It was a great event, and we had a lot of fun with it,” says Blicha. “We did a special on Idaho® potatoes, and framed it as a big steak-and-potato sale . . . with both fish and beef steaks. We had a 10 percent increase in customer counts over the previous year [without the truck visit].” Wholey’s promoted the truck visit as part of a BIG summer promotion.

“We had a 10 percent increase in customer counts over the previous year [sale].” —MICHAEL BLICHA, WHOLEY’S MARKETING MANAGER

In addition to in-store and Facebook promotions for the event, the store also sent out a press release that helped generate local television coverage of the truck’s stop in Pittsburgh’s historic market district, where Wholey’s is located. “This is a very busy place on weekends, and there were a lot of people around that weekend,” says Blicha. “We did a hot potato electronic game in the store and handed out stickers to the kids. A lot of people also participated in activities set up by the Tater Team. We even had a little girl here who shattered their previous record for the Potato Plank Challenge—she did a 21-minute plank!” Ah, the power of the Idaho® potato.

Idaho® potatoes were on special during the truck’s stop. 6


Connect with the truck

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Facebook: Big Idaho Potato Tour Instagram: bigidahopotato Twitter: @BigIdahoPotato Vine: Big Idaho® Potato Website:


Altoona Dublin


Truck stops The Big Idaho® Potato Truck has parked its wheels at some of the most famous sites in the United States during the past four years, including: Rock and Roll Hall of Fame and Museum, Cleveland, Ohio Liberty Bell, Philadelphia U.S. Capitol, Washington, D.C. USDA headquarters, Washington, D.C. Space Center Houston, Texas Gateway Arch, St. Louis Kentucky Derby, Louisville NFL Hall of Fame, Canton, Ohio Sun Valley Film Festival, Sun Valley, Idaho

If the Big Idaho® Potato Truck’s 12,130-pound spud were a real russet potato: It would have taken 10,634 years to grow. It would have to bake for two years and nine months before it could be served up with the world’s biggest mounds of butter and sour cream. It would make enough mashed potatoes to feed 30,325 people. It would slice up into more than 1.4 million average-sized french fries. P O TAT O R E TA I L I N G T O D AY


the idaho® potato truck driver is running late! Never fear! Savvy’s here!

episode 4: Bill really knows how to move product fast!

kinn’is! c u r t n o keeping bill “speedy” savilo starr

I’ll help you sell potatoes at record speeds, too!

look to idaho® potatoes and bill savilonis, for lightning quick responsiveness! and stay tuned for our next episode!

Fresh Food

2016 Annual Meat Conference

Meat for a

Changing World Grocers must address new generations, tastes and attitudes to stay profitable. By Jim Dudlicek


cuttinG eDGe chef Daniel Vargas carves certified Angus Beef Steakhouse Beef tri tip by Golden West Food Group, which also sampled beer chili, among other products at the conference.


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

on’t market to the middle. Design a meat case that appeals across demographic groups. Expand your convenient cuts assortment. Harness health and wellness as a growth driver. Tose were among the key takeaways from the 2016 Annual Meat Conference, hosted by the North American Meat Institute (NAMI) and Food Marketing Institute (FMI), Feb. 21-23 in Nashville, Tenn. Te conference marks the ofcial unveiling every year of the latest Power of Meat survey, which this time afrmed that shoppers recognize the variety of nutrition benefts ofered by meat and poultry, and place a high value on convenience, variety and transparency when making purchasing decisions in the meat department. Te 11th annual report, commissioned by NAMI and FMI, and conducted by 210 Analytics in partnership with Sealed Air’s Cryovac brand, examines meat purchasing, preparation and consumption trends through the eyes of the shopper. Supermarkets strengthened their position as shoppers’ primary destination for meat and poultry, although consumers increasingly chose alternative channels, like farmers’ markets, dollar stores, and farm-direct and online stores, for certain meat and poultry purchases. Tis trend was particularly evident among Millennial consumers, who exhibited a higher propensity to shop at alternative outlets for meat products. Along with price, consumer desire for transparency in the production process drove sales gains, with segments such as “antibiotic-free,” “grass-fed,” “hormone-free,” “natural” and “organic” meat and poultry recording high growth percentages despite remaining niche market segments. But while interest in natural, organic and other clean-label identifers has surged in the past fve years, “interest does not always translate to actual usage,” said study presenter Anne-Marie Roerink, principal at San Antonio-based 210 Analytics, noting that shopper likelihood of selecting natural/


THE NEW NORMAL? It doesn’t have to be.

Tyson Foods’ Consequences of Failure Study shows that the number of shoppers who experienced incidences of failure in their grocer’s deli when purchasing prepared chicken products increased from 41% in 2014 to 48% in 2015.

It's time for a new direction. Tyson Foods, Consequences of Failure Study, 2015 Tyson Foods, Consequences of Failure Study, 2014

®/© 2016 Tyson Foods, Inc.

Fresh Food

We cannot massmerchandise anymore. Retailers who continue to market to the middle will continue to struggle.” —Sherry Frey, Nielsen Perishables Group

oN the Move Smithfield’s new Ready, Snack, Go! features 9 grams of protein and targets younger consumers.


2016 Annual Meat Conference

organic over conventional products drops considerably as the price gap widens. Cleanliness and freshness are the top attributes shoppers look for in their grocer’s meat department, Roerink added, with staf knowledge and availability among the top opportunities for improvement. While inclusion of meat and poultry as a portion of a home-cooked dinner remained steady at 3.7 times per week, shoppers changed their purchasing patterns slightly and sought more variety in their dinner lineups, with upticks in pork, lamb, valueadded and meat alternatives. Convenience meats, which include heat-and-eat, ready-to-eat and valueadded products, also experienced sales growth, particularly among Millennial shoppers, who seek favorful, fast and easy meal solutions. “Te meat department is a deciding factor for any grocery shopper, as evidenced by 27 percent of shoppers switching outlets when purchasing fresh meat or poultry compared with where they purchase the majority of their groceries,” said Rick Stein, VP of fresh foods at Arlington, Va.-based FMI. “Te research underlines how food retailers have an enormous opportunity to combine the knowledge and skills of the neighborhood butcher with the creativity and favor inspiration of a culinary chef to earn loyalty, grow sales and diferentiate.” Regarding purchasing decision drivers, price per pound, along with total package price, emerged as the dominant factor infuencing meat and poultry product purchases, with product appearance falling to third place. Total package price proved more important to small households and Millennials, suggesting the future importance of package-size variety and price ceilings. Te majority of shoppers—more than eight in 10—afrmed the important role that meat and poultry play as sources of protein and other key nutrients in a healthy, balanced diet. Te annual report series found that consumers were most likely

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

to say red meat, including beef, pork and lamb, was important to energy levels and provided nutrients such as iron and protein. Meanwhile, maintaining a healthy weight and receiving vital nutrients were factors associated with poultry. Te fndings were consistent across generations, with Millennials only slightly less likely to cite meat and poultry’s health benefts. Te “Power of Meat” report is based on data collected through an online survey of a nationally representative sample of 1,360 U.S. consumers.

Millennial Meat-ups Social, economic and age divisions are among the challenges facing meat retailers, according to the team from the Nielsen Perishables Group, which presented “Polarized Consumers Are the New Norm.” Sherry Frey, SVP at the Chicago-based market research company, said that a focus on health and wellness, along with a populace dealing with obesity and a host of chronic ailments, is “changing consumers’ perspectives on how they’re eating — they want food as medicine. Health-and-wellness claims are driving growth in meat despite accounting for a small share of total meat sales, she noted, naming fat, natural, hormones, preservatives, sodium and organic among key product claims. Meanwhile, “antibiotic-free” is growing, but still accounts for less than 2 percent of overall share. Tere’s signifcant growth among consumers known as “Well Beings” — older, more afuent, more “green” and health-proactive folks who make more trips to the store and spend more per trip. Te oft-forgotten Gen Xers aren’t indexing high for overall meat spend, although the “natural” claim ranks high among this demographic, Frey noted. Meanwhile, the market is facing “unprecedented income inequality,” said Mikael Olson, associate client director at the Nielsen Perishables Group. Households with incomes of $70,000 and above are driving sales; those below are driving sales declines across the grocery channel. Te years 2011-14 saw greater elasticity across proteins; substitutions have settled down, but people have started substituting out of the meat case. Household penetration, trip frequency, annual spend and basket size are all trending lower; 245,000 fewer households bought meat in 2015, resulting in $74 million in lost sales. Overall, Boomers buy less in the face of high prices, while Millennials trade down their cuts or shop at cheaper retailers, or switch to processed or frozen products, but are less likely to walk away. Millennials explore alternative channels for savings, while Boomers are more faithful to traditional grocers. Desire for “ease of use” is common to Millennials and Boomers, Olson noted. Price volatility among

convenience cuts is decreasing faster than average, so grocers should prioritize these cuts (grinds, marinated meats, boneless/skinless) to drive growth. Frey encouraged retailers to target specifc audiences within this polarized landscape, and to look to produce and deli/prepared foods for crosspromotional ideas. “We cannot mass-merchandise anymore,” she asserted. “Retailers who continue to market to the middle will continue to struggle.” Demographics were explored further in “Meating the Millennials,” led by Chris DuBois and Larry Levin, of Chicago-based IRI. Shoppers are becoming more ethnically diverse, and “at the heart of the diversity are Millennials,” Levin said, explaining that “this means we have to adjust our favor profles. Millennials are at the forefront of taste innovation.” To connect with Millennials, retailers and brand marketers must understand how they shop and move beyond misconceptions about the demographic. Among Millennials’ cherished values: Tey equate success with being a good friend, working for a cause and contributing to the community. While price is the top factor in their purchasing decisions, with 70 percent choosing price over brand, Millennials also favor brands that are local, natural, organic and innovative. Digital is a critical part of their pre-shop path to purchase. “Te meat department has a huge opportunity to infuence in the store,” DuBois said. “It’s a chance to help a new generation learn how to cook, shop and buy.” According to IRI, Millennials spend more on chicken than other age groups, and spend double when fresh meat is in their basket than when it’s not. Tey also buy more items boasting protein claims. Levin said a key segment of Millennials to target is what IRI calls “New Traditionalists” — older, more educated and afuent consumers who make up 21 percent of this generation. Retailers and brands can reach them more efectively by aggressively shifting their marketing spend to digital, boosting digital and conventional in-store marketing, investing in social media, and stressing meat as the original source of protein. David Portalatin, of Te NPD Group, in Port Washington, N.Y., looked at consumption patterns in his “State of the Meat Eater” report. Amid an economy slow to emerge from the last recession, “consumers are just not fush with cash,” Portalatin said. As such, meat has not kept pace with a return to home meals, and is shifting from center-of-plate to ingredient status. Meat marketers would be wise to adopt strategies that involve the top growth food segments, including chicken, eggs, pizza, frozen entrées, sandwiches and meat snacks, Portalatin advised, adding that they should also pay attention to “clean eaters”

who favor natural and organic products and eschew processed ones.

Dynamics of Meat Retailing Jerry Kelly, national business development manager for Duncan, S.C.based Sealed Air Corp., presented “Dynamics of the Meat Case,” revealing the results of Cryovac’s 2015 “National Meat Case Study.” Sealed Air and Texas Tech University teamed up to audit the meat cases of major supermarket chains, supercenters, and club and small-format stores across the country, noting meat types sold and linear feet of self-service cases. “Te big story is beef,” Kelly said, noting that the presence of packaged beef is down 3 percent in supermarkets and 8 percent in club stores since 2010, when the study was last conducted, the volume having been absorbed by ground beef and pork. Meanwhile, “other” products gained space in the self-service case: processed meat, sausage, ham, seafood, value-added products and side dishes, “almost a 60-40 split, relatively constant over time,” Kelly said, “driven by the heat-and-serve category.” Turkey, chicken and ground beef gained linear feet presence, while SKUs are consolidating for beef, pork, lamb and veal products. Beef lost nine SKUs since 2010, and average pounds per package fell two-tenths of a pound. Kelly noted, “Two-tenths times all the packages sold adds up to a lot.” Meanwhile, the average number of packages per foot in the meat case dropped by 1.6 packages, which Kelly called “huge.” Share of boneless products grew from 57 percent to 67 percent. Te study team also found that production claims surged, with organic claims making considerable gains, especially for ground beef and chicken. Store branding gained signifcantly, Kelly noted: “Stores have made a huge shift in branding their products.” Additionally, vacuum packaging grew considerably.

fResh flavoRs Paul Connor explains the latest additions to Tyson’s Crafted Creations line.

Up-and-comers Branzino, chicarrones, nduja sausage, porchetta, pancetta and brisket are among the key meat-based cuisine trends to watch, according to Jack Li, managApril 2016 | |


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PRIme PoulTRy Jean Jones shares the latest seasoned chicken from Perdue.

2016 Annual Meat Conference

ing director at Chicago-based Datassential, who presented “Consumer Trends Driving Meat Innovation.” Li revisited Datassential’s Menu Adoption Cycle, which demonstrates how new food trends travel from inception, usually at fne-dining restaurants, to adoption (fast-casual, specialty grocers), to proliferation (chains, QSRs, traditional grocers, mass, club), to ubiquity (c-stores, frozen aisle). A rise in alternative proteins, particularly pulses — crops harvested for their seeds, like lentils and chickpeas — should keep meat retailers and producers on guard. In response, the meat industry must focus on favor applications that non-meat sources can’t deliver. Among key trends: meat pies, tortas, fatbreads, schnitzel, bison burgers, Bolognese and savory oatmeal. Te term “fresh” is overused, Li said — focus instead on specifc qualities, like grass-fed and wildcaught. “Stress the benefts frst — what the product will do for you,” he urged.

Trend Trackers Attendees sampled the wares of vendors at 75 booths in the exhibit hall and at a tasting event. Te best products delivered on multiple trends, including great taste, convenience, on-the-go snacking and — fttingly — protein. Here are just a few: Smithfield is rolling out a new product that hits on the key trends of on-the-go snacking and protein: Ready, Snack, Go is a fve-favor line that teams ham or turkey rolled up with cheese in a convenient snack that delivers 9 grams of protein at 90 calories per serving. Smithfeld’s Keller Watts said the product is aimed at providing fast convenience for adults and younger consumers.

The meat department has a huge opportunity to influence in the store. It’s a chance to help a new generation learn how to cook, shop and buy.” —Chris DuBois, IRI


Buddig’s Old Wisconsin brand displayed its new Natural Cut meat snacks line in a merchandiser ready for the grocery sales foor, with packaging emphasizing protein. Tom Buddig said that the company aims to display the product alongside protein bars and other nutritionally dense products in areas not commonly associated with meat snacks, a category that’s seeing signifcant growth. Tyson Foods has expanded its Crafted Creations line to include chicken products in addition to seasoned beef and pork selections. Te boneless/skinless breasts and thighs, along with drumsticks, come in bold favor mashups like Orange Peel, Spicy Tomato Beer and Smokey Barbecue. Meanwhile, Tyson has extended its cleanlabel Open Prairie brand to include pork. Te company’s Kent Harrison explained that the line is made from vegetarian-fed pigs raised without gestation crates or antibiotics.

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

Cargill was premiering its Today’s Kitchen line of value-added proteins “built around the consumer’s need for convenience and gourmet taste,” according to Cargill’s Brian Bell. Parmesancrusted chicken cutlets and beef pinwheels with spinach and garlic herb butter shared space with kabobs and favored burgers. Further, Cargill was showing of a bold new look for its Honeysuckle White and Shady Brook Farms turkey brands. Te packaging relaunch features more prominent nutrition facts and color added to the farm scene to drive home the brand’s family-farm message. Pre Brands ofers grass-fed beef with a clean label. CEO Lenny Lebovich said the company operates by “fnding what the consumers want and [working] backward.” Case in point: the brand’s clear fippable packaging that allows shoppers to see both sides of their steak before purchase. Focusing on health and taste, Pre ofers ribeyes, strip steaks, sirloins, tenderloin and grinds, with no added hormones or antibiotics. “We built a supply chain to deliver a great eating experience,” Lebovich said, noting that the company is focusing on mainstream grocers. “Tey need someone to build this equity for them.” With products currently sold in nine states, Lebovich added, Pre is “not going to invest without proper alignment with our customers.” PG Follow our live industry event coverage at


Fresh Food




As retail prepared and fresh food programs become more sophisticated, packaging needs to keep pace. By Kathy Hayden


hile grocery stores’ prepared food programs fght for share of stomach with restaurants, c-stores, meal delivery plans, food trucks and other venues, food packaging providers have reason to say “the more the merrier.” A recent study by the Freedonia Group, a Clevelandbased industry research frm, fnds that U.S. demand for food containers is projected to increase 2.8 percent per year to more than $31 billion in 2020. Te same study,

“Food Containers: Rigid & Flexible,” fnds projected demand for foodservice disposables used in the retail and vending machine market is projected to advance 5.1 percent per year to $2.6 billion in 2019, outpacing overall foodservice disposables growth. As grab-and-go and anytime/anywhere eating becomes the norm, the food packaging industry will continue to reap the rewards, but not without a lot of product development work and innovation to ensure that every piece of packaging performs at its peak to keep food fresh, stable, hot or cold, and appealing to the eye. April 2016 | |


Fresh Food

Grocery stores need to stay on top and get it right with packaging.” —Lynn M. Dyer, Foodservice Packaging Institute


Performance, Price, Presentation In many ways, packaging designed for prepared food programs in grocery stores has to meet more demands than your typical takeout carton. Lynn M. Dyer, president of the Falls Church, Va.-based Foodservice Packaging Institute, explains that performance and price are usually the top packaging priorities. Aesthetics become a distant third because performance needs are so complex. Dyer rattles of these questions and dozens of others when discussing the evolving needs of grocerant packaging: “Is the food made and packaged on-site, or at a central commissary and distributed through diferent channels? Should it be tamper evident? How will it be displayed? Is the food going to be held in a warm case? Is it frozen and meant to be warmed at home? Does that packaging refect a store’s emphasis on health and wellness or family dining?” “Grocery stores need to stay on top and get it right with packaging,” she advises, noting that people don’t buy food for the packaging, but it can make or break the meal experience. Te food is the most important thing, and the

seeInG Is beLIevInG Consumers are increasingly demanding transparent packaging, and vendors like Milliken Chemical are obliging with solutions such as the nX UltraClear PP line.


| Progressive sive Grocer | Ahead of What’s Next | April 2016

Too Transparent? When a Whole Foods Market recently offered peeled oranges in clear plastic containers, the social media community immediately took the company to task. Convenient, easy-use produce is one thing, but stripping fruit of its natural protective cover and sticking it in plastic is another. The Austin, Texas-based retailer quickly reversed course, but other fresh food suppliers should take note: When it comes to packaging, less is usually more.

packaging needs to perform for the food, Dyer asserts. Packaging needs to work well in many potential environments, from the store, to the car, to home or ofce, and into the microwave. Other packaging demands include improved sealability, sustainability, leak resistance and tamper evidence, the last of which means that consumers must break a seal to open the package. A lot of innovation is coming from the materials used, in a greater range of portion sizes and in overall performance. “Size continues to infuence prepared food packaging as more grocery stores cater to smaller families or singles, snacking and also expand their catering programs for large groups,” Dyer notes. Terry Grill, director of sustainability of the Americas at Sealed Air, a Charlotte, N.C.-based international packaging manufacturer, notes that more portion sizes can also help reduce waste. “Most consumers don’t

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Clear advaNTaGe raley’s prepared food line now comes in see-through packaging.

The need isn’t always for food to always be pretty, but it needs to be real and visible, especially food from the perimeter of the store.” —Sean Norton, Milliken Chemical



give a lot of thought to the amount of food they are wasting just by overbuying or getting tired of those leftovers,” Grill says. “If the industry provides more portion packs that are geared for single use and smaller portions, we can reduce those miscalculated sizes and help consumers be more thoughtful about consumption and use.”

Supermarkets Find Clarity In the food industry, “transparency” is the word. Consumers want menus and food labels to be clear about ingredients, additives, sources and other details. In retail food circles, consumer demand for transparency extends to packaging. Shoppers want clear, see-through containers that allow fresh ingredients to shine through loud and clear. Transparency in packaging also means consumers want food packed in recycled, compostable options that leave a smaller environmental footprint. “Packaging needs to fall in line with customer demands for authentic food, clean-ingredient labels and knowing ingredient sources,” says Emily Blair, business development manager at Spartanburg, S.C.-based Milliken Chemical, a manufacturing company with 39 facilities in fve countries. “People trust what they can see, which has driven a trend from transparent tops for black containers to total transparency, top and bottom. Grocers are using packaging to increase visual appeal.” West Sacramento, Calif.-based supermarket chain Raley’s recently made the move to transparency in its prepared foods and Chef ’s Menu meal kits. Evelyn Milliate, corporate chef at Raley’s, explains that the change allows more of the food to be visible and also supports the retail chain’s emphasis on cleaner, simple, all-natural ingredients. “Our customers want less processed food,” says Milliate, noting that transparent packaging for store-brand prepared meals and meal kits helps support these need states. Sean Norton, Milliken’s North American marketing communications manager, notes: “Te need isn’t always for food to always be pretty, but it needs to be real and visible, especially food from the perimeter of the store, which is known to be fresh and prepared on set. More and more, it’s chef-inspired or prepared by on-site chefs.” Blair adds, “Not only do people want to see fresh food, but if they see half of the dome of a plastic rotisserie container melted under a heat

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

lamp, you’ve lost a customer.” Milliken’s newest product has improved transparency and can be used for hot and cold applications, which brings value to retailers that can employ the same SKU for a variety of prepared foods. “Te same clear packaging can be used for everything from cold salads, guacamole, sides and reheatable chocolate sauce,” Blair says.

Clear and Green Consumer demand for greater transparency in packaging extends to knowing more about the environmental impact of packaging. Sealed Air’s Grill says the industry needs to help consumers understand the environmental impact of food waste versus packaging disposal. According to the U.S. Environmental Protection Agency, food waste makes up 21 percent of municipal food waste, while paper and paperboard makes up 15 percent, and plastics 18 percent. Research shows that more than 60 percent of food waste is avoidable. “If consumers are made more aware of the amount of food that is wasted and the impact of that waste, they want to be more thoughtful about their consumption and how smaller portions and better packaging are better for the environment than food waste,” Grill says. “We’ve done some tests about consumer messaging with Nielsen research, and when consumers understand how a packaging choice afects shelf life, they pick products that provide longer shelf life and can be resealed for reduced waste.” “Te need to be green is absolutely a big part of

the food packaging industry,” Dyer observes, warning that the term “green” is loosely defned: “Does it mean recyclable? Compostable? Today there are options made from sugarcane, some packaging is edible, and bioplastics can be compostable.” Many people think of recycling as the best way to reduce waste, but it’s also a difcult variable to control. “Tere is no consistent infrastructure in place to ensure that the same plastics can be recycled in every municipality across the country,” Dyer explains, noting that creating better materials, reducing packaging and making more reusable options available are other pieces that need to be part of green strategies. “We developed a clear, heat-resistant plastic that can be recycled in at least 50 percent of cities in the U.S. It’s a No. 5 plastic, which is second to soda bottles in recycling capacity,” says Blair, who notes that Millken’s latest plastic innovation can be reused in a number of applications for long-term sustainability, like patio furniture. Waste reduction challenges still exist, however. Grill points out that many fresh items in the meat, deli and produce categories are packaged in plastic flm, which isn’t recyclable, especially with food residue on it. She sees demand for flm-related packaging increasing over time. “Most municipalities are not up to date with their recycling capabilities and are equipped to handle only glass, newspaper and cans,” explains Grill. “Te industry has to do more to understand flm recovery and how to recycle more fexible materials.” Compostable packaging is another option that screams “green,” but only when retailers can ensure that it performs at the same level as its noncompostable counterparts. Not only does the material need to break down like the food it holds, but additionally, if the food doesn’t last as long or if the packaging leaks, it’s doing more harm than good. “Te frst responsibility [of packaging] is to deliver safe, fresh and wellpreserved food,” asserts Grill. Te good news on the green front is that consumers and the industry want the same thing in terms of reducing waste, and the industry is constantly evolving in terms of mate-

rial, with more renewable and recyclable products becoming available all the time. “Te answer won’t be one single revolutionary packaging product, because no single solution fts all the challenges food providers face,” notes Grill. “But there will be a lot of little advances that, in 10 years, will hit a lot of the marks both retailers and users want to hit.” PG

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Exotic Destinations

Produce departments are the latest hotspots for adventurous eaters. By Jennifer Strailey

Dragon Fruit


ragon fruit, purple kohlrabi, feijoa, malanga — today’s produce department has become a multicultural feast of vibrant and enticing oferings. Fueled by a combination of growing ethnic demographics, self-proclaimed foodies, and Millennial shoppers who want what’s new and diferent, sales of exotic produce are on the rise. At the forefront of this trend is Los Alamitos,


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

Calif.-based Frieda’s Inc., which has blazed a trail for exotic produce in the United States for 54 years. A recent documentary flm, “Fear No Fruit,” chronicles company founder Dr. Frieda Caplan from her beginnings as the frst woman entrepreneur at the Los Angeles Wholesale Produce Market in the 1960s through her tireless eforts to introduce more than 200 exotic fruits and vegetables to U.S. supermarkets. Frieda Caplan frst introduced U.S. customers to kiwis more than a half-century ago, and today her family business is still ushering in the exotic, as with “Te Power of Purple” — namely, Stokes purple sweet potatoes, purple snow peas, purple kohlrabi, and more. Over the years, Frieda’s has taken both the industry and consumers on a fascinating and favorful journey via fresh fruits and vegetables. “We continue to travel around the world looking for new products to introduce to American consumers,” says Karen Caplan, current CEO of Frieda’s and the daughter of the founder. With an estimated 20,000 to 80,000 fruits and vegetables that are grown worldwide, but as yet undeveloped commercially, Caplan is confdent that a long and delicious future awaits fans of Frieda’s exotic produce. “Something that’s really getting people’s attention today is dragon fruit,” notes Caplan. Frieda’s oferings include an Israeli dragon fruit, called pitaya, which has a mild, delicate favor. While Frieda’s has supplied dragon fruit for more than 20 years, it seems that the item’s time has fnally come in the United States. When Frieda’s surveyed its

Purple Kohlrabi ally appropriate for retailers,” Caplan notes, observing that in addition to taste, shelf life, nutritional value and volume are all important factors. customers about what causes demand for an unusual item, it found that a mention by Dr. Oz or an appearance on the Food Network sparked a deluge of inquiries about the featured fruit or vegetable. Another reason more consumers are embracing exotic produce, is that more of them are Millennials, continues Caplan. “One of the biggest shifts in the produce industry will be more Millennial produce managers. Tey’ll order something new and not be afraid that they’re going to shrink it,” she predicts, adding that this changing of the guard could take 20 years. Frieda’s anticipated this shift several years ago, and began hiring young people with the aim of harnessing their perspective on the specialty produce business. Today, more than 50 percent of its buying and selling teams consist of Millennials. Te company also recently rebranded Frieda’s with the tagline “inspire.” to appeal to a younger demographic. While novelty and exoticism resonate with more and more consumers, Caplan asserts that “frst and foremost is taste.” Still, she admits that specialty produce has its limits at grocery. “We’re aware of the challenges on the retail side: Tey don’t have a never-ending amount of space to devote to produce, so we evaluate every product to determine if it’s re-

Ethnic Explosion “With over 66 percent of consumers eating a greater variety of ethnic foods today than fve years ago, it makes sense that the consumer response to tropicals has been overwhelmingly positive,” says Marion Tabard, director of marketing for Turbana Corp., in Coral Gables, Fla. “Tis last year, we experienced a 40 percent growth in Turbana ethnic tropical,” adds Tabard. “We have noticed that sales volume for Turbana chayote and malangas are growing at a faster rate than the eddo, probably because eddoes are lesser known. Chayote and malanga remain top contenders in our tropical line, but we are expecting the entire line to experience a sales lift in 2016.” With the recent addition of Hass Avocados from Mexico,

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Chayote We continue to travel around the world looking for new products to introduce to American consumers.” —Karen Caplan, Frieda’s Inc.

Turbana now ofers 19 ethnic tropical produce items. Tabard attributes the growth in demand for ethnic tropical produce to several factors, from the increasingly adventurous American palate to more consumers thinking and acting like foodies in their desire for authentic dishes and ethnic cuisine. “Te changing demographic composition of the United States, with the highest growth rates among Hispanic and Asian Americans, has also played a role in the recent spike in the popularity of ethnic tropical,” she asserts. Tabard foresees the continued popularity of

authentic dishes and ethnic cuisine. “Within fresh produce, we see exotic produce as a major contender,” she says, pointing to market research from Chicago-based frm Mintel predicting that sales

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Exotic Tropicals With over 66 percent of consumers eating a greater variety of ethnic foods today than five years ago, it makes sense that the consumer response to tropicals has been overwhelmingly positive.” —Marion Tabard, Turbana Corp.

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of ethnic food overall will increase by 20.3 percent between 2012 and 2017. To reach consumers who are unfamiliar with ethnic tropicals, Turbana works with its retail customers to create large interactive in-store displays, and product signage in both English and Spanish. Turbana also ofers educational videos and a mobile app for store managers to learn about ethnic tropical produce management. Trough the app, retailers can access the demographic breakdown of consumers living in the areas served by their stores to customize product assortment to meet the specifc needs of each market. Te app also alerts retailers to upcoming holidays so they can capitalize on promotional opportunities that involve tropicals.

American-grown Exotic When people hear the word “exotic,” colorful, faraway lands typically come to mind. In some cases, however, unique produce is closer to home than one might think. J&C Tropicals has introduced a locally grown tropical produce program that includes some 25 Florida-grown items, from dragon fruit and longan to lychee and passion fruit. “Our fastest-growing line is our Florida-grown tropical program,” asserts Jessie Capote, EVP and a principal of the Homestead, Fla.-based company. “Te program has grown exponentially in the last few years, in part because of the signifcant growth in the Hispanic and Asian demographics, and also

because our retailers are interested in everything locally grown,” he explains. “When you marry those, you’re hitting two out of the fve largest interests of a corporate retailer’s produce initiative.” Capote also fnds that Florida mangoes are also becoming a niche business, as Florida cultivates diferent mango varieties from the Tommy Atkins, which dominates the import market. “Florida mangoes are similar to an Ataulfo mango,” he notes. “Tey are more buttery in consistency and less fbrous.” For J&C Tropicals, which sells across the country, Florida, California and the Northeast are well-established markets for exotic produce, but Capote sees growing interest from emerging markets in Minnesota, Atlanta and Virginia. In an efort to reach a larger audience, J&C Tropicals will make its television debut this July on “Te Balancing Act,” a half-hour magazinestyle program that airs on the Lifetime network. Te program will feature dragon fruit, the season for which is mid-June to the end of October.

what you defne as ‘exotic,’” he adds. “Cherimoya is not exotic in the Latin community. It’s also important to understand the shopper’s level of afuence and lifestyle.” While education is the key to increasing sales in exotic produce, the competition for shoppers’ attention is ferce. “Te average consumer sees 5,000 marketing messages a day. Tey can’t pay

Targeting Adventurous Eaters Te produce department has never been more important to a supermarket’s success than it is today, according David Ciancio, senior customer strategist with Dunnhumby, an international customer science frm based in the United Kingdom, with U.S. headquarters in Cincinnati. Ciancio, who helped to bring Dunnhumby to the United States through a joint venture with Cincinnati-based Kroger, championed that grocer’s customer-frst strategy and built its award-winning loyalty program, currently works with retailers to analyze customer behavior and understand shopper trends and practices. “With most retailers, the No. 1 question on their list is, what can they do to improve their fresh oferings?” says Ciancio. While assortment, pricing, quality, touch, customer experience, and a knowledgeable and friendly produce staf all play a role, when it comes to exotic produce, understanding the customer and their trip mission is critical. “What’s exotic to one person might be an everyday item in a different ethnic group, so be careful April 2016 | |


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attention to all of it,” asserts Ciancio, who recommends targeting adventurous eaters through direct mail and email to alert them to new exotics, and supporting these eforts with in-store demos, tastings and signage. Dunnhumby’s research has identifed a number of “ascending” exotic produce items, including fresh horseradish, cherimoya, fgs, gai lan and pine needles (as an ingredient). “Get customers to try new exotics, get it in their hands, and accompany that with information on nutritional and health benefts,” adds Ciancio, cit-

Top Trends in Exotics What’s trending in the exotic and tropical fruit categories? Robert Schueller, director of public relations for Melissa’s Produce, in Vernon, Calif., shares his top-10 list for spring, plus tips for product placement 1. Papaya — Display with other papaya and mangoes. 2. Dragon fruit — Merchandise with papaya and pineapples. 3. Passion fruit — Place near feijoa and guava. 4. Ataulfo mangoes — Merchandise alongside other mango varieties, papaya and pineapples. 5. Young coconuts — These need refrigeration. Place by berries and grapes of the season. 6. Kiwano melons — Place by passion fruit and guava. 7. Kumquats — These work with other citrus fruits: tangerines, grapefruit, oranges, etc. 8. Starfruit — These complement dragon fruit and coconut displays. 9. Quick-crack coconuts — These play well with starfruit, dragon fruit and bananas. 10. Feijoa — Stock near passion fruit, guava, feijoa and kiwano.


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

ing a Dunnhumby study that found consumers are increasingly looking to supermarkets to help them make healthy food choices. More than half (53 percent) of the study’s respondents said they believe a retailer can “have a signifcant role in supporting their commitment to health.”

Recipes and Demos Educating produce personnel and shoppers alike is the secret to success with exotic produce, but the learning process requires an element of fun to translate into sales. In 1972, Frieda’s became the frst produce company to put a recipe on its labels. Today, the company ofers scores of recipes, from appetizers to main dishes to beverages, on its website to capture the interest of customers shopping the produce department with smartphones in hand. Demos and tastings are also efective ways to build awareness of exotic produce, asserts Leslie Simmons, of Dave’s Specialty Imports, in Coral Springs, Fla. While she says demand for the company’s Cape Gooseberries is rising slowly, more education is needed. “People always want something unique and interesting, but there is defnitely still a gap in education, and some people have no idea what [gooseberries] are,” she admits. “In-store demos and recipes can make the diference between a sale and a customer sailing by the lesser-known fruit.” For example, while many people enjoy gooseberries raw, they may not know that this fruit is highly versatile, and can be used in both savory and sweet dishes. Simmons recommends using them as an alternative to grape tomatoes in a caprese skewer or pasta primavera. PG

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Produce Category Spotlight

Passion for


Tropical flavors are a top trend made hotter still by alluring health benefits. By Jennifer Strailey

uita Pineapple Salsa to Hawaiian Grilled Ham and Cheese with Chiquita Pineapple. “Tese fun and easy recipes are a great way to engage consumers to eat pineapples, and a great tool to help us drive sales within the category,” says Chris Dugan, EVP for Chiquita North America, in Fort Lauderdale, Fla. Today’s consumers not only want tips on ways to prepare fresh produce, they also want to know where their food comes from and how it was grown. Chiquita’s sustainability eforts are helping the communities in which pineapples are grown, as well as the larger ecosystem.


ineapples are one of the top-10 fastest-growing categories across the entire store, according to Schaumburg, Ill.-based Nielsen Perishables Group. And the heat emanating from this tantalizing fruit has nowhere to go but up. Te Food Network has cited “Taste of the Tropics” among its top food trends for 2016, specifcally “a craze for tropical foods,” including pineapples and even pineapple wine. Further fueling interest in this tropical fruit are its compelling health-and-wellness benefts. An excellent source of vitamin C and manganese, pineapples also contain bromelain, an enzyme with anti-infammatory properties.

Value-added pineapple has become increasingly popular. This trend has increased the overall per capita consumption of Tropical Timeliness pineapples.” With food trends favoring tropical favors, —Dionysios Christou, Del Monte Fresh Produce


Chiquita reports steady sales growth. To help consumers make the most of pineapples in their diets, Chiquita ofers a number of favorful recipes on its website, from Fresh Chiq-

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

Spears and Simplicity “Value-added pineapple has become increasingly popular,” notes Dionysios Christou, VP marketing for Del Monte Fresh Produce, in Coral Gables, Fla. “Tis trend has increased the overall per capita consumption of pineapples.” Some of Del Monte’s top-selling fresh-cut products include cylinders, chunks and spears made from pineapples grown on its company-owned farms in Costa Rica. Fueling the value-added trend is the fact that while consumers are becoming increasingly sophisticated and knowledgeable about food preparation, others crave the convenience of ready-to-eat options. Packaging is another focal point for Del Monte Fresh Produce. “An integral part of making freshcut, healthy products successful has come from the need for innovative packaging that is portable, and at the same time maintains the freshness and integrity of the product,” says Christou. “Del Monte Fresh is continuously developing innovative packaging with the on-the-go consumer in mind, such as nonspill containers and cups that ft in car cup holders.” As to the future of the pineapple category, Christou sees expansion on the horizon, with value-added and innovatively packaged pineapple increasingly sold across a number of new channels, including convenience stores, vending machines, drug stores and foodservice. PG

Produce Category Spotlight

Fresh Food

Kernel of Truth Fresh corn signals shoppers to buy for barbecue season — when the price is right. By Jennifer Strailey


side from the proteins on the grill, nothing says “backyard barbecue” like corn on the cob. A favorite vegetable of young and old alike, fresh corn signals summer eating for many shoppers. However, less-than-ideal growing conditions in Florida and Mexico have led to low corn supplies this spring. California begins shipping its crop this month. “Te California crop is normal to slightly above,” notes Daren VanDyke, director of sales and marketing for Five Crowns Marketing, a grower, packer and shipper that markets and sells GloriAnn corn out of Brawley, Calif. He predicts supplies will be better in May than in April.

Trends and Tastes “Demand for value-added is up, but what still drives the corn category is bulk,” observes VanDyke, who believes that corn priced as a loss leader may be hindering growth in value-added. “As an industry, I think we have to look at changing the way corn is marketed to avoid making it a loss leader, but still ofer it at an attractive price,” he continues. “Instead of four [ears] for a dollar, maybe it’s six for $1.99.” At the same time, VanDyke understands the draw of more corn for the money. “Embrace multiples,” he says. “A hot corn deal gets customers in the door, and then shoppers buy charcoal, steaks and beer.”

Cross-merchandising is also key, VanDyke advises. Fresh corn is an opportunity to sell everything from pesto sauce to brush on grilled cobs, to avocados and salsa for a Cinco de Mayo celebration. “Show customers diferent ways to use corn in soups, salads or fresh pico de gallo,” he notes.

Nostalgic Nibbles “Corn on the cob is one of those things that harkens back to summertime and picnics, barbecues and family gatherings,” says Lori Bigras, senior marketing manager of Growers Express, in Salinas, Calif. “No matter where you grew up, it seems to be a nostalgic favorite that takes people back to simpler times.” Growers Express’ Green Giant Fresh brand ofers premium fresh corn-on-the-cob items all year long, including sweet, white, yellow and bicolor. To satisfy shoppers’ craving for convenience, Green Giant Fresh also ofers value-added cob items, many of which are prepped and ready to cook, and some of which are microwaveable in their pouches. Branch, a Family of Farms, in South Bay, Fla., recently debuted its newest sweet corn variety, Sweet Emotion. Beginning this month, the corn will be available through Labor Day at select retailers in the United States. Retailers that join the Sweet Emotion program will receive exclusivity in their respective markets, notes Brett Bergmann, president of Branch. Participating retailers gain marketing support, including POS materials and social marketing content. PG

Demand for value-added is up, but what still drives the corn category is bulk.” —Daren VanDyke, Five Crown Marketing

April 2016 | |



Predictive Analytics

Not Ready for

Prime Time Widespread use of data mining remains modest among grocers.


By John Karolefski

redictive analytics — that is, mining data for information to predict trends and behavior patterns — can be used by grocers in several areas: category management, pricing, inventory planning, e-commerce and mobile marketing, among others. While some major chains deploy this analytical tool throughout their companies, widespread use by grocery retailers remains modest to moderate at best. “Most grocery retailers do not yet have the capabilities in-house to fully leverage predictive analytics within their organizations,” says Tony Kleiner, senior business consultant at Dayton, Ohio-based Teradata, a provider of Big Data analytics. “Some are in the process of trying to develop these capabilities, while many others are still waiting to determine whether they want to make the commitments necessary to become data-driven organizations.” Reena Kapoor, of You Technology, admits that grocers’ overall use of predictive analytics is “modest,” but recommends it as an essential strategy in any chain’s business and growth planning. “Tey need strategies to improve their top-line growth and margins,” says the VP of product for the Brisbane, Calif.-based provider of digital-offer networks. “Predictive analytics can help with this. Moreover, they operate in close competition, and their competitive space is only getting more diverse with the advent of Amazon, Google and other online players who have a lot more cash to throw at their business. “Analytic behavioral and value segmentation can — and should — be built to not only help grocers understand their customers’ shopping/ spending habits, but personalize the customer experience as well,” she goes on to say. “Predictive modeling is a must when addressing customer retention and promotional strategies. Grocery chains simply cannot aford to lose money. Having the means to predict shopper behavior, targeted marketing, trends for category management


| Progressive Grocer | April 2016

and/or pricing could be the golden goose for their long-term health, and even survival.” Other technology executives say that most grocers are far from operating that way. For example, Ziad Nejmeldeen, of Infor, fnds that too many decisions are still handled through a mixture of “signifcant human efort” and Excel, when the data and technology have long existed to make those decisions more intelligently. “How many grocers use store-based sales data to make localized assortment decisions for that store?” asks the chief scientist for the New Yorkbased provider of business applications. “And then there is the data that is newly available — such as


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Predictive Analytics

loyalty — which has yet to be seriously leveraged. Tis data means we can track customer spend over the course of the year, see what they like to buy by time of year, and use that information to efectively market via email or mailer campaigns. We see some grocers starting to do this, but they are still in the minority.”

Analytic behavioral and value segmentation can — and should — be built to not only help grocers understand their customers’ shopping/ spending habits, but personalize the customer experience as well.” —Rena Kapoor, You Technology


True Practitioners So which grocery retailers are the true practitioners of predictive analytics today? Whole Foods Market is one. Infor’s Dynamic Science Labs has been working with the Austin, Texasbased retailer to identify the localized products that require price protection to maintain longterm customer loyalty. “In the U.S., Whole Foods stands out for their strong focus on localization,” notes Nejmeldeen. “‘Right product/right store/right time’ is said far too often, but that is exactly what they are going for by leveraging store-level historical transactions, that is, market basket data. We can also add ‘right price’ to the list.” Another grocery retailer that has implemented predictive analytics is Europe’s Aldi Nord for its more than 1,400 stores. Te Germany-based chain recently incorporated SAP technology for in-store stock and replenishment planning. Te solution enables Aldi to generate order proposals based on sales forecasts. Tis empowers in-store personnel to make real-time, informed decisions based on data captured on mobile devices. Brookshire Grocery Co. recently launched a project to digitally transform more than 150 stores to meet consumer expectations. Upon completion, the project will gather accurate, consistent data to help Tyler, Texas-based Brookshire align its actions with the company’s brand promise and create an omnichannel experience for shoppers. Te most recently completed phase uses SAP technology, which now allows Brookshire to gather sales information to design personal, proftable promotions. Additionally, the company has been able to collect and analyze behavioral trends to respond to shoppers’ changing demands. Minneapolis-based Target also makes great use of predictive analytics, according to Graeme McVie, VP and general manager of business development at Toronto-based Precima. “Tey’re successful because they have highly visible support from senior management and they have a central merchandising strategy

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

team that acts as a center of excellence to consistently support the category management team. Tis enables Target to retain internal expertise in analytics that they can then use to support the category management team in how to best use the analytics to make decisions on a day-to-day basis. Te team can enable and support the required change management around internal processes and the organization to ensure that Target acts on the predictive analytics and maximizes the value that is captured.” John Kelly, managing director and a leader of Emeryville, Calif.-based Berkeley Research Group’s predictive analytics practice, says that Safeway is advanced in predictive analytics partly because it’s based near Silicon Valley and has been able to attract some innovative data science talent. You Technology works with retailers, including ShopRite, Kroger and Big Y, on predictive analytics integrated with digital ofers for loyalty and promotions, according to Kapoor.

Getting Started Not every grocer has the resources to deploy fullservice predictive analytics across several parts of their operations, but experts recommend that they take small steps to increase their use of predictive analytics, or at least get started. “Te frst step is to understand the business systems that will provide a singular view of your customer data. Tis digital core, a full set of centralized data points, is a critical success factor,” says Randy Evins, senior principal IVE food and drug at Scottsdale, Ariz.-based SAP Retail. “Data consolidation and the creation of a digital core will allow grocers to implement custom promotions, enhanced product searches, variable pricing, and more.” Tis is just the starting point, according to Evins. Retailers and their suppliers need to take a holistic view of their supply chain to respond quickly to consumer demand. “In the long term, whether a purchase is digital or in-store, a tighter supply chain will enable retailers to use predictive insights to alert a supplier of a coming need, and that translates into a better customer experience,” he says. Grocery has a distinct advantage over other forms of retail, because consumers typically make frequent shopping trips, points out Alan Lipson, global retail and CPG marketing manager at SAS, a Cary, N.C.-based provider of business analytics software and services. Frequent-shopper card data also help grocers track a customer’s purchases over time and understand a shopper’s evolving buying behaviors. “By combining shoppers within a single household, grocers can create a more complete picture of that household’s needs, then use analytics to put together marketing programs that can help increase basket size, improve margin and increase consumer satisfaction,” Lipson notes. PG

October 25–26, 2016 • Chicago

Building the Grocerant Experience

Of course, the creep factor is in the eye of the consumer, and what’s creepy to some may be “cool” to others.

Digital Dialogue By Sylvain Perrier

Balancing the Creep Factor How to deliver personalization without getting too close for comfort.


ig Data” holds big promise for grocery retailers, but the collection and use of personal information have many consumers concerned. Shoppers are not only asking, “How do they know that about me?” but also “Why do they want to know that?” Tis is where the “creep factor” sets in: the feeling that business is getting a little too personal. While uneasiness can arise from common tactics such as ad retargeting, the creep factor can emerge from a number of practices. One is crossing the privacy line with targeted ofers. Tere’s a well-known story about Target knowing a teenage girl was pregnant before her father found out. Te retailer reportedly sent the teen coupons for baby-related items before she had revealed the news to her family. While this example is a bit extreme, some product categories shouldn’t fall into the world of personalization. Te creep factor also exists when consumers don’t have control. In a grocery environment, customers can choose not to use their loyalty cards at the cash register, thus becoming more anonymous. However, some programs and technologies make it virtually impossible for consumers to opt out or set their preferences, so they have little to no control. Another aspect of the creep factor is not giving customers a tangible beneft in providing their information. Certainly, people understand that when they’re looking for a restaurant on Yelp, the app will ask for their location, but consumers will have a harder time fguring out why a recipe app needs to know a user’s location. Whatever the beneft is, it should be made clear to consumers from the outset. Of course, the creep factor is in the eye of the consumer, and what’s creepy to some may be “cool” to others. Unsurprisingly, Millennials are more comfortable with the notion of personalization than older generations are. In fact, a 2015 Accenture survey found that almost three times the number of Millennials versus Boomers think being reminded about needed items while shopping is cool.


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

For those who are less comfortable with technology, there exists a sense of wariness: what if something happens? Will my identity be compromised? For grocery retailers, the question becomes, how can the business beneft from personalization without sacrifcing customer trust? Before getting started, companies may need to re-evaluate their goals. Many organizations want to understand how to use personalization to increase revenue, foster loyalty and boost customer satisfaction. Ultimately, however, those elements are byproducts of a properly established program. Te frst, most important stepping stone is to put the consumer at the center of the experience. Retailers can do so by: Asking customers what they want to get out of the experience across various channels Explaining the benefts of personalization and creating a value exchange Giving customers control and allowing them to set preferences Having a clear privacy statement and an easy opt-out By and large, people today are comfortable with sharing a tremendous amount of data, whether it’s on social media or with various brands. A recent Aimia study found that although consumers are worried about how their personal data are being handled by companies, they’re willing to share if they get rewarded. For grocery retailers, it’s critical to be transparent and communicate with customers at every step. Ultimately, the idea is to guide customers through a journey, as opposed to coming on strong and invading their personal space. Te result is that they won’t feel the creep factor — they’ll feel like they had a great customer experience. PG Sylvain Perrier is president and CEO of Mercatus Technologies, a Toronto-based enterprise-grade software company specializing in digital solutions for North American grocery.


Supply Chain

Platform for


Today’s pallet companies are doubling as supply chain service providers to help cut costs and design new solutions. By Jenny McTaggart


he pallet is a seemingly simple tool used day in and day out in grocery distribution, and normally given little thought by the typical retail exec. As it turns out, though, these pillars of the retail supply chain — and the companies that provide them — are poised to help retailers achieve greater efciencies in transportation, operations and even in the store environment. Indeed, in this day and age of increased supply chain efciencies, as retailers are encouraged to constantly re-evaluate their supply chains from a systems-based approach, pallet companies have evolved to become supply


chain service providers themselves. Led by Atlanta-based CHEP, which is part of supply chain logistics company Brambles Ltd., and joined by Peco, iGPS and several smaller companies, including a new notfor-proft network of pallet providers, the industry is helping its manufacturer, distributor and retailer partners tackle challenges while developing innovative solutions, including smaller pallet sizes and enhanced food safety measures. “Pallets are the literal foundation of the fast-moving consumer goods supply chain,” asserts Vishal Patell, VP of retail supply chain solutions for CHEP, which now serves more than 60 countries and provides around 300 million pallets in total. “Most, if not all, material-han-

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


SmAller SOluTiOn CHeP’s half pallets reduce labor and handling costs in the warehouse.

Pallets are the literal foundation of the fastmoving consumer goods supply chain.” —Vishal Patell, CHeP

Supply Chain

dling, storage and transport systems in the domestic supply chain are heavily reliant on good-quality pallets — the combination of which is what results in continuous productivity improvement, helping keep the cost of goods lower for the end consumer.” Today, CHEP provides its customers comprehensive supply chain solutions to help them become more efcient, reduce end-to-end supply chain costs and be more environmentally sustainable, according to Patell. Services CHEP provides include value stream mapping, platform mix optimization, product damage reduction, packaging performance testing, store fulfllment solutions, unsalables reduction and reverse logistics. Patell is particularly excited about CHEP’s work in freight collaboration. “We’re leveraging our unique position in the supply chain to drive signifcant cost reduction to both manufacturers and retailers by optimizing private feet movements for individual entities or through three-way collaboration,” he says. “Retailers deliver CHEP pallets to manufacturers, and on the return, they pick up product — this eliminates empty miles and helps them unbundle inbound logistics costs,” explains Patell. Orlando, Fla.-based iGPS, which specializes in plastic pallets, likewise has been looking for ways to provide “customized supply chain solutions” to its clients, according to CEO Jefrey Liebesman. “We work directly with our customers to assess

Forward Thinking One pallet expert is making it his mission to ensure that pallets and their interactions with packaging and unit-load handling equipment deliver the most efficiency, safety and cost savings possible. Marshall S. White, a professor emeritus of packaging science at Virginia Tech and president of Blacksburg, Va.- based independent packaging


their individual businesses and make recommendations accordingly,” he says. “We are seeing a concerted and signifcantly aggressive efort in the grocery supply chain to drive down the total cost of business — from both the manufacturers and retailers.” In addition to “making every penny count,” food companies have been placing a growing emphasis on product hygiene, Liebesman observes. “iGPS has been helping our customers address each of these issues through reduction of pallet/shipping weight, uniformity in automated facilities, minimizing product damage, eliminating splinters and preventing absorption of bacteria, to name a few,” he notes.

One Size Doesn’t Fit All While pallets have traditionally come in uniform sizes, a new trend in the industry is the introduction of smaller, half-size or quarter-size pallets. Tese designs have been driven by the boom in smaller retail formats, as well as the need for more agile designs to move in and out of stores. Some pallets are even fnding their way into stores as elements of end caps or displays. “We’re borrowing a little bit from the European model,” notes Marshall S. White, president of White and Co. LLC, an independent packaging research and consulting frm based in Blacksburg, Va. “I think it’s an impressive trend.” CHEP’s Patell says he sees fractional pallets, which are being used to drive in-store growth, as the biggest trend in the industry today. “CHEP’s half-pallet platform solution is proving to be a popular option for manufacturers and retailers, because it increases delivery fexibility and decreases operational costs, especially with inventory optimization and pick operations in multiple store formats,” he explains. “It can also be used as a platform to build merchandising displays at the end of an aisle or in

research firm White and Co. LLC, regularly speaks at industry meetings to share his vision. “We have found in our studies that pallet packaging spend can be reduced by 8 percent to 18 percent when you take into account how the pallet interacts with packaging and automated equipment,” he says. “This is an opportunity for the grocery industry to start to focus on

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

the fact that a pallet’s not just a pallet. You have to consider how the pallet interacts with the packaging. Are there opportunities to change the pallet that might improve the efficiency of the supply chain?” As far as current pallet trends go, White says that rental programs continue to dominate the U.S. market, with about 60 percent of pallets in the U.S. food industry being rented. The other 40 percent are purchased. (His statistics come from a Modern Materials Handling magazine pallet survey.) The trend of renting pallets is

high-trafc areas, as well as a platform for storing and displaying bulk produce.” Patell estimates that CHEP’s half pallets can reduce labor and handling costs in warehouses by 25 percent. He also links the half pallets to reduced out-of-stocks for high-volume products and better sell-in for new products and seasonal promotions. Another company that’s rolling out smaller pallets is Oconomowoc, Wis.-based Orbis Corp. Orbis specializes in reusable packaging and runs a reusable plastic pallet program. Its newest product, Pally, is a mobile pallet designed for quick load at the distribution center and quick unload at the retailer, according to Samantha Goetz, Orbis’ marketing communications manager. Te company has also launched a 42-by-30-inch small-format pallet. “Our small-format pallet was specifcally designed for frequent product deliveries into smaller-format retailers,” explains Goetz. “It enhances maneuverability in tight spaces. Te mobile Pally was also designed for this application.” Pally is additionally being used for omnichannel picking and staging for store pickup of e-commerce items, notes Goetz. She expects its popularity to grow as omnichannel operations and smaller-format stores increase. Along with new product development, Orbis remains focused on safety and efciency, according to Goetz. “Te need to safely and efciently move product from the DC to the retail aisle is more important than ever, to avoid product damage and to reduce labor costs associated with deliveries and merchandising,” she says. As such, Orbis ofers a full suite of asset-tracking, management and cleaning services to support its pallet programs.

likely to continue to grow, according to White. That’s because the rental companies’ design, based on the block class of pallets, tends to be preferred in the industry. In addition, the rental system has been more efficient, especially for companies that have to ship more frequently. As he looks ahead to the future of the industry, one of White’s chief concerns is the need for global standards. “We’re already palletizing food internationally and intercontinentally,” he notes. “If this trend continues, we’re going to need a greater level of

New Model on the Market In addition to the major players and niche providers, there’s a new pallet company on the market — but this one is a not-for-proft, consisting of a nationwide network of hundreds of certifed pallet manufacturers, recyclers and distributors. Woodbridge, N.J.-based 9Bloc was founded in 2011 with a mission “to provide a high-quality, independently inspected pallet pool to U.S. manufacturers and distributors, with on-demand services and transport logistics at the most competitive pricing structure.” 9Bloc’s white presswood pallets were designed to meet the specifcations of major warehouse club chain Costco, based in Issaquah, Wash. Te pallets can be leased, rented or purchased. Te company also ofers web-based tracking software to help keep tabs on its pallets. White and Co.’s White says he believes the 9Bloc model will grow, as “it’s another alternative that can help retailers control, if not reduce, their supply chain operations costs.” PG

We are seeing a concerted and significantly aggressive effort in the grocery supply chain to drive down the total cost of business — from both the manufacturers and retailers.” —Jeffrey Liebesman, iGPS

oN the Move CheP estimates it has saved its customers $15 million-plus in the past year by optimizing their supply chains.

standardization in packaging and pallets. We unfortunately use differentsized pallets in different regions of the world.” Yet White admits that “it has to be an evolutionary process — it can’t be revolutionary.” He’s already quite involved in the process himself, serving as head of the U.S. delegation to the International Organization of Standardization (ISO) TC51 Committee on International Pallet Standards. “We started the process years ago of trying to get countries to start to consider one size of pallet globally,” he says.

“But we’ve got a long way to go. I think the ISO needs to make a commitment to at least endorse the idea. When I brought it up a few years back, it was voted down summarily by the other countries. It will come up again, though.” Global standards would not only eliminate re-palletization costs and the disposal costs of packaging, they would also make a significant impact on energy consumption, as well as the safety and health of the workers moving product, notes White. “This crosses over all socioeconomic classes,” he contends.

April 2016 | |


Equipment & Design

Adaptive Design


Access Retailers offer stores that accommodate the elderly and others with physical limitations. By Bob Ingram


he older population — people age 65 and older — numbered 44.7 million in 2013, the latest year for which data are available, representing 14.1 percent of the U.S. population, according to the U.S. Department of Health and Human Services Administration for Community Living. Tat’s a lot of potential senior shoppers, a fact not lost on supermarket designers, who keep this older population in mind when working with food retailers. “We account for all of the requested shoppers when designing a new space, which can vary depending on the retailer, location and demographics,” says Christopher Studach, creative director at King Retail Solutions, in Eugene, Ore. “In the case of seniors,” he continues, “there are several elements that we consider when designing. One key area is good lighting that improves product visibility and readability. Seniors can also have a difcult time with contrast, so large swings from light to


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

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Integrated Retail Intelligence

Equipment & Design

Specifying slip-resistant flooring is a smart consideration for the young to the old, with toddlers running around and seniors often walking with canes or using walkers or wheelchairs.” —David yehuda, Dy Design Inc.

Adaptive Design

dark areas within the store can cause frustration and risks for senior shoppers.” According to Studach, King Retail Solutions also focuses on the size, location and makeup of categories that are of special interest to seniors, particularly lifestyle and health-related categories, with the goal of providing easy wayfnding to help locate hard-to-fnd items. “For example,” he notes, “how many times have you searched with frustration for that one small package of vitamin K that is thoughtfully buried among hundreds of similar small packages?” Te current trend among retailers, he adds, is to use every cubic inch of space for merchandising, but for areas in which seniors have particular interest, it’s important to consider product height and not force seniors to stoop or bend down to merchandise placed too low, and also to try to place heavier products at a height that makes them easier to load into a cart. “Designer trends tend to lean toward ghostly pale text in graphics and signs, sometimes with barely legible font sizes,” observes Studach. “When considering the senior shopper, we need to back of from that trend and provide adequate font size and contrast.” In the future, he concludes, design adaptations for seniors will include clear wayfnding, easy-toread infographics and a strong focus on the particular areas of interest to seniors. “Te goal should be to convey a genuine sense of compassion through functionality as well as aesthetics,” says Studach.

EASy to REAch categories of special interest to seniors should be readily accessible, as in this Bartell Drugs unit in Seattle, designed by King Retail Solutions.


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

A Better Shopping Experience David Yehuda, president of Kings Point, N.Y.-based DY Design Inc., emphasizes that efcient supermarket design will beneft all customers, regardless of age or disability, and make their shopping experience more pleasant and comfortable. “Layouts and trafc fow are designed for the ease of all customers, as well as the efciency of the store and its products,” he says. “Placing enough room between the checkouts, utilizing signage with letters large enough to be seen and read by all, and applying lighting that will illuminate the signage, in addition to giving the products a punch of color and vibrancy, are all important.” Yehuda believes that applying universal design principles benefts the senior population as well as people in other life stages and age groups. “Specifying slip-resistant fooring is another smart consideration for the young to the old,” he notes, “with toddlers running around and seniors often walking with canes or using walkers or wheelchairs.” Good design choices are recommended by the designer and need to be approved by the store owner, Yehuda points out. Regulations, codes and laws at the local, state and federal levels exist and infuence these decisions, ensuring, for example, that wheelchair users have enough space to navigate through doors comfortably and safely. “Entryways are of huge importance,” he stresses. “If an entryway does have stairs, a ramp must be installed. Also required are handicapped toilets,

which must be clearly marked and come equipped with handrails, an important safety measure.” Yehuda adds that café areas have become popular in supermarkets, not only so customers can stop and eat, but also so seniors can stop and rest. “Having a café specifed on my plan communicates to my clients that I understand the psychological needs and the physical limitations of their customers,” he says. “Having positive social interactions is part of a successful shopping experience, whether a customer is asking a store clerk for help in fnding an item or engaging in small talk with a cashier.” Improved technology in the future will aford seniors — and all shoppers — quicker and easier access to check prices and check out their food items, he says, and store designers will use their creativity to develop innovative graphics and store décor from natural and sustainable building materials.

Total Engagement Regarding the accommodation of seniors in supermarkets, Ken Nisch, chairman of Southfeld, Mich.-based JGA, notes, “While I think grocery stores have all jumped on ‘the easy way out,’ like brighter lighting, bigger signs [and] more open aisles … they have woefully failed on engagement.” While Whole Foods Market is often thought of as “a yuppie place,” Nisch says, it has delivered on many of the things that seniors most like, such as involvement in community, a place to engage and connect with interesting and articulate people, an interesting variety of foods — particularly prepared and ethnic fare — and, in many cases, a willingness to go the extra mile, from a customer service standpoint. “Te consumer may think they would have to pay more,” he admits, “but many seniors are entering into the time of their lives when they have the most disposable income, are interested in their health, but are looking to have a little fun with friends, family and community along the way.” Nisch points to a concept in India, where elders are held in high esteem, that his frm recently completed for a Big Bazaar store in that country. Te store features a sit-down checkout system where seniors and others, such as expectant mothers, are invited to sit and enjoy a sampling of foods and store products while the store staf takes the customer’s cart, runs it through the checkout, bags the items and takes the bags to the customer’s car or driver. Te store will also deliver the order free if transportation is a problem.

“Te store has shopping experts who can shop along with seniors if they need extra help,” Nisch continues, “because modern retail is still relatively new to India, and they have great food stalls across a variety of ethnic foods from all parts of India, including a ‘bake while you wait’ roadside stand. Tese types of services are great for seniors who enjoy and are accustomed to fresh, homemade and nonprocessed food, but don’t necessarily have the wherewithal to cook on an everyday basis what are often very complicated favorite recipes. In this case, they are engaging the customer, not merely accommodating them.” According to Nisch, the senior-sensitive grocery store of the future may fnd that what customers value is not so much the science, but rather the art, of retail in helping them engage and spend time in the store. PG

LEgibiLiTy This Whole Foods Market in Davie, Fla., designed by King Retail Solutions, has highly readable signage.

big ScREEnS in Detroit, a Whole Foods Market, designed by JgA, features large monitors on end caps.

April 2016 | |


Food, Beverage & Nonfood Products

All Dressed Up

As entrée salads continue to trend higher as main meals, according to data from The NPD Group, Wish-Bone has added two dressings to its product portfolio to give consumers more options. Created from chef-inspired pairings, the brand’s EVOO dressings combine extra-virgin olive oil with Wish-Bone’s signature blend of vinegars and spices. They’re available in Garlic Basil Italian, Roasted Red Pepper, Lemon Herb, Sundried Tomato and Caesar Vinaigrette varieties. The brand’s Ristorante Italiano dressings — which come in Signature Italian, Creamy Peppercorn Caesar, Garlic Parmesan Vinaigrette and Roasted Garlic Balsamic varieties — are inspired by popular flavors served at many Italian restaurants. Both lines retail for a suggested $2.99 per bottle.

Rebel Yell

“We experimented with dozens of test-batch IPAs in our nanobrewery, with different combinations of hops and grapefruit, and love this marriage of citrus and bitterness,” says Seth Adams, brewer at Samuel Adams, of the brand’s Rebel Grapefruit IPA. The new brew is made with California-grown Star Ruby and Star Rio grapefruit varieties, which give the beer a sharp, tart character. Made with four hop varieties (Mosaic, Centennial, Cascade and Citra), Rebel Grapefruit IPA is available in 6-packs for an SRP range of $7.99-$9.99, and 16-ounce cans for a suggested $1.99-$2.49.

Smooth Skin for Men

With sales of men’s personal care products in the United States anticipated to reach $4.7 billion by 2020, Galderma Laboratories, maker of Cetaphil cleansers and moisturizers, is expanding its portfolio with a product line exclusively for men. The Cetaphil Men line offers seven solutions to clean, moisturize and protect men’s skin. Formulated for all skin types, including dry or sensitive skin, the line is dermatologistrecommended, non-irritating, and leaves out harsh ingredients and heavy fragrances to promote healthy skin on a daily basis. Cetaphil Men is currently available online and at select retailers nationwide.

A Twist on a Classic

Inspired by the timeless heritage of pubs as places to gather with family and friends and enjoy locally crafted fare, Herr Foods has added Pub Style Sourdough Pretzel Thins to its expanding product portfolio. Combining consumers’ love for the hearty crunch of sourdough with the classic thin pretzel, the offering is made with wholesome ingredients while delivering a twist on a classic snack. Herr’s Pub Style Sourdough Pretzel Thins retail for a suggested $3.69 for a 12-ounce bag and a suggested $1.49 for a 3.75-ounce bag.


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

Simple Ingredients

Made from just four ingredients — cream, buttermilk, cheese culture and salt — without artificial flavors, colors, preservatives or added hormones, Simply Better Arla Cream Cheese boasts 60 calories, 5 grams of fat and 3 grams of saturated fat per 2-tablespoon serving. Set for national distribution this year, the cream cheese comes in Original, Light, Herbs & Spices, Peppercorn, and Blueberry varieties, and carries an SRP of $2.99 for a 7-ounce tub.

Heart of the Matter

Palmelitas’ Hearts of Palm salad cuts aim to deliver a “unique and desirable” salad component designed to pair with a wide variety of produce items or soups, or as a stand-alone snack. Giving shoppers a fresh alternative to the traditional processed or canned offering, these Coast Rica-grown salad cuts come in state-of-the-art, nonrefrigerated stand-up pouches with a 12-month shelf life; additionally, there’s no need for consumers to drain the product before use. Hearts of Palm has an SRP range of $2.99-$3.49.

Hitting the Links

Land O’Frost’s Simply Savory sausages are made with lean cuts of chicken and pork, paired with flavorful ingredients like chopped roasted red pepper, real bacon, and mozzarella and cheddar cheeses. Building on the innovation behind the brand’s heart-healthy Simply Delicious lunchmeats, Simply Savory links are naturally smoked, contain no fillers or artificial ingredients, and deliver 9 grams of protein, 35 percent less fat and 150 calories or fewer per serving, according to the company. Simply Savory sausages are available in Bacon and Cheddar, Italian Style, Polish Kielbasa, and Chipotle & Roasted Red Pepper varieties.

Organic Snacks

The ever-popular Brownie Brittle, which pairs a rich brownie snack with a cookie crunch, now has an organic option. Organic Brownie Brittle is available in three flavors: Chocolate Chip, Dark Chocolate & Pretzel, and Chocolate & Toasted Coconut (the latter two are new to the Brownie Brittle family and unique to the organic line). This 120-calorie-per-serving treat is available in 5-ounce resealable packaging for an SRP of $4.99. The Chocolate Chip variety also comes in a 16-ounce club store-sized bag, for a suggested $8.99. April 2016 | |


Celebrating a Decade of Top Women in Grocery 10 years of Leaders 10 years of Excellence 10 years of Celebration!

In 2016, Top Women in Grocery will proudly commemorate the 10th anniversary of saluting outstanding women across all sectors of the grocery industry for above-and-beyond contributions to their companies and communities and the industry at large. Plans are now underway for a very special 10th-anniversary celebration, additional details for which will be forthcoming. We look forward to continuing a rewarding tradition of honoring the grocery industry’s leading women.

Sponsorships are available. Contact Jeff Friedman at 201-855-7621 or

ECRS Delivers Direct Payment Integration With FDMS Boone, N.C.-based business optimization solution provider ECRS now provides a direct, non-gateway link to the world’s largest payment processor, First Data Merchant Services (FDMS), to improve payment-processing reliability and reduce the occurrence of costly charge-back issues. Atlanta-based FDMS has certified the ECRS Catapult system for direct processing via its Rapid Connect platform, and the solution is successfully performing in high-volume retail establishments. This certification comes in response to the increased demand from grocery enterprises for direct, dependable, affordable and secure payment integration. This further enhances ECRS’ specialized, performance-based solution suite for food industry retailers, including supermarkets, natural and organic markets, grocery cooperatives, and specialty food markets.

Gold Medal Expands Executive Team Cincinnati-based concession equipment company Gold Medal has expanded its executive team. Curt Fisher, VP of sales for the United States and Canada, joins Gold Medal with more than 20 years of Fisher Wallach Oaks sales experience in the feld. With a background in manufacturing and durable goods, he has held progressive leadership roles over more than 13 years with Whirlpool and Goodman Distribution. Mark Wallach, VP of manufacturing, an expert in leading operations, has an impressive résumé of improving efciency and productivity. He brings 24 years of experience to his new role, including stints as plant manager at Pella Corp. and director of continuous improvement with Sunrise Windows. Craig Oaks, VP of HR, has previously managed human resources for such companies as Comair Airlines, Cornerstone Brands and Apex Supply Chain Technologies.

SGS, PLC Help Companies Navigate Nutrition Facts Changes Louisville, Ky.-based packaging producer SGS and Washington, D.C.-based Prime Label Consultants (PLC) have created an industry guide and video series outlining the requirements for the FDA’s upcoming Nutrition Facts label changes regulated by the U.S. Food and Drug Administration (FDA). Te free guide, “7 Steps to a Successful Transition,” can be accessed via an opt-in online newsletter. Te materials were created to educate and provide U.S. and Canadian food and beverage companies, manufacturers, designers, printers and converters with insight and step-by-step instructions to address the most signifcant nutritional labeling changes in a generation. Te last signifcant FDA nutrition-labeling change took place in 1993.;

Fire & Flavor Hires New VPs Athens, Ga.-based Fire & Flavor, a provider of allnatural cooking solutions, including cedar planks, charcoals, rubs and seasonings, has hired two industry veterans as its latest VPs. LaPine Wein Gene LaPine, VP of sales, will lead all sales initiatives. He has worked in the consumer products industry for more than 20 years with such companies as Hormel Foods, Glacéau and Newell-Rubbermaid. Jeremy Wein, VP of operations, will manage all supply, inventory and sourcing strategies, and execution for the brand. He brings 16 years of supply chain experience from such companies as Bubba Brands and Hamilton Beach/ProctorSilex Inc.

Price Chopper Adopts Park City’s Scan-based Trading Solution Schenectady, N.Y.-based Golub Corp. has selected Park City Group’s scan-based trading solution to support its Price Chopper banner’s new go-to-market strategy for direct store delivery (DSD) vendors. “DSD products are notoriously difficult to manage at the shelf,” says Blaine Bringhurst, Price Chopper’s SVP of sales, merchandising and marketing. “Park City Group’s solution will provide us with a progressive way to manage our DSD vendors while lowering our costs and inventory investment.” Randall Fields, CEO of Salt Lake City’s Park City Group, notes: “Over time, collaborators also see lower out-ofstocks, improve assortments and provide fresher products for shoppers, which all but guarantee higher sales.”;

April 2016 | |


the last word

Omnipresent Opportunities


s revealed on the “sleepless nights” infographic on page 44 in this year’s 83rd Annual Report of the Grocery Industry, the trio of foremost concerns weighing heavily on the minds of retail executives — rampant minimum wage hikes, data protection/cybersecurity and defationary food prices — aptly refects their status as top headline-grabbing news stories in recent months. While Jim Dudlicek’s commentary on page 10 touches on another issue factoring prominently as a top-of-mind consideration for grocery execs — the increasing importance of fresh prepared food programs — perhaps no other issue du jour is more signifcant than omnichannel strategy, which has rapidly emerged as a top priority in a relatively short time span. In fact, it was only two years ago that we posed the frstever omnichannel question in our Annual Report survey, regarding companies’ adoption rates and readiness regarding an integrated in-store, online and mobile platform. Although historical data fuctuate from year to year, due to a unique set of viewpoints captured from a varied set of annual survey participants, the pervasiveness of omnichannel, both in practice and as a concept, has clearly gained considerable traction in the course of 24 months. Evidence of the transformational changes retailers are making to embrace evolving consumer preferences is detected in the gap between the 18 percent of retailers who describe themselves as being in the early stages of omnichannel adoption this year, a signifcant tightening from the 30 percent logged in 2014. Equally telling is this year’s 45 percent of respondents who report making solid progress with a semi-cohesive omnichannel scheme, versus 29 percent two years ago. While the omnichannel needle is decidedly moving in the right direction in the retail food world, where the vast majority of players recognize the need to create a holistic experience that transcends channels for connected consumers, recent insights from Boston Retail Partners (BRP) further underscore a daunting journey in play for many. According to BRP’s 2016 POS/Customer Engagement Survey, 85 percent of respondents indicate that unifed commerce is a top priority. However, in light of the costly and complex proposition before them, many retailers have taken the “just get something done” approach to enter the

game, with this quick-fx strategy resulting in what BRP study cohorts describe as a “faux” omnichannel model that potentially poses a bigger risk of disappointing, rather than delivering for, customers. “Many retailers are realizing that the future of POS is part of a unifed commerce platform that hosts a single shared cart across all channels and is integrated with order management,” notes Brian Brunk, a principal at BRP. However, while there’s no denying the fundamental changes occurring in how retailers think about omnichannel, existing legacy systems weren’t designed to deliver the necessary integrated capabilities customers expect, which in turn fnds many retailers scrambling “to cobble things together,” adds Ken Morris, also a principal at BRP. Te risk of losing customers because of disappointing shopping experiences as a result of “fawed omnichannel architecture is deadly,” afrms Morris, which is why he urges retailers “to do it right” by investing in infrastructure, networks and service-oriented architecture (SOA). Two other key fndings of BRP’s 2016 POS/Customer Engagement Survey that dovetail well with insights from our Annual Report of the Grocery Industry include: Improving customer engagement and the customer experience is critical (infographic on page 46). Retailers are still occupied with payment/data security (infographic on page 44).

We extend our earnest thanks to the 131 senior-level retail participants who responded to our Annual Report of the Grocery Industry survey, whose shared viewpoints and valuable time have enabled us to carry on a tradition that’s spanned a healthy 83 years. As we look ahead to next year, we encourage continued participation from this year’s exceptional base of executive panelists, and hope to have a chance to tally a wider pool of views for an updated annual survey, for which advance feedback and guidance are warmly welcomed. PG Meg Major Twitter @Meg_Major/@pgrocer

While the omnichannel needle is decidedly moving in the right direction in the retail food world, a daunting journey is in play for many.


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

advertiser index 5 Generation Bakers 64 Anchor Packaging 14 - 13 Anheuser Busch Inc. Inside Front Cover Apio 129 Beaver Street Fisheries 92 - 93 Beiersdorf USA 42-43 Blount Fine Foods 154 - 155 Braga Organic Farms Inc. 127 Butler Home Products 139 California Avocado Commission 24, 125 Chep USA 141 Coca Cola NA 56 - 57 David Nalchajian, Inc. 29 Daymon Worldwide 45 Del Monte Fresh Produce Inc. 131 Dietz & Watson Inc. 86 - 87 Domino Foods 30 Dr. Praeger’s Sensible Foods 58 - 59 ECR Software Corporation 7 Edgewood Consulting Group 48 - 49 Emmi Roth USA 41 Farmland Inc. 65 Food Marketing Institute 97 General Mills Inc. 32 - 33 Goya Foods, Inc. 13 Heineken USA Inc. 17 Idaho Potato Commission 105 - 112 International Dairy Deli Bakery Association 21, 121 Irving Consumer Products, Inc. 51 J. Skinner Baking Company 99 Jack Links Beef Jerky 53 Jelly Belly Candy Company 27 JTM Foods 47 Kelloggs Company 23 Loving Pets Products 113 Mars Chocolate NA 39, 69 Mason Ways Indestructible Plastics 91, 128 MilkPep 82-83 MillerCoors LLC 4 Mondelez Back Cover Musco Family Olive Co. 95 National Beef Packing Co. 101 Nature Sweet 126 Nestlé Nutrition 61 Penton 85 Perfetti Van Melle USA Inc. 68 Pfizer Consumer Health 35 Pompeian Olive Oil 78-79 Poppies International 88-89 Post Consumer Brands 11 Premier Nutrition 55 Red Bull 67 Robbie Flexibles 123 Ruiz Foods Product, Inc. Cover Tip Save-A-Lot 81 Seneca Foods 63 Stagnito-Edgell 46, 135, 137, 145 Thanasi Foods LLC 103 The Happy Egg Co. 25 The Hershey Company 3 The Humane Society 36-37 The J.M. Smucker Company 19 The Spice Lab 98 Trion Industries Inc. 8-9 Tyson 73, 75, 115 Unilever North America 28 www.milkpep

Progressive Grocer (ISSN 0033-0787, USPS 920-600) is published monthly by Stagnito Business Information, 570 Lake Cook Rd. Deerfield IL 60015. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Deerfield, IL 60015 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to Progressive Grocer, P.O. Box 1842 Lowell, MA 01853. Copyright ©2016 Stagnito Business Information All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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advertiSing SaleS & BUSineSS Staff Kollin Stagnito President & CEO 224-632-8226 Ned Bardic Chief Revenue Officer 224-632-8224 Korry Stagnito Chief Brand Officer 224-632-8171 Jeff Friedman Vice President/Brand Director 201-855-7621 John Huff Midwest Regional Sales Manager 224-632-8174 Elizabeth Cherry Western Regional Sales Manager 310-546-3815 • Cell 310-990-9597 Maggie Kaeppel Eastern Marketing Manager 630-364-2150 • Cell 708-565-5350 Mike Shaw Northeast, Marketing Manager 201-855-7631 • Cell 201-281-9100 Janet Blaney Marketing Manager (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 Jackie Batson Advertising Manager 224-632-8183 United StateS MarketS Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green • Technology Hospitality • Apparel

Canadian MarketS • Convenience • Pharmacy • Foodservice

April 2016 | |


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wish there were of shoppers read 60% ofmoresnackers healthy snack options 75% food labels 2


Sources: 1 Kantar Retail Dollar Sales Projections from 2012 through 2020, 2 Snacking Motivations and Attitudes, Mintel Group Limited, April 2015, 3 Shopping for Health 2013, Food Marketing Institute © Mondelēz International group