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omnichannel ShaTTered in Brick-and-morTar aTTack!

April 2017 • Volume 96 Number 4 • $10 • www.progressivegrocer.com

In-depth Analysis!

page 43

Compelling Data!

SkyrockeTinG

coSTS haUnT

iS freSh overraTed?

reTailerS! PG Reveals!

The UlTimaTe SecreT Behind indUSTry’S moST impreSSive hyBrid WarehoUSe STore page 24


A NEW DESIGN THAT STEALS THE LIMELIGHT.

CATEGORY SHOPPER S SA ID OUR NE W PACK AGING* COMMUNICATE S: HIGHER QUA LIT Y • MORE REFRE SHING • BE T TER TA STE

DRINK RESPONSIBLY. Corona Light® Beer. Imported by Crown Imports, Chicago, IL. Source: PRS IN VIVO Silver Validation — Corona Light Packaging Graphics Redesign study, June 2016 *New 12-pack bottle secondary vs. Current 12-pack bottle secondary


Give your shoppers smooth-sipping satisfaction For more information about Chobani, please contact us via email at sales@chobani.com. *Than other yogurt drinks. Drink Chobani™ beverage: 22g sugar; other adult yogurt drinks: average 33g sugar per 10oz serving.

Š2017 Chobani, LLC


GOOD FOR GRILLING. GRE AT FOR BUSINESS. There’s nothing trendier than BBQ. And with sales of competitive BBQ cuts growing 7x faster than total fresh meat sales,1 partnering with Smithfield is a surefire way to heat up the register. Our new line of Dry Seasoned Fresh Pork products are great on the grill. So fire up your sales this summer with Smithfield and give your customers what’s quickly becoming one of the biggest brands in BBQ.

©2017 Smithfield Farmland Sales Corp. All Rights Reserved.

Drive Marinated Category Growth

Grow Total Meat Department Sales

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For more information about Smithfield Marinated Fresh Pork, contact your Smithfield Sales Representative or email FreshPorkSales@smithfield.com 1

Nielsen Perishable Group 52 weeks ending 7/30/16; Total US


Contents

04.17 Volume 96, Issue 4

43

ProgressiveGrocer ’s 84 th Annual Report of the Grocery Industry

Balancing Expectations and Reality

Grocers remain upbeat despite political uncertainty and an economy waiting to be kicked into high gear.

87 / Packaging Holding Pattern Perimeter packaging solutions address freshness, convenience and safety.

24 24 / Store of the Month Highway to a Hybrid Fork Lift by Nugget Markets is in the fast lane as a next-generation lifestyle/price-impact concept supermarket. 69 / Supply Chain Safety Safeguarding the Supply Chain New technology and retailfocused audits are among the latest tools for executives to manage the ongoing food safety journey.

91 / Produce Exotic Destinations Globally sourced fruits and vegetables turn heads, delight taste buds and drive traffic in produce.

73 / Grocery Taste Test Flavor, ingredient and packaging trends continue to shape the condiment category. 79 / Refrigerated & Frozen Foods

Easy as Pie Grocers can harness pizza’s allure to make it a centerpiece of meal solutions.

91

April 2017 | progressivegrocer.com |

5


Contents

04.17

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 224 632-8200 • www.progressivegrocer.com SVP, Brand Director 201-855-7621 Associate Brand Director (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY)

97

97 / Technology A Growing Threat Ransomware, skimming are just two data security threats to prepare for.

Jeff Friedman jfriedman@ensembleiq.com Janet Blaney jblaney@ensembleiq.com

630-364-1601 EDITORIAL Editorial Director Joan Driggs 224-632-8211 jdriggs@ensembleiq.com Chief Content Editor Meg Major 724-453-3545 mmajor@ensembleiq.com Editor-in-Chief James Dudlicek 224-632-8238 jdudlicek@ensembleiq.com Managing Editor Bridget Goldschmidt 201-855-7603 bgoldschmidt@ensembleiq.com Senior Editor Randy Hofbauer 224-632-8240 rhofbauer@ensembleiq.com Senior Editor Katie Martin 224-632-8172 kmartin@ensembleiq.com Senior Editor Anna Wolfe 207-773-1154 awolfe@ensembleiq.com Contributing Editors Nancy Krawczyk, Annette Maggi, Jenny McTaggart and Jennifer Strailey ADVERTISING SALES & BUSINESS Midwest Marketing Manager Angela Flatland aflatland@ensembleiq.com 224-229-0547 • Mobile: 608-320-4421 Western Regional Marketing Manager Rick Neigher (CA, OR, WA) rneigher@ensembleiq.com 818-597-9029 Northeast Marketing Manager Mike Shaw 201-855-7631 • Mobile: 201-281-9100 mshaw@ensembleiq.com Account Executive/ Classified Advertising Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com EVENTS SVP, Events & Conferences Maureen Macke 773-992-4413 mmacke@ensembleiq.com CUSTOM MEDIA VP/Custom Media Division Pierce Hollingsworth 224-632-8229 phollingsworth@ensembleiq.com General Manager, Custom Media Kathy Colwell 224-632-8244 kcolwell@ensembleiq.com MARKETING VP, Marketing & Communications Bruce Hendrickson 224-632-8214 bhendrickson@ensembleiq.com Director of Market Research Debra Chanil 201-855-7605 dchanil@ensembleiq.com AUDIENCE DEVELOPMENT Director of Audience Development Gail Reboletti greboletti@ensembleiq.com Audience Development Manager Shelly Patton 215-301-0593 spatton@ensembleiq.com List Rental The Information Refinery 800-529-9020 Brian Clotworthy Subscriber Services/Single-copy Purchases 978-671-0449 or email at EnsembleIQ@e-circ.net ART/PRODUCTION Director of Production Kathryn Homenick khomenick@ensembleiq.com Advertising/Production Manager Jackie Batson 224-632-8183 • Fax: 888-316-7987 jbatson@ensembleiq.com Art Director Bill Antkowiak bantkowiak@ensembleiq.com (AR, CO, IL, IN, IA, KS, KY, MI, MO, NE, ND, OK, SD, TN, WI)

99 / Supply Chain Pallet Progression Sustainability concerns and new technology are driving change among the industry’s most portable platforms.

99

8 / Editor’s Note Golden Nuggets 12 / PG Pulse 14 / In-store Events Calendar

June 2017

20 / All’s Wellness Leveraging the Path to Purchase 22 / NEW Horizons How Stubborn Stereotypes Hold Women Back

16 / Nielsen’s Shelf Stoppers/Spotlight

102 / What’s Next Editors’ Picks for Innovative Products

18 / Mintel Global

106 / The Last Word: Too Legit to Quit

General Merchandise New Products

Cheese

6

| Progressive Grocer | April 2017

CORPORATE OFFICERS Executive Chairman Alan Glass President & CEO Peter Hoyt Chief Operating Officer Richard Rivera Chief Brand Officer Jeff Greisch Chief Financial Officer Len Farrell Chief Business Development Officer & President, EnsembleIQ, Canada Korry Stagnito President of Enterprise Solutions/ Chief Customer Officer Ned Bardic Chief Digital Officer Joel Hughes Chief Human Resources Officer Greg Flores


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Note By Jim Dudlicek

Golden Nuggets DEFLATE-GATE SPELLS END FOR KROGER!

Want to stay relevant and profitable in the age of disruption? Don’t be afraid to try new things. Engage your shoppers. Offer a seamless experience across all platforms, real and virtual.

I

figured that would get your attention, in keeping with this month’s tabloid-style “fake news” theme for PG’s 84th Annual Report of the Grocery Industry. But you might be led to believe that some analysts actually think so, by how they were advising folks to dump their Kroger stock in the wake of the grocery giant’s reporting the end of its amazing 13-year streak of same-store sales growth amid persistent market deflation. “This may be a difficult trend to reverse now that Wal-Mart Stores is experimenting with lower grocery prices,” Dow Theory Forecasts proclaimed shortly after Kroger’s last earnings call, as reported by the retailer’s hometown Cincinnati Business Courier. Difficult? Maybe. Impossible? Hardly. It’s a testament to Kroger’s strength as a retailer that it took this long for ongoing deflation to knock its quarterly comps into the red. It isn’t anything that grocers haven’t seen before, despite today’s new market disrupters, like Amazon, which is not only rolling out its own brick-and-mortar grocery stores, it’s also urging CPG companies to bypass retailers completely and reach out directly to consumers. Kroger has successfully repelled Walmart in markets around the country, besting the big box in selection and service, if not often enough on price. Kroger’s investments in shopper insights, clickand-collect, and other omnichannel initiatives have helped its Customer 1st strategy pay dividends. Despite headlines about low grocery prices reaching a fever pitch, deflation is easing, and Kroger’s in a better position than anyone to rebound. Things are looking up already — as this issue went to press, Moody’s Investors Service announced that it expects grocery prices to rise about 1 percent this year, with ebbing deflation bringing an 8 percent boost to retailers’ operating profits, after

Jim Dudlicek Editor-in-Chief jdudlicek@ensembleiq.com Twitter @jimdudlicek

8

| Progressive Grocer | Ahead of What’s Next | April 2017

dropping 5 percent last year. Improvements at Kroger, as well as Albertsons and Whole Foods Market, will drive sector growth, Moody’s predicted. It appears that the smart money will be on grocery — as of this writing, just a couple of weeks after the compstreak bad news, CNN Money was reporting that a consensus of investment analysts agree that it’s time to buy Kroger as its stock price begins to rebound from a temporary downslide. So it seems that grocery stocks are nothing to lose sleep over. For what retailers are tossing and turning about, turn to page 43 and start reading our latest Annual Report. Amid the challenges of driving an industry fast approaching $700 billion in sales, grocery retailers are most worried about the rising cost of all aspects of doing business, labor issues and competitive threats, particularly the spread of online retailers and the expansion of the limited-assortment format. In fact, limited assortment supermarkets, specifically hard-discounter Aldi, have been responsible for the largest leap in physical store growth, according to data in our annual report. Aldi and newcomer Lidl are poised to go head to head and drive innovation within the format. Want to stay relevant and profitable in the age of disruption? Don’t be afraid to try new things. Engage your shoppers. Those are two key areas embodied by Woodland, Calif.-based Nugget Markets, whose hybrid lifestyle-warehouse concept store, Fork Lift, is this issue’s Store of the Month, starting on page 24. Offer a seamless experience across all platforms, real and virtual, and work on defining what that means for your company. As PG’s Randy Hofbauer reported from the National Retail Federation show earlier this year, keynoter Rod Sides, of Deloitte, asserted that winning retailers do three things: offer integrated experiences, whether online or offline; leverage customer data in meaningful ways for each category; and compel shoppers to return to their stores by creating integrated unique experiences. Or, as former Jewel Foods CEO Bill Bolton said at Western Michigan University’s recent Food Marketing Conference, “We must be willing to cast aside today’s methods, however effective, for those that seem better suited for tomorrow.” PG


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

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

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What’s trending on progressivegrocer.com …

PG’s exclusive interview with Meijer Inc. President/CEO Rick Keyes following the retailer’s announcement of ambitious plans to expand home delivery across its sixstate Midwest footprint after a successful test in Detroit last fall factored among the most popular news stories on progressivegrocer.com during the Feb. 16 - March 15 timeframe. Other items racking up heavy website clicks included a look at the food retailers with the most promising ecommerce models, Target’s revised projections for its grocery business, analysis of The Kroger’s Co.’s 2016 Q4 performance and Walmart’s best quarterly financial performance in four years.

“Being busy is not a demographic issue.” —Rick Keyes, President and CEO, Meijer Inc.

Meijer Prez/CEO Rick Keyes Details Significance of Home Delivery Expansion bit.ly/2nybjTZ

“As Walmart ramps up competition against Seattle-based Amazon.com, attention to perishables will play a critical role.” – Carol Spieckerman, Spieckerman Retail

4 Food Retailers Poised for Future Ecommerce Excellence bit.ly/2lH7g3h

Kroger Playing for the Long Term

– Rodney McMullen, CEO and Chairman, The Kroger Co.

bit.ly/2nph9rg

Walmart U.S. Posts Best Quarter in 4 Years; Ecommerce Soars 29% bit.ly/2nPtXE8

12

“We’ve never been more determined about our future. We continue to focus on gaining a larger share of the $1.5 trillion U.S. food market …. We are playing for the long term, and that requires being deliberate and determined.”

| Progressive Grocer | Ahead of What’s Next | April 2017

“We’re very focused on improving our grocery performance [and] we haven’t just been standing still. We’ve got more work to do and we’re certainly not satisfied with where we are, but we have been making progress.” – Target Corp. CEO Brian Cornell

Target CEO Outlines Plans for New Stores, Grocery Biz bit.ly/2mu8X44

“We’re moving with speed to become more of a digital enterprise and better serve customers.” — Doug McMillon, President and CEO, Wal-Mart Stores Inc.


It’s broke,

so fix it. Prepared foods shoppers know the deli is broken and need you to change.

TysonVelocity.com/ChangingTheConversation Š 2017 Tyson Foods, Inc.


June 2017 is... National Candy Month National Dairy Month National Fresh Fruit and Vegetables Month National Iced Tea Month National Papaya Month

S

M

T

W

T

1

Summer Is Almost Here! Offer Born Sweet Zing™ Organic Stevia Sweetener for Zero Calorie sweetening.

Email your calendar submissions to awolfe@ensembleIQ.com

4

IDDBA, in Anaheim, Calif., begins and continues through June 6.

5

National Ketchup/ Catsup Day. However it’s spelled, spotlight it with displays and specials.

ECRM Candy Planning begins in Palm Beach Gardens, Fla., and continues through June 6.

11

12

National Corn on the Cob Day

World Tea Expo, in Las Vegas, begins and continues through June 15.

National German Chocolate Cake Day

International Falafel Day

6

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

13

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

7

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

8

National Jerky Day. Sample all of the jerkies that you offer.

F

2

National Rotisserie Chicken Day

National Strawberry Shortcake Day Flag Day

15

National Lobster Day. Crossmerchandise the contents of your lobster tank with the makings of a sumptuous dinner.

3

National Chocolate Macaroon Day National Egg Day

9

10

16

17

Fresh Veggies Day

National Cherry Tart Day

23

24

National StrawberryRhubarb Pie Day

National Jelly-filled Doughnut Day

14

S

National Fudge Day

National Iced Tea Day. Born Sweet Zing™ Organic Stevia Sweetener is perfect for sweetening iced tea.

National Apple Strudel Day

Cupcake Lovers Day

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International Picnic Day

19

National Martini Day

20

National Vanilla Milkshake Day

National Cheesemakers Day

21 22 1st Day of Summer. Consumers slimming down will be looking for Zero Calorie sweetener options.

National Chocolate Eclair Day National Onion Ring Day

National Pecan Sandy Day

Father’s Day

25

26 Offer consumers a

National Catfish Day

Zero Calorie Organic sweetener made with real ingredients– nothing artificial.

Eid al-Fitr, the end of Ramadan

Summer Fancy Food Show, in New York, begins and continues through June 27.

14

National Public Service Day. Honor your local first responders.

27

National Pineapple Day. Share pineapple upside-down cake pictures on your Instagram page.

28

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

National Chocolate Pudding Day

| Progressive Grocer | Ahead of What’s Next | April 2017

29

National Almond Buttercrunch Day

30

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

National Pralines Day. Share recipes on your Facebook page.


Summertime Sales are looking

Sweeter already!

Perfect Sweetness. Perfect Sense. Born Sweet Zing™ Organic Stevia Sweetener is the sweetener that makes perfect sense to the discerning shopper. It has a delicious, clean sweet taste, contains zero calories and is certified organic. As summer comes, so will sales for zero calorie sweeteners. Meet demands with Born Sweet Zing™ Organic Stevia Sweetener, perfect for sweetening beverages like smoothies, iced tea, lemonade or cold brewed coffee.

zingstevia.com ©2017 Domino Foods, Inc.


Front End

Market Intelligence By The Numbers

Shelf Stoppers Stoppers

General Merchandise Frozen Vegetables

ToTal general merchandise sales reached $4.7 billion in The pasT year

TOTAL FROZEN VEGETABLE SALES REACHED (52 weeks ending Feb. 27, 2017) $2.97 BILLION IN THE PAST YEAR

Top2,52016) general merchandise categories (52 weeks ending April

once essential living expenses have been covered, what are americans spending their extra cash on?

$500,000,000

400,000,000

Consumers chose frozen broccoli over alternatives for a variety of reasons:

300,000,000

32%

200,000,000

purchase new clothes

100,000,000

12%

0 charcoal logs and accessories

baTTeries

home, school and office supplies

household plasTics

magazines

“it’s been a tough time for general merchandise products. in the latest 52 weeks, the overall department has seen a contraction of 3 percent in dollar sales across the food channel. but despite the challenging times, there are pockets of opportunity within some of the top categories in this space. batteries and household plastics are two examples, seeing 1 percent dollar growth, respectively. perhaps due to the multitude of electronic gadgets populating today’s households, or the increased need for food storage of prepared food items, these categories are among those sustaining volume in general merchandise.” —nielsen Vp consumer insights Jordan rost

Spotlight on Frozen Broccoli Demographics

WHEN AREmerchandise CONSUMERS FROZEN BROCCOLI? many general categories EATING are skewing toward larger households and those with

older children in the home. The “older bustling family” cohort spends 25 percent more than Broccoli as on anthe ingredient is mostmerchandise commonly department. Frozen broccoli often used in a side expected overall general among is themost top-growing general consumed at dinner, followed bystores, lunch.all are purchased dish, followed a main entrée.housemerchandise categories in food the leastbybyassingle-member holds. families, and the ever-changing needs within these dynamic households, are more likely to purchase the variety of assorted products within this department. 3% 9%

because it’s quick and easy

25% 10%

purchase home improvements/ because it tastes decorating items great

9%

because it’s healthy and nutritious

24%

purchase new technology products

8%

because it’s low in calories, fat and sugar

Cross-merchandising Candidates Top complemenTary producTs

OCCASION

ProDuct 29% TYPE 62% nuts batteries and flashlights medications, remedies and health aids Vitamins DINNER LUNCH OTHER butter

InDex 35% 112 111 111 111 SIDE DISH 110

MEAL ITEM CLASS 61%

purchase out-of-home entertainment MAIN ENTRÉE

Source: nielsen

16

18%

| Progressive Grocer | Ahead of What’s Next | April 2017

OTHER

Source: nielsen global online consumer confidence survey, Q4 2016


Mintel Global New Products Database Category Insights

Cheese Market Overview The United States is the standout growth market in the North American cheese category, with an average value growth of 3.5 percent over the past five years. Household penetration of natural cheeses in the United States is at a peak: 90 percent of U.S. adults indicate that they’ve eaten natural cheese in the past three months. key issues U.S. manufacturers are increasingly catering to the demands of Millennials, who are high users of cheese. While taste and price are top priorities for cheese purchasers of all ages, cheese selection for younger shoppers is likely to be focused on organic varieties. U.S. cheese manufacturers have been prompt to respond to Millennials’ appetite for organic cheese: Innovation in the natural/organic cheese segment has increased from 1.5 percent of launches in 2012 to 10 percent in 2015. Protein content is the secondary consideration that U.S. Millennials would be influenced by when purchasing natural cheese over another kind. However, cheese positioned as being high in protein is still an untapped opportunity in the United States, with only 1 percent of the total new product launches in the last 12 months to September 2016 featuring a “high protein” claim.

As Millennial consumers aspire to live a healthier lifestyle, they seek what they perceive as being better for them: organic cheese, but also nondairy cheese. Cheese brands thus have room to reinforce their health messages, particularly in comparison with dairy-free varieties.

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| Progressive Grocer | Ahead of What’s Next | April 2017

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


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All’s By Annette Maggi

Leveraging the

Path to Purchase Successful health-and-wellness programs follow consumers every step of the way.

D

igital couponing, ecommerce, social media influence — these are just a few of the factors that have drastically changed the traditional consumer path to purchase. Opportunities exist at every step of today’s path to purchase to impact shopper purchase decisions in relation to better-for-you foods. The traditional path to purchase was a linear journey, starting when the consumer recognized a need (e.g., lack of food in the house), moving through a multistep shopping process, and ending when he or she evaluated the product purchased (Did I get what I needed? Was it a positive experience?). Today, the process is far from linear, and shoppers may repeat steps, reconsider and review alternatives within the retail industry before making a purchase. The new path to purchase is circular, despite the fact that the starting and ending points are still the same. The final goal was, and is, a purchase. Consider the following disruptors of the path to purchase and how retail dietitians can leverage them to increase sales of healthier foods.

To leverage health and wellness as a business driver, it’s essential that your messaging be present wherever and whenever shoppers are present.

Retailer website: Shoppers sign up for retailer newsletters, download online coupons and review products online before purchasing. While many RDs have a presence on their company websites, they’re not typically targeted to influence shoppers visiting stores or purchase behavior once the shopper is in the store. Ensure RD programs and services are easily found online and that signups can be accomplished electronically. Include links to RD blogs and social media pages, and feature “RD Picks”

20

right on the website. Having actionable RD insights available on your company’s website will not only give consumers one more reason to shop your stores, but also provide valuable insights and build relationships. Social content: The goal here is to drive purchase and help consumers make decisions about foods that align with their lifestyle goals. Make your social content direct. Give product reviews, and highlight specific foods and short recipes that meet a specific health or wellness need. Suggest that RD product ideas get put on the grocery list. Link social posts to digital coupons or promotional pricing on specific products. Tell shoppers exactly where to find better-for-you products in your stores.

Multichannel engagement: Because today’s shoppers are techsavvy, it’s essential that health-and-wellness engagement be consistent and relevant across all touchpoints they have with you. If your company offers online shopping, how is the RD leveraged to highlight healthier products? Are “RD Picks” both signed in the store and tagged in online shopping? If the RD is a team of one at your company, how can you train and leverage store staff to ensure guidance to healthier products is available in stores as well as online and in social outlets? To leverage health and wellness as a business driver, it’s essential that your messaging be present wherever and whenever shoppers are present. PG

| Progressive Grocer | Ahead of What’s Next | April 2017

Annette Maggi, MS, RDN, LD, FAND, is executive director of the Retail Dietitians Business Alliance (RDBA), www.retaildietitians.com.


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NEW By Nancy Krawczyk

How Stubborn Stereotypes

Hold Women Back

Women leaders are seen as competent or well liked — rarely both. women back, they’re keeping men from developing a more effective, balanced leadership style, according to “Moving Beyond Male/Female leadership,” a recent study from Redwood City, Calif.-based executive coaching firm Skyline Group Inc. Employees surveyed said that they most respect assertive, competitive male leaders and communicative, inclusive female leaders, but have less favorable feelings toward men and women who exhibit the other gender’s “accepted” leadership styles. What’s worse, the study found, women promote these gender stereotypes as much — or more — than men.

7 Key Factors The Skyline study found that women who adopted “masculine” behaviors were viewed by male and female employees as bossy. The study looked at seven key facets of leadership: Executive presence: Employees respond

T

hink of a woman Men are leader in your orgapraised for nization. Would you taking big say she’s “assertive” risks, while or “bossy?” Is she women are “in control,” or is she “cold?” Is she expected “hands on” or “a micromanager?” to offer Women continue to face entrenched stereotypes that cast men — less risky and only men — as “natural leaders.” options. Maybe you, too, believe that the most effective business leaders are aggressive, driven men who never express their emotions while making business decisions. But have you considered how this stereotypical view of “strong leaders” creates a double bind that penalizes women? Research shows that when women take on “male” leadership traits, they’re deemed ruthless and too ambitious. If they don’t “lead like a man,” however, they’re judged “too soft” to be leaders. These stubborn stereotypes are not only holding

22

more favorably to women who display poise and authenticity, and less favorably to those who “command respect.”

Self-confidence: Women who display confidence through actions are more appreciated than those who talk about their accomplishments.

Emotional control: Women leaders are expected to share their feelings, or risk being seen as “cold.”

Entrepreneurship: Men are praised for taking big risks, while women are expected to offer less risky (and more) options.

Coaching and mentoring: Women leaders who create development plans are seen as bossy. Those who involve employees in planning and exploration aren’t.

Monitoring the performance of direct reports: Daily progress checks will label a woman as a micromanager. Looking at overall performance is seen as more effective.

Planning and organizing: When men make small decisions

| Progressive Grocer | Ahead of What’s Next | April 2017

to yield a larger plan, they’re viewed as leaders. When women use the same strategy, they’re seen as dictatorial.


Facing persistent but erroneous stereotypes of what makes an effective leader, many women are pushed to continually recalibrate their behavior. As one report from New York-based research and strategy development firm Catalyst puts it, women are “Damned If You Do, Doomed If You Don’t.”

What Companies Can Do What can companies do to chip away at these stereotypes so that they’re able to leverage the best talent — male or female — in leadership roles? I agree with many of Catalyst’s recommendations: Provide training that raises awareness of the effects of stereotypical perceptions. Include information on recognizing bias, inconsistencies between company values and actual behavior, and the causes and detrimental effects of gender inequality at work. Look at your formal evaluations. Are they based on welldefined criteria? If not, gender bias can creep in. Assess the workplace and identify ways women are at risk of bias. What’s the ratio of men to women in the company — and in specific work teams or divisions? What’s the ratio of men to women at specific job levels?

Create innovative work practices that target stereotypical bias. Cultures that favor authoritative and hierarchical leadership styles are often less welcoming to women and/ or supportive of their career goals. Take a few minutes and ask yourself: When you think about a woman leader, what qualities does she have? What are her strengths? Chances are, your perceptions of what makes a “good” woman leader are similar to those of your colleagues. And that’s a problem. Because the way you think about effective leadership is likely based on gender stereotyping, which can derail women’s career goals; keep men and women from being their strongest, authentic selves at work; and, certainly, depress business results. Wiping out stereotypes — the first step in workplace transformation — starts with you. PG Nancy Krawczyk is VP of marketing and corporate partnerships for the Network of Executive Women, Retail and Consumer Goods, a learning and leadership community representing 10,000 members, more than 950 companies, more than 100 corporate partners, and 20 regional groups in the United States and Canada. Learn more at newonline.org.


Store of the Month

Fork Lift by Nugget Markets, Cameron Park, Calif.

Highway to a Hybrid Fork Lift by Nugget Markets is cruising as a next-generation lifestyle/price-impact concept supermarket. By Meg Major

W

hen you come to the Fork Lift in Northern California’s Cameron Park, take it. Especially if it’s Fork Lift by Nugget Markets, which provides a case-study on how a once-underperforming warehouse supermarket successfully reinvented itself by spotlighting organic, local and specialty foods while maintaining its price-impact roots. As its solo lifestyle/price-impact hybrid store — but not for long — Fork Lift is a unique member of Woodland, Calif.based Nugget Markets’ 16-store family dotting the greater Sacramento and Sonoma valleys, and most recently, Marin County, with Sonoma Market and Glen Ellen Village Market. Nugget’s 12 namesake banner stores reside in an elite class of supermarkets around the country that set the high watermark for stellar store design, exceptional perishables and unrivaled service. Accordingly, the formation of Fork Lift, as a brandnew addition to the fold, was a calculated risk, but one that’s paid off nicely since its debut in December 2014.

24

| Progressive Grocer | Ahead of What’s Next | April 2017


April 2017 | progressivegrocer.com |

25


Store of the Month

Fork Lift by Nugget Markets, Cameron Park, Calif.

Hybrid HeroeS L-r: Store director randy Watson, Grocery Manager daniel Moore and PoS Manager Molly Lewis are integral to the proficient and productive 90-member Fork Lift team.

The 50,000-square-foot Fork Lift has hit its stride as a best-of-both-worlds destination store that seamlessly blends the special charms of the regional retailer’s flagship banner with the utilitarian framework of its Food 4 Less forerunner. While the store’s hipster vibe doesn’t necessarily scream “no-frills warehouse store,” Nugget Markets President and CEO Eric Stille affirms, “It’s got the bones of a Food 4 Less.” Those sturdy bones, he adds, provided an ideal canvas on which to tinker with a hybrid concept that took its main cue from its initial warehouse configuration, tricked out from there with ample inspiration from market trends and competitive dynamics. The tease on the cover of this issue, “The Ultimate Secret Behind Industry’s Most Impressive Hybrid Warehouse Store,” is a direct nod to the 90-member Fork Lift team, each of whom, Stille says, is integral to the overall process of redefining what a warehouse store can be. Led by Store Director Randy Watson,

26

| Progressive Grocer | Ahead of What’s Next | April 2017


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Store of the Month

Fork Lift by Nugget Markets, Cameron Park, Calif.

the New Age warehouse market embraces many of the format’s hallmark features — such as bulk foods, a vast produce department and value pricing on conventional staples — while setting the differentiation bar a few decisive clicks higher in other departments yet staying true to its distinctive local roots.

Organics on Top Upon entry, guests are greeted by a dynamic “wall of values,” which immediately conveys the store’s foundational warehouse roots with aggressive promotions of large-quantity national brands. A series of bulk food stations pepper the inside of the “walls” on the way to an expansive, vibrant produce department where organics “get top billing,” notes Watson. The three-pronged technique packs a powerful punch to immediately convey an inviting, “cheap chic” ambiance with a convincing formula that fuses a price-impact format with a lifestyle specialty grocer under one roof. Fork Lift prominently plays up 12 lifestyle

Fork Lift by Nugget Markets 3333 Coach Lane, Cameron Park, Calif. Grand Opening: December 2014

Sales by Department Total Grocery (Includes Adult Beverage)

59.0%

Fresh Meat, Seafood and Deli

17.5%

Fresh Produce

14.9%

Bakery, Kitchen and Specialty Cheese

$46.50

Average Order Size

designations for specific product attributes, including organic, local (within 100 miles), non-GMO and vegetarian, which are showcased throughout

Produce

Bulk Foods

A series of bulk food stations featuring hundreds of options invite guests to purchase as much or as little of their favorites as they want. Formerly housed in large tubs, Fork Lift’s bulk foods are now offered in bins that add an aesthetically pleasing touch that borrows heavily from the flagship Nugget Markets approach.

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| Progressive Grocer | Ahead of What’s Next | April 2017

8.6%

Organics and locally grown items get top billing in the show-stopping produce department, which is a star attraction of Fork Lift, whose mix features roughly 140 organic items and 160 conventional (fewer or more in either direction as the situation warrants). With produce deliveries six days per week and fresh-cut fruit done on-site daily, Store Director Randy Watson says Fork Lift features “one of the freshest fresh produce departments you’ll find in the state of California.” Comprising about 15 percent of total selling space, the department is arranged in such a way that makes each set, if not each item, stand on its own. On the day of PG’s visit, Assistant Produce Manager Erik Diehl noted that the redesigned produce department “turned out great, because it has a very vast, open feel,” highlighted by large blocks of product that play up the natural beauty of fresh produce’s colors and sensory appeal. “It’s all about color, and inserting the proper color breaks with a keen eye to detail,” notes Diehl. In keeping with the store’s warehouse roots, “the majority of products are still presented right out of the box,” adds Nugget President and CEO Eric Stille.


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Fork Lift by Nugget Markets, Cameron Park, Calif.

the store with pallet art and shelf tags, conveniently leading shoppers with special diets or product preferences to the appropriate areas. To offer a helping hand when shopping for specific food categories, Fork Lift features shelf tags and high-visibility wall art denoting items suited for special diets or lifestyles. Designed entirely by Nugget’s in-house team, Fork Lift also houses an impressive selection of chefprepared foods; an in-store bakery (breads baked in El Dorado Hills store and brought up daily); a service meat department featuring local and organic meats and made-on-site sausage; a full deli complete with build-your-own sandwiches, salad and grain bars, and fresh soups; and a well-appointed healthy living department. Beer lovers are treated to the largest selection on El Dorado County’s west slope, while cheese lovers relish the specialty cheese counter. Reflecting on the store’s nine-month transition, Stille says the build-it-around-organicsand-they-will-come approach was unproven, yet ripe for experimentation. “Before the conversion,

Store of the Month

the location was in the bottom third of the company’s stores, so the time was right to mix things up,” notes the fourth-generation grocer who leads the company started by his grandfather and great-grandfather 91 years ago. Fork Lift’s foray into full-tilt organics and natural began, Stille describes, “by dipping our toes in the water, beginning in the refrigerated departments, which enabled us to double the SKU count. As our commitment to natural and organics gradu-

Deli and Prepared Foods

Just past produce, en route to the deli and bakery, are expansive self-service salad, olive and grain bars and a full-service charcuterie. With more than 50 chefprepared entrées, including vegetarian selections, Fork Lift’s high-volume specialties are pre-packaged and made onsite. A vast assortment of signature dips, snacks and side dishes hailing from the nearby El Dorado Hills Nugget Market offer something for everyone. Kitchen Manager Austin Triplett, who oversees the store’s bakery and deli and who originally came up through the ranks via Nugget’s coffee bars, says he’s “loved every minute working at Nugget Markets, and now at Fork Lift. I really fell in love with the company, the people and the processes,” largely as a result, he adds, “of knowing that the CEO knows you by name.” Fresh meals are a big hit with the Fork Lift crowd. “Our guests are really responding to chef-prepared meals that they can talk about with associates,” says Triplett. “We really promote product knowledge with our team behind the counter, to focus on helping them make their meals — and lives — better, whether it be by knowing what pairs best, knowing what wine goes best with a dish and knowing what creations you can have with it.” Triplett also gives kudos to Fork Lift’s exceptional “sandwich connoisseurs,” who thoroughly know their stuff. “We have so many guests that come in and just say, ‘Make me whatever.’ They trust us, and it’s also fantastic that they’re being more creative with themselves.”

April 2017 | progressivegrocer.com |

31


Store of the Month

Fork Lift by Nugget Markets, Cameron Park, Calif.

ally grew by adding more and more products to each department, we saw immediate sales increases as we went.” Consequently, he continues, “We felt we were onto something, and it just felt right when we moved on to produce, to take it at least 50 percent organics and see what happens.”

Elevating Itemization The trial balloon took flight, and as momentum continued to build, the decision was made to remove

the 8-foot steel beams within the store, which, Stille says, “allowed us to double the SKU count up and down the grocery aisles, again focusing on natural, organic and specialty, while selectively adding conventional shelving where needed.” When looking back on the before-and-after results, Stille says the journey to create Fork Lift was a learning experience on many levels. The original warehouse format “had heavy nationalContinued on page 38

Specialty Cheese

Bakery

Fork Lift’s in-store bakery belies its warehouse lineage. Fresh-baked scratch breads, such as rustic batards, Pugliese and sourdough, are big sellers and a particular point of pride for Kitchen Manager Austin Triplett. “Our El Dorado Hills store bakes our signature breads in stone deck ovens, using our own handmade recipes, and delivered to us daily,” he notes. The bakery also carries a variety of cookies, sweet goods and custom cakes, baked and decorated in-house daily. Triplett, who has been with Nugget for three years, says the company’s culture of training and empowerment puts him on a fast track to become a foodie, “because of the people that so generously pour it into you,” such as CFO Dennis Lindsay and HR Director Mary Muller. “Dennis is the reason why I can walk in here confidently and actually know the numbers behind it,” Triplett explains.

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| Progressive Grocer | Ahead of What’s Next | April 2017

A phenomenal point of difference for Fork Lift is its specialty cheese counter, at which 50 percent of sales are from items individually hand-sold to guests. Directed by resident cheese specialist Robin Luke, the cheese department was the last added to the store, as it wasn’t part of the original conversion plan. President and CEO Eric Stille says, “We debated about adding service cheese,” which, as a service item, would potentially stray from the priceimpact model. “But with a rock star like Robin, who serves as a concierge of the store, it’s helped complement the overall offering, and it’s been well worth it,” as evidenced by compounded 20 percent quarterly gains, and counting. “By far, this was the biggest divergence and commitment, but it also put us on the map for fresh, and we felt we just had to make a statement,” adds Stille. “This store’s really fun,” beams Luke, whom Stille also refers to as “a cheese specialist extraordinaire.” “We have a lot of great guests, and it’s just been awesome to turn people on to good cheese,” she says. Crediting “our awesome store director, Randy Watson,” Luke says, “The biggest thing about being a part of the Nugget family is the culture that provides freedom to explore and have fun.” Exiting the corporate world for her “encore career,” Luke, who joined the company two years ago, is grateful for having the chance to do “something I am passionate about. Once people get to know me and become familiar with the cheeses they purchased” — often at her suggestion — she relishes the confidence entrusted to her to select new varieties for guests, based on their past experiences. Luke collaborates with fellow department leaders to crossmerchandise with products like fresh produce, crackers, jams, bulk foods and deli meats. “We all kind of work together to create festive, fun pairings,” she says. “It’s a very cool, special family to be a part of, all focusing on one thing: making our guests happy.”


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Store of the Month

36

Fork Lift by Nugget Markets, Cameron Park, Calif.

| Progressive Grocer | Ahead of What’s Next | April 2017


Meat/Seafood

Meat and seafood lovers have ample reason to applaud Fork Lift, which offers vast varieties of proteins in every pack size and flavor profile imaginable. While the unmistakable quality proposition is reinforced by a full-service meat counter offering fresh meat, fish, cut-to-order selections and some 140 entrées, the value message is heavily hammered home by an 85-foot self-service meat case featuring a wide variety of beef, pork, lamb and poultry. The bounty of the selfservice case has the distinction of being the largest of its kind in the company. With an impressive selection of valueadded items spanning the full range of fresh fish, poultry, pork and beef, the mantra of Fork Lift’s meat and seafood team — which also makes Nugget’s signature Fresh to Market sausage daily — is simple: “Whatever our guest needs, we’ll make it happen,” affirms meat cutter Jonathan Haskell. USDA Choice rules the Fork Lift roost, which is occasionally subject to change, depending on market conditions. “But we primarily prefer to feature Choice, which is always offered from the counter,” notes President and CEO Eric Stille. Fork Lift’s meat and seafood leaders remain close at hand for recommendations and oven-ready specialties, Among the top trends that Haskell is seeing of late is greater demand for grass-fed beef and airchilled poultry, both of which “are starting to pick up quite a bit.” Featured items are rotated based on seasonal preferences, and at the time of PG ’s visit, oven-ready items were abundant, including such ontrend favorites as whole stuffed baconwrapped semi-boneless chickens, stuffed game hens, and roasts. Special orders are also popular at Fork Lift, especially during the holidays, for which the meat and seafood teammates are well prepared. “We’ve got our system down pat, and when they come in, they show us their order ‘valet’ number, [and] we’ve got it wrapped, numbered, and ready to rock,” Haskell asserts. The same applies on an everyday basis for special orders, which are a welcome service offered by the hybrid warehouse market.

April 2017 | progressivegrocer.com |

37


Store of the Month

Fork Lift by Nugget Markets, Cameron Park, Calif.

Continued from page 32

brand presence, and we were disappointed with its performance.” Conversely, at the conclusion of the rebranding, Fork Lift emerged at the top third of the company’s best performers, which Stille observes was “exponentially earned by double-digit-on-topof-double-digit increases,” primarily by itemization changes, including an additional 20,000 new items. “The biggest change of all was the itemization,” Stille says, noting, “It really shows the power of organics, which is what guests in this particular area were looking for.” Each departmental overhaul was analyzed to ensure that labor savings were maximized “in order to allow us to stay as close [as possible] to our roots of a price-impact store,” which Stille says helped define “our own brand of hybrid that marries the best of a price-impact and best of a lifestyle store.” The decision has proved to be both favorable and fortuitous — but not without teachable moments. “While we didn’t discontinue a single Hispanic item with the

conversion, because we chose to integrate products versus offering strictly Hispanic-focused aisles, we lost the Hispanic shopper slowly, which was not our intent by any means,” admits Stille. “That was the one downside of the conversion, but we’ve since stepped back to ask where we went wrong.” It’s an important question, he adds, “because we plan to convert our Woodland store to Fork Lift as well, but we’re going to focus on a definite heavier Hispanic focus,” including the addition of a fresh department.

Refreshing the Promise While the store’s traffic flow has remained the same, its predecessor had no service departments prior to conversion. “So it was a big transition balancing the required efficiencies of a price-impact format that’s still designed for volume against wanting to elevate the fresh element,” explains Stille, noting that Fork Lifters survey the competition weekly to maintain the store’s value-pricing proposition. To that end, Fork Lift significantly expanded prepared foods, many of which hail from the nearby El Dorado Hills

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Nugget Market. Stille observes, “We have a small kitchen here with limited production, with 50 percent of the prepared foods and bakery items being brought in,” which he says is both prudent and productive. “It’s playing off of both brands, but Fork Lift has differentiated itself. It is still a warehouse store with a Nugget feel.” Indeed, the wide aisles and easy-to-navigate floorplan offer “a little more divergence” beyond a grid for “a pallet drop,” notes Stille. “We’re touching the displays a little bit more, which gives us the ability to bring in unique items, along with a choice between organic and conventional,” he adds. “While we always have our price-impact hat, at the same time we’re still looking to merchandise in such a way that speaks to freshness first, as well as uniqueness.” Based the success of the item mix and adherence to remaining aggressive on pricing, Fork Lift added a service gourmet cheese department roughly a year after the store reopened, which further proves that a price-impact format can still be fun, without feeling sterile. In terms of design, the polished concrete floors and exposed ductwork ceiling are intact from the original store, while new aisle markers and artwork, all created in-house by hand, are designed to stimulate the senses “to let the product speak for itself,” according to Stille. Another noteworthy departure from the former

Healthy Living

Fork Lift’s healthy-living section is stocked full of quality brands, Fair Trade products, and Nugget’s own line of Fresh to Market vitamins, produced by Vitamer. For recommendations and suggestions, guests can consult with Healthy Living Specialist Aman Notra, who enjoys interacting with customers to help them find the best products for their needs.

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Store of the Month

Fork Lift by Nugget Markets, Cameron Park, Calif.

model was the addition of baggers, which Stille says was carefully deliberated prior to proceeding. “But adding baggers actually helped the productivity of the checkers, while further enhancing the shopping experience, so it wasn’t as high of an expense as we originally thought,” he explains, characterizing the move as all part of the giveand-take of the price impact evolution.

Reflecting on the process that hoisted Fork Lift into a league of its own, Stille enthuses: “It was pretty cool, and very fun watching it come together, especially for the associates, because they were giving it their all. But once we acknowledged we were selling something that the guests really didn’t want, it all fell into place — thanks to people that made it happen.” PG

Beverages

If you’re thirsty, you came to the right place. Fork Lift’s single-serve drink case, which runs the full length of the store, features a staggering array of beverages of all kinds. Offering every drink option imaginable — from juices to waters to soda and sparkling beverages — the stars of the show are geared to adults, in a tremendous growth spurt from its former limited-assortment choices. “Adult beverages was somewhat of an Achilles heel in the original store,” explains President and CEO Eric Stille, “but after doubling the dedicated space, providing far greater choices is what drove the increases,” a strategy that he says pertains to the vastly expanded wine and spirits department as well. “It’s been a nightand-day difference.” The self-serve wall features the largest selection of microbrewed beer east of Sacramento, which follows the lead of the widely popular craft beer scene, “which has brought a whole new awareness and appreciation [to] our guests, many of whom have switched from wine,” notes Stille. The craft beer movement, he asserts, “has truly re-energized the category.” Fork Lift also features an extraordinary selection of local, domestic and imported wines, about which the department’s team of stewards and experts are ready to answer questions and offer suggestions. “What makes it fun for our team here,” Stille believes, “is the room to do some creative merchandising and aggressive promotions.”

Grocery

Among the many aspects that Grocery Manager Daniel Moore savors most about his role is the ability to size up — and quickly seize, if so desired — an unexpected selling opportunity with something “I can throw out on the wall and know I’m going to beat anybody in town.” In addition, Moore says that the “sheer selection in our aisles has been tremendous for this town,” where he’s lived for the duration. “I started at this store when it was Food 4 Less, and although I wasn’t here immediately after the conversion, the opportunity to come back and run the grocery department has been a fantastic experience.” Further, based on direct feedback from his friends and family, Moore affirms: “The community loves Fork Lift. They can come here now and get everything they need without going anywhere else,” to say nothing of its value-driven cred. “There’s nowhere else like Fork Lift, which features abundant displays of grocery staples at excellent prices,” he adds. “You can’t really explain it until you’re here. And then you’re like, ‘Holy moly, this place is awesome!”

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| Progressive Grocer | Ahead of What’s Next | April 2017


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Grocers remain upbeat despite political uncertainty and an economy waiting to be kicked into high gear.

84th AnnuAl RepoRt of the GRoceRy IndustRy

Balancing ExpEctations and

REality

Analysis by Joan Driggs, Jim Dudlicek, Bridget Goldschmidt, Randy Hofbauer and Katie Martin / Research by Debra Chanil

o

ptimism seems to be running much higher than reality would indicate among the nation’s grocery retailers. At least that’s the impression we’re left with, based on the responses Progressive Grocer received to its latest survey that’s driving our 84th Annual Report of the Grocery Industry. In fact, responses indicate that grocers are more optimistic than they’ve been in recent memory, buoyed by a peak in consumer confidence, though dampened by the prospects for national immigration reform, the proposed Border Adjustment Tax, lingering deflation that has depressed sales numbers, and ongoing competitive pressures that are challenging traditional retailers to innovate, streamline and stay relevant.

April 2017 | progressivegrocer.com |

43


84th 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)

38,441

100%

$668,680

100%

Supermarket-Conventional

26,712

69.5

424,161

63.4

Supercenter

4,327

11.3

168,592

25.2

Supermarket-Limited Assortment

3,396

8.8

23,354

3.5

Supermarket-natural/Gourmet Foods

3,382

8.8

42,602

6.4

Warehouse Grocery

455

1.2

5,334

0.8

Military Commissary

169

0.4

4,636

0.7

Conventional Convenience

153,816

n/A

441,985

n/A

Gas Station/Kiosk

20,699

n/A

n/A

n/A

12,678

n/A

19,383

n/A

1,370

n/A

153,378

n/A

719

n/A

4,229

n/A

PerceNt of total

SaleS ($ millioNS)

PerceNt of total

OThER FOOd RETAiL FORMATS

Superette Conventional Club Military Convenience Store

Source: Nielsen TDLinx; Progressive Grocer Market Research, 2017

SuPermarket SaleS by SaleS raNge Number of StoreS SUPERMARKETS ($2 MiLLiOn OR MORE)

38,441

100.0%

$668,680

100.0%

ChAin (11 OR MORE STORES)

31,571

82.1%

$632,372

94.6%

$2,000,000 TO $4,000,000

2,163

5.6

6,452

1.0

$4,000,000 TO $8,000,000

7,310

19.0

43,704

6.5

$8,000,000 TO $12,000,000

3,752

9.8

39,137

5.9

$12,000,000 TO $20,000,000

5,060

13.2

82,696

12.4

$20,000,000 TO $30,000,000

6,124

15.9

152,186

22.8

$30,000,000 TO $40,000,000

3,408

8.9

118,429

17.7

$40,000,000 TO $50,000,000

2,257

5.9

100,066

15.0

$50,000,000+

1,497

3.9

89,703

13.4

indEPEndEnT (10 OR FEWER STORES)

6,870

17.9%

$2,000,000 TO $4,000,000

2,309

6.0

6,951

1.0

$4,000,000 TO $8,000,000

3,981

10.4

21,607

3.2

$8,000,000 TO $12,000,000

354

0.9

3,559

0.5

$12,000,000 TO $20,000,000

172

0.4

2,648

0.4

$20,000,000 TO $30,000,000

42

0.1

1,013

0.2

$30,000,000 TO $40,000,000

9

0.0

303

0.0

$40,000,000 TO $50,000,000

1

0.0

44

0.0

$50,000,000+

2

0.0

183

0.0

$36,309

Source: Nielsen TDLinx; Progressive Grocer Market Research, 2017

44

| Progressive Grocer | Ahead of What’s Next | April 2017

5.4%

PG’s survey includes the responses of 125 retail grocery executives, including presidents, CEOs, C-level officials, store owners and managers, category managers and merchandisers, and store operations, sales, advertising and marketing executives. Amid the challenges of driving a $668 billion industry, grocery retailers are most worried about the rising cost of all aspects of doing business, labor issues and competitive threats. Not the least of those threats is the expanding foothold of online retailers, leading traditional grocers to invest more time and resources in online ordering, click-and-collect and home delivery services. In addition, they’re stepping up efforts to create a seamless experience for consumers, from the brick-and-mortar store to the endless aisle, and to engage shoppers more tenaciously along the path to purchase, from home to store and back. Within this competitive environment, differentiation is paramount, offering the convenience that cybercentric shoppers expect and the sensory experience that pure etailers can’t deliver. And as grocers grapple with a growing number of SKUs on

metHoDology Progressive Grocer’s 84th 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 125 retail executive participants, 64 percent classify themselves as independent retailers, while 36 percent are selfdistributing chains. Of the total respondents, 59 percent operate one to 10 units, while 41 percent operate 11 or more units. The average number of stores operated by 2017 Annual Report panelists is 443. Additional store count and sales data is provided by Nielsen TDLinx, which maintains a national database of supermarket and other retail format locations.


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84th AnnuAl RepoRt of the GRoceRy InduStRy

SaleS per Store (HiStorical trend) SaleS Volume ($ millionS) $17,500,000 17,000,000 16,500,000 16,000,000 15,500,000 15,000,000 2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Source: Progressive Grocer Market Research, 2017

their shelves, limited-assortment retailers are coming on strong to serve consumers seeking greater values. Year after year, grocers too easily can be described as being “cautiously optimistic” when it comes to how they feel

about the road ahead. With all of the challenges, as well as the unknowns of a market undergoing change at a rapid pace, caution may be better than optimism, but prudence shouldn’t be allowed to suffocate innovation.

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Q. How can improved transport packaging affect profitability of perishables? Eric Frank: Of course, packaging is important in every category, but when you’re transporting perishables, quality packaging can make or break the category’s success. Eggs, dairy, produce and meat are high-revenue generators for grocery operators, yet they’re also incredibly fragile and challenging to transport. What’s more, consumer surveys tell us that shoppers want these items to look perfect — produce should be unblemished, eggs must be clean and free of even hairline cracks, and meat should look fresh. Grocers lose money when their transport packaging doesn’t adequately protect perishables.

Q. How can RPCs help improve the successful transportation of product, especially perishables? Eric Frank: RPCs have a well-established ability to protect product, especially perishables, while preserving quality and freshness. What’s more, RPCs are proven to reduce

| Progressive Grocer | Ahead of What’s Next | April 2017

losses by curtailing the damage that renders product unsellable. In its Sustainability Playbook, Walmart reported that converting from corrugated packaging to RPCs for eggs reduced damage rates and saved 37 million eggs from being discarded.

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84th AnnuAl RepoRt of the GRoceRy InduStRy

RETAIL CLIMATE

Optimism

Reality

Outshines

a

the newly formed Americans for Affordable Products (https://keepamericaaffordable.com/) coalition to combat the BAT, which the National Retail Federation forecasts will cause prices to rise 15 percent, costing the average American family an extra $1,700 a year. While positive in appearance, performance measures aren’t a full picture of industry sentiment. Per-store sales volume was up 1.9 percent in 2016, compared with just less than 1 percent in 2015. These figures translate to an average perstore sales volume of $17.39 million in 2016, up from $17.08 million in 2015. Square footage and number of checkouts were also up slightly, painting a rosy picture of growth and the freedom with which consumers are spending. Nielsen’s TDLinx reports total grocery industry growth of 3 percent in 2016, which is based on a sales

s they enter 2017 with a new, pro-business administration in Washington, D.C., grocery retailers are feeling more optimistic than they did at the dawn of 2016. With the exception of 2015, when retailers — and consumers — really began shaking off the post-recession blues, optimism hasn’t been this high for more than five years. Just slightly more than a quarter — 26.2 percent — of respondents are feeling less optimistic. A limited labor pool, perhaps further threatened by immigration reform, as well as the proposed Border Adjustment Tax (BAT) is curbing enthusiasm for the coming year. Food Marketing Institute, the National Grocers Association, BJ’s Wholesale, Target, Meijer and Walmart are among the organizations that have joined

Retail Climate

more optimistic less optimistic

Compared with a year ago, are you more or less optimistiC about the retail Climate for supermarkets?

No Change

54.0

50%

49.6 45.5

40 32.9

30

26.2

28.3

39.3

36.8 30.9

29.8

33.5

30.5

28.2 22.6

20.6

20

35.9

32.5

46.0

45.9

44.3

41.5

22.2

27.7 20.3

23.6

27.6

45.9

26.4

25.1 29.0

10 0 2017

2016

2015

2014

2013

Source: Progressive Grocer Market Research, 2017

48

| Progressive Grocer | Ahead of What’s Next | April 2017

2012

2011

2010

2009

2008


Battling Bat americans for affordable Products launched a campaign to fight the proposed Bat.

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increase of 1.9 percent as well as the 1.1 percent increase in store count. But the combination of more stores — a great percentage of which are deep discounters — and current price deflation (which includes lowered egg and meat price adjustments after avian flu and drought a few years back) have definitely softened prospects for many retailers. The retail forecast for 2016 was 69.3 on the optimism scale, but on reflection, retailers rated the year a 62.5. Still, those pressures aren’t holding them back for 2017, with retailers again rating the coming year a 68.6 on a scale of 100. These numbers have been increasing since the low of 58.4 in 2009, when the country was feeling the full impact of the recession. Retailers might also be buoyed by the Conference Board’s Consumer Confidence Index, which hit a high of 114.8 in February 2017, up from 111.6 in January, and the highest since July 2001. With “improved … short-term outlook for business … consumers expect the economy to continue expanding in the months ahead,” according to Lynn Franco, director of economic indicators at the Conference Board. Still, the industry will be balancing the high expectations of shoppers with the reality of major retailers, including Kroger and Target, which are reporting diminished gains due to the aforementioned deflation and competitive woes, including ecommerce.

The BoTTom Line

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Rated on a scale of 0-100, where 0=Awful, 100=Sensational 2017 forecast

68.6

2016

2015

2014

62.5

68.1

66.3

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Source: Progressive Grocer Market Research, 2017 * “Star Ranch Angus® Beef In Store Promotion Material Test” Midan Marketing. Spring 2015 Tyson Foods, Inc. | 2017 | April 2017®/© progressivegrocer.com

49


84th AnnuAl RepoRt of the GRoceRy InduStRy

The BoTTom Line: ForecasT vs. acTuaL

forecast

Rated on a scale of 0-100, where 0=Awful, 100=Sensational

Actual

(ActuAl vs. forecAst from previous yeAr’s survey)

50%

40

69.3 62.5

72.2

71.8

68.1

66.3

68.1

67.0

67.7

66.5 65.6

63.6

70.3 62.1 59.4

60.8

67.1

58.4

30

20

10

0 2016

2015

2014

2013

2012

2011

2010

2009

2008

Source: Progressive Grocer Market Research, 2017

averaGe Per-sTore suPermarKeT PerFormance measures saLes voLume ($ millions) $20 15

$17.39

$16.92

$16.26

$15.57

$15.46

$14.68

2016

2014

2012

2010

2008

2006

33,300

33,100

2014

2012

10 5 0

seLLinG area (squAre feet)

33,360 2016

Source: Progressive Grocer Market Research, 2017

50

| Progressive Grocer | Ahead of What’s Next | April 2017

33,300 2010

33,250 2008

33,398 2006


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84th AnnuAl RepoRt of the GRoceRy InduStRy

COMPETITION

is Fresh overrated ?

W

ell, no. Although nonperishable products have definitely gained traction as part of a distinctive in-store experience, to differentiate themselves meaningfully, grocers must still primarily think fresh. In rating the most successful departments, 67.1 percent of respondents to this year’s Annual Report

survey chose meat as the top draw (see page 54), while deli/ grocerant/prepared foods occupied the second spot, with 60.8 percent attesting to its popularity. Other big lures were third-place produce, down from last year’s top spot; beer/wine/liquor (if applicable), up from fifth place last year; and private label, which soared from No. 12 to round out the top five, in line with store brands’ greater impor-

enhancing the in-store experience Merchandising/Brand enhanceMent (percent of respondents rating each strategy as extremly/very important) current

Year ago

private label

69.5%

61.2%

locally sourced products

69.1

65.7

signature products

66.7

52.2

grocerant/prepared foods

65.7

76.1

cross-merchandising

60.5

59.7

store-within-store specialty departments

57.0

54.0

Bogos

35.0

36.4

in-store pharmacies

32.5

23.4

free Wi-fi

28.0

16.4

cooking/meal prep stations

16.3

38.8

in-store services

(percent of respondents rating each strategy as extremly/very important)

custoMer interaction

(percent of respondents rating each strategy as extremly/very important)

on-site Butchers

current

Year ago

65.4%

71.2%

community programming

41.5

40.9

seafood specialists

38.3

36.4

florist

28.0

n/a

event planners/concierge services/catering

24.7

25.8

vegetable “Butcher”

24.1

n/a

cheesemongers

20.7

16.7

current

Year ago

community involvement

69.5%

74.6%

children’s/student programs

20.7

15.2

seasonal special events

62.2

57.6

service-based Kiosks

19.5

21.2

sampling/demos

53.0

50.7

certified chefs

18.3

19.7

healthy-eating store tours

22.9

18.5

self-checkout/check-less

17.9

n/a

in-store restaurant

22.9

23.1

Wine consultant

17.1

18.2

Wellness events/counseling

20.5

26.9

Wellness experts

15.7

21.2

health screenings

15.9

19.4

informational Kiosks

15.0

20.0

7.3

16.9

registered dietitians

12.0

10.6

cooking classes Source: Progressive Grocer Market Research, 2017

52

| Progressive Grocer | Ahead of What’s Next | April 2017


place, up from No. 3 last year. Retailers that have used this strategy effectively are H-E-B, with its Texas-centric offerings, and Ahold Delhaize, which creates “artificial scarcity” through its “Limited Time Originals” cross-category platform bringing together unique items across the store based on seasonal flavor profiles. Other popular

tance to the in-store experience. In fact, meat scored as the most influential department in driving stores’ overall brand, image or point of differentiation by a wide margin, followed by deli/grocerant/prepared foods, produce, organic, private label and center store (also see page 54). When asked what big issues were keeping them up at night, 42.8 percent of respondents identified competitive threats, which leapt from 14th place last year to third as a major concern. This response indicates a much rockier competitive landscape for grocers, caused by supermarkets’ extremely tight margins and the need to keep up with rapidly changing trends. Greater competitiveness could explain the uptick in limited-assortment stores, with their promise of quality products at value prices, from 3,325 stores to 3,396, with sales up a whopping 39 percent to account for 3.5 percent of the total supermarket sector, up from 2.6 percent last year. Be that as it may, the benefits of differentiation are clear: Looking at EBITDA over the last five years, research firm Deloitte LLP found that if a retailer provides differentiated products and experience, then growth is almost 13 percent in that particular segment compared with the average growth of 2 percent, according to Progressive Grocer Senior Editor Randy Hofbauer’s coverage of the National Retail Federation’s Retail’s Big Show in January. When it comes to ways to enhance the in-store experience, 69.5 percent of respondents zeroed in on private label, landing it in first April 2017 | progressivegrocer.com |

53


84th Annual Report of the Grocery Industry

Most Successful Departments Generating Sales

Driving Traffic

Rank Department Percent

Rank Department Percent

1

Meat

67.1%

1

Meat

57.7%

2

Deli/Grocerant/Prepared Foods

60.8

2

Deli/Grocerant/Prepared Foods

56.3

3

Produce

53.2

3

Produce

50.7

4

Beer/Wine/Liquor (If Applicable)

48.1

4

Organic

36.6

5

Private Label

44.3

5

Beer/Wine/Liquor (If Applicable)

35.2

6

Dairy

40.5

6

Fresh Bakery

33.8

7

Center Store

39.2

7

Front End

31.0

8

Fresh Bakery

38.0

8

Dairy

29.6

9

Frozen Foods

36.7

9

Gourmet/Specialty

26.8

10

Cheese

30.4

10

Center Store

25.4

11

Organic

26.6

11

Private Label

23.9

12

Gourmet/Specialty

25.3

12

Pharmacy

22.5

13

General Merchandise

25.3

13

Cheese

21.1

14

Health, Beauty & Wellness

24.1

14

Floral

19.7

15

Seafood

21.5

15

Ethnic

18.3

16

Ethnic

20.3

16

Seafood

16.9

17

Front End

19.0

17

Health, Beauty & Wellness

14.1

18

Floral

16.5

18

General Merchandise

11.3

19

Pharmacy

15.2

19

Frozen Foods

9.9

Source: Progressive Grocer Market Research, 2017

Most Influential Department in Driving Stores Overall Brand/Image/Point of Differentiation 6.8%

5.4%

Center Store

Private Label

37.8%

8.1%

Meat

Organic

12.2% Produce

17.6%

Deli/Grocerant/Prepared Foods Source: Progressive Grocer Market Research, 2017

54

merchandising and brand enhancement strategies include locally sourced products, holding steady at No. 2; signature products, which climbed from sixth place last year to third this year; grocerant/prepared foods, last year’s top program, which slid to the fourth rung; and rounding out the top five, cross-merchandising, which dropped a slot from last year. In the area of customer interaction, community involvement, seasonal special events and sampling demos all retained their spots in the top three, while healthy-eating store tours rose from seventh place last year to fourth this year, tying with in-store restaurants, which advanced from the fifth slot last year. Descending a rung from last year, this year’s No. 5 was wellness events/counseling. As for in-store services, on-site butchers, community programming and seafood specialists continue to hold the lead, at Nos. 1, 2 and 3, respectively, while promoting a store’s florist as a point of differentiation (new to this year’s survey) captured fourth place, and event planners/concierge services/catering dipped from No. 4 to No. 5. Also new to the survey were offering vegetable “butchers,” a service that’s recently received a lot of attention for its inclusion in the recently opened Bryant Park Whole Foods Market in New York City, at No. 6, and providing self-checkout/ check-less capabilities, in 11th place.

| Progressive Grocer | Ahead of What’s Next | April 2017

PG 0417 42-67 Annual Report bgJIMjoan.indd 54

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84th AnnuAl RepoRt of the GRoceRy InduStRy

sweating Bullets:

Costs, laBor anD Deflation leaDing worries

D

espite a new presidential administration that most in the industry regard as being more friendly to business and less likely to support a hike in the national minimum wage, the cost of doing business remains at the top of the list of things keeping grocery retailers up at night. Jumping up a few rungs on the worry ladder since last year is labor (from fifth to second), and that’s really no surprise. As the workforce continues to transition from

more seasoned employees to a younger generation with a decidedly different concept of the ideal workplace, retailers are looking for ways to make a mature grocery industry more appealing for a group that largely places corporate citizenry ahead of personal gain. As PG noted in its March 2017 feature on recruitment and retention, prospective employees want to know that they’re a good fit for

Big issues

Current

Keeping You up at night

Year Ago

No. 1

No. 2

No. 3

No. 4

No. 5

No. 6

No. 7

50.3%

48.9%

42.8%

35.7%

31.2%

28.7%

28.1%

(minimum wage, health care, etc.)

(recruitment, retention, diversity, training)

Labor

Competitive Threats

Price Deflation

Data Protection/ Security

Food Safety

Market Saturation

No. 1

No. 5

No. 14

No. 3

No. 2

No. 4

No. 6

63.9%

31.5%

5.1%

54.4%

61.4%

35.5%

29.9%

No. 8

No. 9

No. 10

No. 11

No. 12

No. 13

No. 14

27.9%

24.5%

17.8%

16.8%

5.2%

4.4%

3.9%

Increasing Overhead Costs

Keeping up with Advancements in Technology

Sustainability

Trust/ Reputation

Feeding the Hungry

Transparency

Genetically Modified Organisms (GMOs)

No. 7

No. 8

No. 9

No. 10

No. 12

No. 13

No. 11

63.9%

31.5%

5.1%

54.4%

61.4%

35.5%

29.9%

Benefits

(energy, infrastructure maintenance, etc.)

Source: Progressive Grocer Market Research, 2017

56

| Progressive Grocer | Ahead of What’s Next | April 2017


Other issues mentioned by retailers responding to PG’s survey included the cost of credit card transactions, which one respondent likened to “dealing with the mafia,” along with food costs and warehouse supplies.

84th AnnuAl RepoRt of the GRoceRy InduStRy

a company, so retailers ought to spend as much time creating a delightful experience for their associates as they do for their shoppers. The worry of competitive threats leapt to third place from 14th, obviously as a result of saturated markets and increased intrusion by other channels, especially online. Dreaded price deflation dropped to the fourth-highest worry from third, but clearly was still a concern among retailers struggling to satisfy bottom lines with a cheap food supply. It even managed to catch up with The Kroger Co., which in part blamed deflation for the end of its 52-quarter streak of same-store sales growth. But it’s clear that the giant won’t be shaken. “We are obviously disappointed,” Kroger Chairman and CEO Rodney McMullen said last month about the retailer’s Q4 results, which did see a rise in overall sales. “Kroger has always focused on executing against our long-term strategy. … We could stop all of these investments, given the headwinds our industry is facing. That might make our results look better today, but we are playing for the long term, and that requires being deliberate and determined.” Meanwhile, companies like Ahold Delhaize (buoyed by

its merger), Ingles Markets, Natural Grocers and Weis Markets posted Q4 gains, while others, like Smart & Final, Target and Whole Foods, slipped, with most still warning of continuing deflation. Target sustained a huge blow with a third straight quarter of lower comps in Q4, which Chairman and CEO Brian Cornell said “reflect the impact of rapidly changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores.” Making retailers less nervous than last year was data security, down to fifth after hitting second place in 2016 following a season of well-publicized data breaches. Food safety dropped two rungs but remained an important focus in a market where consumers are demanding increased transparency (as a separate concern, holding fast at 13th) about their food supply. Other issues mentioned by retailers responding to PG’s survey included the cost of credit card transactions, which one respondent likened to “dealing with the mafia,” along with food costs and warehouse supplies.

EXPECTED 2017 CHANGE IN OPERATIONAL FACTORS Score: 100=increase; 50=no change; 0=decrease 100 90

89.3 89.5 84.7

Current

86.7

80

Year Ago

81.6 73.6

70

74.7

71.6 73.3

72.4 64.7

69.4

66.8

70.9 60.5

57.4

60

63.5 57.4

52.8

50

42.8 40 30 20 10 0 Wage Costs

Benefit Costs

Competition

Percent Gross Margin

Energy/Fuel Costs

Source: Progressive Grocer Market Research, 2017

58

| Progressive Grocer | Ahead of What’s Next | April 2017

Technology Spending

Percent Net Profit

Retail Prices

Capital Expenditures

Employee Turnover


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84th AnnuAl RepoRt of the GRoceRy InduStRy

OMNICHANNEL

TECH CrEEp

O

n the omnichannel front, the number of grocers with a full-fledged program in place inched up compared with the year prior (three points to 12 percent), although there’s still a long way to go. The majority of grocers remain at work on development here, albeit at different areas in the process: Some 71 percent of respondents either are just getting started or have a strategy that they’re in the process of executing, about the same number as last year. Click-and-collect growth has been robust over the past year, with 23 percent of respondents saying that they have a program in place, up from 15 percent a year ago. This corresponds with the numerous stories of food retailers building out click-and-collect over the past year, from nationals such as Walmart and Kroger to regionals like Meijer and Strack & Van Til — even to independents, which made up a large chunk of the survey’s respondent base. It’s no wonder that click-and-collect is so big. First, young families and affluent couples — grocers’ most important customers — are “especially ready” to take

OmniCHannEl sErviCEs OffErEd

GradE Of COmpany’s sTraTEGy fOr COnnECTinG wiTH COnsumErs

Any Omnichannel Service (Net)

53.5%

Mobile Shopping Apps

29.6

Click and Collect

22.5

Curbside Delivery

18.3

Third-party Vendor Home Delivery (e.g., Instacart, MyWebGrocer, etc.)

16.9

Store-supported Home Delivery

14.1

In-store Mobile Product Scanning

8.5

Ordering Kiosks

2.8

Other Mentions

1.4

None

46.5%

Source: Progressive Grocer Market Research, 2017

60

advantage of online grocery shopping, according to a March 2016 report from the Grocery Manufacturers Association and The Boston Consulting Group. And when they do make purchases online, they’re likely to spend far more across all channels than they would have done shopping in the traditional manner, with uplift often ranging from 30 percent to 50 percent. Second, click-and-collect already has proved popular abroad in markets such as France and the United Kingdom, and geographic considerations, coupled with current consumer shopping patterns, indicate that such a service would be even more favorable in the United States — a powerful fit for consumers here, considering the automotive mobility of U.S. consumers and their extreme time constraints. Of course, there also has been much development on the third-party-delivery front, with respondents using such companies for home delivery doubling from 8 percent to 17 percent. This corresponds with the growth of partnerships between grocers and third-party delivery providers over the past year, particularly with Instacart

15.9%

36.6%

1.2%

12.2%

34.1%

Source: Progressive Grocer Market Research, 2017

| Progressive Grocer | Ahead of What’s Next | April 2017

A

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

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?


Benefits of MoBile Devices/ sMartphones CurrEnt

YEAr AgO

59.1%

50.7% Facebook

51.9%

39.1% E-coupons

44.5%

34.8% Digital Circular

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40.4%

37.7% Interactive Website

31.1%

• 100% vegetarian diet, except for milk

22.4% Store Circular (Print)

29.7%

• *Minimally processed. No artificial ingredients.

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23.2% Meal Planner App

29.4%

22.5% Shopping List App

27.9%

17.7% Order Online/In-store Pickup

27.2%

20.8% Personal Shopping Assistance

25.8%

21.7% Delivery of Online Orders

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B2B.OPENPRAIRIENATURALPORK.COM Source: Progressive Grocer Market Research, 2017 **FEDERAL REGULATIONS PROHIBIT THE USE OF ADDED HORMONES IN PORK. ™/© 2017 TYSON FOODS, INC.


84th AnnuAl RepoRt of the GRoceRy InduStRy

Tools Used To engage wiTh CUsTomers Primary Use

Use

To engage wiTh CUsTomers

To Change The way we do bUsiness

noT aPPliCable

Social Networks

92.0%

88.0%

4.0%

8.0%

Associate Feedback

82.4%

33.8%

48.6%

17.6%

Electronic Communications/Digital Surveys

55.7%

41.4%

14.3%

44.3%

Loyalty Card Data

53.6%

33.3%

20.3%

46.4%

Third-party Data Provider/Vendor

42.4%

15.2%

27.3%

57.6%

Focus Groups/Intercepts

37.7%

14.5%

23.2%

62.3%

Customer Service Hotline

35.8%

22.4%

13.4%

64.2%

Outside Agency

34.8%

10.6%

24.2%

65.2%

I

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CE

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Md. BCC-100 Poultry Cutter

Md. 9-22 Food Grinder

TH

CRU AR

N SWI R L I N

ST ON THE PE R

Source: Progressive Grocer Market Research, 2017

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| Progressive Grocer | Ahead of What’s Next | April 2017

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and Shipt, which have entered new markets and expanded their business with new and existing grocery partners. While the number of respondents saying that they have mobile apps hasn’t changed much over the past year — rising only two points to 30 percent, a small number when considering how many grocers are expanding their ecommerce — this could simply suggest that grocers are developing responsive websites for ordering, rather than fullblown mobile apps. New research from Aptaris and Dunnhumby shows far more grocers with or working on a mobile-friendly website (86 percent) than those with or working on an app (59 percent). This is anticipated to change, however, as the same report shows that nearly three-quarters (72 percent) of respondents believe grocery stores need an app. As for the most important

There also has been much development on the third-party-delivery front, with respondents using such companies for home delivery doubling from 8 percent to 17 percent. tools used to engage with customers, social networks bumped up to the top ranking from No. 2 last year, swapping places with associate feedback, both far ahead of other tools listed. This showcases the value and effectiveness that retailers find in direct communication with their patrons, whether online or face to face. Facebook took top mention again for interaction, with even more respondents saying it’s the No. 1 benefit that mobile devices offer, as consumers continue turning to their smartphones in-store. As Facebook grows to be a more powerful tool for consumers and retailers alike, the number of grocers ranking it at the top could very well grow, too.

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84th AnnuAl RepoRt of the GRoceRy InduStRy

DeclaratIon of

InDepenDents

I

ndependent grocers tend to be a forward-looking lot, and optimism remains high. “We’re off to a good start, and we feel pretty good about this year,” says Jimmy Wright, owner of Wright’s Market, in Opelika, Ala. “Certainly, you’re seeing somewhat of a lift up with the change in [presidential] administration and overall consumer confidence out there.” Pat Raybould, president of B&R Stores, based in Lincoln, Neb., also feels that while there are certainly challenges, the overall atmosphere is upbeat. “We’re seeing some bottom-line improvements,” he says. “I’m looking forward to the rest of 2017 and beyond.” While optimism is high, the general feel for the bottom line is down slightly, with independent retailers rating the coming year at 65.2 on a 0-to-100 scale (zero being awful

and 100 being sensational), which is down from last year’s forecast of 67. (At year’s end, independents actually ranked 2016 at 60.8) Some of this could be attributed to the uncertainty that always accompanies a change in administration, as well as the many challenges facing retailers today. Some of those challenges include wage costs, benefit costs and competition, which are the same top three operational factors that weighed on independents last year, and fall in line with the overall supermarket industry’s top three concerns. Independents do differ from the whole industry in their rising concern about retail prices, which ranked fourth compared with the overall industry’s eighth, while energy/fuel prices saw a big jump this year to hit the top five, from last year’s ranking of 10.

eXpecteD 2017 cHanGe In operatIonal factors For independent retailers. Score: 100=increase; 50=no change; 0=decrease 100

95.0 86.8

85.8

Current 83.0

80

Year Ago

80.7 73.2

70.2 69.8

69.0

66.7

60

60.7

64.9

70.2 60.7 53.6

46.5

66.1

58.8 52.8

50.9

40

20

0 Wage Costs

Benefit Costs

Competition

Retail Prices

Energy/Fuel Costs

Source: Progressive Grocer Market Research, 2017

64

| Progressive Grocer | Ahead of What’s Next | April 2017

Percent Gross Margin

Technology Spending

Percent Net Profit

Employee Turnover

Capital Expenditures


“I could see fuel as having some effect down the line, and utilities go up each year,” Raybould notes. B&R, which operates several banners, including Super Saver, Apple Market, Russ’s Market and Save Best, has actively been replacing older equipment with newer, more energy-efficient models and replacing open cases with models that have doors. Competition continued to rank in the top three of operational factors concerning independents, and the types of competition continued to grow. According to the National Grocers Association’s 2016 Independent Grocers Financial Survey, competition from other conventional supermarkets is the biggest threat — the first time that supercenters haven’t taken the top spot in the study’s nine-year history. However, both Raybould and Wright take a laissezfaire attitude toward competition. Wright observes that his market has seen a number of new stores open, from limited-assortment to discount retailers. “When I grew up, it was grocery store versus grocery store,” Wright points out. “Now we’ve moved into some kind of ‘hypercompetition.’” No one format has seemed to have a huge impact on his business, however. It’s more of “there’s a little bit here and little bit there,” when it comes to competition, he says.

The BoTTom Line for indies

How was 2016? How are prospects for 2017? Rated on a scale of 0-100, where 0=Awful, 100=Sensational 2017 forecast

65.2

2016

2015

60.8

66.0

Source: Progressive Grocer Market Research, 2017

Raybould notes that several new types of competitors have entered his market in the past several years, but the one currently having the most impact is the specialty channel that’s growing across the country. As for the big issues worrying independents? The top one remained benefits, including wages and health care. “My biggest concern right now is health care,” Wright affirms. “We’re in a state where one provider has almost 95 percent of the business.” He offers health care benefits to employees as part of an attractive benefits package, which he attributes to his abil-

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April 2017 | progressivegrocer.com |

65


84th AnnuAl RePoRt of the GRoceRy IndustRy

Labor, ranking as the No. 2 concern this year for both independents and the whole industry, made a significant jump from last year’s No. 5 concern.

ity to retain many long-term employees and minimize labor issues. Wright’s Markets’ cost to provide health care coverage for a family of four is about $20,000 per year. “You take that across multiple employees, and you see what we’re looking at,” he adds. “Health care is just wreaking havoc on us.” Labor, ranking as the No. 2 concern this year for both independents and the whole industry, made a significant jump from last year’s No. 5 concern. It’s certainly a concern for B&R Stores. Raybould notes that his market largely escaped the economic downturn and resulting high unemployment rates of the past decade. “When we got out of the recession, unemployment was already low, so labor continues to be a struggle,” he says. “We’ve

made some adjustments and have lowered our turnover with some increase in pay.” The minimum wage in Nebraska rose to $9 last year, but B&R also restructured the bonus plan for the company, allowing all employees to feel a “buy-in” with the stores’ success. B&R is an employee-owned company, so the bonuses are in addition to the profit sharing employees already receive. Overall, independents aren’t seeing any huge impediments to continued growth. As Wright says, “I think everything has been pretty stable.” PG

Big issues

Current

Keeping indies up at night

Year Ago

No. 1

No. 2

No. 3

No. 4

No. 5

No. 6

No. 7

63.1%

46.1%

37.1%

36.0%

32.9%

32.1%

29.7%

Labor

Data Protection/ Security

Price Deflation

Competitive Threats

Increasing Overhead Costs

Market Saturation

Benefits

(minimum wage, Affordable Care Act, etc.)

(recruitment, retention, diversity, training)

No. 1

No. 5

No. 2

No. 3

No. 14

No. 6

No. 6

75.4%

31.6%

57.9%

49.1%

3.5%

29.8%

29.8%

No. 8

No. 9

No. 10

No. 11

No. 12

No. 13

No. 14

28.1%

23.9%

18.1%

16.3%

5.3%

4.3%

3.4%

Food Safety

Keeping up with Advancements in Technology

Sustainability

Trust/ Reputation

Genetically Modified Organisms (GMOs)

Feeding the Hungry

Transparency

No. 4

No. 8

No. 9

No. 10

No. 11

No. 12

No. 13

33.3%

28.1%

26.3%

21.1%

10.5%

5.3%

3.5%

source: Progressive Grocer Market Research, 2017

66

| Progressive Grocer | Ahead of What’s Next | April 2017

(energy, infrastructure maintenance, etc.)


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Supply Chain Safety

Feature

Safeguarding

the Supply Chain New technology and retail-focused audits are among the latest tools for executives to manage the ongoing food safety journey. By Jenny McTaggart

I

t’s 10 p.m., and the U.S. Food and Drug Administration is knocking on your supermarket’s sliding glass doors. Do you know where your cucumbers are from? This may sound reminiscent of the public service announcements that started playing on TV back in the late 1960s, urging parents to keep track of their children’s whereabouts. Nowadays, however, it’s a realistic what-if scenario that’s keeping many food industry executives up at night as they grapple with deadlines and regulations tied to the Food Safety Modernization Act (FSMA), while also dealing with an ever-growing number of product recalls that have extended beyond fresh produce and meat to include areas like pet food and even the frozen section. Food safety is now easily one of the chief supply chain concerns for the top brass at supermarket companies, as evidenced most recently by an uptick in attendance at industry food safety trade shows and seminars. At this year’s Food Marketing Institute (FMI) Midwinter conference — an annual gathering of CEOs from retail and manufacturing companies — food safety was top of mind, according to Diane Cercle, chief marketing officer at Salt Lake City-based Park City Group. “Food safety used to not be a huge topic of conversation, but over the last couple of years, it has been,” she says. During FMI Midwinter, a representative from Associated Wholesale Grocers, also based in Salt Lake City, spoke about the wholesaler’s experience using services from ReposiTrak, a subsidiary of Park City Group that provides a track-and-trace solution, along with document management.

Meanwhile, at the Global Food Safety conference, hosted by the Global Food Safety Initiative (GFSI) in Houston earlier this year, a record-breaking crowd of 1,500 traveled from all across the globe to discuss the industry’s most pertinent issues. LeAnn Chuboff, senior technical director for FMI’s Safe Quality Food (SQF) Institute, who attended the conference, says that she was particularly impressed with the CEO panel, which featured Danny Wegman of Rochester, N.Y.-based Wegmans Food Markets, among others. “It was outstanding,” she notes. “They were talking about the continuous building of food safety programs, and how to get your workforce more engaged.” Indeed, CEOs are more concerned than ever before with the security of the grocery supply chain, and for good reason. Not only do they have FSMA regulations to contend with, but they’re also dealing with safety concerns — not to mention potential liability — involving a larger array

palM reader Many retailers are moving from paper to the cloud to comply with regulatory requirements.

April 2017 | progressivegrocer.com |

69


Feature

Supply Chain Safety

Cracking the Code Food retailers now have a new tool in place to help them become more proactive in their food safety efforts. The Safe Quality Food (SQF) Institute at Arlington, Va.-based Food Marketing Institute has just launched a farm-to-fork code specifically for retailers, which will allow them to earn “gold standard” certification in food safety. Under the new retail/wholesale grocery code, which is part of SQF’s edition 8 code, auditors will be looking at things like storage, handling and proper hygiene, according to LeAnn Chuboff, senior technical director at SQF. “What’s nice about the retail code is that it’s not just looking at the store,” she notes. “The emphasis is on management commitment. So we’re looking at corporate policies and procedures, and how that trickles down to the store level.” As of early March, SQF already had retailers lined up to try the new program. Chuboff says that all of SQF’s programs are now better designed to be preventive rather than reactive. “We’re trying to get away from that checklist mentality of an audit,” she explains. “Rather, let’s look at the company’s organizational commitment to food safety.” When she trains SQF auditors, Chuboff reminds them that when you go into a facility, “that’s that facility’s best day. They know you’re coming.” In fact, Chuboff finds that unannounced audits are the most successful way to ensure that corporate leadership is fully committed to food safety. “We decided to instill a mandatory unannouncedaudit requirement, in which one out of every three audits would be unannounced,” she notes. “What we found is that the scores didn’t really change much, but management commitment changed: the perception [of] having to be prepared 24/7, 365 days a year. … That perception, and the pride it causes people to take in their facility, is really something else.” Other new programs at SQF include an ethical sourcing code that looks at social and environmental responsibility, as well as a gluten-free program that’s allied with the Allergen Control Group (ACG) certification program. Meanwhile, the company is working on developing a foodservice code with the National Restaurant Association. Coming up in November, the 2017 SQF International Conference will be held in Dallas Nov. 7-9. “We’re currently looking for speakers who want to talk about the additions in the SQF code, so that we can provide solutions for the people who attend,” says Chuboff. At the end of the day, “food safety is a journey,” she concludes. “With food safety, there’s no destination. Just because you’ve finished an audit, you’re not done. Just because you have that certificate, you’re still not done. It’s a continuous-improvement journey.”

70

| Progressive Grocer | Ahead of What’s Next | April 2017

of produce and other fresh product from around the world, as well as the unique sanitary considerations of foodservice operations; a growing register of suppliers from the United States and abroad to keep track of; and smarter, more demanding consumers who will likely bring the need for supply chain transparency full circle in the not-too-distant future, thanks to the power of technology that allows anyone to access information at any time. “You really have to be on top of your game today,” observes Michael Ambrosio, VP of quality assurance at Keasbey, N.J.-based Wakefern Food Corp. “Regardless of what type of systems you have in place, it’s more about validating the accuracy of that information. Somebody could say a product is certified … but by who, and how do you validate that? It gets really intense. “You have to have a good infrastructure in place, you have to have good people working for you, and you have to pay so much more attention,” he adds.

On the Track Companies like ReposiTrak have been a major source of help as retailers sift through the regulations and aim to up their food safety game to stay on top of recalls. ReposiTrak, which has an exclusive endorsement from FMI, has been tracing products through the supply chain for 20 years, but the company added an automated document management system more recently, when FSMA legislation was still in the preliminary stages. ReposiTrak’s solution has been particularly helpful to the growing number of retailers that are involved in acquisitions, notes Cercle. “Their legacy systems can’t be merged easily, so their documentation had been very manual,” she points out. “Our system helps not only automate the collection of these documents, but it also keeps them current. It’s all exception-based reporting, and it sends out alerts. Our technology can even read inside the documents to guard against fraud and misrepresentation, which helps save dollars and resources associated with human review.” For now, document management is taking center stage, but Cercle predicts that once FSMA compliance is fully underway, a focus on trackand-trace will come back. Another company that’s heavily involved in traceability and FSMA compliance is Durham, N.C.-based FoodLogiQ. The company grew out of a consulting project between its parent company, Clarkston Consulting, and the Canadian government to develop a strategy for tracking cattle after the outbreak of mad cow disease in 2003. After the food industry was hit again with spinach- and jalapeño pepper-related E. coli outbreaks in 2006, FoodLogiQ was born to meet the need to help


keep the food supply chain safer. “We specifically work with grocers to manage their suppliers and track products across their supply chains, from grower to distribution center to retail locations,” explains Dean Wiltse, CEO of FoodLogiQ. “Food retailers use FoodLogiQ Connect to build an online supplier community, onboard their suppliers all at once, and stay on top of supplier audits, assessments and documentation. They also use our platform to manage quality incidents, report them directly to their suppliers or distributors, and recoup the cost of stock withdrawals. And with our lot-level traceability visualization tool, they can see exactly where product is at all times, especially when it matters most — during a recall or investigation.”

‘Responsibly Grown’ One retailer client of FoodLogiQ that has been particularly proactive in monitoring its vendors’ supply chains is Austin, Texas-based Whole Foods

Market, according to Wiltse. “In 2012, we began working with Whole Foods, their growers and other experts on the Responsibly Grown program, which launched publicly in 2014,” he notes. “With this program, prospective suppliers seek approval by entering data about their products, supply chain and certifications into the Whole Foods supplier portal, using FoodLogiQ’s platform. Once approved, the system surveys its suppliers on Whole Foods’ standards around growing practices, pesticide use and waste management, among other things, and then qualifies them for the listing of Responsibly Grown. Whole Foods stores, in turn, print identifying labels with the designation and place them on floor signage by the products.” New Hartford, N.Y.-based ParTech Inc. is another technology provider that’s helping retailers enhance their food safety. Minneapolis-based Lund Food Holdings began using ParTech’s SureCheck Advantage technology a little more than a year ago to support the food safety program in all of its Lunds & Byerlys stores throughout the Twin Cities area. The difference that the technology has made for the retailer has been indisputable, according to Chris Gindorff, senior manager of quality assurance and food safety at Lund Food Holdings. “ParTech’s SureCheck technology has allowed us to truly focus

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Feature

Supply Chain Safety

on our many compliance areas,” he says. “It has given us the ability to review our food safety programs at an extremely granular level. It offers us flexibility to measure and review whatever we choose, while providing cost savings in both labor and materials. And the best part is that it’s so simple to use.” The company has since installed and used SureCheck technology in almost every component of its retail locations and operations. “We employ the

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technology in asset protection to assist in keeping our operations safe, in operations maintenance to aid in monitoring equipment performance, and, of course, in food safety and quality to help meet or exceed regulatory compliance,” notes Gindorff. “This provides us with greater confidence that we provide fresh and safe products for our customers every day.” In addition, Lunds & Byerlys recently installed ParTech devices in one of its manufacturing facilities and plans to introduce more into a second facility, he observes.

“We specifically work with grocers to manage their suppliers and track products across their supply chains, from grower to distribution center to retail locations.” —Dean Wiltse, FoodLogiQ

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72

| Progressive Grocer | Ahead of What’s Next | April 2017

Having such crucial information available at retailers’ fingertips is certainly coming in handy, just in case FDA comes knocking. Further, looking to the future, this type of technology will likely prove invaluable if consumers keep demanding more information about the products on supermarket shelves. Notes Park City Group’s Cercle: “In a world where you can see everything on your phone and track virtually anything anywhere, I think consumers are going to eventually demand to see that path in the supply chain. That will force retailers and wholesalers — all participants in the supply chain, really — to deliver that transparency.” PG


Condiments

Grocery

Taste Test Flavor, ingredient and packaging trends continue to shape the condiment category. By Bridget Goldschmidt

F

iguratively and, quite often these days, literally, condiments are hot. Just listen to Patrick Ford, VP of Raleigh, N.C.-based Ford’s Gourmet Foods, maker of Bone Suckin’ Sauces, as well as seasonings and rubs, many made with organic ingredients. “Hot is always a good thing,” he affirms. “People love to have that burst of heat added with sweet, and it’s a home run.” His company’s latest flavor profiles, such as Honey & Habanero Wing Sauce, would seem to bear out that assessment. What’s more, condiments are coming from all over the planet, as well as from the fertile imaginations of their creators. As Austin Texas-based Whole Foods Market noted in its recent 2017 trends forecast: “From traditional global recipes to brand-new ingredients, interesting condiments are taking center stage.” Citing IRI figures, Amanda Perry, brand director at Chicago-based Conagra Brands, observes that “the ethnic food category is growing in the grocery store. Within that, Asian food is the fastest-growing ethnic food in that category. In fact, consumers who purchase Asian sauces/marinades tend to spend twice as much on an average grocery trip as those who don’t.” To capitalize on that growth, Conagra’s P.F. Chang’s Home Menu line is launching five restaurant-style sauces that can be used for sautéing, as dips or as marinades: Kung Pao, Mongolian, Teriyaki, Sesame and Soy. Developed in collaboration with P.F. Chang’s co-founder Philip Chiang, the versatile sauces feature no artificial ingredients. “The American palate has changed over the years, and American consumers are more open to new and different tastes, spices and flavors,” says Joe Perez, SVP of Jersey City, N.J.-based Goya Foods, whose most recent condiment products are Sherry Vinegar, imported from Spain, and Organic Extra Virgin Olive Oil. “I foresee even broader world flavors being added to condiments.”

Hot is always a good thing. People love to have that burst of heat added with sweet, and it’s a home run.” —Patrick Ford, Ford’s Gourmet Foods

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Beaverton Foods Inc. America’s Finest Gourmet Condiments since 1929

Chicken Breasts with Jalapeño Curry Mustard Sauce

Ingredients 2 boneless, skinless chicken breasts Salt and pepper to taste 2 tbs. extra virgin olive oil ½ cup unseasoned chicken stock

Directions 1. Season the chicken breasts with salt/pepper and sear on each side in a non-stick skillet using the olive oil 2. Add the chicken stock, orange juice, orange peel, garlic, onion, curry powder, and mustard to the skillet

½ cup orange juice 1 tbs. freshly grated orange peel 1 tsp. granulated garlic

3. Cover and cook on medium high heat until chicken juices run clear – approximately 5 to 7 minutes 4. Uncover and place chicken on a serving platter

1 tsp. granulated onion

5. Pour the pan juices over the cooked chicken 6 Tbs. curry powder 2 tsp. Beaver Brand Jalapeño Mustard

Serve and enjoy!


Condiments

Reinventing the Classics This influx of novel flavors means that, as Whole Foods’ report put it, “[o]nce rare and unfamiliar sauces and dips are showing up on menus and store shelves.” Perez describes this shift toward innovation from the shopper’s point of view: “Consumers … are either looking for a current condiment that has been enhanced with additional flavors, or something totally new.” For those home chefs not quite up to speed on piri piri sauce, harissa or some other emerging flavor, however, it will suffice to look at how classic Western condiments and spices are adapting to current trends. Take mustard, ketchup and mayo, for example. “We’re continuing to deliver bold flavors to meet increasing consumer and retailer needs with Gulden’s Sriracha Mustard and Gulden’s Stone Ground Dijon Mustard, both all-natural and fat-free,” says Conagra Brand Director Patrick Fitzgerald. “Sriracha has been one of the biggest trend success stories on menus in recent years.” Sriracha’s enduring success is no fluke, he believes. “In addition to all-natural and organic movement in condiments, consumers are demanding more from their condiments,” Fitzgerald asserts. “Consumers are looking for more exciting and bolder condiments. They want to try things that are new and different. We are also seeing spicier flavor innovation used to capture the Millennial consumer

that desires more from their condiments.” At Hillsboro, Ore.-based Beaverton Foods, these trends led to its latest offering, all-natural Beaver Brand Stone Ground Mustard, but as CEO Domonic Biggi points out, other considerations also factored into the product’s development. “We have been focusing on adding consumer-influenced attributes,” he explains. “Gluten-free, kosher, safe manufacturing, as well as offering better nutritional information. We are also looking at sustainable packaging and impact manufacturing.” Packaging is also on the minds of the folks at Sir Kensington’s, which launched an improved squeeze bottle for its classic and spiced ketchup and yellow mustard at Natural Products Expo West last month. “We are using BPA-free plastic and have inverted the design to improve both the recyclability and usability for our fans of all ages,” explains Gracie Dulik, director of natural and specialty sales for the New York-based company. More excitingly, Sir Kensington’s has brought genuine innovation to the stalwart mayonnaise segment with plant-based vegan Fabanaise, the world’s first product to use aquafaba, the water left over from cooking chickpeas, as an egg replacement. Originally launched last year in Chipotle and Classic flavors, the product line recently debuted a version made with avocado oil, also at Expo West. Despite all of the new developments in the category, when it comes to promoting and merchandising classic condiments, certain fundamentals apply, like the perennial popularity of grilling, especially in fine weather. “Retail marketing programs that we use to support our condiments include programs such as must-buys, summer/ grilling seasonal pricing programs and various merchandising activities,” says Fitzgerald. “We also execute cross-promotions with other Conagra brands; for example, ‘Buy Hebrew National, save $1 on Hunt’s Ketchup or Gulden’s Mustard.’” The reason that these seasonal pricing programs continue to do so well, he explains, is that “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

Grocery

We focus our promotions around major grilling holidays – Memorial Day, Fourth of July, Labor Day – while also looking for more creative themes that still feature high condiment use – Easter, Thanksgiving, back to school.” —Allison Marchesani, Sir Kensington’s

TiME oF ThE SEASon Sir Kensington’s merchandises its condiments on an eye-catching end cap, with a reminder to add them to traditional summer picnic fare, and save while doing so.

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Condiments

consumers early in the season, and capturing Memorial Day is key to capitalizing on the summer/ grilling season.” Despite its cutting-edge image, Sir Kensington’s has taken a similar approach, according to Marketing Communications Manager Allison Marchesani, although with something of a twist: “We focus our promotions around major grilling holidays — Memorial Day, Fourth of July, Labor Day — while also looking for more creative themes that still feature high condiment use — Easter, Thanksgiving, back to school.” Additional strategies Marchesani mentions are large, enticing off-shelf displays at hot price points; high-visibility shippers featuring best-selling products; and secondary placement opportunities in relevant departments such as meat, seafood or deli. Goya is also big on cross-merchandising in the perimeter. “We’ve found that usually stand-alone displays placed next to produce sections, as well as meat counters, are effective ways to promote condiments,” notes Perez. “This adds excitement and an added impulse takeaway to what a consumer is already purchasing.”

Grocery

bolstering the popularity of flavored, smoked and unique varieties of finishing salts as consumers continue to seek out innovative condiments that add creativity, panache and a punch of flavor to snacks and meals.” In response to this flavor trend, SaltWorks’ Fusion line offers a wide selection of flavorful, colorful sea salts that have been naturally fused with

Worth Its Salt In the area of spices, what could be more basic than salt? If SaltWorks had its way, though, no one would ever view the item that way again. “Globally inspired, hot and spicy, and rich smoke flavors continue to captivate consumers,” observes Megan O’Keefe, media relations manager at Woodinville, Wash.-based SaltWorks “These trends are influencing and April 2017 | progressivegrocer.com |

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Grocery

Condiments

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a real food ingredient. The company’s clean-label products additionally meet the rising consumer demand for easily identified, minimally processed items, according to O’Keefe, while “artisanal, handcrafted appearance and packaging made with eye-catching high-quality materials is driving consumers to higher-end and more unique condiments that are worthy of counter or tabletop display.” To this end, SaltWorks debuted three new “stunning and functional” retail packaging styles for its gourmet Artisan Salt Company brand at the Winter Fancy Food Show this past January, she notes. “Now available in convenient wholesale case quantities for retailers, the packaging includes a beautiful boutique glass jar with sustainably harvested American black walnut wood lids, refillable salt shakers designed to fit perfectly in existing retail spice rack displays, and reusable, infinitely adjustable ceramic grinders,” adds O’Keefe, adding that the airtight containers were “designed to be refilled, reused and repurposed.” Continued invention in the condiment category is a certainty, given the human propensity to seek out the new. “Consumers are always in need of constant food excitement,” observes Goya’s Perez, “and condiments help to provide that to any dish.” PG For more about condiments, visit progressivegrocer.com/condiments.


Frozen Pizza

Refrigerated & Frozen Foods

Easy as Pie Grocers can harness pizza’s allure to make it a centerpiece of meal solutions. By Jim Dudlicek

T

he aroma is all too familiar: savory spices, pungent garlic, with undertones of baking bread. You’re at the supermarket, and you know that you smell pizza. And there it is — you spot the pizza coming out of the oven, being sliced and plated, with an extra garnish of grated cheese and herbs, accompanied by a colorful salad. The visuals of bright-red tomato sauce, rustically appealing toppings, and gooey, stretching cheese delight the eye. Shoppers eagerly accept the tacit invitation to sample these wares and, perhaps, are inspired to replicate the experience at home. But you’re not in the deli or near the hot bar — you’re in the frozen aisle. Of course, as of now, this scenario is entirely fictional, outside of a random product sampling. This

kind of romance only happens in the fresh perimeter. But why can’t it happen in the frozen aisle? In our industry’s ongoing quest to reinvent the store, why should frozen constantly play second fiddle to fresh? There are plenty of opportunities to demonstrate the flavor, convenience and versatility awaiting shoppers in the freezer case. “Grocers should leverage cross-selling promotions to complete the pizza meal,” asserts Ryan James Dee, creative director at San Diego-based experiential marketing solutions provider Interactions, a subsidiary of Daymon. “For example, a store could easily upsell garlic and cheese bread from bakery, freshly packed salads from produce, hot wing appetizers from the deli, and wine from adult beverage to create a total meal solution. In order to make it even more enticing, a grocer could

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Frozen Pizza

Refrigerated & Frozen Foods

coupled with special offers; and partnering with “hip” brands like Screamin’ Sicilian, Sasquatch and Urban Pie, along with others offering organic, natural and free-from products. “Our palate is becoming more and more adventurous every day, and there are no signs of this trend stopping anytime soon,” Dee says. “Today’s shopper is always on the hunt for something new and unexsample small bites of everything to sell the complete package either right at the demonstration or provide a small map with exclusive offers to collect the components across the store.” To be sure, product innovation has taken frozen pizza well beyond the cardboard-like disks of yore to highly diverse and delicious offerings that can rival their counterparts on the other side of the store and at budgetfriendly price points. Strategically cross-merchandise them with complementary products, demonstrate the ease of putting them together, and satisfy shoppers’ mealtime need states.

Disruptin’ in the Oven Despite peaks during big-game and holiday periods, frozen pizza could use a boost. Schaumburg, Ill.-based Nielsen reports sales approaching $6.5 billion in the pizza/snack category for the year ending last Dec. 17. But Chicago-based market researcher Mintel predicts that sales will remain flat through 2019 after a steady decline since 2010, with household penetration contracting despite the overall popularity of pizza. Retailers can easily demonstrate how to take frozen pizzas up a notch. The Harrisburg, Pa.-based National Frozen and Refrigerated Foods Association (NFRA), on its EasyHomeMeals.com site, offers a recipe for grilled pizza that involves taking a frozen cheese pizza, adding veggies, fresh basil and extra cheese, and finishing on the gas grill — an ideal way for grocers to demonstrate customization and to cross-merchandise with produce to drive sales and consumption of fresh vegetables. Further, grocers can create buzz among younger consumers by highlighting intense flavors favored by Millennials; documenting store events and experiences on social media,

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Refrigerated & Frozen Foods

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Frozen Pizza

pected. These factors have already influenced innovations in frozen pizza, and we’ll see this continue.” Among global flavor profiles Dee expects to see hitting store shelves: Korean pizza with gochujang, Ethiopian sambuusa pizza and Japanese ramen pizza. “Another trend we may see influencing frozen pizza is the DIY movement that we’re seeing with services like Plated and Hello Fresh,” he adds. “In this respect, we could easily see frozen pizzas kits that require a bit of assembly from the home chef, allowing them to customize the pizza with as many or as few toppings as they like.” Among new category disruptors are Los Angeles-based Caulipower, which is working with retailers like Bristol Farms and Whole Foods Mar-

ket to create awareness of its frozen pizza made with a gluten-free cauliflower-based crust. “While Caulipower is a great-tasting ‘unifier’ product for all consumers — health-conscious,

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Refrigerated & Frozen Foods

Grocers should leverage cross-selling promotions to complete the pizza meal. To make it even more enticing, a grocer could sample small bites of everything to sell the complete package right at the demonstration.” —Ryan James Dee, Interactions

Frozen Pizza

free. We tie into all major holidays and occasions that call for large-group dining, and leverage the fact that we can attract customers who may not usually find themselves buying frozen pizza.” Designed to be lower in sodium, calories and sugar than traditional frozen pizzas, Caulipower comes in three-cheese, veggie and margherita varieties, as well as a plain crust for home customization.

gluten-free or just lovers of pizza — we work with our retail partners to merchandise it so that all pizza consumers can access it,” says founder and CEO Gail Becker. “While Caulipower can be an ideal healthy meal solution for young families, it can also be ideal for consumers that require to eat gluten-

Leveraging the Consumer Now more than ever, consumer research is driving product innovation, according to Laurie Fallucca, chief creative officer at Milwaukee-based frozen pizza maker Palermo Villa Inc. “It’s all about knowing what consumers want and giving it to them. This involves retailer-specific research in addition to the general population.” Fallucca’s company offers consumers the chance to join “pizza clubs” — La Famiglia for its Palermo’s brand, Scream Team for Screamin’ Sicilian, and Urbaneers for Urban Pie. “We frequently survey club members about potential new varieties, product names and more, and also invite them into our test kitchen to provide their opinions during product development,” she

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explains. “It’s a great way to engage consumers while also gathering feedback that helps us better meet their needs.” As shopping behavior is planned and rushed, it’s critical to call attention to new products and ideas that can drive shoppers into the frozen aisle for more impulse purchases, says Diane Harper, VP of consumer insights and analytics at Schwan’s Shared Services LLC, part of the Marshall, Minn.-based Schwan Food Co., whose pizza brands include Red Baron and Freschetta. “Retailers can consider featuring on-trend products and new items in the end caps, which may be slower-turn items but can drive shoppers into the frozen aisle for unplanned purchases,” Harper notes. “Retailers can test secondary placements such as adding a freezer in the deli area near complementary items like semi-prepared foods and refrigerated pizzas, or near the checkout to capture shoppers who might not be planning to go the to the frozen food aisle on this trip.” Harper adds that it’s essential to build trust among shoppers in both frozen food products and the frozen food aisle to create and reinforce longterm loyalty to the category. “By turning the section

into a discovery-filled, linger-worthy destination,” she says, “retailers will not only draw more carts down the frozen aisle, they’ll amplify the entire shopping experience and boost sales.” PG For more about opportunities in frozen pizza, visit progressivegrocer.com/frozenpizza.

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Packaging

Fresh Food

Holding Pattern Perimeter packaging solutions address freshness, convenience and safety. By Bridget Goldschmidt

W

hen it comes to the packaging of items sold in supermarkets’ perimeter departments, consumers and retailers may have slightly different needs, but they both agree that the products should be as fresh as possible. “Consumers are looking for packaging that can protect the product, can extend shelf life of the fresh food contents, and is available in grab-andgo sizes due to changing eating patterns,” notes Jack Tilley, market research manager at Shelton, Conn.-based Inline Plastics Corp., whose most recent introduction is the SnackWare line of single- and multicompartment containers featuring a lid that provides a leak-resistant seal around one of the compartments so that contents such as dips, salsas and dressings can be offered. “Retailers are looking for robust ... grab-and-go/snacking containers in [various] sizes that also provide high clarity to spotlight the quality of the foods and promote impulse purchases.” Tilley expects that there will be an “expansion in the sizes and shapes” of such portable solutions.

Produce Pouches With the demand for fresh vegetable packaging expected to rise to $2.8 billion in 2019, according to Produce Business magazine, TC Robbie, part of Vaughan, Ontario-based TC Transcontinental Packaging, best known for its ready-to-eat meal packaging, has created its first solutions for the produce section. “Packaging developments focused on benefits to the consumers in areas of cooking convenience and easy cleanup have become key components in promoting and merchandising fresh-cut produce,” observes Rebecca Casey, senior director of marketing at TC Transcontinental Packaging. “Customers are embracing the convenience of no prep, saving on food waste and the comfort of knowing that they are buying produce that wasn’t frozen or exposed to the general public.” July 2016 saw the retail debut of the Steam N Eat Produce pouch. “The new package allows retailers the ability to offer customers fresh-cut produce packed in-store with a value-added steamable feature,” says Casey. “Consumers can take advantage of grab-and-go convenience, as well as

simPle solution sealed Air Cryovac worked with Perfect Fit meals on a customized package for the latter company’s fresh-crafted meals.

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DiP aS you Go inline Plastics’ SnackWare line packages dip, salsa or dressing with complementary items for portable munching.

Packaging developments focused on benefits to the consumers in areas of cooking convenience and easy cleanup have become key components in promoting and merchandising fresh-cut produce.” — Rebecca Casey, TC Transcontinental Packaging

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enjoy healthy eating options that are simple and easy to prepare using the convenience of their microwave. Currently, packaging with this technology is typically found in the frozen aisle or prepacked at the processor level, then shipped to the retailer.” She adds: “The pouch is designed with customized laser-venting technology that allows the produce to cook evenly while maintaining the taste and nutritional benefits of steam cooking. Retailers welcome that it provides them with a fresh alternative versus processorshipped product.” The pouches can hold a variety of fresh-cut produce, including asparagus, broccoli, cauliflower and medleys. Soon after the initial launch, TC Robbie developed a second pouch sized for steaming four to five ears of corn. Casey firmly believes that this segment has nowhere to go but up. “We will see more retailers start to bring in-house preparation of their freshcut produce programs to capitalize on the growing demand for fresh foods in the perimeter,” she predicts. “And with this move, you will see more of an emphasis on packaging. For instance, we may see more of a movement from tray and overwrap film to pouches. Printed pouches give retailers an easy way to educate their consumers that their product is freshly cut and packed in-store.” What’s more, according to Casey, “Some of the fastest-growing segments for produce are microwave ready, ready-to-cook vegetables and healthy snack-size options. Pouches offered with laser perforations, vent holes, alternative bottom seals, smaller platforms and tear notches will become the package of choice for retailers wanting to enter the value-added produce market.”

Playing it Safe Another important concern regarding fresh food packaging is that it contain no harmful ingredients that could contaminate the product within or cause damage to the environment. “As safety concerns have been raised in recent years surrounding dangerous levels of synthetic chemicals leaching into food from packaging ... consumers and retailers are seeking increased accountability in safety, sustainability and traceability in their fresh food packaging,” notes Wayne Millage, president and CEO of Renton, Wash.-based TrojanLitho, whose sustainable folding carton and single-face litho laminate food packaging, which can be used for such fresh food applications as prepared foods and baked goods, has qualified for Food Safety System Certification (FSSC-22000) through Ann Arbor, Mich.-based product-testing, inspection and certification organization NSF International.

| Progressive Grocer | Ahead of What’s Next | April 2017

In the area of eco-friendliness, he observes that TrojanLitho’s “sustainable business practices and delivery methods are aimed at helping to chart a new, more environmentally focused path for the food packaging industry, which we foresee as a continuing trend in fresh food packaging. In the coming years, we anticipate an even greater focus on providing biodegradable packaging that is produced in eco-friendly, ISO-certified and FSSC22000-certified facilities. We also expect a greater emphasis on packaging that is made with completely recyclable, high-quality paper and earth-friendly, vegetable oil-based inks such as ours.” Further, Millage anticipates “a trend toward singleface litho laminate packaging that offers significant cost-savings when compared to flexography or preprint solutions. Flexo and pre-print plate costs can be as much as 10 times more than those completed through our lithography process, meaning customers can ultimately save tens of thousands of dollars in printing costs. Litho-printed single-face also eliminates the need for roll minimums required with preprint, and the associated exposure to obsolete material due to graphic changes.”

Team Efforts Sealed Air Corp., the Charlotte, N.C.-based maker of Cryovac packaging solutions, is an active collaborator on products that enhance the safety not only of fresh food, but also of the workers who handle it. “Kroger Co., one of the world’s largest grocery retailers, recognized the value of implementing easy-open packaging,” notes Mike Rosinski, North American director of marketing to the smoked and processed meats sector for the Cryovac division. “One of the early adopters of the knife-free packaging trend, Kroger challenged Sealed Air Cryovac to migrate its easy-open solutions into their Private Selection brands of cheese within a 12-month timeframe. As part of this conversion, 10 SKUs from four different suppliers were migrated to Cryovac’s Grip & Tear packaging, totaling nearly 2 million bags in


Fresh Food

in the baG tC Robbie’s handy new Steam n eat Produce pouches allow consumers to prepare vegetables in the microwave.

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yearly volume. Kroger’s migration to easy-open packaging on a national scale demonstrates the growing need for retailers to eliminate risk behind the deli counter, and the company’s successful implementation of knife-free solutions provides a road map for smaller operations to protect their workers and businesses in the same way.” Rosinksi adds that along with easy-open packaging, “cook-in-bag technology and post-pasteurization are trends on the rise for a reason. These new solutions allow delis to reduce the risk to employees, increase food safety by reducing potential for cross-contamination, improve worker productivity and minimize food waste.” The company also works with suppliers to create customized solutions, as it did with Houstonbased Perfect Fit Meals (PFM), a maker of freshcrafted meals that needed packaging that helped eliminate cross-contamination in the production process through a seamless segmentation of meals for those with allergy and dietary restrictions.

| Progressive Grocer | Ahead of What’s Next | April 2017

The result was a Cryovac Simple Steps packaging solution in several sizes that fit PFM’s quality and safety needs, while also presenting the meals in a practical and aesthetically pleasing way. The future is sure to hold further advances in fresh packaging performance. As Inline Plastics’ Tilley observes, “Packaging innovations continue to be driven by customer requirements and unmet needs.” PG For more about perimeter packaging solutions, visit Progressivegrocer/freshpackaging.


Produce

Fresh Food

Exotic

Destinations Globally sourced fruits and vegetables turn heads, delight taste buds and drive traffic in produce. By Jennifer Strailey

S

piny, hairy, gnarled and deceptively delicious, some of today’s hottest exotic produce is providing new opportunities for grocers to appeal to increasingly adventurous consumers who will buy once they try. Consider rambutan. Specialty produce experts around the country have identified this Southeast Asian sweet treat as a top trend, despite its wiry, sea urchin-like appearance. At the family-owned and -operated Penn Dutch Food Center, in Margate, Fla., Produce Manager

Harshad Patel has created unprecedented demand for the unusual-looking fruit, along with a host of other specialty produce items, through regular sampling, customer education and attractive pricing. “A lot of people are unfamiliar with rambutan,” he acknowledges. “It looks kind of ugly and hairy from the outside, but once you open it and give customers a taste, they love it. We personally ripen our rambutan and give customers a sample.” Penn Dutch hosts demos of the fruit, when in season, on Saturdays at peak shopping hours between noon and 3 p.m. “Rambutan is typically priced at $3.99 a pound,

It’s probably the most artistically beautiful fruit around. Every retailer wants to carry dragon fruit.” — Robert Schueller, Melissa’s Produce

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year oF the rambutan Sales of rambutan have surged at Penn Dutch Food Center.

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but we offer a 5-pound box for $16 and we sell them left and right,” enthuses Patel, who estimates that the grocer’s sales of rambutan are as much as triple what they were a few years ago. Availability is also helping to fuel demand. “Our fastest-growing exotic fruit has clearly been the rambutan,” asserts Marc Holbik, of Miami-based Ecoripe Tropicals. “Five years ago, Central American growers were just beginning to harvest commercial volumes, and the U.S. market had yet to receive fresh rambutan of good quality on consistent and marketable volumes. Now, during the May-to-November season, we have fresh arrivals of GlobalGap-certified fruit six days per week from Guatemala.” In his six years with Penn Dutch, Patel has cultivated a loyal customer base looking for exotic produce, from fresh turmeric to Indian bitter melon. “I built a full section of Indian produce in the store, and we sell things like Indian okra for 10 cents cheaper per pound than the local Indian markets,” he says.

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| Ahead of What’s Next | April 2017

Patel, who emigrated from India to the United States 30 years ago, shares his vast produce knowledge with staff and customers alike, including the health benefits of a juice made from Indian bitter melon, and the many uses of fresh turmeric. India has a rich tradition of using roots and other produce for medicinal purposes, beauty aids, digestive health, and more. Patel’s enthusiasm for, and expertise in, these time-honored methods proves popular on the store floor. Revered for its many health properties, fresh turmeric has become such a hot commodity at Penn

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Produce

Dutch that Patel receives calls each week from customers willing to drive a considerable distance to purchase the root. “Turmeric is pretty expensive at $4 a pound,” he says. “Customers will spend between $10 to $12 on fresh turmeric — that’s a lot of business in produce.” Large displays at the front of the store are also critical to growing produce sales, according to Patel.

In mid-March, when there were fewer peak-of-season offerings, Penn Dutch wowed customers with a powerful papaya display that grabbed shoppers’ attention upon entering the store. “We typically sell $200 to $300 in papaya a week,” says Patel, although last month, the store sold $1,400 worth of the fruit. He advises produce managers to be sure to order papaya with color. “People don’t want to buy green papaya and wait three or four days for it to ripen.”

Going Coconuts In December, Austin, Texas-based Whole Foods Market named coconut as a top food trend in 2017. Several months earlier, Robert Schueller, director of public relations at Melissa’s Produce, predicted the coconut craze during a media presentation at the Produce Marketing Association Fresh Summit, in Orlando, Fla. Indeed, coconut product sales are up across the board for Los Angelesbased Melissa’s, which has seen a sales uptick of almost 20 percent this year. “Quick Crack Coconuts that are pre-scored are our most popular coconut product,” notes Schueller. Demand for sweet young coconuts that produce coconut water are also on the rise. To feed the trend, Melissa’s newest products include Coconut Hearts and Coconut Slices. The company is also launching a new Fresh Coconut from Vietnam. The coconut comes with a sticker that surrounds the fruit’s “soft eye” and bears the instructions “insert straw here.” It comes with a sturdy straw that easily pierces the fruit, making the enjoyment of fresh coconut water convenient and cool. Dragon Fruit on Fire “It’s probably the most artistically beautiful fruit around. Every retailer wants to carry dragon fruit,” asserts Schueller, who reports that Melissa’s sales of the fruit from the United States, Vietnam, Nicaragua, Mexico and Israel are up 16 percent over last year. Indeed, suppliers from coast to coast are proclaiming dragon fruit one of the most sought-after exotic specialties in produce. Karen Caplan, president and CEO of Los Alamitos, Calif.-based Frieda’s Specialty Produce, affirms that dragon fruit, along with jackfruit, young

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coconut, rambutan and turmeric, comprise the company’s five top-selling exotic produce items. But it’s pitaya (the Spanish word for dragon fruit) from Israel about which Caplan is particularly excited. Just last year, the USDA permitted the importation of pitaya from Israel. “We are very fortunate to work with the top pitaya breeder in the world, and his varieties all have fantastic flavor,” notes Caplan. “The Asian dragon fruit we’re familiar with is not known for having a distinctive flavor, so the introduction of the pitaya has been a real plus for consumers,” she adds. One potential challenge, notes Caplan, is that some pitaya varieties from Israel are

shaped differently from the Vietnamese fruit. Frieda’s has created additional signage and POS to educate consumers accordingly. American-grown dragon fruit is also on the rise. “Dragon fruit is coming up fast. There are close to 1,200 acres of dragon fruit in Florida, and that acreage will increase,” predicts Jessie Capote, principal/EVP of J&C Tropicals, in Miami. Not only is dragon fruit a fanciful sight and fun to eat, it’s also packed with enticing health benefits. “It’s a superfood — up there with kale and berries,” asserts Capote, whose company recently completed a study of Florida-grown dragon fruit with Florida International University, in Miami. The study found that Florida-grown dragon fruit contains high levels of antioxidants and vitamin C, among other benefits. Capote anticipates the study’s release in the next couple of months.

loco for coconuts Melissa’s fresh coconuts offer an easy-to-pierce top.

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Fresh Food

JACK be NimbLe A sought-after meat substitute, jackfruit has seen its sales rise.

Produce

Jazzed About Jackfruit With sales up about 20 percent over last year, jackfruit also makes Melissa’s list of top-trending exotic produce for 2017. Schueller attributes the sales increase to the year-round availability of the fruit and its popularity with vegans and vegetarians who use it as a substitute for pulled pork. Within the jackfruit category, Schueller says the demand for smaller fruit (between 8 and 16 pounds) is particularly high. Jackfruit can grow to enormous proportions — up to 100 pounds. Melissa’s imports its jackfruit from Mexico. Jackfruit also tops Caplan’s trend list. “First of all, these top-selling items all have the commonality of being popular with Asian shoppers,” she notes. “They are also listed on almost every trend list for the last few years. And finally, when supplies increase, the price comes down and we see more consumers have access to these products as all grocers begin to stock them.” Kiwi of a Different Color While green kiwifruit may seem more mainstream than exotic these days, education and sampling remain key to driving sales in this category, particularly when it comes to yellow-fleshed kiwifruit. “We are very excited about the growth of the kiwifruit category,” asserts Sarah Deaton, of Zespri International, the Mount Maunganui, New Zealandbased exclusive exporter of New Zealand kiwifruit, with U.S. offices in Newport Beach, Calif. “It’s grown 9 percent from 2015 to 2016, and kiwifruit

Locally Grown Global As “local” remains one of the strongest selling points in produce, it’s not surprising that consumers are looking for more exotic fare grown closer to home. “What we see the highest demand for is our South Florida-grown tropical line,” reveals Jessie Capote, of Miami-based J&C Tropicals. “People don’t always associate South Florida with produce, but we’ve been farming here for 52 years.” Green-skin avocados, dragon fruit, boniato (a type of sweet potato), malanga blanca and mangos are all tropical produce cultivated in the Sunshine State. J&C recently

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dollar sales outpaced total fruit by nearly 5 points,” she adds. Zespri’s SunGold Kiwifruit is yellow-fleshed and has a sweeter taste than green kiwifruit. Some describe the taste as a cross between a strawberry and mango. Packaging its SunGold smooth-skinned kiwifruit in clamshells and pouches that feature an image of the cut fruit has proved highly successful. “Kiwifruit is on trend and surpassing total fruit sales, and a lot of that growth is coming from SunGold,” affirms Deaton. Zespri is ready to collaborate with retailers this kiwifruit season, which lasts from May to November. “We are developing marketing programs with retailers and encourage them to reach out to our market development managers to arrange in-store sampling, create custom POS and help spread the word about SunGold kiwifruit,” says Deaton. “Putting kiwifruit on ad is also helpful,” she continues. “People do read circulars, while in-store demos help people taste this new variety and give retailers the opportunity to show customers how to eat them. A lot of people still think you need to peel a kiwi. We’re trying to teach consumers the cut-and-scoop method.” Also, because the outward appearance of a SunGold Kiwifruit is more like that of a potato than a piece of fruit, showing customers the luscious and colorful inside of the fruit is critical. Deaton recommends putting the fruit in the fresh-cut section to familiarize shoppers with this new offering. Zespri will offer double the volume of SunGold kiwifruit from last year. PG

AmeriCAN exotiC boniato, a type of sweet potato, is grown in South Florida.

added to its list taro root, which hadn’t been commercially grown in Florida in more than 30 years. Further, J&C is about to harvest this year’s malanga blanca crop, which will be sold exclusively by Walmart stores in South Florida as a locally grown product. “We also have seen increasing demand for our Floridagrown exotics, such as dragon fruit, sapodilla and carambola,” notes Marc Holbik, of Ecoripe Tropicals, also in Miami.

| Progressive Grocer | Ahead of What’s Next | April 2017


Data Breaches

Technology

A Growing Threat Ransomware, skimming are just two data security threats to prepare for. By Randy Hofbauer

W

ith every year that passes, data breaches become a bigger and more frightening threat for retailers. In 2016, nearly 1,000 cases were reported, the highest number since The Identity Theft Resource Center, in San Diego, began keeping records in 2005. And grocers are a hot place for data criminals. According to research from Chicago-based fraud protection firm Rippleshot, they make up the No. 1 channel for data breaches in terms of the percentage of compromised accounts. Today, there are two common forms of breaches that all retailers face: at-rest-data breaches and malware-type breaches, according to Lynn Holland, VP of merchant solutions at ACI Worldwide, an electronic payment solutions provider based in Naples, Fla. Those incidents concerning at-rest payment data involve settlement files that haven’t been sufficiently secured for storage and transmission to an acquirer. These aren’t too difficult to protect oneself from, Holland notes, as stronger Payment Card Industry Data Security Standard (PCI) controls, network security and encryption help secure the data center. And now tokenization can secure the settlement and back-office processes for merchants, replacing the clear card number with a secure token for all postauthorization processes that secures the consumer’s data while still allowing the merchant’s

back-office processes to operate. “As a token would imply, they have a number, but it’s not the number on the credit card,” says Josh Hartinger, manager, electronic payment technologies at Commerce, Calif.-based wholesaler Unified Grocers. “So if it gets stolen, it doesn’t have any value.” More alarming and tricky is when self-replicating malware is introduced into the in-store environment, infecting servers in a location and sniffing out card data being passed from payment terminals and the POS platform to be sent for authorization. “This breach targets the in-store IT environment, which is much harder to physically secure than a hardened central data center,” observes Holland.

The Malice of Malware Arguably the most significant malware incident on a food retailer in recent memory is Minneapolisbased Target’s incident in 2013, when criminals broke into the retailer through its HVAC service provider, and then placed a self-replicating program that moved from store to store. “This malware took up residence in the memory of all servers it infected and sniffed for payment-card data flowing through these servers,” Holland explains. “As clear card data was sent from a payment terminal to the POS payment application, it was recorded and sent back to the criminals’ network.” Overall impact of the malware on Target was significant, as it went public before the holiday season. The breach exposed approximately 40 million debit

The ability for cybercriminals to use ransomware is so easy, and the low cost to obtain such software essentially allows anyone to become an overnight hacker.” —Collin Hite, Hirschler Fleischer

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Technology Data Breaches

and credit card accounts over less than one month. But smaller retailers typically see most of the breaches, Hartinger says, and a lot of them lose so much business as a result, they have to close up shop altogether. One solution, Holland offers, is to introduce point-to-point encryption technology to the payment process. “This uses the same type of encryption technology and processes that have been in use to protect debit card PINs,” she says, “and removes the transmission of any non-encrypted card data from the process, rendering these memory-sniffer-type malware attacks ineffective.”

We have seen where retailers just let people go behind … and touch the terminals, and nobody thought anything of it.” —Josh Hartinger, Unified Grocers

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Things Get Tricky Among malware attacks, ransomware is especially troubling and a growing concern, especially for smaller chains and independents, according to Collin Hite, a data security expert based at the Richmond, Va., office of law firm Hirschler Fleischer. “Ransomware attacks have exploded in the last two years,” says Hite, who leads the data privacy and security group of the firm’s insurance recovery group. “The ability for cybercriminals to use ransomware is so easy, and the low cost to obtain such software essentially allows anyone to become an overnight hacker.” Hartinger concurs: “We are hearing reports from retailers that their office systems have been subject to ransomware. It is limited, but something for them to be aware of.” Typically, a criminal infiltrates a system through a phishing email that a negligent employee opens, which deploys the software into the computer network, locking up the network when a program is activated and holding it for a ransom, sometimes for up to $100,000. It can be incredibly costly both time- and money-wise to unlock the system, so victims often just pay the ransom, almost always required in bitcoin format. Loretto Foodland, an independent grocer in Loretto, Ky., was one such victim, when one morning in 2015, computers began displaying “crazy messages” and locked up, with cash registers following hours later. When an IT vendor discovered that Russian criminals had hacked and compromised the system, the grocer chose to purchase new computers rather than pay the ransom. While this was an ideal solution for an indie like Loretto, it’s typically not for larger chains. Hite says grocers must ensure they have a robust backup system ready in case of a strike. But while the culprits in the Loretto ransomware incident were remote, others can easily strike internally via other methods. Skimming, for instance, remains a real threat to grocers, Hartinger says. In such an incident, criminals can put an interface

| Progressive Grocer | Ahead of What’s Next | April 2017

between the payment terminal and the person running information on it, which gets them the data they seek. While some technology works against it, it’s critical for grocers to, first and foremost, maintain their environment, keeping watch over who touches terminals, and restricting access. “We have seen where retailers just let people go behind … and touch the terminals,” he notes, “and nobody thought anything of it.”

An Etiquette Lesson Grocers, like all retailers, must have a fully functioning cyberprogram in place for security purposes, Hite asserts. This includes a full risk assessment for data protection, development and implementation of a written information security program, development and testing of an incident response plan for cyberevents, vendor vetting and cyberstandards imposed on them, and PCI compliance. But training employees to be mindful of their actions and those happening around them is also critical to maintaining security. Grocers should consider: Paying attention to the “security sandwich”: The gap that leads to big breaches typically happens between the times of planning and completing delivery of features or upgrades, according to Babs Ryan, principal of the retail division of Chicago-based technology consultancy ThoughtWorks. This is called the “security sandwich” — when lots of upfront planning and discussion about security takes place, as well as post-development testing and fixes, but with little or no security in between. Minimizing the unnecessary and eliminating the unneeded: If you don’t need data, then don’t collect it. Additionally, when information is no longer needed, it should be found and digitally shredded. “Old, forgotten data is dangerous,” Hite cautions. “Eliminate what you no longer need.” Understanding their network and security’s place in it: Grocers should review network logs for unauthorized activity — and make sure that their security professionals do the same, Hite stresses. Further, security shouldn’t be limited just to the IT department — make sure that the entire organization creates and respects a culture of privacy that prioritizes security as the basis for all operations. Keeping systems up to date, making sure unauthorized people can’t approach terminals, requiring more secure passwords, keeping an eye on employee equipment so it doesn’t get stolen, and training employees not to open questionable links or emails all play a role in respecting a culture of security. PG


Pallets

Supply Chain

Pallet Progression Sustainability concerns and new technology are driving change among the industry’s most portable platforms. By Jenny McTaggart

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ith some 15 billion pallets circulating across the planet, the global pallet market is in a state of change. Sustainability is top of mind among developers, many of whom are increasingly opting for smaller pallets, new materials and recycling programs. At the same time, technology is making 21st-century “smart pallets” a reality, bringing the promise of better tracking and a new level of visibility. For U.S. retailers and their supply chain partners, these trends promise some exciting innovations. But perhaps the best news of all is that new pallet development, along with end-to-end supply chain services being provided by leading vendors, is poised to save money, reduce product damages, make store merchandising easier and help track recalled product. Pallets are just one area of the supply chain with the potential for real savings, according to Ben Eugrin, director of supply chain solutions at CHEP North America, a leading pallet and supply chain solutions provider based in Atlanta.

He cites a recent study from McKinsey and Co., “Starting at the Source: Sustainability in Supply Chains,” which finds that up to 90 percent of the potential efficiency and cost savings within the consumer goods sector can be achieved in the supply chain, versus manufacturing operations. CHEP is one example of a pallet provider that has broadened its business model to also offer end-to-end supply chain services to help its customers save money. “We helped General Mills identify 40 efficiency opportunities and helped the company save $3 million by addressing the top 10 issues alone,” says Eugrin. In addition, CHEP helped a global soup company increase in-store sales just by using CHEP half pallets, he notes. CHEP’s half pallet, which is 40 inches by 24 inches, can potentially reduce warehouse handling costs by up to 25 percent, decrease in-store labor by up to 75 percent, lower shelf replenishment time by up to 60 percent and increase sales by up to 30 percent, according to Eugrin. “The half pallet is truly becoming more than just a pallet, but a standardized tool that allows

A new ‘pAl’ RM2’s BlOCKpal can be used with an IoT locationmonitoring device that allows users to track and trace the pallet across multiple regions.

April 2017 | progressivegrocer.com |

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Supply Chain

Pallets

“By 2020, it’s projected over efficient and effective store fulPallets are 50 billion supply chain devices fillment and merchandising,” he becoming more will be IoT-enabled,” says David says. That’s because the smaller than just a source Simmons, chief technology pallets are becoming a popular officer for RM2. “RM2ELIoT platform for promotional floorof traditional gives our clients the ability ready displays. supply chain to capture and analyze large Along with creating smaller value — they are amounts of geolocation data in pallets, CHEP and other comnow a source of their supply chains, down to the panies are more focused than relevant product pallet level. This level of visibility ever on sustainability, in an information that and granularity can reveal new effort to help preserve Earth’s can be digitized, ways of managing supply chains, resources. In a 12-month communicated and identifying bottlenecks, handling period, CHEP’s efforts helped analyzed.” product recalls, improving secuits customers keep 1.4 milrity and highlighting many other lion trees on the planet and —Ben Eugrin, supply chain inefficiencies.” eliminated 2.3 million tons of CHEP North America Track-and-trace technology carbon dioxide from the atmowas previously unavailable for use sphere, Eugrin estimates. in pallets, due to high cost, poor As far as technology is battery life and the difficulty in concerned, he says: “The combinaprotecting tracking technology tion of accelerating technologiwhen it’s fitted to a pallet, notes cal innovation and decreasing Simmons. costs is rapidly transforming “RM2’s fully integrated the fast-moving consumer RM2ELIoT system offers goods marketplace. Pallets customers the ability to track are becoming more than just and trace every individual a source of traditional supply pallet in a pallet pool across chain value — they are now a multiple regions for 10 years,” source of relevant product inhe explains. “The system is formation that can be digitized, designed to be zero-maintenance, communicated and analyzed.” requiring no additional infrastructure Eugrin goes on to note that CHEP or battery charging, with data being delivand its parent company, Brambles, are ered to a secure cloud-based portal in a format “uniquely positioned for technology adoption,” best suited to the customer’s needs.” thanks in part to their access to resources such as Adds RM2’s VP of business development and the CHEP Innovation Centre and BXB Digital — marketing, David Kalan: “Besides being able a Brambles company focused on applying IoT (Into track a pallet, companies can also associternet of Things) technologies to the supply chain. ate product with the pallet ID, as each pallet now has its own license plate. This will provide One Smart Solution actionable data such as true dwell times, and can Another global pallet provider, Luxembourg-based even be used to calculate their customers’ sales RM2 International, has already begun using IoT rates and inventory. Several companies are looktechnology to bring new potential to pallets. ing at using our system in their internal loops to Last November, the company officially keep track of inventory by specific location. This launched its RM2 BLOCKPal pallet, part of an technology is also being used to ensure product IoT smart-pallet solution designed to optimize is being appropriately rotated.” supply chain visibility by providing granular data RM2’s pallets are meant to provide an alternafor segments of the supply chain from a pallet tive to wooden pallets, which still easily dominate perspective. The hardwearing composite pallet is the current pallet market, notes Kalan. “We develpowered by RM2ELIoT, a fully integrated IoT oped a composite pallet, built from material that location-monitoring device based on the LTEis highly durable and nonporous, making it easy M cellular network. The RM2ELIoT electronic to clean and eliminating the risk of contaminants module is designed to last up to a decade on a such as bacteria or mold to harbor.” single power source, while the BLOCKPal pallet With new solutions like the ones from is designed to last for more than 100 pallet trips CHEP and RM2, the pallet market seems to before needing repairs, according to the company. be on the right track for a more sustainable and Both Walmart and Loblaw have approved “smarter” future. PG BLOCKPal for use by their suppliers.

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| Progressive Grocer | Ahead of What’s Next | April 2017


Go green

Lower Costs Great news for your bottom line. There are more than 40 areas of savings when businesses switch from wood pallets to iGPS plastic platforms. This includes lower transport costs, less product damage and reduced equipment downtime. The new and stronger iGPS has reemerged as a driving market force with its unique Plastic Pallet Pooling System, that provides cutting edge, global supply chain solutions for some of the leading companies and manufacturers in the world.

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Food, Beverage & Nonfood Products

Gray Be Gone Smartphones, smart cards, smart watches — more intuitive products exist today than ever before. Now comes “smart shampoo,” with Combe’s Just For Men Control GX. Unlike traditional hair color, the shampoo doesn’t require extra steps in a man’s current morning routine — it simply can be used instead of usual shampoo for a couple of weeks, until users reduce the amount of gray to achieve their desired look. Then it can be used a few times a week in rotation with their usual shampoo to maintain that look. In development for more than eight years, the shampoo mimics the universal pigment held within a strand of hair to create every person’s natural hair color. It’s available as a shampoo and a two-in-one shampoo/conditioner for an SRP range of $7.99-$9.99 per 5-ounce bottle. The product works on any shade of hair, except red. https://justformen.com

Mix in the Meat Today’s active individuals love their trail mix, blending together such tasty, energizing foods as nuts, seeds, fruits — and meat? Such is the case with Oberto’s line of protein-packed trail mixes, a combination of sweet and salty, fruits and nuts, and plant- and animal-based proteins. Tender jerky combines with premium nuts, seeds, fruits and dark chocolate to satisfy hunger without any artificial ingredients, and to provide an even greater protein boost for today’s satiety-seeking Americans. Varieties include Original Beef, Spicy Sweet Beef and Teriyaki Chicken. Each 2-ounce bag has an SRP of $2.99. www.oberto.com

More-Filling Flapjacks While a number of breakfast options can ensure a good dose of protein — eggs, sausage, yogurt, etc. — pancakes are among those that don’t. Or at least they didn’t before: Among Friends’ Patrick’s Protein Pancake mix offers 14 grams of protein per serving when prepared. Said to be unlike any other gluten-free protein pancake mix on the market, the product derives its protein from a combination of pea protein, whole grain flours and egg products, and is free from gums or fillers. Able to make soft, hearty pancakes with a classic homemade flavor, the Non-GMO Project Verified mix has an SRP of $4.99 per 11.5-ounce bag. http://amongfriendsbakingmixes.com

No Squeals Here With flexitarian diets on the rise and consumers more interested than ever in alternative sources of protein, Tofurky has responded with another offering in its line of meat alternatives: Tofurky Ham Roast. Created following the popularity of the company’s signature Holiday Roast, the limited-edition vegan roast is made with a blend of organic tofu and wheat. It’s crafted in partnership with Oregon’s Hopworks Urban Brewery to add a flavorful glaze using the brewer’s ESB ale. The refrigerated roast provides five servings and is non-GMO and free from artificial flavors. It has 0 grams of saturated fat and no cholesterol, and is said to be an excellent source of protein. The SRP per roast is $12.99. www.tofurky.com

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| Progressive Grocer | Ahead of What’s Next | April 2017


Exotic and Authentic Catering to consumers’ desire for exotic, authentic flavors and convenience-minded solutions — not to mention the current popularity of Mexican cuisine — Conagra Brands has added two frozen lines under the Frontera brand founded by renowned celebrity chef Rick Bayless: taco bowls and taco skillet meals. Both lines feature distinct flavors from south of the border, including authentic Mexican sauces made in small batches from fresh, fire-roasted ingredients, and fresh and dried chili peppers. Available in 11-ounce packages, the bowls come in four varieties: Chicken Fajita, Barbacoa Taco, Veggie Taco (vegan) and Tinga Taco. In 20-ounce packages, the skillet meals come in five varieties: Chicken Fajita, Veggie Taco (vegan), Chicken Taco, Barbacoa Taco and Carnitas Taco. SRP range is $3.99-$4.99 per bowl, and $7.99-$8.99 per skillet meal. www.conagrabrands.com

Alove Your Yogurt Japanese food is incredibly popular, and was even named by natural grocer Whole Foods Market as a top trend to watch this year. Responding to this, Morinaga Nutritional Foods has added a Japanese touch to a traditional breakfast and snack option: yogurt. Said to be the first of its kind, Alove is a kosher-certified yogurt snack that contains aloe, touted as a good source of protein and calcium with no artificial flavors. The product is made using Morinaga’s proprietary process: Fresh aloe is removed from the plant’s leaves and then mixed into creamy yogurt. Made in the United States from locally sourced California milk, the product contains no high-fructose corn syrup, is gluten-free and doesn’t contain aloin. It comes in three flavors — Original Aloe, Strawberry and Blueberry — with an SRP range of $1.49-$1.79 per 6-ounce cup. www.morinu.com

Add a Little Zip The mustard category is much loved by Americans, yet can be a drab area for the many looking to add a little unique zip to their sandwiches or hot dogs. Enter Seattle restaurateur Tom Douglas, who has launched Tom Douglas Seattle Kitchen Mustards under his Rub with Love label. Joining his popular line of spice rubs and specialty sauces are Spicy Chili, which combines chipotle purée and crushed red chili peppers with a vinegary finish; Toasted Shallot, which incorporates zesty Dijon and aromatic roasted shallots; and NW Porter, which contains notes of toasted malt, smoky paprika and a hint of roasted coffee. The three mustards are all crafted in small batches in the Pacific Northwest, with an SRP of $6.50 per 8-ounce jar.

Vinegar Vigor Drinking vinegars are said to promote good gut health, and Live Beverages has entered the category with four flavors of ready-to-drink vinegars under its Live Sparkling brand: Tart Cherry, Concord Grape, Pomegranate & Elderberry, and Blueberry & Ginger. Each 12-ounce bottle contains 2 tablespoons of raw, unprocessed apple cider and coconut vinegars, and is blended with organic fruit juice and water. Effervescent, refreshing and guilt-free at only 2 to 3 grams of sugar per serving, these vinegars are said to be part wellness tonic, part tart refreshment and part “cure what ails ya.” The SRP is $2.59 per bottle. www.drinklive.com April 2017 | progressivegrocer.com |

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Hussmann Helps New Seasons Market Earn GreenChill Platinum Status Bridgeton, Mo.-based Hussmann Corp.’s Purity refrigeration system has helped New Seasons Market reduce its emissions toward earning the EPA’s GreenChill Platinum Certification for a new 37,000-square-foot store in Mercer Island, Wash., which opened last Nov. 10. This is the first Platinum Certification for Portland, Ore.-based New Seasons, which operates 20 locations in the Pacific Northwest. The status recognizes the retailer’s efforts in reducing refrigerant emissions by at least 95 percent. “We worked very closely with New Seasons and their engineering firm, CTA, to make sure that Hussmann Purity was meeting all their refrigeration and sustainability needs,” says Michael Nobile, Hussmann sales manager. Beau Butler, New Seasons’ director of construction and facilities, adds, “We have been wanting to do a ‘greener’ refrigeration system project, and the Mercer Island store provided us the opportunity to do so by

installing a transcritical CO2 refrigeration system, which removes HFCs from our store and reduces our business’ carbon footprint.” www.hussmann.com

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Index 5 Generation Bakers Airius Beaver Street Fisheries Beaverton Foods Inc. Beiersdorf USA Biro Manufacturing Blount Fine Foods Cambro Manufacturing Company Campbell Soup Company Celsius, Inc. Chobani Chosen Foods Creekstone Farms Crown Imports LLC Daymon Worldwide Del Monte Fresh Produce NA Inc. Domino Foods Dr. Oetker USA LLC Ferrero USA Inc. Forte Products GenerationNext Goya Foods, Inc. Heineken USA Inc. Hollymatic IGPS Inline Plastics Corp International Deli Dairy Bakery Association Mars Chocolate NA/ Wrigley MasonWays Indestructible Plastics MIWE New Pig Organic Valley Family Of Farms Penton Peri & Sons Farms Plochman Pompeian Olive Oil Pro Food Systems - Champs Chicken Robbie Flexibles Saltworks Sato of America Schwan Food Company Smithfield Fresh Summit Brands TH Foods The Fremont Company The Hershey Company The Spice Lab Thermal Technologies Inc. Tony Chacheres Creole Foods Tosca Ltd. Trion Industries Inc. Tyson - Open Prairie Pork Tyson - Star Ranch Angus Tyson Foods Unified Grocers Windsor Foods/Discovery Foods Zespri International Limited

62 81 82-83 74 Inside Back Cover 62 10-11 86 29 65 3 76 41 Inside Front Cover, 45  68 93 15 80 Back Cover   26 67 27 17 30 101 90 19 57 84 71 63 21 42 92 53 38-39   89 94 7 51 85 4 72 95 78 33 104 55 77 46-47 9 61 49 13 59 34-35   23

Progressive Grocer (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 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 ©2017 EnsembleIQ All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 Phone: 224 632-8200 Fax: 224 632-8266 www.ensembleiq.com United StateS MarketS Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Technology • Hospitality • Apparel

Canadian MarketS • Convenience • Pharmacy • Foodservice

advertiSing SaleS & BUSineSS Staff Peter Hoyt President & CEO 773-992-4456 phoyt@ensembleiq.com Richard Rivera Chief Operating Officer 973-264-4380 rrivera@ensembleiq.com Jeff Greisch Chief Brand Officer 224-337-4029 jgreisch@ensembleiq.com Ned Bardic Chief Customer Officer/President of Strategic Platforms 224-632-8224 nbardic@ensembleiq.com Jeff Friedman Senior Vice President/Brand Director 201-855-7621 jfriedman@ensembleiq.com Janet Blaney Associate Brand Director (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 jblaney@ensembleiq.com Rick Neigher Western Regional Sales Manager (CA, OR, WA) 818-597-9029 rneigher@ensembleiq.com Mike Shaw Northeast, Marketing Manager 201-855-7631 • Cell 201-281-9100 mshaw@ensembleiq.com Angela Flatland (AR, CO, IL, IN, IA, KS, KY, MI, MO, NE, Midwest, Marketing Manager ND, OK, SD, TN, WI) 224-229-0547 Cell: 608-320-4421 aflatland@ensembleiq.com Jackie Batson Advertising Manager 224-632-8183 jbatson@ensembleiq.com

April 2017 | progressivegrocer.com |

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The Last By Meg Major

Too Legit to Quit

“A Our reliable research, compelling content and entrenched industry relationships are our stock in trade, and underscore what sets us apart in an era when legitimate information has never been more important.

lie can travel halfway around the world while the truth is just putting on its shoes.” Mark Twain’s clever quip, uttered in a bygone era, has never been more relevant than in the present day, when “fake news” and “alternate facts” have rapidly emerged as a perpetual part of our daily discourse. Fittingly, we couldn’t resist using the exaggerated climate as creative inspiration for the tongue-incheek treatment of our 84th Annual Report of the Grocery Industry, which we had great fun conceiving (more on that momentarily). A bona fide hallmark of Progressive Grocer’s nine-decade heritage, our exclusive annual report, as always, provides a reliable, real-time pulse of the mood and sentiment of the national supermarket climate, courtesy of direct input from the executives leading the charge. Although there’s certainly no dearth of outlets to turn to for headline news and punditry, our April issue provides our team of veteran scribes and affiliate-brand ambassadors a chance to pause and ponder the significance of being part of the grocery industry’s mainstay trade journal that has steadfastly served food retailers for 95 years and counting. While the propensity of the current “fake news” cycle centers on the usual suspects of politics, personalities and public policy, the food industry is likewise vulnerable to fearmongering in the form of clickbait-friendly headlines, which frequently blare inaccurate information via biased sources whose “conclusions” are not only dubious, but also, far too often, patently false. That’s why it’s more important than ever for retailers to embrace, and ultimately own, the conversations they want to have with their shoppers, whose interest in food ingredients and sourcing practices are poised to proliferate further in the coming years. Which leads me back to the significance of the main attraction of this issue — the

Meg Major Chief Content Editor mmajor@ensembleiq.com Twitter @Meg_Major/@pgrocer

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| Progressive Grocer | Ahead of What’s Next | April 2017

Annual Report of the Grocery Industry — which underscores our core mission to deliver top-shelf, fact-checked, research-based industry insights and analysis alongside in-depth profiles, carefully crafted category features and authentic storytelling. Our reliable research, compelling content and entrenched industry relationships are our stock in trade, and underscore what sets us apart in an era when legitimate information has never been more important. While the investment in long-form print journalism informs our significant point of difference, a companion point of team pride extends to our robust reach of real-time news and original content, delivered in our first-to-market daily e-newsletter and website, for which a new and improved platform will soon be unveiled.

***

While we evidently take our work very seriously, we also try to have a little fun, as showcased on our tabloid-style cover, whose hot-under-the-collar prime subject aptly captures the prevailing sentiment chronicled within the study, which begins on page 43. Yet for an industry that’s been tested mightily against the backdrop of the harshest deflationary downturn in ages — compounded by an onslaught of competitive threats from all sides of the cutthroat retail derby — the increasingly complicated climate belies an optimistic outlook shared by many, who not only view their companies as better equipped to survive, but also to emerge stronger as a result. Driven by the mandate to remain competitive and capture, retain and engage consumers, progressive grocers playing the long game will continue to undergo significant transitions into the next decade. And so it goes for PG, which will soon embark on its continuing evolution with a new website, new offerings and a new daily news template that aims to further solidify our legacy as we head into the next century of quality coverage and reliable reporting. We are deeply grateful for the invaluable feedback of the retailer panelists who took the time to respond to our Annual Report survey, data and insights for which would otherwise not be possible to produce. Companion kudos are also in order for the extraordinary efforts of our resident creative wizard/art director, Bill Antkowiak, as well as our dedicated editorial team, including Joan Driggs, Jim Dudlicek, Bridget Goldschmidt, Randy Hofbauer and Katie Martin, and our production manager, Jackie Batson, whose dedication and talents never go unnoticed. PG


SKIN CARE HAS BEEN OUR FOCUS FOR OVER 100 YEARS

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Progressive Grocer - April 2017  

Progressive Grocer - April 2017