L E A R N M OR E O N PAG E S 14 - 15
i n t r od u c i ng
oat milk
DAIRY
F REE
ORGANIC GLUTEN
WHOLE
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GRAIN awesome
NO ADDED SUGAR
NON-Gmo
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POUR YOURSELF
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MAKE RICH, CREAMY
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LATTES.
YOU CAN BAKE WITH
IT TOO!
fr
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tical l y s a t Fa n
BETTER IMBIBING Raise a toast to healthierprofile beverage alcohol GRILL CRAZY New products promise a sizzling season FINER DINING Specialty market offers unique in-store seating experience
April 2019
Volume 98, Number 4 $10 • www.progressivegrocer.com
Salesforce for commerce
Q&A Q&A
Ecommerce is grocery’s next fresh thing.
Hear Zeeshan Idrees, Retail Go-to-Market Director at Salesforce, discuss the potential of ecommerce for grocers—and how Salesforce can help.
Why should a grocer invest in selling groceries online?
How can Salesforce help Grocers connect to their customers?
ZI: It’s becoming highly lucrative. While
ZI: With our Customer Success Platform,
Forrester found that only 2.9% of grocery sales were made online in 2017, that figure is set to double by 2022. Consumers are getting more comfortable with buying food online, especially with Amazon and Alibaba entering the business.
grocers can deliver integrated and engaging shopping experiences across every touchpoint and device. They can also get a single view of their shopper, by unifying all critical data and connecting marketing, commerce, stores, service, and employees
What are the major considerations for grocers when choosing an ecommerce platform?
Can Salesforce address the needs of both B2B and B2C Grocery Companies?
retail segments. It needs a different set of capabilities, such as frequency of promotions and price changes, weight consideration, optimum delivery slots, and right order picking and fulfilment. Grocers need a platform that’s enterprise grade and scalable. At a high level, it should fit the following criteria: • Market Readiness - Faster time to market, high user adoption • Open - Easy Integration, automatic upgrades, fast-changing ecosystem • Innovative - Use case driven with AI, voice, Internet of Thing as enablers • Integrated - Cross-functional enterprise data for omnichannel experience • Scalable - Elastic infrastructure that scales with business growth
“
“
ZI: Online grocery is different from other
Yes. Our Customer Success Platform offers grocers pre-built solutions in both B2C and B2B commerce.
What is the role of store and employees in delivering a unified shopping experience?
ZI: Grocery stores are serving as shopping destinations, with physical re-allocation of space, in-store dining, omnichannel capabilities and assortment optimization. Employees are moving from cashiers to advisors to offer personalized experiences based on consumers’ needs and preferences, they’ll need access to the right tools. Our Customer Success Platform helps grocers digitize their stores and empower employees in their new roles. Should you have any questions please email Zeeshan at zidrees@salesforce.com.
V&V®, V&V SUPREMO®, CHIHUAHUA® & DESIGN ARE REGISTERED TRADEMARKS OF ©V&V SUPREMO FOODS, INC., 2019, DIST., CHICAGO, IL 60608 • TOLL FREE 1-888-887-8773 • MADE IN THE U.S.A.
Contents 04.19
Volume 98 Issue 4
46 Features
32 PROGRESSIVE GROCER ’S 86 TH ANNUAL REPORT OF THE GROCERY INDUSTRY
A-B-C: Always Be Changing
46
58 GROCERY
STORE OF THE MONTH
Beers, wines and spirits billed as better-for-you are starting to upend the beverage alcohol aisle.
Little Giant
Compact urban market aims to bring culinary inspiration to a diverse Philadelphia neighborhood.
To Your Health
Coffee may be for closers, but victory goes to the disruptors in the increasingly fast-paced grocery game.
Departments
20 MENU TRENDS
28 ALL’S WELLNESS
Health Needs of the Future
Our Future Together
Uncork a Fountain of Trends in Alcoholic Beverages
12 INDUSTRY AWARDS
22 NIELSEN’S SHELF STOPPERS
PG Honored as Best Niche B2B Magazine
Health and Beauty
Break the Glass Ceiling — or Break the Law
16 IN-STORE EVENTS CALENDAR
Cheese
10 PUBLISHER’S NOTE
26 MINTEL GLOBAL NEW PRODUCTS
30 NEW HORIZONS
96 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS
June 2019
98 INDEPENDENT THOUGHTS
18 CONSUMER INSIGHTS
Where is IGA Going?
Shopping Influencers PROGRESSIVE GROCER April 2019
7
Contents 04.19
Volume 98 Issue 4
8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 800-422-2681 Fax: 978-671-0460
www.ensembleiq.com
64 FROZEN & REFRIGERATED FOODS
PRESIDENT, CANADIAN DIVISION & NORTH AMERICAN GROCERY Jennifer Litterick jlitterick@ensembleiq.com
Milk Shake-Up
Retailers can send dairy sales skyrocketing with a few creative tweaks. 70 FRESH FOOD
BRAND DIRECTOR John Schrei 248-613-8672 jschrei@ensembleiq.com
64
EDITORIAL EDITORIAL DIRECTOR James Dudlicek 224-632-8238 jdudlicek@ensembleiq.com MANAGING EDITOR Bridget Goldschmidt 201-855-7603 bgoldschmidt@ensembleiq.com
Cultivating Kid Consumers
DIGITAL & TECHNOLOGY EDITOR Randy Hofbauer 224-632-8240 rhofbauer@ensembleiq.com SENIOR EDITOR Kat Martin 224-632-8172 kmartin@ensembleiq.com
Summer fruits and veggies offer a hot opportunity for grocers to woo young customers.
CONTRIBUTING EDITORS Princess Jones Curtis, D. Gail Fleenor, Jenny McTaggart, Lynn Petrak and Barbara Sax ADVERTISING SALES & BUSINESS
77 SOLUTIONS
70
Light the Fire
Grilling season ignites with new products, merchandising.
SOUTHEAST ACCOUNT EXECUTIVE Larry Cornick (NEW ENGLAND, SOUTHEAST) 224.632.8248 lcornick@ensembleiq.com SENIOR MARKETING MANAGER Judy Hayes (CA, PACIFIC NORTHWEST) 925-785-9665 jhayes@ensembleiq.com SENIOR MARKETING MANAGER Theresa Kossack (MIDWEST) 214-226-6468 tkossack@ensembleiq.com
82 TOTAL MEAL SOLUTIONS
WESTERN REGIONAL MARKETING MANAGER Rick Neigher (SOUTHWEST) rneigher@ensembleiq.com 818-597-9029
Sitting Pretty
ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com
Traditional Japanese seating enlivens a modern American specialty market’s dining section.
77
CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com EVENTS VICE PRESIDENT, EVENTS Michael Cronin mcronin@ensembleiq.com MARKETING MARKETING MANAGER Carly Kilgore 201-855-7601 ckilgore@ensembleiq.com AUDIENCE ENGAGEMENT DIRECTOR OF AUDIENCE ENGAGEMENT Gail Reboletti greboletti@ensembleiq.com AUDIENCE ENGAGEMENT MANAGER Shelly Patton 215-301-0593 spatton@ensembleiq.com LIST RENTAL MeritDirect Elizabeth Jackson 847-492-1350, ext. 318 ejackson@meritdirect.com
88 TECHNOLOGY
SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES 978-671-0449 or email at EnsembleIQ@e-circ.net
Key Tech Takeaways From Shoptalk ’19
PROJECT MANAGEMENT/PRODUCTION/ART VICE PRESIDENT OF PRODUCTION Derek Estey destey@ensembleiq.com
90
Grocery retail transformation was a major topic of discussion at the annual trade show.
CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com
90 SUPPLY CHAIN
Modern Movement
Not your grandfather’s pallets, today’s solutions are tackling supply chain challenges head-on. 93 PG PET
Play With a Purpose
Multifunctional, interactive and sustainable items are trending in a category that grocers neglect at their peril.
8
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REPRINTS, PERMISSIONS AND LICENSING Wright’s Media ensembleiq@wrightsmedia.com 877-652-5295 CORPORATE OFFICERS EXECUTIVE CHAIRMAN Alan Glass CHIEF EXECUTIVE OFFICER David Shanker CHIEF FINANCIAL OFFICER Dan McCarthy CHIEF OPERATING OFFICER Joel Hughes CHIEF INNOVATION OFFICER Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several
THE FUTURE OF WORK REDUCE TURNOVER
REDUCE LABOR COSTS
INCREASE EXECUTION
SHELF ST OCKIN
IN
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D T
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U
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IT
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OR DER
S
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WWW.JYVE.COM
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PUBLISHER’S NOTE By John Schrei
Our Future Together Editor’s Note: It is my pleasure to introduce Progressive Grocer’s new brand director, John Schrei, a veteran of food industry B2B publishing, who joined PG in March — J.D. f there’s one thing that’s constant, it’s change. We cannot escape it, but we can learn to harness and leverage it to maximize the benefits that always come from it. What change am I referring to? A very personal one — my own — and a more general one — the change taking place throughout the industry that this exceptional brand serves. I have spent my career in the B2B world, working on behalf of the many fine businesses, and people associated with those businesses, to connect them with their customers. I am pleased to represent Progressive Grocer and the fine team that produces the industry’s leading content and marketing products. They are smart, innovative and talented, and they work very hard on your behalf.
A fundamental measure of our success will be the value we create for you — today, tomorrow and over the next 100 years. Progressive Grocer has been published for almost 100 years, but we are far from old. When you have been around for nearly a century, you can safely say you believe in the long term. All of us here at PG strongly believe that a fundamental measure of our success will be the value we create for you — our readers and our advertisers — and how well we connect both 10 progressivegrocer.com
of you in a mutually beneficial way, today, tomorrow and over the next 100 years. The stronger our market leadership, the more innovative and creative our products and content, the more powerful we can be for you. In addition to the above, I promise to deliver on the following goals:
To focus relentlessly on our customers. To be a solution center for our customers, just like you need to be for yours. To measure the effectiveness of our content and our products, and continue to strive for more innovative ways to connect each of you. To be bold in our market leadership on your behalf. To share strategic thought leadership and collaborate to better this great industry we serve. To work tirelessly on your behalf and be passionate about our mutual success. Here’s what I would like to ask from you, our readers and advertisers: Let me know what you like and what you don’t like about us. What trends or thoughts are keeping you up? What does your business need, and what can we do together? Feel free to call me, email me or stop me at events to talk. I am looking forward to our future together.
John Schrei Brand Director jschrei@ensembleIQ.com (248) 613-8672
®
Growing Your Pet Category with brands shoppers know and trust.
Proudly offering a portfolio of well-known and beloved brands that nurture the bonds between pet parents and their cherished family members.
©/TM/® The J.M. Smucker Company. © 2019
INDUSTRY NEWS
Awards
PG Honored as Best Niche B2B Magazine ACCOL ADE PRESENTED AT 2019 NICHEE AWARDS IN NASHVILLE. Progressive Grocer, the leading voice in retail grocery publishing since 1922, has won a 2019 Nichee Award for Best Niche B2B Magazine. Presented by California-based Niche Media, the Nichee Awards capture the talent, spirit and creativity of the very best of target-audience magazine media publishers. PG won from among a field of dozens of B2B publications nominated for the honor. Nichee Awards are presented annually in 17 categories for excellence in print, digital, events and leadership. Nichee judges praised PG’s extensive and compelling content, including articles, photos and layouts, saying the publication drew them in and held their interest despite being about an industry with which none of them were otherwise associated. “I am incredibly proud of the Progressive Grocer team,” said PG Editorial Director Jim Dudlicek. “This award is a testament to their combined talents and commitment to serving the retail grocery industry.” John Schrei, PG’s new brand director, who joined the title in March, said, “I couldn’t be more proud to
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join such an outstanding brand and team. My goal is to continue this momentum and build upon the spirit and creativity that has defined Progressive Grocer for nearly 100 years. “The fundamental measure of success for us will be the value we create for our readers and advertising partners, and how we connect them in a mutually beneficial way. Congratulations to everyone involved in bringing home this tremendous honor.” Dudlicek accepted the award March 19 at the Super Niche Media Event, in Nashville, Tenn. PG’s team also includes Managing Editor Bridget Goldschmidt, Senior Editor Kat Martin, Art Director Bill Antkowiak, Ad Manager Jackie Batson, a talented roster of freelance writers and photographers, and a robust ad sales team. This marks the second Nichee Award for PG, after winning Best New Website in 2018. Progressive Grocer is published by Chicago-based EnsembleIQ, which operates an integrated network of media brands across all retail sectors and leverages its scale to inform, connect and provide actionable marketplace intelligence to help clients achieve growth.
SAY HELLO TO ™
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HEAT TOLERANT Can be applied to cool or warm items. Decorations hold up outside of the refrigerated case.
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in dependent su r v e ys show TASTE
IN PERSON TASTE TEST. RATED ON A SCALE FROM 1-5.
OATSOME OATLY
3.52 2.98
PACKAGING WHICH OAT MILK CONCEPT IS MOST APPEALING TO YOU? 71.4%
OATSOME OATLY
28.6%
NUTRITIONAL FACTS & NUTRIT ION & INGREDIENTS WHICH INGREDIENTS IMAGE IS MOST APPEALING TO YOU, FOR AN
OATSOME OATLY
53.5%
ALTERNATIVE MILK BEVERAGE?
46.5%
ADDED GUMS OR STABILIZERS
OATSOME
HAPPY PLANET
PACIFIC FOODS
SILK
CALIFIA FARMS
OATLY
ELMHURST
YES
NO
YES
NO
NO
NO
NO
YES
YES
NO
YES
YES
YES
YES
YES
YES
NO
NO
YES
YES
YES
NONE
YES
YES
YES
NONE
NONE
NONE
contact our team
JENNIFER FABER
MATT MCKENZIE
BYRON ERIKSEN
WESTERN REGION VP OF SALES JENN@OATSOME.COM
EASTERN REGION VP OF SALES MMCKENZIE@OATSOME.COM
MIDWESTERN REGION VP OF SALES BERIKSEN@OSTSOME.COM
NUTRITION & INGREDIENTS AND PACKAGING SURVEYS ARE BASED EACH ON ~290 RESPONSES. QUALTRICS RANDOMIZED STUDIES WITH RESPONSES AGES 18-44, FROM ALL 4 REGIONS OF THE US. TARGETED CONSUMERS THAT EITHER SHARE OR ARE THE PRIMARY DECISION MAKER FOR GROCERY SHOPPING AND WHO HAVE PURCHASED A DAIRY MILK ALTERNATIVE BEVERAGE WITHIN THE PAST 6 MONTHS. IN-PERSON TASTE SURVEY IS BASED ON 53 RESPONSES AND WAS A BLIND RANDOMIZED STUDY, CONDUCTED IN THE LOS ANGELES REGION CONSISTING OF CONSUMERS AGES 18-54.
SPONSORED CONTENT
oatsome vs. other oat beverages
i ntrod u c ing
oat milk
DAIRY FREE
k
able
tica F a n tas l l y
othabl
e
NON-GM0
ORGANIC
GLUTEN FREE
NO ADDED SUGAR
GRAIN
ious D elic ly Drin -
fr
WHOLE
B eauti f ully B akeable
nO ADDED GUMS OR STABILIZERS
oatsome.com
b r an d
IN-STORE EVENTS
Calendar
06.19
National Candy Month National Dairy Month National Fresh Fruit and Vegetables Month
National Iced Tea Month National Papaya Month National Mango Month National Seafood Month
S M T W T F S
1
National Hazelnut Cake Day Encourage staff to compliment each other and customers for National Say Something Nice Day.
2
Sometimes every day seems like National Rocky Road Day.
3
National Chocolate Macaroon Day National Egg Day
National Rotisserie Chicken Day
9
National StrawberryRhubarb Pie Day
16
This year, Father’s Day falls on National Fudge Day: Doesn’t Dad deserve a treat?
23
National Pecan Sandy Day
Highlight the many uses of cheese in cooking for National Cheese Day. National Frozen Yogurt Day
10
National Iced Tea Day
17
11
National German Chocolate Cake Day
18
In addition to National National Apple Cheesemakers Day Strudel Day and National Cherry Tart National Sushi Day Day, it’s also Eat All Your Veggies Day — which to choose?
24
National Pralines Day. Who says these are a favorite only in New Orleans?
30
We all want to be on a beach for National Mai Tai Day. National Ice Cream Soda Day
16
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5
National Ketchup/ Catsup Day
National Applesauce Cake Day
Detail some of your sustainable practices on social media in honor of World Environment Day.
12
13
International Falafel Day
Cupcake Lover’s Day
National Jerky Day
National Cucumber Day
19
20
National Peanut Butter Cookie Day
Kitchen Klutzes of America Day
Run a poll: Is it shaken National Vanilla or stirred for National Milkshake Day Martini Day? World Tapas Day
26
National Strawberry National Chocolate Parfait Day Pudding Day National Catfish Day
6
27
Celebrate all things orange for National Orange Blossom Day.
7
Create the mother of all ice cream sandwiches by combining these two occasions: National Chocolate Ice Cream Day and National Doughnut Day.
8
National Jelly-Filled Doughnut Day If you participate in any type of sustainable seafood program, promote it for World Oceans Day.
14
15
21
22
National Strawberry Lobster Day Shortcake Day
National Peaches and Cream Day
National Chocolate Eclair Day National Onion Ring Day
28
National Tapioca Day
29
National Almond Buttercrunch Day
CONSUMER INSIGHTS
Market Research
Shopping Influencers In this month’s issue of Progressive Grocer, results of the Annual Report are shared in which retailers give their perceptions of the marketplace. For the first time, PG, along with sister company EIQ Research Solutions, surveyed 1,000 grocery shoppers about their own perceptions of their grocery stores. This month looks at the results of what they say is most important when deciding where to shop.
86%
Retailer Question
How important are each of the following “Enhancing the In-Store Experience: Customer Interaction” strategies to your company?
80%
73%
(Rate each on a scale of 1 to 6, where 1 = not at all important, through 6 = extremely important. (n = 66)
70
66%
Consumer Question
60
How important are each of the following to you when deciding where to shop for groceries? (experience and events)
50
(Rate each on a scale of 1 to 6, where 1 = not at all important, through 6 = extremely important. (n = 897) 40
Sampling/demos, seasonal special events and community involvement are the top three areas of importance for both retailers and consumers, but the level of importance is significantly higher for retailer strategy than for shoppers when choosing where to shop. Wellness events/counseling and in-store restaurants are significantly more important to retailers than to shoppers, but this may be due in part to a lack of usage/understanding of the benefits on the part of the shopper. It’s important to remember that the areas where there seem to be large discrepancies aren’t necessarily because the retailer is putting its efforts into the wrong thing, but perhaps because in shoppers’ minds, these aren’t things that they (consciously) place importance on when deciding where to shop. However, they’re likely factors that subconsciously affect their feelings, perceptions and opinions of a store. Consumer survey respondents were sourced via ProdegeMR, reinventing the research process by taking a respondent-first approach. Visit www.prodegemr.com/ensembleiq for more information.
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32% 29%
30
27%
27% 24%
23% 20%
20
17%
17%
16%
17% 14%
14%
10
0 SAMPLING, DEMOS
SEASONAL SPECIAL EVENTS
COMMUNITY HEALTH INVOLVEMENT SCREENINGS
Source: Progressive Grocer market research, 2019
WELLNESS
IN-STORE RESTAURANTS
COOKING CLASSES
HEALTHYEATING STORE TOURS
Satisfy Your Shoppers’ Hunger For A Different Kind Of Snack
Millennials, whose love of snacking is well known, are increasingly seeking alternative snacking experiences that deliver unique flavors and textures not found in traditional snacks. Capitalize on this growth opportunity with distinctive snacks from a leader in alternative snacking – GOYA®! As the brand with the #1 SKU in the plantain chip category in the U.S.*, GOYA® offers a full range of authentic and exciting flavors guaranteed to be a hit with your shoppers. *Source: Nielsen Answers On Demand, Total U.S. (All Outlets Combined), unit and dollar sales, 52 weeks ending 1/26/19
Visit goyatrade.com or email us at salesinfo@goya.com
©2019 Goya Foods, Inc.
Offer Them the Full Line of Delicious GOYA® Plantain Chips
MENU TRENDS
Research & Analysis
Uncork a Fountain of Trends in Alcoholic Beverages From the rise of canned packaging for just about every type of alcoholic beverage imaginable to manufacturers debuting more health-forward twists on traditional alcoholic beverages — think low-calorie or even nonalcoholic beer that still tastes like regular beer — there’s no shortage of trends to help grow your sales. Check out these flavor trends influencing the beverage alcohol department right now:
Rosewater MAC stage: Inception — Ethnic markets, ethnic independents and fine dining. Trends start here and exemplify originality in flavor, preparation and presentation. Originally from Persia, this refreshing beverage of steeped rose petals and water is often used as a sweetener. It can essentially be thought of as a floral version of vanilla, meaning a little goes a long way. Add a few drops of rosewater to a cocktail for a floral twist — Café Roze, based in Nashville, Tenn., offers a playful version of an Old Fashioned with its Roze Fashioned cocktail, made with Old Forrester Signature, Amaro di Angostura and rosewater. On 1.6% of U.S. restaurant menus Up 60% on U.S. restaurant menus 42% of consumers know it / 16% have tried it Menu Example Koy Rose Water Cocktail Aviation Gin, lemon, lychee, rosewater
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Elderflower MAC stage: Adoption — Ethnic aisle at supermarkets, casual independents, fast casual. Adoption-stage trends grow their base via lower price points and simpler prep methods. Still differentiated, these trends often feature premium and/or generally authentic ingredients. The flower of the elderberry is often steeped in a concentrated sugar solution to make a syrup, and is also the base flavor for St. Germain liqueur, found in a variety of cocktails. The syrup is also used in other beverages and even desserts such as cupcakes, curds or fritters.
Coconut MAC stage: Proliferation — Proliferation-stage trends are adjusted for mainstream appeal. Often combined with popular applications (on a burger, pasta, etc.). The fruit of the coconut tree is commonly consumed as dried flakes sweetened with sugar, but it has many other uses as well. For example, both coconut water and coconut oil are increasing in popularity as better-for-you ingredients. Additionally, coconut milk is a very common ingredient in Southeast Asian cooking in dishes such as curry. On nearly 38% of U.S. restaurant menus
Ruby Red Frosé
Pomegranate MAC stage: Ubiquity — Ubiquity-stage trends have reached maturity, and can be found across all sectors of the food industry. Although often diluted by this point, their inception-stage roots are still recognizable. Pomegranate is a very popular cocktail component that’s still growing outside the category. Its red, gemlike seeds are scooped out and pressed into juice, or can be used in marinades and sauces. The seeds also make excellent mix-ins for salsas, salads or even desserts. On 18% of U.S. menus
On 7% of U.S. restaurant menus Up 91% on menus over the past four years 26% of consumers know it / 9% have tried it Menu Example Bonefish Grill, Tampa, Fla. Winter White Cosmopolitan Reyka Vodka, Cointreau, St. Germain Elderflower liqueur, white cranberry juice and fresh lime juice
Up 18% over the past four years 96% of consumers know it / 80% have tried it Menu Example Ruby Tuesday Malibu Coconut Mohito Malibu Coconut Rub, Cruzan Rum, Myer’s Dark Rum
Up 17% over the past four years 91% of consumers know it / 68% have tried it Menu Example Maggiano’s Little Italy Ruby Red Frosé Vino rosé, Deep Eddy Ruby Red Vodka, pomegranate, a squeeze of lemon and a splash of strawberry purée
Malibu Coconut Mohito
& A Q&A WITH TOM “TD” DIXON, CHIEF MARKETING OFFICER, JACK LINK’S
HOW JERKY IS SHAKING UP THE CATEGORY AND DRIVING SALES IN BETTER-FOR-YOU SNACKING PROGRESSIVE GROCER: According to the International Food Council, 60 percent of Americans want to consume more or as much protein as possible, with that number continually rising. Is this a trend you are seeing at Jack Link’s? TOM “TD” DIXON: We see the protein trend occurring on a macro level, with this increased desire for protein playing out among more micro trends — the rise of better-for-you snacking, higher nutritional standards, “sugar is the enemy,” on-the-go snacking and meal-time blur. The forms, flavors and recipes we’re developing focus on these micro trends and emerging occasions. But protein is always our foundation. PG: What are the biggest benefits of consuming animal-based proteins versus plant-derived proteins and how do meat snacks fit that equation? TD: Animal-based proteins are considered complete proteins. They have all the amino acids your body needs to repair protein. Your body is also better at absorbing and utilizing them. When it comes to calories, fat and carbs, meat-based snacks are hard to beat.
PG: How would you describe the “typical” meat snack customer(s)? TD: The typical meat snack consumer has definitely evolved from the outdoorsmen of years ago to more of an “all family” audience today. Consumers’ growing health consciousness and awareness have transformed the category from a traditional road trip snack to an anywhere/anytime treat high in protein and satiety, yet low in fat, sugar, calories and carbs. PG: What type of retail product mix works best in meat snacks and how should products SP O N S O R E D CO N TE N T
be merchandised/presented to communicate benefits and taste profiles? TD: Our DSMP guidance provides channel specific assortment priorities focused on attracting new consumers and occasions while meeting current consumer needs in form, flavor, pack and size. Our “best-in-class” (BIC) shelving principles are tailored to increase shopability across in-store locations by anchoring strategic brands based on flavor and size. For example, a major grocer implemented our “BIC” principles last April. Its meat snack category growth has outpaced TTL US Foods during the last 52 weeks. PG: Outside of the snack aisle, what types of cross-merchandising, display and seasonal opportunities can retailers take advantage of? TD: Because protein is top-of-mind, multiple touchpoints are key. You can capture strong basket builds by placing meat snacks in refrigerated, the nutrition set and the on-thego salty set. They also do well near items that index high for category users, like energy drinks. PG: What kinds of in-store and out-of-store messaging best communicate the benefits/ taste profile of meat snacks? TD: It all comes back to protein. While it may seem obvious, we drive this message home consistently out-of-store and encourage retail partners to drive it in-store. Also, the number two reason consumers buy jerky is that it’s made with 100% beef. There’s still a lingering misperception that the category is filled with mystery meat products. We’ve made it a priority to call out 100% beef across our portfolio. PG: You are now offering meat snacks in bar form. How has this been received? TD: Consumers are seeking more in bars and don’t want manufactured or synthetic protein. Our meat bars are made with 100% beef and have been driving growth since they launched last year. They have eight grams of protein, 70 calories and are gluten free.
FRONT END
Shelf Stoppers
Shelf Stoppers
Frozen Vegetables TOTAL FROZEN VEGETABLE SALES REACHED $2.97 BILLION IN THE PAST YEAR
ending April 2, 2016) Health and(52 weeks Beauty
Category Snapshot
Total Department Performance Health and Beauty Care
Latest 52 Wks 2 YA W/E 12/29/18
$89,431,836,756
Latest 52 Wks YA W/E 12/30/17
Latest 52 Wks W/E 12/31/16
$87,995,419,279
$87,278,350,069
Top Health and Beauty Care Supercategories by Dollar Sales Hair Care Cosmetics and Nail Grooming Bath and Shower Hair Removal Facial Skin Care
$12,00,000,000 10,000,000,000 8,000,000,000
12%
10%
because it tastes great Ingredients
6,000,000,000
Plant stem, kukui oil
4,000,000,000
9%
Spotlight on Frozen Broccoli
2,000,000,000
WHEN ARE CONSUMERS EATING FROZEN BROCCOLI? 0
When consumers believe in the claims Consumers chose and made on products frozen broccoli over see value in specific alternatives for ingredients, they’re a variety of reasons: likely to pay more for their skin care products. What are examples of these it’s claims because and ingredients and easy will that quick Americans splurge for in skin care?
Broccoli as an ingredient is most commonly consumed at dinner, followed by lunch. Latest 52 Wks 2 YA Latest 52 Wks YA W/E 12/29/18 W/E 12/30/17
Frozen broccoli is most often used in a side dish, followed by as a main entrée. Latest 52 Wks W/E3% 12/31/16
Source: Total U.S. xAOC (all outlets combined)9% — includes grocery stores, drug stores, mass merchandisers, select dollar stores, select warehouse clubs and military commissaries (DeCA).
because it’s healthy and nutritious
8%
because it’s low in calories, fat and sugar
Period: Latest 52 weeks, week ending Dec. 29, 2018. 29%
OCCASION TYPE
62%
35%
MEAL ITEM CLASS 61%
Consumers have become increasingly aware of what they put in and on their bodies. What might have been ‘nice to have’ has, for many, become essential to purchase decision criteria. Today, there’s a rising number of consumers worldwide who crave DINNER LUNCHneeds OTHER DISH MAIN ENTRÉE OTHER products that can meet their health and beauty in a socially and SIDE environmentally responsible way. Health and beauty care sales remain in modest growth, up nearly 2 percent in dollars compared to a year ago. But in order to continue an upward trajectory, brands need to understand and align with sustainable product attributes, many of which have grown in sophistication and complexity over the past few years.”
Claims
Aloe, retinol
—Lauren Fernandes, Manager-Strategy and Analytics, Nielsen
Demographic Spotlight Health and beauty care consumers within the under-$20,000 income bracket spend 28 percent less than their expected share on HBC products (relative to their incidence in the U.S. population). HBC consumers within the $100,000-plus income bracket spend 19 percent more than their expected share on HBC products (relative to their incidence in the U.S. population). When looking across several HBC categories, Established Couples are spending more than the average American household, particularly on hair care, cosmetic and nail-grooming products, and bath and shower products. By contrast, both Independent Singles and Senior Singles spend significantly less than the average cohort on these same categories. When it comes to the impact of household size, larger households and those with kids over 6 years old are overindexed in their purchases of hair care, cosmetic and nail-grooming products, and hair removal aids.
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Source: : “Nielsen Quick Screen, Claims Testing in Beauty Report,” October 2018
SHOPPERS ARE HUNGRY FOR CONTENT:
HOW TO SATISFY THAT CRAVING WITH DIGITAL TECHNOLOGIES By Curtis Campbell Senior Marketing Manager, North American Division (NAD)
HOW DO TODAY’S DIGITAL TECHNOLOGIES MORE DEEPLY ENGAGE SHOPPERS? CC: We focus on the “point of decision,” whether it’s the physical location or the point in time at which a customer makes the choice to buy. With today’s technology, including tech that makes register check-out obsolete, that decision point could be anywhere in the store or even on mobile or online. Ultimately,
the guiding principles of engaging consumers remain the same: provide information in a compelling format that entices people to interact and meet the customer’s desire and expectations for personalization, convenience and speed. The result will be improved sales, superior customer satisfaction and customer experience. New technologies— both consumer-facing and even in employee breakrooms—also help
inform and empower employees to deliver that exceptional shopping experience.
WHAT ARE SOME OTHER KEY INSIGHTS YOU’VE GLEANED ABOUT HOW TODAY’S SHOPPERS ARE USING AND MANAGING INFORMATION? CC: Evolving attitudes toward food have made customers hungry for content. Customers are looking to digital platforms, including in-store signage, mobile apps and websites, for this intelligence. Shoppers use digital tools for creating grocery lists, sales and coupons, research, reviews, recipes and more. As a provider of managed network services, we’ve seen this increasing reliance on technology
ADVERTORIAL
born out in the demand for network support of mobile marketing, instore Wi-Fi, loyalty apps and more. Grocers can improve sales and the customer experience by honing their digital offerings and gain valuable insights on shopper behavior through analytics. Cameras on digital signage can evaluate demographics or even mood, Wi-Fi heat mapping reveals shopper patterns, and apps predict behavior that informs targeted marketing.
HOW CAN TECHNOLOGIES MAKE THAT FINAL DECISION, WHETHER IN STORE OR ONLINE, NOT ONLY EASIER, BUT MORE RELEVANT TO THE SHOPPER IN THAT MOMENT? CC: External digital platforms and the in-store customer experience must reflect and match one another in both quality and relevance. Whatever the medium, the information presented must be engaging, informative and relevant. Personalization is one key to establishing relevancy. The right technology can track and leverage a shopper’s previous experience, infer and predict buying behaviors and create offers custom-tailored to that customer. Another way to enhance relevance is timeliness. Today’s technology can generate digital signage content or mobile offers based on factors like weather. If the temperature in your area goes above 90 degrees, a shopper might be informed about popsicles. If you’re in a deep freeze, it may trigger a promotion for coffee or hot chocolate. Smart technologies supported by a robust network marry the in-store experience seamlessly to the digital realm.
FOR FOODSERVICE-AT-RETAIL, HOW DOES DIGITAL SIGNAGE HELP DIFFERENTIATE A GROCER’S OFFERINGS AND KEEP PEOPLE COMING BACK? CC: Digital signage brings products to life. Through the use of videos, stunning imagery, as
Signs of Change 94% of retailers have used digital signage to change, augment or improve customers’ in-store experiences.
80% say it is important or essential to those experiences.
87% of retailers cite interactivity as the most effective part of digital signage.
75% of retailers say that digital signage with sales-driven initiatives (offers, promos, product ads, personalized content) are more likely to succeed.
33% of retailers say that adapting content to shopper behavior is the biggest pain point in digital signage.
Most retailers agree that meeting their 2021 goals involves creating digital signage with responsive content and data processing at the source.
well as accompanying product information, customers have a richer encounter with offerings. Today’s curious shopper craves information to make purchasing decisions: digital signage can offer recipes, customer reviews/ favorites, sourcing information, QR codes for capturing that link to even more content either in store or at home. As “grocerants” and markets are increasingly becoming an experiential food destination, digital signage, including menu boards, encourages shoppers to embrace the store as a casual dining destination.
HOW ARE CUSTOM SOLUTIONS EFFECTIVE IN BOTH BOOSTING SALES AND ACHIEVING CUSTOMER SATISFACTION? CC: Hughes partners with grocers versus selling to grocers to understand the uniqueness of a brand and help the brand capitalize on these differences. Examples include beacon technology that connects a person’s mobile device with a brand’s loyalty program; custom templates that can be changed based on customer flow, seasonality, and time of day; and the use of cameras to help analyze age, sex, and mood of shoppers to likewise present these shoppers with offers specific to their interests. Coupled with the ability to automatically update screens based on predetermined variables, like weather or time of day, Hughes’ solutions enhance the shopping experience in ways that other vendors of digital signage sometimes fail to recognize. Additionally, as a managed service provider of network technology, we can combine digital signage with breakthrough network solutions such as Wi-Fi heat mapping to better understand traffic flows and dwell times and help a brand determine the best places to deploy digital signage and other technology.
MINTEL CATEGORY INSIGHTS
Global New Products Database
FOR MORE INFORMATION, VISIT WWW.MINTEL.COM OR CALL 800-932-0400
Cheese Market Overview
Slight annual growth expected Sales of $23.5 billion are 8 percent above the 2013 totals but virtually unchanged since 2015, demonstrating a large but relatively stagnant category in need of expanding its usage. Consumers avoiding processed 2018 saw processed cheese sales drop 2.7 percent from the 2017 performance. Consumers are avoiding options perceived as processed and are turning to fresher options, which they perceive as healthier.
Usage largely confined to only a few varieties Some 80 percent of consumers say that they like trying new types of cheese; however, consumption levels of other cheeses fall far short of those of cheddar, mozzarella and parmesan.
Opportunities Increasing awareness of cheese’s healthy attributes Cheese can leverage protein and calcium as key selling points. However, protein and calcium content falls considerably short of other reasons that consumers cite for eating cheese, suggesting that there may well be opportunity in communicating just how healthy cheese can be.
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Specialty cheese options for on-the-go usage A majority (81 percent) of consumers like to try different types of cheese, and nearly as many express a strong interest in cheeses to eat while on the go. Retailers can appeal to the on-the-go eating/ snacking occasion with specialty cheese varieties, or blends of the tried and true with new varieties. Capitalizing on cheese’s role as a healthy indulgence Cheese is in a rare position to leverage a role as a treat that delivers healthy benefits, and to increase consumption by incorporating more varieties into recipes or by experimenting with new cheese varieties.
What Does It Mean? With consumers seeking healthy attributes and indulgence in an easily prepared snack food, cheese seems to be in quite an enviable position. The category’s biggest challenge seems to be its own success, as consumption is widespread. Increasing consumption frequency will require brands to encourage consumers to try new recipes, consumption occasions, and potentially even unexplored cheese varieties.
ALL’S WELLNESS By Molly Hembree
Health Needs of the Future FOUR EDUCATED GUESSES ON WHAT GROCERS SHOULD E XPECT.
s is the case with many retail operations, forecasting is a powerful tool. Whether it be predicting holiday rushes, foot traffic, extreme weather or unique promotions, an accurate estimate as to what’s around the corner can help your store(s) run smoothly. Wouldn’t it be nice to peer into the future to see what the health interests and needs of the future will be, so you can determine which foods need to be available to your customers in the weeks, months and years to come? Let’s a take a look at some educated guesses about what the future holds for health:
1
More Plants
Plant-based nutrition has gained massive ground over the past few years as not only a trend, but also a well-recognized approach to eating well, backed by registered dietitians, other health care professionals and researchers. Well-planned plant-forward diets may also reduce the risk, or help manage, top U.S. chronic diseases such as hypertension, heart disease, cancer and diabetes. Plant-centered eating includes vegetarian and vegan diets, but also eating patterns that allow for non-meat alternatives, dairy and egg-free options, as well as a concentration on fruits, vegetables, whole grains, beans, nuts and seeds. Anticipate that over the next several years, there will be a drive for products like cashew cheese, almond yogurt, soy burgers, jackfruit entrées and seasoned tofus.
2
The Digital Age
It likely comes as no surprise, but the future is digital. Further, technology related to consumer health needs is thriving. In fact, a 2017 study confirmed that there were then more than 100,000 health-related apps. With this ever-expanding area of wellness-related mobile technology, customers will eventually demand that their grocery carts be linked to their health in a digital format. We should expect to see advances in UPC and QR code scanning that puts nutrition facts, allergen information, product insights and food-record tracking in the palm of the customer’s hand. It would be wise to explore opportunities with these types of technological advancements to keep relevant and stay a step ahead in a highly competitive retail landscape.
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In a land of complexity, be the store where the consumer shopping experience is uncomplicated.”
3
Save Time
Although many consumers wish they had more time to devote to meal planning and cooking, often they have mere minutes to construct meals for themselves and their families. Meet shoppers where they are with online ordering, grocery pickup, meal kits, hot bars, crafted pizzas, and frozen and deli-prepared meals.
4
Keep it Simple
In a land of complexity, be the store where the consumer shopping experience is uncomplicated. Customers can be bombarded with new food trends, nutrient content claims and confusing marketing. If you’re part of corporate branding or packaging efforts at your retailer, find ways to convey health messaging to shoppers without being overwhelming. Also, team up with your dietitian to find ways to broadcast the most meaningful claims for a set of products that will still catch the shopper’s eye. Molly Hembree, MS, RD, LD, is a registered dietitian coordinator for The Little Clinic and Kroger.
We’re looking for the most innovative meal solution concepts!
CATEGORIES INCLUDE: Cross-Merchandising Concept Dine-In Concept Grab & Go Concept Meal Kit Ready-to-Cook Program Shopper Engagement Snacking Program Signature Chef Creation
DEADLINE TO ENTER:
May 20, 2019 Winners will be honored in our August issue and in a ceremony at our
TOTAL MEAL SOLUTIONS SUMMIT September 9 & 10 in Austin, TX
Enter at:
progressivegrocer.com/TMSAwards
NEW HORIZONS By Sarah Alter
Break the Glass Ceiling – or Break the Law A NE W L AW IN CALIFORNIA STARTS A CONVERSATION ON WOMEN IN TOP E XECUTIVE POSITIONS.
ast fall, California became the first state to pass a law requiring publicly traded corporations to add women to their boards. Hmm, “All male? Go to jail.” Not quite. The state law requires publicly traded companies based in California to appoint at least one woman to their boards by the end of this year. By the end of 2021, a minimum of two women must sit on boards with five members. There must be at least three women on boards with six or more members. Companies that fail to comply face fines of between $100,000 and $300,000. “People would prefer that you wouldn’t have to mandate,” Tierney Remick, vice chairman and co-leader of Korn Ferry’s board and CEO services practice, said at the time that the law passed. “But in reality, [progress is] not moving fast.” As counted just before the law passed, 377 California companies tracked by the Russell 3000 Index (the largest U.S. stock-traded companies) must add at least one woman to their boards to comply with the law, according to Board Governance Research LLC. In total, nearly 700 women must be seated in the next three years. These figures don’t reflect the scarcity of women on boards of smaller public companies based in the state, many of which are likely to have all-male boards, Board of Governance Research CEO Annalisa Barrett told the Associated Press. “Smaller companies haven’t had as much pressure on them to take advantage of the benefits of having a diversified board,” she noted. What does it say about deeply entrenched bias in corporate America that the threat of a $300,000 penalty will do more to move the needle on gender equality than the myriad proven competitive and bottom-line benefits associated with women’s leadership? Scores of studies have shown the business benefits of greater representation of women at the most senior levels. Gender diversity and inclusion bring better decision-making, higher returns on investment, improved efficiency and lower turnover. One report, by Lehigh University’s Corinne Post and Georgia State University’s Kris Byron, found that
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women tend to think more broadly and holistically, and that companies with women board members are more socially responsible. When that type of thinking is brought to the boardroom, decision-making implications for employees and the communities where companies do business are more likely to be given a voice. Women’s preparedness — fueled by feelings that their qualifications may be questioned — has an effect on male board members, Post told Forbes.com. “When women participate on boards, the attendance of male directors goes up, too,” she said. “There might be some
Pressure t increase go diversity aender top is on t t the he rise.
type of contagion effect where if women come better prepared, then everybody starts preparing better. That can help in making better decisions overall.”
Pressure for Progress At the current rate of progress, though, true equality at the senior level is decades away. The glacial movement is caused, in part, by the many men and women who are satisfied with so little progress. Nearly half the men and a third of the women surveyed for McKinsey’s “Women in the Workplace 2018” study believe that women are well represented at the senior level, when they fill just one in 10 roles. Even so, the California law comes at a time when public, shareholder and institutional investor pressure to increase gender diversity at the top is on the rise. Other states — including Illinois, Massachusetts, Pennsylvania, Ohio and Colorado — have issued resolutions encouraging gender diversity on corporate boards. More than 80 percent of institutional investors surveyed by the EY Center for Board Matters reported that board composition, with a focus on diversity, would be a top priority last year. “This may include gender, race and ethnicity, age, nationality and geography, socioeconomic backgrounds, or other forms of diversity, but gender was most commonly cited, partly due to the lack of consistent disclosure on any other characteristic,” EY noted.
In February 2018, BlackRock Inc., the world’s largest asset manager, announced that it wanted its portfolio companies to have diverse boards, noting that “we would normally expect to see at least two women directors on every board.” The firm also asked some 300 companies in the Russell 1000 that have fewer than two women on their boards to disclose their approach to boardroom and employee diversity. Still, California’s law has been opposed by nearly three dozen business groups and will most certainly be challenged in court, likely by the California Chamber of Commerce. But if it takes a state mandate and fine to break down barriers and move toward gender equality, I say, “One down, 49 to go.”
Sarah Alter is president and CEO of the Network of Executive Women, a learning and leadership community of 12,500 members representing 900 companies and 22 regional groups in the United States and Canada. Learn more at newonline.org.
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Coffee may be for closers, but victory goes to the disruptors in the increasingly fast-paced grocery game. By Jim Dudlicek, Bridget Goldschmidt and Kat Martin
he lines between success and failure have been growing closer together. Grocers have had to shrug off their age-old reluctance to try new things, because not to try is to fail. Fence-sitters have been forced to become limb-sitters. Always being in a state of readiness for a battle they ultimately might not win — it’s a reality that grocery retailers have spent the past several years getting used to. Perpetual disruption by new generations of innovators have forced a mature $700 billion industry to enter a state of constant reinvention, investing significant resources in creating a seamless omnichannel experience while leveraging core competencies in feeding the masses. “A great ecommerce business sits on a great brick-and-mortar business. You can’t have one without the other,” Albertsons Cos. 32
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CEO Jim Donald remarked at this year’s Shoptalk conference. Technology and competition are great motivators for innovation, but grocery executives responding to Progressive Grocer’s latest Annual Report survey said that talent is actually the top issue keeping them up at night. “When you talk about technology, you talk about talent,” Ahold Delhaize CEO Frans Muller told Shoptalk attendees last month. “We invest in those who are fresh-minded — who understand the future of retail and the future of the shopper journey.” Though seemingly shaken a bit compared with last year, retailers on the whole remain largely confident in their chances for continued success and growth — nearly half of our survey respondents described themselves as more optimistic than a year ago. That’s following a year marked by bankruptcies and store closures, and continued investment by Amazon in grocery, as well as German deep discounters Aldi and Lidl in U.S. expansion, along with ecommerce initiatives by the likes of Kroger and Albertsons.
“Amazon opening stores isn’t all bad for grocery retailers, or something that should instill only fear,” Albertsons’ Donald said at Shoptalk. “In the end, it keeps retailers sharp and encourages innovation.” In fact, more retailers this year than last year told us that they see the current climate as an opportunity. Additionally, consumer confidence is on the rise, and PG’s own research indicates that consumers are optimistic about the year ahead. Fresh categories continue to lead most retailers’ hopes for maintaining an edge against competitors. Consumers’ growing interest in overall wellness, clean-label foods and product transparency all present opportunities for supermarket operators. “Health is critical not only for a grocer’s business, but also for customer retention,” Ahold Delhaize’s Muller remarked at Shoptalk. “Grocers can help shoppers prevent disease and illness through better food and teaching better eating habits. Remember: Food is less expensive than health care.” Meanwhile, most retailers plan to continue upping their investments in technology — for example, Kroger’s already expanding its use of autonomous delivery vehicles beyond the initial trial and is advancing its partnership with U.K.based Ocado for online fulfillment in the United States. Robotics, artificial intelligence and leveraging of Big Data shopper insights will all play increasingly important roles in delivering a seamless consumer experience, regardless of how folks choose to access the store. As Instacart Chief Business Officer Nilam Ganenthiran noted at Shoptalk, “It’s a misnomer to think there’s an online customer and an offline customer. In reality, there is just a customer.” It’s a far different retail world that we live in compared with just a year ago, and expect even more changes a year from now. Change is constant, accelerating and far-reaching. And it’s all happening with one goal in mind. “Grocery retail isn’t about selling, but about serving,” Sprouts Farmers Market Co-CEO, President and COO Jim Nielsen said at Shoptalk. “There’s a level of gratitude gained when a grocer serves the customer.”
Methodology Progressive Grocer’s 86th Annual Report of the Grocery Industry is based primarily on an exclusive survey conducted among executives at supermarket chains and independent operators across the United States. Among this year’s 66 retail executive participants, 64 percent classify themselves as independent retailers, 21 percent as regional chains and 5 percent as national chains. Of the total respondents, 74 percent operate fewer than 50 stores, while 26 percent operate 50 stores or more. Additional store count and sales data is provided by Nielsen TDLinx, which maintains a national database of supermarket and other retail-format locations.
Supermarket Sales by Format
Number Percent Sales Percent of Stores of Total ($ millions) of Total
Total Supermarkets ($2 million or more)
38,307
100%
Supermarket-Conventional
26,149
68.3% 438,686
Supercenter
4,412
$701,188
100% 62.6
11.5 180,660 25.8
Supermarket-Natural/Gourmet Foods
3,507
9.2
46,230
6.6
Supermarket-Limited Assortment
3,680
9.6
27,172
3.9
Warehouse Grocery
389
1.0
4,235
0.6
Military Commissary
170
0.4
4,204
0.6
Other Formats Conventional Convenience Conventional Club
152,593 1,338
n /a $457,251
n /a
n /a 154,883
n /a
Superette 11,454 n /a 17,594 n /a Conventional Drug
28,243
n /a 176,594
Rx Only and Small Independent
13,590
n /a 13,093 n /a
644
n /a 3,798 n /a
Military Convenience Store Gas Station/Kiosk
18,648
n /a
n /a
n /a
62.6% Grocery sales accounted for by conventional supermarkets, with the next most popular format, supercenters, accounting for 25.8 percent.
n /a
Supermarket Sales by Sales Range
Supermarkets ($2 million or more)
38,307
100%
$701,188
100%
Chain (11 or more stores)
31,669
82.7%
$665,177
94.9%
$2,000,000 to $4,000,000
2,062
5.4
6,055
0.9
$4,000,000 to $8,000,000
6,975
18.2
41,985
6.0
$8,000,000 to $12,000,000
3,532
9.2
36,534
5.2
$12,000,000 to $20,000,000
5,156
13.5
83,443
11.9
$20,000,000 to $30,000,000
6,035
15.8
150,814
21.5
$30,000,000 to $40,000,000
3,522
9.2
122,447
17.5
$40,000,000 to $50,000,000
2,544
6.6
112,964
16.1
$50,000,000+
1,843
4.8 110,934 15.8
Independent (10 or fewer stores)
6,638
17.3%
$2,000,000 to $4,000,000
2,222
5.8
6,627
0.9
$4,000,000 to $8,000,000
3,810
9.9
20,849
3.0
$8,000,000 to $12,000,000
316
0.8
3,169
0.5
$12,000,000 to $20,000,000
210
0.5
3,177
0.5
$20,000,000 to $30,000,000
65
0.17
1,546
0.2
$30,000,000 to $40,000,000
11
0.03
387
0.1 0.0
$36,011
5.1%
$40,000,000 to $50,000,000
3
0.01
125
$50,000,000+
1
0.00
130 0.0
Source: Nielsen TDLinx
34
Number Percent Sales Percent of Stores of Total ($ millions) of Total
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94.9% Sales accounted for by supermarket chains of 11 or more stores, with independents operating 10 or fewer stores making up the rest.
Optimism Still Abounds RE TAILERS — ALONG WITH CONSUMERS — STILL HAVE CONFIDENCE IN THEIR ABILIT Y TO WE ATHER ANY ECONOMIC STORMS ON THE HORIZON. By Kat Martin
I
f you listen to some media reports, brick-andmortar retail is doomed. Grocery operators remain relatively optimistic about the retail climate, however, with 45 percent more optimistic than a year ago and one-third reporting the same level of optimism compared with a year ago. This is down slightly from last year, when 51 percent reported increased optimism, and only a quarter felt the climate would remain the same. Progressive Grocer also surveyed consumers about how they felt about their own personal finances, which will affect how much they spend in grocery stores. Their optimism is slightly lower, with 43 percent being more optimistic about their finances from a year ago, and then, in common with retailers, onethird indicating no change in their financial outlook. While 350 food stores closed in the past year or so, including Southeastern Grocers, which closed 22; The Fresh Market, which shuttered 15; and Tops Market, which shut down 10, John Ross, the CEO of IGA Inc., chooses to see this as an opportunity. “The [media] is talking about a plague,” he noted during the recent IGA Global Rally in San Diego, “but it’s really a renaissance. The shopper is asking us to change and expand.” It’s up to retailers to listen to customers, and then provide the solutions they’re asking for. The market bifurcation continues as shoppers move away from the middle. Growth in the grocery sector is coming from either end of the shopping spectrum — an uptick in discount providers like Aldi and Lidl, as well as growth for those retailers with specialty or upscale offerings. The dollar volume for those stores at the upper end is four times higher than discount spending, Ross noted in his presentation. Ross also stressed that food is actually in a growth pattern, with more Americans becoming more interested in what they’re eating, and the food industry isn’t going anywhere as the population of the country continues to grow. (Learn more about how Ross views the industry in the interview on page 98.) Many retailers seem to agree with Ross that the current climate is an opportunity, with 50 percent of them ranking their company’s prospects for the remainder of the year as an eight or higher on a
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Overall, what kind of year was 2018 for your company? And how do you view 2019 prospects for your company? Rank
2018
2019
Sensational
10 9 8 7 6 5 4 3 2 1
3.0%
7.6%
24.2%
15.2%
19.7%
18.2%
21.2%
21.2%
10.6%
10.6%
16.7%
7.6%
7.6%
4.6%
3.0%
0.0%
1.5%
3.0%
Awful
3.0%
Source: Progressive Grocer Market Research, 2019
1.5%
10-point scale, with 10 being sensational. This is up slightly from the 42 percent who felt that way a year ago. Only 38 percent felt 2018 rated a ranking of 8 or higher. Consumers as well are sensing better days ahead, with 37 percent rating their optimism for the rest of the year as an 8 or above on a 10-point scale, according to PG research. The Conference Board Consumer Confidence Index hit 131.4 in February, up slightly from last year, when it was 130.8. “Consumer confidence rebounded in February, following three months of consecutive declines,” said Lynn Franco, senior director of economic indicators at The Conference Board. “The Present Situation Index improved, as consumers continue to view both business and labor market conditions favorably. Expectations, which had been negatively impacted in recent months by financial market volatility and the government shutdown, recovered in February. Looking ahead, consumers expect the economy to continue expanding.” Operating costs are expected to continue to rise, with 82 percent indicating a rise in wage costs and 70 percent foreseeing an increase in benefits costs. Nearly two-thirds are expecting their technology spend to increase, which seems to fall in line with where the retail market in general is headed, thanks to increasing consumer demand and/or acceptance of ecommerce and other digital solutions like scan-and-go technology and autonomous-vehicle delivery. Two-thirds of retailers predict an increase in retail prices for 2019, which may help offset some of their other rising costs, but only one-third of retailers are expecting their percent net profit to increase, while slightly more — 36 percent — are expecting it to stay the same for 2019 compared with 2018. For percent gross margin, 40 percent expect it to increase, and the same number expect it will remain the same.
Beef ’s Marketing Champion A partnership with the Star Ranch Angus® brand team is a partnership with the best-supported Angus beef brand in the business. When your store joins our program, we immediately go to work for you with brand launch kits, fresh in-store point-of-sale materials updated yearly, targeted consumer digital campaigns and experiential events across the country. Behind the scenes, we’re conducting annual consumer research to produce maximum impact through results-driven marketing campaigns — and the results are worth paying attention to.
Bigger sales, better support. It starts with Star Ranch Angus beef: → TysonFreshMeats.com/SRA
Retail Climate Compared with a year ago, are you more optimistic or less optimistic about the retailing climate for supermarkets?
51.1% 50%
More Optimistic Less Optimistic No Change
45.5% 40
33.3% 30
21.2%
23.3%
25.6%
20
10
0
2019
2018
Source: Progressive Grocer Market Research, 2019
®/™/© 2019 Tyson Foods, Inc.
All the Difference
Most Influential Department in Driving Stores’ Overall Brand/Image/ Point of Differentiation
AS THE Y FEND OFF A RISING NUMBER OF RE TAIL FOES, RE TAILERS ARE STICKING WITH WHAT WORKS BEST.
33.0%
Meat
By Bridget Goldschmidt
A
23.0%
s they face increased competition from such contenders as a certain online behemoth and two well-publicized deep 12.0% discounters of German origin that are expanding their respective reaches in the United States with more locations offering a typical combination of bargain prices and signature private 7.0% label items, traditional grocers’ need to differentiate becomes more crucial than ever in the quest to attract — and keep — customers. 5.0% Still, a renewed focus on the fundamentals may be just the key to edging out their retail rivals. When asked which department was the most influential 5.0% in driving their overall brand/ image/point of differentiation, 33 percent of respondents to the 2019 Annual Report sur3.3% vey chose meat, which was a top choice last year, but at just 21 percent, indicating that grocers are doubling down on the 3.0% tried and true when positioning themselves to stand apart from the retail pack. While last year, produce tied with meat as most 2.0% influential, this year it was second by a full 10 fewer percentage points, chosen by 23 percent Meat was the most influential of 2019 survey respondents. 2.0% department in driving stores’ Next came deli/prepared overall brand, image or point of foods, selected by 12 percent, differentiation, while meat and slightly down from 2018’s 15 produce tied as the top departments percent, and private label, at 7 2.0% for generating sales, and meat retook percent, a six-percentage-point the No. 1 spot for driving traffic. slide from 13 percent last year. Gourmet/specialty and center 2.0% store tied at 5 percent, with the former seeing a small uptick from 2018’s 3 percent, while the latter dropped six percentage points from last year’s 11 percent. 2.0% Beer/wine/liquor, if applicable, and fresh bakery were both chosen by 3 percent, and organic, ethnic, frozen foods, checklanes/front end and seafood all garnered 2 percent. Source: Progressive Grocer Market Research, 2019
33%
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Produce
Deli/Prepared Foods
Private Label
Gourmet/ Specialty
Center Store
Beer/Wine/ Liquor
Fresh Bakery
Organic
Ethnic
Frozen Foods
Checklanes/ Front End
Seafood
Most Successful Departments at Generating Sales Rank Department
Percent
1. Meat 68.3% 2.
Produce 68.3
3.
Deli/Prepared Foods 51.7
4. Beer/Wine/Liquor (if applicable) 40.0 5.
Center Store 36.7
6.
Fresh Bakery 33.3
7.
Private Label 26.7
8. Dairy 26.7 9.
Frozen Foods 21.7
10. Organic 21.7 11. Seafood 18.3 12. Pharmacy 16.7 13. Gourmet/Specialty 13.3 14.
Checklanes/Front End 11.7
15.
Health, Beauty & Wellness 10.0
16.
General Merchandise 8.3
17. Ethnic 5.0 18. Floral 5.0 19.
Other 1.7
Most Successful Departments at Driving Traffic Rank Department
Percent
1.
Meat 63.3%
2.
Produce 58.3
3.
Deli/Prepared Foods 40.0
4.
Beer/Wine/Liquor (if applicable)
5.
Center Store 30.0
6.
Dairy 26.7
7.
Fresh bakery 25.0
8.
Organic 18.3
9.
Private Label 11.7
1.
10.
Pharmacy 11.7
2. Cross-Merchandising
74.2
11.
Seafood 11.7
3.
Private Label
70.8
12.
Checklanes/Front End 8.3
4.
Locally Sourced Products
66.7
13.
Frozen Foods 8.3
5.
Signature Products
63.6
14.
Health, Beauty & Wellness 6.7
Store-Within-Store Specialty Departments
15.
General Merchandise 5.0
6.
(i.e., organic, gluten-free, specialty cheese, housewares, etc.)
53.2
16.
Gourmet/Specialty 5.0
7.
Cooking/Meal Prep Stations
50.9
17.
Ethnic 3.3
18.
Floral 3.3
19.
Other 5.0
38.3
Source: Progressive Grocer Market Research, 2019
40
As for the departments most successful at generating sales, meat and produce tied this year, at 68.3 percent, with the former working its way back to share the top spot after falling to third in 2018. Private label, which came in second last year, at 63.7 percent, plunged to 26.7 percent — a clear sign that own-brand products are in danger of losing customer interest once the novelty has worn off. Deli/prepared foods was third this year in generating sales, at 51 percent, up two spots from 2018, while the top five was rounded out by beer/wine/liquor, if applicable, at 40 percent (down from last year’s 58.8 percent but maintaining its No. 4 position), and center store, at 36.7 percent (up two spots despite losing 20 percentage points). Most successful at driving traffic was meat, back on top with 63.3 percent, after again falling to third last year, behind produce and deli/prepared foods, which this year came in second, at 58.3 percent, and third, at 40 percent, respectively. Fourth was beer/wine/liquor, where applicable, at 38.3 percent, rising from eighth place in 2018 and dislodging checklanes/front end, which plummeted to No. 12 this year, while center store was fifth with 30 percent, replacing organic, which fell to the eighth spot. In the area of merchandising and brand enhancement services, prepared foods once again topped the list of important strategies, this year chosen by 77.3 percent of respondents, up from 73.2 percent last year. Second was cross-merchandising, at 74.2 percent, rising from its fifth-place spot in 2018, when it was chosen by 60.7 percent. Also key were private label, at 70.8 percent, up a spot from last year; locally sourced products, at 66.7 percent, down from third place last year; signature products, at 63.6 percent, which went from second place to fifth; store-within-store specialty departments, at 53.2 percent; cooking/meal
progressivegrocer.com
Most Important Merchandising/ Brand Enhancement Services Percent of respondents rating each strategy as extremely/very important Rank Strategy
Prepared Foods
Percent
77.3%
8. BOGOs
46.8
9.
Free Wi-Fi
42.6
10.
In-Store Pharmacies
41.7
Source: Progressive Grocer Market Research, 2019
Talent Show
prep stations, at 50.9 percent, up from 10th to seventh; and free Wi-Fi, at 42.6 percent, down a rung from 2018. Regarding customer interaction, community involvement was more crucial than ever for 2019 respondents, 86 percent of whom chose it once more as their top strategy for connecting with shoppers, up from a mere 73.2 percent last year. In second place again was seasonal special events, at 73 percent, substantially up from 59.8 percent in 2018. Sampling/demos remained in the third spot, although, at 66.2 percent, it was still up from 55.4 percent last year. Wellness events/counseling, at 29.1 percent, and offering an in-store restaurant, at 26.5 percent, completed the top five. These results reveal that grocers are relying on what they do best — extensive meat, produce and deli/prepared food departments offering customized service; deep roots in the community; and comprehensive knowledge of their customers’ preferences, gained over time — to beat back the competition.
L ABOR ISSUES CONTINUE TO TOP C-SUITE CONCERNS, WITH BENEFITS, COMPE TITION AND TECHNOLOGY NOT FAR BEHIND. By Jim Dudlicek
L
Most Important Customer Interaction Strategies Percent of respondents rating each strategy as extremely/very Important
Community Involvement
86.0%
Seasonal Special Events
73.0%
Sampling, Demos Wellness Events/ Counseling In-Store Restaurants Healthy-Eating Store Tours
66.2% 29.1% 26.5% 23.2%
Cooking Classes
17.0%
Health Screenings
17.0%
Source: Progressive Grocer Market Research, 2019
42
progressivegrocer.com
et’s edit an old saying to fit the current context: The more some things change, the more other things stay the same. To elaborate: Advancements in technology and evolution in the way consumers shop continue to disrupt all levels of retailing. But amid the rapid change, grocery executives responding to Progressive Grocer’s annual survey say that the issue keeping them up most at night is labor — namely, the recruitment, retention, diversity and training of their workforces. It’s the second year in a row that talent issues have topped this list after rising from second place in 2017 to first in 2018. About three-quarters of all respondents named talent as their No. 1 concern, evenly shared among larger and smaller operators. “We try to help everybody to grow and be successful, and get them to love coming to work,” remarked Tom Heinen, co-president of Ohio-based Heinen’s Grocery Stores, during a c-suite panel discussion earlier this year at the Food Marketing Institute (FMI) Midwinter Executive Conference. And, as Jessica Adelman, group VP for corporate affairs at the Cincinnati-based Kroger Co., told PG when interviewed in late 2018: “I think this war for talent is certainly a big one. We know that we have to earn everybody’s commitment every day. As a leadership team, we try to foster the right culture, the right environment, and be relevant to the workforce.” A big part of that will involve doing a better job selling a career in grocery retail to the next generation moving their way through college. Cindy Sorensen, founder and president of The Grocery Group, a Minneapolis-based industry consultancy, urges retailers to establish a presence on college campuses to attract talent. Further, while only about a third of U.S. workers feel engaged at their jobs, according to a 2017 Gallup study cited by Sorensen during the National Grocers Association (NGA) annual show this past February, onboarding programs have been shown to improve retention and employee performance. “This generation wants to feel like they have a friend at work,” Sorensen said. “Create a culture of opportunity. Lay out a career path for them that’s performance-bound.” The second most-important issue overall our respondents named was benefits, up from No. 7 a year ago, though it’s clearly more of a concern for smaller operators than larger ones. Likely reasons? A Democratic majority in the U.S. House of Representatives and a growing nationwide movement to increase the minimum wage. Competitive threats is in third place, where it slid from its No. 2 spot a year ago. Clearly this continues to be a leading concern among traditional retailers grappling with cross-channel compe-
tition, overstored markets, growth among hard discounters like Aldi and Lidl, and the acceleration of ecommerce — which leads right into top concern No. 4: keeping up with advancements in technology. As continues to be stressed by industry analysts and observers, grocery retailing is no longer just about selling food — it’s about selling experience and information. Consumers want more individualized approaches, said Gary Hawkins, CEO of Walnut, Calif.-based Center for Advancing Retail & Technology (CART), during February’s NGA Show. Hawkins urged the industry to focus more on personalized marketing, supported by technology. “Think of it from a customer’s perspective,” he said. “Technology today is driving change. We’re at a point of inflection.” The online share of total grocery spending is growing faster than expected, noted Steve Bishop, managing partner and co-founder of Barrington, Ill.-based Brick Meets Click. “The online portion of the busi-
“This war for talent is certainly a big one. We know that we have to earn everybody’s commitment every day. As a leadership team, we try to foster the right culture, the right environment, and be relevant to the workforce.” — Jessica Adelman, group VP for corporate affairs, The Kroger Co.
ness is where growth is happening,” Bishop said at the NGA Show. “That’s why new competitive entrants are coming into the space. … [R]etailers need to consider how to make it seamless for shoppers to move between online and in-store.” From a seamless omnichannel shopping experience, to delivery solutions like Kroger’s trials of autonomous vehicles and partnership with U.K.-based Ocado, to Albertsons’ investments in cloudbased platforms, to engagement with shoppers via social media and targeted personalized offers, continued attention on all levels will be paramount to ensuring long-term growth and success.
What are the big issues keeping you up at night?
Current Ranking Year Ago
No. 1
No. 2
No. 3
No. 4
No. 5
No. 6
No. 7
74.2%
59.1%
56.1%
42.4%
39.4%
30.3%
27.2%
Competitive Threats
Keeping up with Advancements in Technology
Increasing Overhead Costs
Market Saturation
Price Increases
Labor
Benefits
(recruitment, retention, diversity, training)
(minimum wage, Affordable Care Act, etc.)
No. 1
No. 7
No. 2
No. 3
No. 6
No. 5
No. 8
66.7%
30.0%
58.3%
45.0%
30.8%
34.2%
24.2%
No. 8
No. 9
No. 10
No. 11
No. 12
No. 13
No. 14
25.8%
21.2%
15.2%
12.1%
6.1%
4.6%
3.0%
Online Sales/ Omnichannel
Sustainability
Data Protection/ Security
Food Safety
Trust/ Reputation
Genetically Modified Organisms (GMO)
Animal Welfare
No. 4
No. 9
No. 10
No. 11
No. 12
38.3%
20.0%
18.3%
17.5%
16.7%
N/A
N/A
(energy, infrastructure maintenance, etc.)
Source: Progressive Grocer Market Research, 2019 PROGRESSIVE GROCER April 2019
43
Driving Tech Forward
What omnichannel services do you offer? Mobile shopping apps
AUTONOMOUS DELIVERY VEHICLES ARE JUST ONE OF THE INNOVATIONS IN WHICH RE TAILERS MAY CHOOSE TO INVEST THIS YE AR. By Kat Martin
39.4%
Store-supported delivery
T
36.4%
Third-party vendor home delivery
echnology remains a key concern, hitting No. 4 on the list of issues that keep retailers up at night in Progressive Grocer’s Annual Report, with 42 percent citing keeping up with technology as a key concern. Two-thirds of retailers indicated that they planned to increase their technology spend in 2019 to keep up with the rapid pace of change in the industry as consumers increasingly shift their lives online or into the digital realm. Technology upgrades also ranked second for shoppers’ suggestions for investments, according to a PG consumer survey. One of the areas generating the most buzz is the rise of autonomous delivery vehicles. Several grocers, both large (Kroger, Walmart, Stop & Shop) and small (independent grocer BFL Grocery) are preparing to introduce autonomous delivery vehicles in their markets. E-grocer Amazon is testing Scout, a cooler-sized delivery robot. Nearly 8 percent of retailers indicated that they planned to invest in autonomous delivery vehicles, which should be a wise investment, as more than a quarter of consumers surveyed by PG expressed a desire for their gro-
34.9%
(e.g., Instacart, MyWebGrocer, etc.)
Drive-up collection sites
24.2% 21.2%
Click-and-collect
In-store mobile product scanning Ordering kiosks Delivery via autonomous vehicles Other
12.1% 9.1% 3.0% 4.6%
None
25.8%
What do you consider to be the most advantageous benefit offered by mobile devices/smartphones? 50%
50.0% 45.5%
43.9%
40
40.9% 33.3%
31.8%
30
28.8% 24.2%
20
21.2% 13.6%
10 0
E-coupons
Order Online/Pickup In-Store
Source: Progressive Grocer Market Research, 2019
44
progressivegrocer.com
Store Circular
Digital Circular
Personalized Discounts
Delivery of Online Orders
Shopping List App
POS Loyalty Card
Please grade your company’s strategy for connecting with consumers at multiple touchpoints: 3.0%
A We have a fully integrated strategy using in-store, online and digital channels B We’ve got a strategy that we’re executing
9.1%
12.1%
C We’re just getting started D We don’t have plans for omnichannel Other
34.9%
40.9%
cery store to offer delivery via autonomous vehicles. both retailers and consumers see e-coupons as the best ofRetailers are also turning to technology to deterfering, with 50 percent of retailers and 41 percent of shopmine eco-friendly delivery routes. Farmstead, an onpers citing them as the most advantageous benefit. Retailers line grocer, recently announced its new Sustainable seemed to place greater emphasis on social media, with 44 Routes program, which groups percent citing Facebook and 14 percent together neighbors to receive citing Instagram as the most advantageous their groceries on the same day in benefits offered by smartphone. Conversethe same delivery window while ly, only 10 percent and 5 percent, respecoffering customers three delivery tively, of consumers cited the same. windows a day. The goal is to However, Suzy, a consumer insights platget delivery vehicles off the road form, released a report that found that conand reduce carbon emissions. sumers are more likely to hear about health Additionally, Postmates delivfood trends on social media. And where do ery service has introduced Postthey go to shop in support of these food of grocers are currently executing mates Party, which allows users trends? The grocery store. So while conor running a fully integrated to see who in their area is ordersumers may not be making the connection ominchannel strategy using in-store, ing from which retailers and to between social media and your store (and online and digital channels. 35% group their deliveries together. it might not be your social pages promoting of respondants say that they are Users get free delivery and can the trends), social media is playing a role in just getting started feel better about the environwhere they shop, especially if a retailer has mental impact, and Postmates a reputation for specializing in or offering a can reduce delivery costs. large selection of trending health products. When it comes to omnichanFor consumers, ordering kiosks topped nel, 9 percent of retailers indithe list of technologies that they would cated that they had a fully integrated strategy that like their retailer to offer, with 28 percent of consumers connects with consumers via multiple touchpoints; citing this desire, while only 11 percent of retailers reporthowever, consumers saw it differently, with nearly ed that they had plans to implement ordering kiosks in the one-third giving their grocery stores high marks next year. In-store mobile product scanning also was in the for offering multiple omnichannel touchpoints. top three desires — autonomous delivery vehicles came in Retailers should take note that this gives them the second — with 22 percent of consumers wishing that this opportunity to surprise and delight customers who service was available at their store. They may soon get their seem to have lower expectations. wish, as 17 percent of retailers indicated that they planned When it comes to the ubiquitous smartphone, to add mobile scanning in the next year.
49%
PROGRESSIVE GROCER April 2019
45
APRIL 2019
Store of the Month
Giant Heirloom Market Philadelphia
LITTLE Compact urban market aims to bring culinary inspiration to a diverse Philadelphia neighborhood. By Jim Dudlicek Photography by Vito Palmisano
Custom-blended olive oil and balsamic vinegar help drive sales at Giant Food’s new urban format store.
PROGRESSIVE GROCER April 2019
47
STORE OF THE MONTH
Giant Heirloom Market
he line for wine might be the thing that took the Giant Heirloom Market team most by surprise. The first week the store was open, lines were out the door, leading the team to open a second checkstand dedicated to wine and beer purchases, says Paul Madarieta, Giant’s director of growth initiatives, who led the creation of the market. “Our company is blown away by how much wine we sell here,” Madarieta adds. “It’s giving the whole banner a bit of confidence.” In fact, Madarieta notes items that might not sell well elsewhere in the Giant system tend to move briskly at the new 9,500-square-foot store in Philadelphia’s dense Graduate Hospital neighborhood. Although Giant has had a presence in Philadelphia since the banner opened a store on Grant Avenue in 2011, Giant Heirloom Market will be its first-ever downtown location, and there are already 48
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“This new store format is a nod to our past, but it also incorporates the best features customers love about Giant today,” says Paul Madarieta, Giant’s director of growth initiatives.
plans for three more Heirloom stores in the city. The store offers high-quality, fresh and seasonal foods, along with everyday essentials, in a welcoming, up-to-date environment. Store features include a produce chef preparing fruits and vegetables on demand, local artisanal breads, a huge assortment of plant-based foods in a dedicated display, and regular sampling and demonstrations. And if customers want an item not available in the store, associates will direct them to in-store iPads to order it online via Peapod Pickup or Delivery. “From featuring products made locally to being staffed by people who call the neighborhood home, Giant Heirloom Market is a true reflection of the surrounding community,” Giant Food Stores President Nicholas Bertram said when announcing the store last fall.
MEAT-ING THE NEEDS OF TODAY’S MEAT SHOPPER CONVENIENCE • HEALTHY • DIVERSITY As one of the largest departments in the grocery store, the meat case is where you will find today’s customer trends influencing buying decisions the most. Over the years meat purchasing and consumption have fluctuated within the household. Yet in today’s market, meat still holds a significant place at the table with consumers displaying different purchasing behaviors.
CONVENIENCE At the core, today’s shopper is busy. The desire for simple cooking and “ready-tocook” meals is increasing and consumed more frequently.
HEALTHY Convenient cooking can sometimes imply unhealthy meals. Today’s shopper wants the combination of a convenient, healthy meal along with safe cooking practices.
DIVERSITY Meat consumers are displaying an interest in trying different cuts of meat and flavors.
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STORE OF THE MONTH
Giant Heirloom Market
Global Inspiration, Local Focus
The concept of this store was largely driven by neighborhood insights. “We held focus groups and street intercepts in neighborhoods throughout the city,” Madarieta says. “Overwhelmingly, customers expressed a desire for high-quality ingredients in a daily format. We drew inspiration globally from Europe, and locally from Philadelphia’s best restaurants and from the 9th Street Italian Market and Reading Terminal Market, renowned foodie destinations in Philadelphia.” Giant’s goal was to develop a new store format that met the needs of the Graduate Hospital community while creating an opportunity for additional growth that was scalable. “Our new urban format focuses on core elements that we knew would attract customers while ensuring we had the capability to pull them off consistently and exceptionally every day,” Madarieta says. Shoppers entering the store are greeted by a compact floral and gift display that opens immediately into the produce section. “One of the biggest things people wanted was produce — organic and affordable,” Madarieta says, noting storage areas built under the displays to maximize space. The backdrop for produce is the Heirloom Kitchen. Until noon, it’s a produce butcher, and then becomes a sampling area. “Customers we 50
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The Heirloom Kitchen includes a deli offering custom sandwiches (top) as well as sushi made fresh daily.
talked to told us they wanted to be inspired,” Madarieta explains. “We wanted to do a little theater, with chefs cutting fruit and vegetables. Then we deliver some inspiration for dinner and get food into people’s mouths.” Also in the Heirloom Kitchen is the deli area, offering Boar’s Head meats and cheeses, as well as custom sandwiches, salads and grab-and-go items. There’s also a Hissho Sushi chef stationed here daily. Across the aisle, facing the produce and deli areas,
The store’s extensive beverage selections include a diverse curated wine department (above) and kombucha, both on tap and ready to drink.
is a case dedicated to plant-based foods. “We carry these items in a regular Giant store, but not all in the same spot,” Madarieta notes. “We’ve been pleased with the results. We’re filling this all the time.” Bakery items include locally made pastries, cannoli and cheesecake. In fact, the only other place in Philadelphia that you can get some of these items is at the city’s Italian Market or family-owned bakeries. “We asked customers what the best roll is — they all said Sarcone’s,” Madarieta says, referring to the fifth-generation South Philly bake shop. Other items include bread, doughnuts (the mocha ones are a favorite) and tomato pie slices. Regarding the cannoli, which go for $5 each, “We sell every single one,” he asserts. A Pairings section, featuring cheese, charcuterie, spelt breads (“We keep upping the number because we keep selling out,” Madarieta says) and baguettes, is strategically located opposite the wine department. “We wanted to bring all this together,” Madarieta observes. Speaking of wine: “We created our range to be what you’d find in a higher-end store,” Madarieta explains, noting that rather than mainstream brands, Heirloom Market carries “more imported wines, nice chiantis, wines from France and Spain,” along with Champagne and prosecco. There’s also a 90-second wine chiller for folks who want to consume items soon after purchase. Reflecting Madarieta’s passion for wine, the assortment includes varieties at all price points and is representative of all types of wine. It’s also uniquely arranged, with wines displayed in an order that suggests which varietals might be attractive based on current preferences. “It really makes me feel like we did our homework when someone says, ‘Wow, you have Portuguese wine — vinho verde — or other Italian wines,” he remarks. Kombucha on tap is “a big hit” here, with 16-, 32- and 64-ounce growlers, Madarieta says, adding, “This store, as small as it is, leads the Giant brand in kombucha sales.” Local and craft selections are dominant among beer choices. Also on tap are olive oil and balsamic vinegar. Using a touchscreen, shoppers can blend their own oils and vinegars from a variety of flavors, with pairings suggested by the computer. “People are responding well to this,” Madarieta says, noting that this feature yields the store’s best-selling olive oil. Other oils and vinegars come from local purveyors, as do some pastas and prepared meals. PROGRESSIVE GROCER April 2019
51
STORE OF THE MONTH
Giant Heirloom Market
Giant Heirloom Market 2303 Bainbridge St. Philadelphia, PA 19146
Grand opening:
Jan. 25, 2019 Total square footage
9,500
Selling area
6,500 square feet
Employees: 60 Checkouts
9 self-checkouts, 2 beer and wine checkouts Hours: 7 a.m.-10 p.m. Designer: Giant team with decor fabrication by InSign
52
progressivegrocer.com
About Giant Food Stores
Giant Food Stores LLC operates more than 170 neighborhood stores in Pennsylvania, Maryland, Virginia and West Virginia. Employing more than 30,000 associates, the retailer offers home delivery, online/mobile ordering, fuel centers, pharmacies and in-store nutritionists. The Giant family of brands encompasses Giant; Martin’s Food Markets; Giant Direct, Powered by Peapod; and Giant Heirloom Market. Owned by Ahold Delhaize USA, Giant Food Stores was founded in 1923 in Carlisle, Pa.
STORE OF THE MONTH
Giant Heirloom Market A Foodie Environment
“We’re creating a foodie environment here,” Madarieta continues, explaining how items are merchandised to help inspire visitors. “We designed the store around how customers shop.” For example, spices are displayed in a vertical rack heading into the meat and seafood department, where they might inspire a special dish (if they don’t, value-added items dominate among proteins). Also, food-related books and magazines are marketed throughout the store to spark ideas in every category. Additionally, the compact, curated center store section features a “meal inspiration aisle,” featuring ethnic products and signage encouraging shoppers to ask store associates for guidance. Here again, to maximize space, backstock is stored in drawers beneath the shelves. Giant’s store brands feature prominently in this area, in particular the appropriately named Taste of Inspiration, as well as the banner’s organic Nature’s Promise label. “Everyone else is surprised that private label is selling so well,” remarks Madarieta, who spent 20 years at Trader Joe’s before joining the Giant team. There’s a “15-foot run of gluten-free” in center store, Madarieta notes, plus two doors in frozen,
which runs along the back walls with dairy. Further, there are limited selections of nonfood products, including baby items and pet supplies. One thing that you definitely won’t find at Heirloom Market are mainstream soft drinks. “We don’t
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Refrigerated cases offering milk, yogurt and other chilled products line the back walls of the compact Giant Heirloom Market.
carry Coke and Pepsi — you can get that through Giant Direct,” Madarieta advises. But you will find plenty of readyto-drink kombucha and other specialty drinks. Further, Giant partnered with a Pennsylvania-based company to create the exclusive One Village Coffee line; the retailer donates a portion of each bag of beans sold to the local Children’s Hospital of Philadelphia and hunger relief organization Philabundance. Energy bars are conveniently clustered near the checkout area, with conventional and all-natural brands sold side by side. “We didn’t put candy at checkout — we want to to be good partners with Mom and Dad,” Madarieta says. Instead of being numbered, the nine check stations (there are also two dedicated for beer and wine sales) are named for local thoroughfares, including Carlisle Street, which also honors Giant’s headquarters in Carlisle, Pa. To expedite locals’ in-and-out shopping trips, it’s all self-checkout here; there are also Giant Direct online ordering terminals, and the store is a Peapod pickup site. “If you can’t find what you want, we can have it here the next day,” Madarieta says amid signage promoting Giant’s endless-aisle proposition and proprietary Scan It! & Go app that allows shoppers to skip the checkout line altogether.
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It’s Their Grocery Store
In the same style as other department signage, tall illuminated letters spell out “Gathering” above an area where Giant Heirloom Market invites its patrons to take a break from the hustle and bustle of Philly’s streets. “We wanted to create a space where you can do your work, meet a friend, have coffee,” Madarieta says. A long communal table, made from wood reclaimed from a 1930s bowling alley, dominates the
We’re proud to serve our Graduate Hospital neighbors during their culinary quests by offering fresh produce, meat and seafood alongside the Philly products they know and love, all in a store designed for them.” —Angel Cordero, store manager ®
/™/© 2019 Tyson Foods, Inc.
STORE OF THE MONTH
Giant Heirloom Market center of the space, bordered by individual seating. Charging stations and board games invite shoppers to linger. “You can play, sit, have dinner,” he continues. “I saw someone doing their homework here.” Murals decorating the walls in this section, as well as the store’ entryways, are the work of a local artist. Store associates stand ready to assist. “I intentionally [designed the store] without a manager’s office,” Madarieta says. “We can’t hide — we’re all customer-facing.” Adds Store Manager Angel Cordero, “We’re proud to serve our Graduate Hospital neighbors during their culinary quests by offering fresh produce, meat and seafood alongside the Philly products they know and love, all in a store designed for them.” The store is part of new construction that includes three levels of residential units above the bottom-level market. “Our landlord is here every day getting food,” Madarieta notes. “People use this like a European market — they shop for each meal. A lot of extra trips, not a big stock-up store.” Graduate Hospital was selected as the first Giant Heirloom Market location because of its established residential community, and because of residents’ desire for a better grocery shopping ex-
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Beyond the craft beer cooler, the store’s gathering place offers shoppers a chance to relax and recharge.
perience. “The residents here wanted high quality at prices they could afford, and we knew we would be the perfect fit for them,” Madarieta says. “We have a nice following already,” he continues. “We only have one store in the city limits, and people have responded very well.” That will change soon, as Giant has announced three more Heirloom locations to open in Philadelphia on a rolling basis through 2019, the largest of which is expected to be nearly double the size of the Graduate Hospital store, Madarieta says. The new stores will be located in Philly’s University City, Northern Liberties and Queen Village neighborhoods. What will be different in the larger location? “We’ll do more produce. The service element will be heavier,” Madarieta replies. “We have a few things in our arsenal we want to play around with.” Overall, there should be more elbow room. “We crammed a lot in here. Our back of house is extremely tight. In an urban setting, you can’t avoid it,” Madarieta admits, noting that the store receives deliveries right on the street (the site is at a three-way intersection bound by narrow one-way streets with limited parking). “If you go all the way back to our origins, our business started as a small neighborhood market that grew over time,” Madarieta adds. “This new store format is a nod to our past, but it also incorporates the best features customers love about Giant today.” The most rewarding part of opening this store, he says, “was finding the courage, inspiration and ability to collaborate and design a new concept. We dreamed big and used our passion for food to propel us forward. We partnered with local chefs and food purveyors who also shared our vision. Giant’s goal is to get close to the heart of the community, and that started with us listening closely to their desires and making sure our neighbors had a say in the offerings.” And it’s cool to see the store’s shopping bags out in the community, being toted by neighborhood folks, Madarieta acknowledges. “It’s their grocery store now.”
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GROCERY
Beverage Alcohol
To Your Health BEERS, WINES AND SPIRITS BILLED AS BE T TER-FOR-YOU ARE STARTING TO UPEND THE BE VER AGE ALCOHOL AISLE. By Bridget Goldschmidt
Key Takeaways Manufacturers and retailers are responding to higher consumer demand for better-for-you beverage alcohol products across the category’s segments with new products and high-visibility placement. Innovations in kombucha, cider, beer, sparkling and still waters, ready-to-drink cocktails, wines and spirits are providing more options for health-conscious consumers. Expect better-for-you beverage alcohol to continue to borrow from trends in other beverage categories to provide more exciting, unexpected experiences that will enable consumers to imbibe with less guilt.
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lcohol consumption — except for the heart-healthy properties ascribed to red wine —isn’t generally associated with better health, but in line with customers’ expectations, retailers are seeking such products, and manufacturers are delivering. “People are looking for healthier alternatives in alcoholic beverages, whether it be hard kombucha, or lower-calorie RTD spritzers and cocktails, [or] lower-sugar wine,” affirms Rachel Shemirani, VP of marketing at San Diego-based Barons Market, which operates seven — soon to be nine — locations. “In the past year, this trend has really taken off, and we’re seeing more brands enter these markets. We’re experiencing an increase in sales of these better-for-you options. We just brought in a new low-sugar, Keto-friendly wine, because of the recent popularity of the Keto diet. It was one of our most requested items among our customers.” To make these items stand out, Shemirani says: “We put our RTD cocktails, hard kombucha and wine spritzers all together in one section, in our craft beer coolers. This is great way to discover these items when customers are perusing our craft beer options. We’ve put floor stacks of the Keto-friendly wine near our Keto-friendly grocery displays, instead of in our wine department, to really draw attention to this product.” She attributes the rise of better-for-you beverage alcohol to a particular demographic. “Millennials are really pushing this trend because not only do they love trying a variety of new and unique products, but they are more aware of ingredient labels than other generations,” she points out. “With these products, they are able to actually read ingredients, as opposed to wine, which does not have to have an ingredient label.”
GROCERY
Beverage Alcohol
Jeff Cameron, wine and beer category manager at Lakewood, Colo.-based Natural Grocers, agrees with Shemirani that this trend is creating quite a stir. “The choice and quality available throughout the country, as well as an awareness of the health impact of traditionally popular alcoholic beverages, [are] making a big splash in the liquor industry,” he asserts. “Natural Grocers customers can now find great-tasting alternatives in a variety of flavors and formats that can better fit their health and lifestyle goals.” In common with Barons Market, Natural Grocers, which operates 152 stores in 19 states, has experienced “real sales growth and excitement in our alcoholic kombucha segment,” notes Cameron. “These products hit many of the high points with gluten-free, low or no sugar, low carbs, low-calorie, low-alcohol, and even include some probiotics. We have several partners … that have done well in our Natural Grocers Cottage Wine and Craft Beer [sections] over the past year, and we are seeing many new entrants into the category. We are also just starting to see some strong newcomers in the sparkling alcoholic categories that are working with interesting natural ingredients, flavors and even superfoods. We are seeing seltzers, sparkling sake and spritzers that are made from everything from quinoa to brown rice.” The company expanded its Cottage section from one location at the end of 2017 to 11 stores, as of this past February, and is planning to expand the concept to many of its Colorado stores over the next few months. Cameron identifies an additional segment that’s “really a big focus for Natural Grocers”: gluten-free beer. “This is something that can be very important and very impactful on some of our customers’ lifestyles, and we have instituted a strict policy of only featuring and carrying those products that are truly gluten-free and made without any gluten-containing products,” he explains. When it comes to merchandising healthier items in the category, observing that “[m]any of the better-for-you beverages may have limited shelf stability compared to normal alcoholic products, depending on the production process and the ingredients they use,” Cameron says: “When possible, we like to feature our partners with in-store displays and case stacks. … We also love to promote our new and interesting products, and, for example, let our regular kombucha customers know that we offer alcoholic alternatives in the Cottage section.”
Natural Grocers’ Cottage Wine and Craft Beer sections carry an extensive range of products, including better-for-you options.
Robust Innovation
Manufacturers, for their part, are embracing this change in shopper demand. “Consumers are definitely keeping an eye out for beverages that they can feel better about in their soft drinks, juices, performance drinks and hydration solutions,” notes Reggie Gustave, brand manager, emerging brands at White Plains, N.Y.-based Heineken USA. “This trend is quickly moving to the beverage alcohol category and fueling the resurgence of low-/no-alcohol beers, the explosion of hard seltzers/ spritzers, and the popularity of more natural products such as hard ciders. It’s encouraging to see that there is excitement from manufacturers to continue to push the boundaries of innovation and to see enthusiasm from consumers seeking out new beverage experiences.” Heineken USA’s entries in this segment include Strongbow 100-Cal Slim Cans, which are rolling out nationally in April. “We’re The choice still at the early launch stages of our latest innovation, the Strongbow 100-Cal Slim Can and quality available Variety pack, and so far reception has been throughout the country, great!” enthuses Gustave. as well as an awareness “Strongbow’s point of difference is the of the health impact of 100-calorie proposition, and we’re leading with that simple message on pack and on traditionally popular point of sale,” he continues. “We’re also enalcoholic beverages, [are] suring that, where possible, we are offering a making a big splash in selection of our individual flavors so consumers can stick with a preferred flavor option or the liquor industry.” come back to the variety pack for a continued —Jeff Cameron, Natural Grocers experience with assorted flavors.” Meanwhile, at St. Louis-based Anheuser-Busch, transparency is top of mind, due to the fact that “[c]onsumers are increasingly concerned about health and wellness,” as Alicia Cleary, director, trade relations and industry affairs at A-B, points out. “Consumers expect transparency, and that is why Bud Light recently became the first beer in the U.S. to put an ingredients label on its packaging,” adds Cleary. She continues: “Our consumers’ understanding of an active lifestyle has progressed beyond simply counting carbs and calories. They are spending more time and money on their pursuit of a balanced life than ever before. As the fastest-growing beer in the U.S., Michelob Ultra has been perfectly positioned to ride this wave. As such, we have introduced Michelob Ultra Pure Gold — a great-tasting golden lager with lower calories than Ultra, signature low carbs, and a clean, balanced finish. Pure Gold is the first major USDA-certified organic light lager. This is just one example of how we are leading the charge to meet consumers where they are as their needs evolve.”
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Getting ‘Betterment’
“This desire for better-for-you products has lit a fire across food and beverage categories, and beer has been no exception,” notes Mallika Monteiro, SVP and chief growth officer at Victor, N.Y.-based Constellation Brands. Based on its extensive consumer research on “‘betterment’ as a major consumer trend driving drinker behavior,” Constellation found that “when
*Nielsen Planners, YTD 2018 thru June 30th, Total US All Measured Channels PROGRESSIVE GROCER 2019 ©2019 The Coca-ColaApril Company
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consumers think about betterment, they go beyond basic functionality such as ‘light’ or ‘diet,’” observes Monteiro. “Betterment is about both physical and mental wellness, and finding a way to fit alcohol into their lifestyle and into an overall approach to personal betterment. That is resulting in a shift of attitudes as people take control of their health and wellbeing.” She adds: “We recently extended the Corona Masterbrand to take advantage of market trends and consumer desires for a light beer alternative — introducing Corona Premier in select markets, vetting incrementality and brand impact, taking in-market lessons and putting them into action. We’ve driven growth by bringing new drinkers into the franchise using the power of Corona to emotionally connect with consumers.” The product, which launched last year as the first Corona brand innovation in 29 years, contains only 90 calories and 2.6 grams of carbohydrates. Since its introduction, Corona Premier has become the No. 3 fastest-growing brand, “[exceeding] our expectations and [becoming] one of the top growth contributors in the high-end space — with more room to grow,” observes Monteiro. Constellation has also found room for “tightly targeted” new brands, “where our current brands cannot go,” she says. “Our ambition is to build incremental platforms for growth, addressing unmet consumer needs in the beverage alcohol category. To this end, our first healthand-wellness masterbrand, Wild(ish), is set to launch later this year in select markets.” The company intends to take a “test-and-learn approach with two new offerings — a still alcoholic tea and an alcoholic sparkling water — both made with real, simple and natural ingredients,” reveals Monteiro. Wild(ish) Tea will launch this fall in two flavors, Green Tea & Ginger and Black Tea & Lemon, both with 4 percent ABV, while Wild(ish) Spritz sparkling waters will be available in Strawberry, Tangerine and Cucumber varieties, at 4 percent ABV each. Additional products entering this space include Vive, a gluten-free spiked hard seltzer from Covington, Ky.-based Braxton Brewing Co. containing just 100 calories, 2 grams of carbs and 5 percent ABV in natural Dragonfruit, Grapefruit, Lime and Mango flavors; 90-calorie Pura Still, billed as the first spiked still water, from Rochester, N.Y.based Fifco USA, offering a splash of coconut water, 1 gram of cane sugar, 4.5 percent ABV and a hint of natural fruit flavor in Blackberry, Mango and Mandarin Orange varieties; Minneapolis-based Drake’s Organic Spirits’ Organic Vodka and White Rum, both of which are certified USDA Organic, gluten-free, grain-free, kosher, vegan and Non-GMO Project Verified, recently joined by Drake’s Spiked Ice, a 100-milliliter, 80-calorie freezable “pop” containing 15 percent ABV in various flavors; Norwalk, Conn.-based Reed’s gluten-free Ready-to-Drink Mule,
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available in Classic and Keto-friendly Zero Sugar varieties with 7 percent ABV, and sold in a 4-pack of 12-ounce cans that will enable consumers to enjoy Reed’s Ginger Mule cocktail — an offshoot of the popular Moscow Mule — in an easy-to-drink format; and BuzzBallz ready-todrink gluten-free cocktails from Carrollton, Texas-based Southern Champion, which are made with an orange wine base, feature real juices or real cream and natural flavors, and contain no high-fructose corn syrup.
Variations on a Theme
Where will the better-for-you beverage alcohol segment go next? “We know that consumers are also increasingly looking for refreshment and convenience without sacrificing their drinking experience,” notes Heineken USA’s Gustave. “In the future, better-for-you alcohol will continue to borrow from trends in other beverage categories in order to provide a more exciting experience in an unexpected way without forcing consumers to sacrifice what they want.” “We expect to see large companies and small craft producers continue to enter the better-for-you beverage market and to start trying to segment themselves off into smaller subcategories,” predicts Natural Grocers’ Cameron. “We are hoping to see a continuation of natural and organic products in all of these segments to really commit to customers that the producers are making the best possible products for our customers’ lifestyle choices.” Expanding on Gustave’s observation, he goes on to note: “There is This desire for a wide variation of flavors possible better-for-you products with these types of beverages, has lit a fire across food using traditional fruits and flavorings, as seen in other alcohols, as and beverage categories, well as flavorings more common and beer has been no to the nonalcoholic markets. In exception.” addition, we are already starting to —Mallika Monteiro, see non-western flavors and those Constellation Brands using superfoods and teas, and we expect that trend will continue as companies experiment with different combinations to differentiate their products.” What must be borne in mind in developing and selling such products, however, is that health is a state of mind as well as of body. “What we’ve learned is that better-for-you is not a simple consumer need,” emphasizes Constellation’s Monteiro. “It means different things to different people. For some, calories and labels matter — they’re calculating the numbers on everything they consume. For others, it’s about the experience as a whole, the experience with the brand, how it makes them feel, what it says about them to their friends. And for others, being happy is healthy — they look for brands that make them feel good, both mentally and emotionally.”
FROZEN & REFRIGERATED FOODS
Dairy
Milk Shake-Up RE TAILERS CAN SEND DAIRY SALES SK YROCKE TING WITH A FE W CRE ATIVE T WE AKS. By Barbara Sax
airy remains a key traffic driver and core business for supermarkets. According to industry experts, the category accounts for only 3 percent of store space, yet it generates 10 percent of sales and delivers 20 percent of profit to a typical grocery store. Thoughtful merchandising and promotion can boost sales and lift the category to maximize performance.
Maximize Milk’s Massive Household Penetration
Dairy milk is not only 90 percent of the business in the dairy category, it’s also one of the most profitable areas of the store. It has a 95 percent household penetration and drives an average of 30 trips per year. “Milk is a powerhouse category,” affirms Chris Kohls, VP of dairy experience at St. Paul, Minn.-based Midwest Dairy Association. Out-of-stocks in this critical category can cripple a retailer. “Between Key Takeaways 52 and 55 percent of people who Milk is a major part of the dairy can’t find their brand of whole milk category, with interest growing on a store visit go someplace else,” in value-added, flavored, whole, says Eric Richard, education coorlactose-free, single-serve and dinator at the Madison, Wis.-based organic varieties. International Dairy-Deli-Bakery As manufacturers innovate and Association (IDDBA). “If you are out offer more choices, signage can of stock three times, consumers guide shoppers to what they want typically don’t come back.” in the dairy aisle. Retailers that analyze the shelf to In-store promotion and drive destination will win in this categomerchandising help to drive ry. Experts say that despite consumer traffic and boost sales. interest in plant-based milk, only $1.6 billion of a $15 billion category is plantbased, and a profitable milk department’s shelves reflect that reality. A good mix, notes Kohls, must also represent segments that are experiencing an uptick. “We’re seeing growth in flavored, whole, lactose-free, single-serve and organic milk,” he observes. “Retailers should be shifting the mix away from skim toward higher-fat products and adding single-serve flavored milks into their sets.” Value-added products are also fueling growth. “Fairlife has been a disrupter in the milk category — it’s a value-added product that has been a phenomenal success,” says Kohls. Ultra-filtered with less sugar and more protein, the brand has
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FROZEN & REFRIGERATED FOODS
Dairy
brought dollar sales and margin back to the category. “Opportunity exists for value-added products, and the data validates it,” agrees Cindy Sorensen, CEO of The Grocery Group, in Minneapolis. “Processors have the opportunity to innovate in this department.” Outposting milk in different sizes can significantly increase sales. Sorensen advises that to better compete for the milk business with other channels that may offer a more convenient shopping experience, grocers need to consider a secondary location of the beverage. “Milk can be merchandised in several areas of the store — bakery, meat and deli — for that added purchase when a shopper is picking up a meal,” she suggests. “We also encourage a secondary location for milk at the front end.” Richard says that adding single-serve white, chocolate and value-added milk on the beverage wall in the deli and in a refrigerated grab-and-go section at checkout is a smart move — early results of pilot testing of adding milk to small coolers near checkout suggest that the strategy can give the milk category a double-digit boost. Online shopping also presents an opportunity to lift milk sales when sites include an option that makes it easy for consumers to add milk to their purchases every time.
Giving Local a Leg Up
The original farm-to-table product that’s hyper-local and can often be delivered within 48 hours of leaving the farm, dairy meets consumers’ desires for local, transparent and healthy. “Food has become a badge of values,” says Julie Henderson, VP of communications at the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA). “Consumers want to know where their food comes from and how it was processed. Products from the dairy aisle play perfectly into this trend.” Sorensen believes that retailers should take cues from the produce aisle to tout the attributes of the category. “It’s almost impossible to visit a retailer today and not see photos of the local farmers who are supplying the local produce,” she says. “Retailers have incorporated farm photos on signage throughout the produce department and in ads on their websites and social media platforms. Retailers have begun to use signage in their milk departments profiling a dairy farmer who supplies milk to the store.” Retailers are also engaging shoppers by featuring dairy farmers at in-store events, or including a live stream from the farm on a store’s website or social media page where shoppers can watch the milking process and ask questions. NFRA has created a consumer PR campaign to grow the conversation regarding refrigerated foods and to showcase the culinary inspiration that can be found in the dairy aisle. “The objective of the campaign is to increase usage occasions and expand the consideration set of refrigerated items on the weekly grocery list beyond staples,” explains Henderson.
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Provide Snack Solutions
New products drive excitement in any category. Since consumers are snacking more frequently than ever and are looking for healthier options when the urge to nosh hits, manufacturers are responding with more single-serve yogurt, milk-based beverages, snacking cheeses and snack kits. “A new category of chilled snacking is evolving,” asserts Henderson. “With many perfectly portioned and single-size options, we can position the dairy aisle as a destination for snacking.” Adding new products, such as PepsiCo’s Quaker Morning Go-Kit — refrigerated packages that contain trail mix, a breakfast bar and Greek nonfat yogurt — can help fulfill that aim. Moreover, products with a value-added proposition continue to drive sales — and profits — across the category. “Dairy is a true protein — something more and more consumers are looking for — and new products are helping consumers fill their need for more protein,” notes Richard. Consumers will also often opt for products that offer them convenience or a new attribute, even if these items cost more. “Consumers are hungry for these products, and they are willing to pay more for products that are protein-fortified, offer enhanced nutrition, address gut and brain health, or provide an energy boost,” observes Kohls.
Retailers should be shifting the mix away from skim toward higher-fat products and adding single-serve flavored milks into their sets.” —Chris Kohls, Midwest Dairy Association
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FROZEN & REFRIGERATED FOODS
Dairy
June Dairy Month is Coming Americans have been observing National Dairy Month in June since 1937. Following are some promotions timed to the industry’s annual tradition. The Discover the Cool Possibilities dairy aisle promotion, from the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA), uses common messaging to create consumer interest in refrigerated dairy foods, drive traffic in the aisles and benefit the entire category. In addition to digital coupons and offers on Coupons.com, the program includes an integrated media component — created in partnership with New York-based mass-media company Westwood One — that delivers messaging across radio, email, online and social media. Strategic partnerships with Mr. Food Test Kitchen, on a June Dairy Month TV segment that will air to 5 million viewers, and food bloggers, who will engage their followers with creative recipes and meal ideas using refrigerated foods, are designed to reach new audiences. June Dairy Month and participating brands will be promoted on social media throughout NFRA’s consumer-facing Easy Home Meals properties. In addition, a $10,000 sweepstakes will engage consumers online at EasyHomeMeals.com. The conversation will continue on social media with a Twitter party hosted by Resourceful Mommy Media on June 4 at 2 p.m. EDT. Additionally, NFRA’s website will offer a new digital toolkit that collects all June Dairy Month-related resources in a single easy-to-navigate location. Specially themed POP materials are available to purchase, and NFRA will recognize the best merchandising and marketing efforts with its annual Golden Penguin Awards, which will be presented at the NFRA Convention this October in Orlando, Fla. Breakfasts on the farm are a common National Dairy Month activity throughout the United States. More than 70 Wisconsin farms across the state will offer Breakfast on The Farm events that are open to the public and give consumers a chance to meet dairy farmers, explore barns and enjoy homemade cooking. The Madison-based Dairy Farmers of Wisconsin association lists all events on its website, www.wisconsindairy.org, and is supporting the events with a media tour, breakfast kits, an educational app, and PSAs and TV appearances. St. Paul, Minn.-based Midwest Dairy Association, representing dairy farmers in 10 states in the region, will also list farm breakfasts on its website, www.midwestdairy.com Midwest Dairy and the Washington, D.C.-based Milk Processor Education Program (MilkPEP) will focus on raising awareness of the need for food-insecure families with children to have access to milk. Retailers can get information on The Great American Milk Drive at https://milklife.com/give.
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Help Customers Navigate Choices
As manufacturers innovate and offer more choice in the dairy aisle, signage can help consumers navigate the department. “Reinventing the dairy department can be as easy as incorporating the use of signage to help identify segments within the department,” says Sorensen. “It’s not uncommon to find yogurt sections which are 24 feet in length in larger stores. Providing signage which identifies where the segments — Greek, Icelandic, low-fat, probiotic — are located can help ease the shopping experience.” According to Sorensen, retailers that used this type of signage created by a wholesaler throughout the dairy section saw double-digit increases in the milk, yogurt, cheese and juice categories.
Create an Experience
In-store promotion and merchandising help to drive traffic and increase sales. “Research shows shoppers prefer to shop where shopping is an experience and with retailers who provide solutions to their hectic lives,” notes Sorensen. “Creating destination centers within the store can not only increase sales, but will drive traffic to the store for the experience.”
“Milk can be merchandised in several areas of the store — bakery, meat and deli — for that added purchase when a shopper is picking up a meal.” —Cindy Sorensen, The Grocery Group
Dairy associations have been working with retailers on test concepts to keep customers in the department for even a few more minutes longer. “The dairy category has been static for a long time, and retailers are looking for ways to make the department more fun,” says Richard. St. Cloud, Minn.based Coburn’s, for example, created a button in its milk aisle that children can push to hear a cow moo. Cheese islands are a key merchandising opportunity, according to Richard. “A well-merchandised cheese island gives retailers an opportunity to sample and educate consumers on pairings,” he points out. “Focused on the freshness factor and telling the story of a product is a great approach. If you can tell a story about a particular local brand of cheese and how
it got to the store, that’s something consumers can connect with.” Developing a good selection of artisanal cheeses can boost margins. “We see artisanal cheese skyrocketing,” says Kohls. “Consumers are looking for something a little different, from both imported cheeses and domestic cheeses.” Retailers should also take advantage of cross-merchandising opportunities to provide shopper solutions for meals and snacks. “Yogurt and cheese pair well with produce,” recommends Sorensen, “and yogurt provides a great low-calorie dip for fruit.” Retailers can also experiment with destination centers within the store, she adds, to increase dairy sales and drive traffic: “An old-fashioned soda counter serving ice cream, malts and shakes; a milk and bakery bar with cookies and/or peanut-butter-and-jelly sandwiches or other bakery items; a make-your-own-milk-flavor dispenser or a make-your-own-shake machine, used in many c-stores, are all possibilities.”
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Produce
Cultivating Kid Consumers SUMMER FRUITS AND VEGGIES OFFER A HOT OPPORTUNIT Y FOR GROCERS TO WOO YOUNG CUSTOMERS. By D. Gail Fleenor
ention summer produce, and visions of sweet peach juice trickling down your chin, buttery corn on the cob, and redder-than-red strawberries come to mind. With these tasty options, summer is a wonderful time to cultivate the newest produce customers — in other words, kids. These are the produce consumers of the future, and most of their parents are Millennials, the customers who want natural foods like produce. Grocers can do a lot to encourage parents to teach their children to eat more produce and less candy, until one day at the supermarket, Junior insists, “Mom, I want a peach!” According to U.S. Census counts and projections, there are more than 74 million kids under age 18 in the United States. Children make up one-quarter of the population. Since most kids are out of school during summer, it’s a great time to give them a little attention in the produce department through activities such as sampling and handouts with games related to produce. Paying attention to these future customers also makes a positive impression on their parents, something online grocers and summer farmers’ markets can’t do.
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Key Takeaways Sampling summer produce is a great way to introduce kids to the department. Have recipes featuring summer produce and activity sheets available for children and their parents, and consider hosting a festival to introduce little ones to fruits and veggies of the season. Promote produce to kids in summer and year-round through company publications and websites.
In the Summertime
Summer is the time for picnics, cookouts and natural snacks in abundance, such as cherries and peaches, to name just two. Many summer veggies are also at their best and sweetest, such as corn. Various supermarkets allow customers to shuck ears of sweet corn in the produce department. Refreshing melons highlight a still-warm summer evening, and flavorful berries can dot cakes. It’s a time that reminds some of childhood eats — for instance, most of us remember the first time we tasted a nectarine or ate buttered corn on the cob — and introduces little ones to the season’s bounty.
For 125 years, Del Monte has stood as the freshest name in produce. After all, we’re fruit fanatics, which means we’re also quality fanatics. Innovation fanatics. Healthy-lifestyle fanatics. Food-safety fanatics. Sustainability fanatics. And, while we obsess over all the fruits we grow, we’re bananas about bananas.
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Wenatchee, Wash.-based Stemilt Growers may be best known for its apples and pears, but summer is when the grower features cherries and stone fruits. Cherries are grown in both California and Washington state, so the grower has an ample supply from May to early September. This summer, Stemilt is introducing its branded cherry programs, including Skylar Rae, “the sweetest cherry you’ll ever eat,” according to Brianna Shales, company communications manager. “We will also have increased supplies of our A Half Mile Closer to the Moon cherries,” adds Shales. “They are grown in high-altitude orchards a half-mile above sea level.” Stemilt will offer a special program for a grand finale to cherry season from mid-August to September. Late summer will also bring Stemilt’s certified-organic peaches and nectarines to market. “It’s a special program that offers retailers a way to stand out on flavor when it comes to their stone fruits in August and September,” says Shales. “All of these summer flavors are great for kids, and a way for them to get to know the wide variety of fruits grown. We have to teach them about our wholesome products, as they are our consumers of tomorrow.” Stemilt will again offer Lil Snappers, its line of kid-sized fruits, with peaches and nectarines. “We have a lot of supporting material, including lane table display bins and activity sheets, to support promotions around Lil Snappers in stores,” notes Shales. Abundant summer veggies are featured in a variety of main dishes like potato salad. Dutch Yellow potatoes (DYPs) are on the list of summer vegetables, and Los Angeles-based Melissa’s/World Variety Produce Inc. offers DYPs that will fit right into potato salad as well as other dishes. Grown in nutrient-rich volcanic soils, Melissa’s Baby DYPs are “a sweet-tasting potato,” the company asserts. Baby DYPs are petite round potatoes with distinctive yellowish-white skin that can be cooked in a variety of ways. Kids will like their small size. They have a light flavor and creamy texture, according to Melissa’s website. If the potatoes are unpeeled, they are rich in potassium and vitamin C. The potatoes are also low in fat and sodium. They should be stored in a cool, well-ventilated area rather than refrigerated. Melissa’s “DYPs —The Perfect Everyday Potato Cookbook” has more than a dozen potato salad recipes for every season, including a summer salad called Jimmy’s Virginia DYPs, which, as well as the star ingredient, features shallots, vinegar, olive oil, salt and black pepper, and doesn’t require use of the oven on a hot summer night. In August and September, Melissa’s promotes back-to-school
All of these summer flavors are great for kids, and a way for them to get to know the wide variety of fruits grown. We have to teach them about our wholesome products, as they are our consumers of tomorrow.” —Brianna Shales, Stemilt Growers
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lunch items like grapes (muscato, cotton candy, champagne and candy sweet); variety apples (organic Gala, Fuji and Honeycrisp); organic Valencia oranges; kiwi berries; and mangoes. “On the vegetable side, we promote organic baby carrots and mini cucumbers,” notes Robert Schueller, director of public relations for Melissa’s. “These items tie well in the late-summer season/early fall.”
Sample Summer
What other kinds of produce can you introduce kids to this summer? First, let them shuck an ear of corn. Next, try the best of summer such as berries, tomatoes and items that may be new to them, including mangos, jackfruit, kohlrabi, raw asparagus and Swiss chard — all of them ripe in summer. Sampling a Vidalia onion to taste its sweetness and lack of heat would bring attention. Offer banana slices to show that some fruits and vegetables are available year-round. Sample a smoothie made with summer fruits. Remember to make sure that a parent is present and signs a form stating that the child has no allergies. Take your “customer kids” on a visit to the salad bar, if so equipped. Many children are used to choosing from salad bars in school cafeterias, although they may not choose vegetables and fruit. Allow kids to select a limited number of produce items from the salad bar, with the idea of encouraging them to taste something that they haven’t tried before. Sampling need not be confined to the produce department. “We sample heavy whenever a special arises in the produce department,” says Inder Salwan, produce department manager/team leader at Saks Food Hall by Pusateri’s, in Toronto. “Like right now, I have strawberries on special, and I sample them around the store. If guests are shopping with their kids, I’ll encourage the children to try the item so they can taste the beauty of new-season produce.” At Sunbury, Pa.-based Weis Markets Inc., kids can request a free snack-size bag of sliced apples or mini raisins from a produce associate when shopping with an adult, according to Beth Stark, the grocer’s manager of lifestyle initiatives. Year-round programs at Weis include an interactive nutrition education program geared toward second- to fourth-graders that includes a stop in the produce department. “Children learn about the importance of eating a variety of colorful produce and ways to add more to their meals and snacks,” observes Stark. They also sample a seasonal or unique type of produce. “We have six dietitians at store level that plan regular Kids Can Cook Workshops and scavenger hunts in their market areas,” she adds. “In both instances, fruits and veggies have a strong presence, and sampling is involved.”
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The Helpful Side of Online
Online resources can provide easy handouts for store displays. For supermarkets that have their own magazines or mailouts, produce activities and information for kids can be featured. “We have a Kids Bites page in each of our HealthyBites magazines,” says Stark. The magazine is printed six times per year and is available in all stores and online. In each edition, the activity aligns with a different topic, such as a healthy snack that promotes fruit and veggie intake. Saks Food Hall by Pusateri’s uses its company Instagram to market products to children, including produce, according to Salwan. Additionally, there are produce teaching resources on the My Plate USDA website, as well as the United Fresh Produce Association site.
A New Way to Spell Rad(d)ish Raddish, a cooking club for kids, is a fairly new educational resource that parents can purchase for their budding foodies. Launched in 2014 by founder Samantha Barnes, the club has a subscriber base of going on 1 million children across the United States and Canada. Kids receive (and parents pay for) a new kit each month that centers on a particular theme and contains three recipe guides, a grocery shopping list, a kitchen tool, an apron patch, conversation starters and an activity. Online components include bonus recipes and playlists. “Our shopping lists are designed to introduce kids to the grocery shopping process, from navigating the grocery aisles and budgeting, to identifying certain ingredients, their nutritional values, and roles they play in the cooking process,” explains Barnes. Produce is an important part of the shopping and cooking process. “During my time as a middle-school teacher, I realized that a lot of kids were aspiring foodies … yet they lacked kitchen experience, education and know-how,” she says. Barnes launched her first kid-centric culinary venture in 2006, and soon was teaching thousands of children across Los Angeles through after-school classes, summer camps and cooking parties. The monthly kits have themes such as a season, holiday, creative endeavor or particular part of the world. “We kick off summer kits with Garden Party in May, and follow with themes like Backyard BBQ, Cosmic Cuisine and Comida Argentina,” she notes. “Raddish makes a great
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summertime activity when families are looking for stuff to do.” Continues Barnes: “Our mission at Raddish is to give kids confidence in the kitchen and beyond. We believe in the power of food to bring families together, to build communities, to expand conversation, to foster healthier lifestyles and to strengthen relationships. We have shipped over half a million cooking kits to date, and each one of them empowers a kid to proudly say, ‘I made that!’” Raddish’s monthly kits are simple but revolutionary, taking the goodness of a home-cooked meal and mixing in education, family time and fun. “[T]aking risks, learning from mistakes and following directions: These are qualities we seek to develop in our children, and there is no better place to nurture them than the kitchen,” asserts Barnes. Although Raddish isn’t currently working directly with any supermarket chain, Barnes believes that there’s potential for Raddish content to engage and solidify the shopping habits of supermarket customers. “The Raddish program could be a great value-add for any grocer looking to activate their best customers and get the attention of busy families,” she observes. “Thousands of Raddish families already include their kids in making ingredient lists, budgeting and making an adventure out of the grocery shopping experience.” Photo by Kimberly Orlebeck
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More Produce Programs Produce for Kids rlando, Fla.-based Produce for Kids (PFK) offers games and activity sheets, among other resources, when kids don’t have homework and are looking for something to do. The organization has been helping families and children since 2002. Through produce and grocery retail partner programs, PFK has donated more than $6 million to charities that benefit children and families nationwide. Created by Shuman Farms, a leading grower and shipper of Vidalia sweet onions, PFK is a philanthropically based organization that educates consumers about healthy eating with fresh produce through the produce industry and also raises money for Feeding America, among other charities. PFK runs several in-store campaigns each year that include in-store display materials and online/ social media marketing to reach families. In addition to in-store campaigns, the organization offers the Power Your Lunchbox Promise to encourage families to pack healthier lunches, and the We Heart RDs program, which supports registered dietitians across the country.
United Fresh Start Foundation and Salad Bars to Schools he United Fresh Start Foundation is a nonprofit focused exclusively on increasing children’s access to produce through salad bars in schools, and is affiliated with the Washington, D.C.-based United Fresh Produce Association. Both research and experience in schools across the country have shown that children significantly increase their produce consumption when given a variety of choices in a school salad bar. When offered multiple fruit and vegetable choices, children select a greater variety of both on their plates and increase their overall produce consumption. Since 2010, the United Fresh Start Foundation has helped with the donation of salad bars to 5,000 schools in all 50 states, aiding the produce consumption of nearly 3 million children. The foundation is a founding partner of the national Salad Bars to Schools initiative. The salad bar program provides schools with much-needed refrigeration equipment for produce options. Salad bars highlight produce choices in a visually colorful and appealing way, and help schools meet lunch nutrition standards that require serving a variety of fruits and vegetables each week.
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Produce Marketing Association and Brighter Bites elping families stay healthy, reducing food waste and increasing the consumption of fruits and vegetables are the goals of the Newark, Del.-based Produce Marketing Association’s (PMA) partnership with Brighter Bites, a nonprofit that delivers fresh produce, nutrition education and a fun food experience directly to families in underserved communities. Houston-based Brighter Bites was inspired and created by a mom who successfully changed her children’s eating habits. She saw that creating this same change in underserved communities by channeling surplus produce to families, meeting them where their kids already are — at school and summer programs — would make a difference. Parents and other volunteers pack bags of fresh seasonal produce for families to pick up and take home each week during two eight-week sessions of the school year and an additional eight-week session during the summer. These two bags of fresh produce contain about 50 servings of eight to 12 different produce items. Since its start in 2012, Brighter Bites has delivered more than 18 million pounds of fresh produce to 30,000-plus families. It aims to change behavior among children and their families, and to increase consumption of fresh produce to prevent obesity and achieve long-term health. The program distributes produce, provides nutrition education, and makes healthy foods like produce a fun food experience through sampling a recipe of the week to see how good produce can taste. Brighter Bites also provides education for parents through nutrition handbooks, recipes and tip sheets. The program supports teaching coordinated school health lessons in the classroom and provides teachers with the same fruits and vegetables that the families receive, encouraging the educators to use them during in-class lessons. Research proves in all of these programs that education and exposure to healthy fruits and vegetables increases consumption for kids and their families.
SOLUTIONS
Grilling
Light the Fire GRILLING SE ASON IGNITES WITH NE W PRODUCTS, MERCHANDISING. By Lynn Petrak ure, cooking over fire is as old as, well, the discovery of fire. But even today, people are finding new ways — and new products — to cook over fire, whether it’s a gas grill, kettle grill, smoker, campfire or other form. That’s especially true now that the weather is heating up around most of the country, approaching the traditional grilling season kickoff of Memorial Day. Even people who grill year-round tend to do it more when it’s not sleeting, snowing or icing. The popularity of grilling as a cooking method that invites a host of foods is underscored in research conducted by Mintel. In its 2018 report on grilling and barbecuing, the Chicago-based market researcher found that 79 percent of adults own a grill and nearly half of adults own more than one type of grill. When it comes to what’s actually tossed on the barbie, though, Mintel’s findings point to a near-even split in adults who grill the basics and those who are willing to experiment with different flavors and foods. For
Key Takeaways Grocers should promote perennially popular grilling foods while expanding opportunities with new ideas for the types of items that can be grilled and how. Beer is getting in on the grilling occasion through co-branded prepared meat products and promotions targeting Hispanics who enjoy “food-first” gatherings with family and friends. Among the unexpected items that can be promoted for grilling purposes are duck breast and plant-based burgers.
PROGRESSIVE GROCER April 2019
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Grilling
grocers, that means promoting perennially popular grilling foods while also expanding opportunities with innovative ideas for what can be grilled and how. Rick Stein, VP of fresh food for the Arlington, Va.With based Food Marketing Institute, (FMI) agrees that grilling season opportunities abound for grocers to engage grill-happy upon us, grocers shoppers. “Consumers use four to five different applihave a unique ances when preparing fresh meat/poultry, with the grill among the top three,” Stein says. “With grilling season opportunity to help upon us, grocers have a unique opportunity to help inspire and counsel inspire and counsel shoppers on how and what to grill.” shoppers on how FMI’s recently released meat category report, “The and what to grill.” Power of Meat 2019,” shows that 48 percent of shoppers sometimes grill, 22 percent frequently grill and 17 —Rick Stein, FMI rarely or never grill. Meat is still king of the grill, especially staples like hot dogs, burgers, sausages and chicken cuts. In addition to touting those seasonal grilling favorites this year, a meat department can move other types of fresh meats as well. “When it comes to meat and poultry, we know shoppers are hungry for new cuts and kinds that push their traditional culinary comfort zones, and understanding that more than half of shoppers make their final decision on meat cuts in-store, a well-executed meat department with optimal signage, in-stock conditions and production planning makes all the difference to executing a sale,” Stein points out.
Beer at the Barbecue
On that note, meat and poultry companies are offering new products geared to consumers seeking a different taste or experience. Golden, Colo.-based Coleman Natural Foods, for example, recently added to its lineup in time for grilling season, partnering with Budweiser, the flagship brand of St. Louis-based Anheuser-Busch, to create the Budweiser BBQ Collection by Coleman Natural Meats. The co-branded products include fully cooked Budweiser St. Louis Style Spare Ribs and Budweiser Pulled Pork, both in classic Budweiser barbecue sauce; and Budweiser beer bratwurst and Jalapeño Cheddar Bratwurst, both infused with Budweiser American Ale. For a limited time this grilling season, variety packs will provide a taste of the full line. One impetus for the line is to reach discerning Millennials, who represent more than 80 million consumers and spend $600 billion annually, according to research from Dublin, Ireland-based Accenture. “Introducing this line of products to a new, younger audience will bring generations of consumers from the beer aisle to the prepared meat case,” says Bart Vittori, general manager of Coleman Natural Meats, adding that the items meet growing consumer interest in natural products and processes. “Coleman Natural brings high-quality pork sourced from crate-free hogs that are raised according to the Five Free-
SOLUTIONS
Grilling
doms standards supported by [nonprofit animal welfare group] American Humane. In addition, all livestock is vegetarian fed with no antibiotics or hormones — ever. Anheuser-Busch implements stringent standards for their hops and other ingredients that go into Budweiser products.” Another example of a creative pairing of beer and meat to generate interest among grilling consumers — including the growing market of consumers with Hispanic backgrounds and flavor preferences — comes from Tecate, the Mexican beer brand distributed by White Plains, N.Y.-based Heineken USA. The brand is offering consumers a chance to win a “VIP grilling experience” in partnership with Palatine, Ill.-based grill-maker Weber by visiting one of this year’s Grilling Together Fests in San Antonio, Phoenix and Los Angeles. “For Hispanics, ‘Food First’ is a casual gathering to hang out with friends and family, simply watching a sports game, or backyard socializing. Whatever the reason, everyone is looking to have a good time together,” explains Heineken USA Marketing Manager Juan Carlos Montes, adding that the concept is behind 27 percent of Hispanic beer-drinking occasions. Many of these food-first gatherings involve grilling meat, which is why the program will focus on carne asada in the western U.S. markets, and barbecue in Texas.
The grill could be that gateway mechanism to help introduce a consumer to a protein option they never considered.” —Rick Stein, FMI
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Heineken USA is highlighting the connection between backyard grilling occasions and beer drinking in its Tecate campaign in partnership with grill-maker Weber.
New Alternatives
In addition to red meat and poultry, other proteins and foods can be promoted for outdoor grilling season. “Seafood remains an enigma for most shoppers,” FMI’s Stein notes. “Still, we know from our research that there’s a particularly lucrative seafood shopper who is hungry for information on ways to cook seafood. The grill could be that gateway mechanism to help introduce a consumer to a protein option they never considered.” Meats not usually thought of for the grill are getting a summer makeover of sorts, too. Maple Leaf Farms, for example, is promoting duck breast for grilling season, including its White Pekin duck breast, which, according to the Leesburg, Ind.-based company, eats more like a steak, but with a fat and calorie content similar to a skinless chicken or turkey breast. Meanwhile, in a year in which “plant-based” is a buzzword and a true driver of shopper interest and sales, grocers can also find ways to encourage people to grill vegetables and plant-based proteins that are suitable for that cooking method. These products can include meat alternatives like beef-mushroom blended hamburger patties and all-vegetable patties. The El Segundo, Calif.-based Beyond Meat brand, which has been making inroads in foodservice recently, revealed that its plant-based Beyond Sausage will be available in more than 4,000 stores. Already, Beyond Meat burgers are in several grocery chains and stores aross the United States. Another plant-based meat alternative with a following is also seguing into the retail case to enable grilling opportunities. Redwood City, Calif.-based Impossible Foods plans to make its popular plant-based Impossible Burger available in grocery stores this year. “By far, the No. 1 message from fans on social media is, ‘When will I be able to buy and cook the Impossible Burger at home?’” Dr. Patrick Brown, the company’s founder and CEO, said in late 2018. Soon they’ll be able to do so — and flip a few on the grill at a backyard cookout.
PLMA’s 2019 Private Label Trade Show
Store BrandsMake Things Happen Wizards beware. PLMA’s 2019 Private Label Trade Show is coming. All the top supermarkets, drug chains, mass merchandisers, and specialty and online retailers. All the food, snack and beverage suppliers. Plus, health and wellness, household and kitchen, and more organic and natural exhibitors than ever before. Find out more about how your company can take advantage of PLMA’s great annual event. Telephone (212) 972-3131 or email exhibit@plma.com.
Nov.17-19 • Chicago Presented by the Private Label Manufacturers Association Visit www.plma.com
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In-Store Dining
Sitting Pretty TR ADITIONAL JAPANESE SE ATING ENLIVENS A MODERN AMERICAN SPECIALT Y MARKE T’S DINING SECTION. By Bridget Goldschmidt
ne key feature of the prototype Tokyo Central Specialty Market location that opened last August in Yorba Linda, Calif., is a distinctive in-store dining experience. Gardena, Calif.-based Marukai Corp., which now operates seven stores under the Tokyo Central banner, embarked on the project with a particular mission: to create a new experience for locals that celebrated the fusion of the Californian and Japanese cultures. Along with selling Japanese food and specialty items at affordable prices, the retailer wanted to connect with the surrounding community by offering an authentic Japanese cultural and intergenerational experience including such unique features as Japanese calligraphy classes, a special-events space, a ramen bar, cooking classes, a sake/beer bar, and, of course, a food court and sushi counter with a dining area. “In formulating the design, the team looked beyond the confines of the traditional grocery format, seeking ideas to create connections between East and West, young and old — through the sharing of recipes, ancient traditions, unique ingredients and signature moments, from offering cooking classes in the event space to immersive store tours for local language schools,” notes James Farnell, design principal at Little Diversified Architectural Consulting, with which Marukai partnered to realize its vision. With offices in Charlotte and Durham, N.C.; Los Angeles; Washington, D.C.; and Orlando, Fla., Little has also worked on in-store dining concepts for such retailers as Whole Foods Market, Bristol Farms/Lazy Acres, El Super, H-Mart, 99 Ranch Market, Publix Super Markets and Sprouts Farmers Market. “Our ultimate goal was clear: to design a new fusion market that remained true to the brand’s heritage and cultural mission, while adding a Californian spin that places customers first,” asserts Farnell.
Total Immersion
To that end, the store’s food court dining-area seating is based on horigotatsu, which Farnell describes as “a traditional Japanese seating style where the table is positioned in a circular recess within a raised platform. In addition to visual merchandising features, such as the giant sake barrels in the adjacent liquor area, this element provides a unique moment that enables customers to physically experience Japanese culture.” Farnell goes on to note the additional design features that make the dining area stand apart from those of other food
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retailers. “The food court space capitalizes on natural daylight offered along the storefront, while using traditional round frosted windows to screen the view to the parking lot,” he observes. “The space is bookended with shoji screens that provide a buffer between the diners and customers exiting the registers. Linear felt acoustic ceiling baffles suspended through the length of the area ensure the enjoyment of the diners and absorb noise from the active events and sake tasting bar. Exterior planters and overhead heaters were added to extend the dining space and allow customers to enjoy the Californian outdoors.” This thoughtfulness in design is carried over to a
“Our ultimate goal was clear: to design a new fusion market that remained true to the brand’s heritage and cultural mission, while adding a Californian spin that places customers first.” —James Farnell, Little Diversified Architectural Consulting
neighboring foodservice department. “The ramen noodle concession follows a similar aesthetic, using a light, simple palette, but includes views to the preparation kitchen and a linear window that was cut into the exterior to, again, invite natural daylighting,” says Farnell. “Purposeful merchandising cues of traditional Japanese ceramics, sake and adjacent holloware products immerse local diners in this unique experience, while providing a slower pace for them to ‘enjoy the journey.’” So far, the Yorba Linda location is the only one to feature this type of seating, although Tokyo Central has a growth plan and is actively looking at a couple of locations where it might add the concept.
Tokyo Central Specialty Market’s prototype Yorba Linda, Calif., store employs horigotatsu seating to provide a distinctively Japanese dining experience.
Since the Yorba Linda store’s opening, its dining facilities have proved popular with local residents. According to Store Manager Cory Nakamura: “The feedback from customers has been very positive. They like the uniqueness of the seating areas. The customers haven’t seen that kind of style of horigotatsu seating, and the natural light has been very enjoyable to many. ... We also get requests for reservations for the seating area. In all, it’s been very well received by the public.” Overall, the 35,570-square-foot prototype store has seen increased sales, a higher number of customers and a more varied shopper demographic. PROGRESSIVE GROCER April 2019
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OPTIMAL LIGHT PROTECTION WITH NOLUMA TECHNOLOGY We compare your packaging options for light protection capacity and guide you to the best cost efficient design that prevents content change due to light exposure. Our patented technology measures, assesses and then Noluma certifies the end result as optimally light protected. Noluma.com info@noluma.com © 2019 Noluma International, LLC. Noluma™ and the Noluma Logo are trademarks of Noluma International, LLC.
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LINKING PACKAGING AND CONSUMER TRUST: HOW THE INDUSTRY SHOULD LEAD THE WAY Packaging suppliers have an obligation to share the full extent of their industry expertise with their clients. This means moving beyond discussing the latest trend in recyclable materials or supply chain operations to helping brands understand the fundamental impact that packaging has on contents and on their customer relationships – a holistic approach that takes into account everything from purchasing decisions, to brand perceptions, to consumer trust.
Putting a label on consumer trust While the aesthetic remains important, a bigger, bolder approach to packaging design cannot come at the expense of honest labelling. This is especially true of FMCG brands: customers want as much information as possible about their food and beverages, and packaging is a vital way of communicating this. Indeed, studies are increasingly pointing to a clean label trend, with consumers demanding more from their brands in this area. A recent study by Label Insight demonstrated that consumers are willing to pay more for and will stay loyal to transparent brands. Similarly, Nielsen recently revealed consumers are actively seeking out brands that are honest about their ingredients.
Nutrient degradation Consumer-goods brands always aim to label their products accurately and record the level of nutrients honestly. The problem comes in between products leaving the factory and being opened by the customer: Often the food consumers end up eating does not contain the same level of nutrients as it did when it was first packaged for sale. Various factors impact this – but light is one of the main degradation culprits. Dairy is a case in point. Whether it be light from retail displays or fridges at home, exposure to light can significantly reduce a product’s nutritional content. Milk begins to lose Vitamin A after less than two hours of exposure to retail lighting. According to the Journal of Dairy Science, after 16 hours of similar light exposure, less than half of the Vitamin A remained in milk in a typical plastic bottle. A further study identified that after 12 weeks of light exposure in a retail setting, the nutritional value in UHT milk declined rapidly: Vitamin A reduced by 93%, vitamin D by 66% and vitamin B2 by 100%. And it’s not just indoor artificial light that causes damage: After one hour of sunlight exposure, riboflavin – a nutrient which is crucial for breaking down food components, absorbing other nutrients and helping to maintain body tissues in pasteurized whole milk - dropped by 28%, a study in the Journal of Dairy Science has shown.
What is the answer? Light-protected packaging can provide an easy solution to this problem – a way of shielding dairy and other products from possible light damage, while also ensuring that brands deliver their products as they intended and that consumers get the nutrients they expect. Using the highest level of light protection in product packaging can preserve nutrients, freshness, stability, color, efficacy, performance, sensory and quality characteristics, and lead to an extended sensory shelf life for many products that reduces food waste. For more information, email info@noluma.com Learn more at Noluma.com
©2019 Noluma International, LLC. Noluma™ and the Noluma Logo are trademarks of Noluma International, LLC.
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In-Store DIning News
Hy-Vee Bringing Burger Joint Wahlburgers to WI
Hy-Vee Inc. is bringing the Wahlburgers name to Wisconsin, opening its fourth franchise of the burger joint in Brookfield — the first location in the state. Additionally, local press reported in March that the grocer will open a second Wahlburgers in the state, a 5,300-square-foot location slated for Milwaukee’s Third Ward later this year. Set to open in early summer, the 6,000-square-foot Brookfield restaurant will be located on the northeast side of The Corners of Brookfield shopping center and provide a “unique dining experience” with signature burgers; homestyle sides; beefless options such as fish, chicken and vegetarian; and a full bar with specialty drinks such as adult frappés and floats. Menu items are made with from-scratch recipes. Hy-Vee first announced its franchising partnership with Wahlburgers in August 2017, when it said it planned to build, own and operate 26 locations under the name. Its first three Wahlburgers locations opened in 2018 at Mall of America, in Bloomington, Minn. (above); Hy-Vee’s hometown of West Des Moines, Iowa; and Olathe, Kan. Grand Rapids, Mich.-based mass-merchandiser Meijer also announced in 2017 that it had teamed with the Hingham, Mass.-based burger chain to open franchised locations in its home state. “Hy-Vee is excited to open its fourth Wahlburgers location,
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and to bring a new dining experience to Wisconsin,” said Randy Edeker, chairman, CEO and president of Hy-Vee, which operates more than 245 retail stores across eight Midwestern states, has more than 80,000 associates, and ranks 15th on Progressive Grocer ’s 2018 Super 50 list of the top grocers in the United States. “Families will enjoy great food in a fun atmosphere, served with the excellent customer service and hospitality that Hy-Vee and Wahlburgers are known for.” Founded in 2011 by Paul Wahlberg and two of his brothers, actors Mark and Donnie, Wahlburgers currently operates 29 locations in 19 states and Canada.
Foods Market 365 in Akron, Ohio. The in-store restaurant will serve as a prototype location for a menu featuring favorite Chinese entrées and authentic Japanese ramen. Rounding out the main selections are spring and summer rolls, sesame balls, and two types of gyoza (Japanese dumplings), as well as three varieties of bubble tea. “As American palates become more global, we’re excited to present the flavors of China, Japan and Thailand all at one counter,” said Bill Rosenzweig, marketing and creative director for Hana, the leading provider of fast-casual sushi in the United States, which operates Fire Leaf under its Genji division. “What we’re doing at Fire Leaf is a new retail concept for the company. Tastes are constantly evolving, so we’re always listening to our customers’ feedback and developing ways to keep our menu as fresh as our ingredients.” The Genji division uses no artificial preservatives, coloring, flavor enhancers or hydrogenated fats. Hana sells Asian cuisine under its Genji and Mai brands at hundreds of retail locations across North America. Its products, which range from sushi to ramen, are made fresh daily, often on-site, using 100 percent sustainable seafood. Although it has been reported that Whole Foods won’t be expanding the smaller-format 365 banner, it has no plans to shutter the locations already in operation. Under its parent company, Seattle-based Amazon, Austin, Texas-based Whole Foods is No. 8 on Progressive Grocer ’s 2018 Top 50 list of the top grocers in the United States.
Grocerant Concept to Open Within Luxury Miami Building Whole Foods Offers Pan-Asian Restaurant Concept
The newest concept from Philadelphia-based Hana Group North America, Fire Leaf, has debuted its made-to-order panAsian cuisine within a Whole
A grocerant concept known as My Deli Market will make its debut within the upscale Panorama Tower mixed-use building in the Brickell district of downtown Miami, according to the project’s developer, Florida East Coast Realty LLC (FECR). “Driven by Millennial customers, grocerant encom-
passes elements from cafés, delis and grocery stores to support the revolution of urban living,” FECR noted. Expected to open to the public in June 2019 as part of the building’s 75,000-squarefoot retail space, My Deli Market will offer a range of local and regional fresh produce, meats, bakery, supplementary grocery options, and homemade fare prepared daily by a dedicated culinary team. It will also provide exclusive room-service deliveries to Panorama’s tenants. “Consumers are looking for freshly prepared, casual food that is made to order, but they also want to experiment with new food options,” said Anselmo Endlich, My Deli Market’s founder, a Brazilian entrepreneur who relocated to Miami after establishing the largest online wine retailer in Latin America. “We want our customers to find the unusual, the unexpected and the surprising at My Deli Market. Pioneers like FECR envisioned vertical cities decades ago. The future has arrived, and we are lucky to be a part of it at Panorama Tower.” The concept leverages data analysis to identify the needs of shoppers so as to enhance their experience. A curation service takes into account customers of different nationalities and regions, with an in-depth understanding of Miami’s diversity. “We’ve seen these grocery, deli and café concepts pop up across major urban cities, and now we’re helping to bring them to Brickell,” said Jerome Hollo, EVP of Miami-based FECR. “With the number of young professionals in Brickell, we see the demand for this type of sophisticated grocery store/ eatery combination. Our goal with Panorama Tower always has been to deliver tenants everything that they need right outside their doors, as well as to create a greater sense of community within the neighborhood. Partnering with My Deli Market helps bring this full circle.” Rising 868 feet over the Miami skyline, the 85-story Panorama Tower, which offers 821 luxury rental apartments, is the tallest residential building south of Manhattan.
TOTAL MEAL SOLUTIONS
Industry Awards & Events
PG Launches Total Meal Solution Awards WINNERS TO BE HONORED AT NE W E VENT IN SEPTEMBER.
Winning entries will be published in the August 2019 issue of Progressive Grocer. There’s no cost to enter the contest. Deadline for entries is May 20, 2019. All entries must be submitted online at https://progressivegrocer.com/ TMSAwards. Questions may be directed to jdudlicek@ensembleIQ.com.
Progressive Grocer is seeking the most creative, innovative and forward-thinking concepts for delivering meal solutions to consumers in the grocery retail channel. Grocery retailers entering PG’s Total Meal Solution Awards may enter their concepts, launched since Jan. 1, 2018, in the following categories: Cross-Merchandising Concept (e.g., recipe components, bundled meal items, etc.) Dine-In Concept (including in-store restaurants or any prepared food items intended for primary consumption on site) Grab & Go Concept (hot or cold, RTE, or heat and eat, including “dashboard dining”) Meal Kit (in-house program or third-party partnership) Ready-to-Cook Program (including value-added, marinated and preseasoned entrées; meals in a bag; etc.) Shopper Engagement (including sampling programs, recipe advice, social media outreach) Snacking Program Signature Chef Creation (for retail chefs; includes prepared food menu items, original hot/cold bar recipes, value-added/ready-to-cook/heatand-eat items exclusive to a banner or store location)
“Shopper need-states are wide-ranging, and consumer needs for meal solutions stretch beyond prepared foods into every category,” says Jim Dudlicek, PG’s editorial director. “ PG’s Total Meal Solutions Awards will showcase retailer creativity and innovation in leveraging the entire store.” In the Signature Chef Creation category, contest judges will select three finalists who will be invited to participate in a cook-off at PG’s Total Meal Solutions Summit in September, where all winners will be honored in an awards ceremony. Winners may be asked to participate in panel discussions at the summit in conjunction with receiving their awards.
Total Meal Solutions Summit
Contest winners will be honored in a ceremony at PG’s Total Meal Solutions Summit, Sept. 9-10, 2019, in Austin, Texas. PG has transformed its previous foodservice event into the Total Meal Solutions Summit, which will focus on the latest research and trends in the prepared meal solution space. Attendees will learn how to build shopper loyalty and increase sales with strategies for graband-go, meal kits, hot bars, full meal solutions, and even how to integrate the center store. “The idea of meal solutions is far broader than deli, prepared foods or in-store dining,” Dudlicek notes. “Meal kits, grab-andgo, ready-to-cook value-added products and cross-merchandising are all integral to meeting the myriad needs of consumers looking to feed their families.” PG’s summit will offer an interactive experience including retailer panel discussions, proprietary research, networking with retailers and suppliers, and a foodie tour of Austin-area restaurants, food trucks and grocery stores (a detailed agenda will be released in the coming weeks). Additionally, the Chef Challenge will return with Total Meal Solutions Signature Chef Creation Award finalists facing off in a battle for the top prize. Retailers expected to attend the summit to date include Albertsons, Giant Eagle, Angelo Caputo’s Fresh Markets, Barons Market, Broulim’s Fresh Foods, Gooseberries Fresh Food Market and Woodlands Market, with other invitations pending. Watch for more information and updates at progressivegrocer.com.
Meat with European quality
TECHNOLOGY
Industry Events
Key Tech Takeaways From Shoptalk ’19 GROCERY RE TAIL TR ANSFORMATION WAS A MAJOR TOPIC OF DISCUSSION AT THE ANNUAL TR ADE SHOW. By Randy Hofbauer
rocery retail transformation is always the theme of the annual trade show Shoptalk, and its 2019 event, held March 3-6 at The Venetian Resort Las Vegas, dove right into the topic immediately. As Mark Rabkin, VP of ads and business platform at Menlo Park, Calif.-based Facebook, put it during a general session interview: If
While there were enough technology insights to write thousands of words, here are the ones that were particularly interesting, inspiring, or just plain honest and true:
— Donald
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the retail apocalypse is coming, then it continues to be delayed due to the constant stream of innovation and disruption caused by retailers in an increasingly omnichannel and Amazon-influenced world.
“Ahold Delhaize USA, like many other grocers, is made up of several banners/ brands, all of which differ in markets and operations. To ensure success with multiple differing brands in their respective local markets, it’s critical to centralize capabilities, not strategy, and execute on a local level.”
“Everyone talks digital — Fleeman transformation today in grocery retail. But getting everyone on board isn’t easy. So, how do you get a couple hundred thousand “A great employees to fully embrace ecommerce the data and digital capabilities to help business sits on a serve customers?” great brick-and-mortar business. You can’t — Iyengar have one without the other.”
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Ahold Delhaize CEO Frans Muller was one of the grocery leaders dropping serious knowledge on retail transformation at the recent Shoptalk trade show.
“What’s happening on the physical shelf is affecting the digital shelf — and what’s happening on the digital shelf is affecting the physical shelf.” — Straton
“Amazon’s opening stores isn’t all bad for grocery retailers, or something that should instill only fear. In the end, it keeps retailers sharp and encourages innovation.” — Donald
Two sessions on Shoptalk’s opening day invited grocery retailers and consumer packaged goods companies to comment on what they’ve been doing to stay relevant and gain share in today’s grocery market: “The Digital Transformation of Traditional Retailers and Brands,” which, among its speakers, featured Narayan Iyenagar, SVP of digital and ecommerce at Boise, Idaho-based Albertsons Cos., and Doug Straton, chief digital commerce officer at the Pennsylvania-based Hershey Co., and “The New Digital Organization,” which, among its speakers, featured JJ Fleeman, chief ecommerce officer of Carlisle, Pa.“When associates have based Ahold Delhaize an opportunity to create, USA and president they’re more likely to own. of its Peapod Digital So, letting them be a part Labs division. of the development and the The rest of the event solution is critical. You have was likewise packed to position your culture to with presentations,
accommodate this.” — Fleeman
interviews and conversations that dropped lots of serious knowledge on all aspects of retail transformation, grocery included. Grocery-focused speakers ranged from mainstream to niche online-focused to omnichannel, domestic to international. Attendees heard from such industry heavyweights as Frans Muller, CEO of Zaandam, Netherlands-based Ahold Delhaize; Albertsons CEO Jim Donald; and Nilam Ganenthiran, chief business officer of San Francisco-based Instacart. Those in search of additional tech-centric grocery retail transformation inspiration should check out Progressive Grocer sister brand’s Path to Purchase Expo 2019, taking place in Chicago this November.
“To get all teams involved with transformation talking to one another, grocers need to teach the vernacular so they know how to do so. They also must be evangelists — but not shove it down everyone’s throat.”
“Different CPG partners think about digital marketing in different ways, and it’s critical to work with all of them in the way each one needs. But progressive grocers today know that ultimately, their role with CPGs is to be a true media partner.”
“It’s a misnomer to think there’s an online customer and an offline customer. In reality, there’s just a customer.”
— Fleeman
— Ganenthiran
“When you talk about technology, you talk about talent. We invest in those who are fresh-minded — who understand the future of retail and the future of the shopper journey.” — Muller
— Iyengar
“Digital transformation in grocery retail isn’t about perfection before you move. You have to get started. You have to approach this like you would any other startup.”
“In the race to ensure customer satisfaction and loyalty, it’s important to make ecommerce less expensive for Instacart’s customers. That’s why it recently dropped its own annual subscription fee.”
— Fleeman
— Ganenthiran
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SUPPLY CHAIN
Pallets
Key Takeaways Pallet providers are designing products to deal with labor challenges, boost visibility and transportation efficiencies, achieve sustainability goals, and help retailers take on new competition. Small-format pallets are gaining in popularity as grocers increasingly move toward smaller-footprint stores. Even more advanced pallets are in the pipeline as manufacturers explore digital solutions such as artificial intelligence and RFID.
Modern Movement NOT YOUR GR ANDFATHER’S PALLE TS, TODAY’S SOLUTIONS ARE TACKLING SUPPLY CHAIN CHALLENGES HE AD-ON. By Jenny McTaggart
allets continue to serve their age-old purpose of transporting goods throughout the supply chain, but the latest versions of these supermarket stalwarts are taking their trusted role to a whole new level. Today’s pallet providers are working closer than ever before with their manufacturer and retailer partners to help address labor challenges, increase visibility and transportation efficiencies, meet sustainability goals, and even help position retailers against new competition. Jeff Liebesman, CEO of Orlando, Fla.based pallet-pooling company iGPS Logistics, explains the change in how pallet companies see themselves today. “For quite some time, pallet manufacturing was viewed through what we see now was an overly simplistic approach to cost cutting,” he says. “This ultimately benefited pallet manufacturers more than the customers they served. A race for the cheapest pallet also meant a race for the lowest-quality pallet, which produces increased costs for distributors and retailers via lost or damaged product, higher transport and cleanup costs, a shorter pallet lifespan, and higher risk of worker injury, to name a few. What we’re seeing today and in the past few years in pallet development is a more comprehensive view of the supply
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chain, so that pallet customers receive the lowest total cost of business, rather than pay more for problems caused by inferior pallets.” At iGPS, new pallet capabilities are highlighted by sanitation (last year, the company partnered with El Cajon, Calif.-based PURE Bioscience to develop a proprietary sanitizer), and technology, which “enables the sort of macro-level savings customers look for,” according to Liebesman, who adds that the company’s RFID-equipped pallets help customers get the most efficiency out of their automated systems. This includes advanced shipment tracking and instantaneous pallet-load scanning, both of which save considerable time and money. Alpharetta, Ga.-based CHEP North America, a pallet and solutions provider that has built its reputation on pooling reusable pallets, crates and containers, is also focused on providing more savings for its customers by working with them to solve supply chain challenges. In one example, a little more than two years ago, CHEP began talking with a large North American retailer to help the company prepare for the entrance of hard-line discounters into the U.S. market, according to George Brehovsky, CHEP’s director of customer solutions. Since CHEP is owned by a global company, Brambles, its supply chain team was able to draw from best practices in other markets, including European retailers that had already dealt with this type of competition. CHEP and the U.S. retailer identified a handful of high-velocity products that would have the right amount of shelf space, facings and ideal categories to use CHEP’s CarbonNeutral Half Pallet (40 inches by 24 inches in size) all the way from the point of production to the shelf. CHEP and the retailer decided on private label sugar, a high-velocity item that’s been traditionally associated with spills and other labor challenges. With a focus on more efficient replenishment, CHEP chose its half pallet to reduce product touches, improve supply chain efficiencies,
increase on-shelf availability, and ultimately reinvest savings into price by reducing the size of the unit load and automating the product’s shipment all the way to the shelf. “Essentially, what we worked on is removing the shelf display the way it had existed, using a high-velocity item that would have to be manually stocked on the shelf, and actually getting the manufacturer of that product to automate onto a half pallet all the way to the shelves, and only replenish the half-pallet position once the product had been sold down to the bottom layer,” explains Brehovsky. In the northeastern United States, this money-saving program has now rolled out to more than 800 stores, he says. In addition, the concept is being expanded with a different product — vinegar — in the Canadian market.
There’s a Pallet for That
Orbis Corp., a pallet company based in Oconomowoc, Wis., is focusing on its customers’ supply chain efficiencies with a variety of applications to serve different purposes, whether in distribution center/warehouse handling, retail deliveries, store replenishment or ecommerce order picking, according to Mike Ludka, senior product manager. Orbis’ plastic warehousing pallets, for instance, are often “stackable and rackable,” and are dimensionally consistent for an automated warehouse. Its general 40-inch-by-48inch distribution pallets, meanwhile, are often nestable for
The Pally, Orbis’ pallet/dolly combination, reduces touchpoints and handling during unloading.
The Pally can work with a range of reusable totes and containers for picking, restocking and multichannel purposes.” —Mike Ludka, Orbis Corp.
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SUPPLY CHAIN
Pallets
secure and stable outbound shipments, and, when empty, nest for efficient return trips. Ludka also points to the popularity of small-format pallets, which are becoming increasingly popular as more grocers opt for smaller-format stores. And the Pally — Orbis’ unique pallet/dolly combination — helps bring speed and efficiency to the grocery supply chain by reducing the number of touch points and handling needed to unload a truckload and position
Sustainable Strategies As talk about “circular economies” gains ground in U.S. politics and the business world, some of the leading pallet providers may have been ahead of their time. Alpharetta, Ga.-based CHEP North America is a circular-economy business by nature, and has been since its inception in 1946, according to George Brehovsky, director of customer solutions. “We’re offering the same pallet, crate or container that one customer uses and returns back to us from retail, and then we repurpose that same pallet, crate or container for another customer to use,” he explains. “By doing that, we’re able to extend that platform’s lifecycle, but also more importantly, measure the benefits of supporting the sharing economy amongst all our customers.” Brehovsky notes that a lot of today’s large, fast-moving consumer goods companies are making sustainability a priority, so working with a company like CHEP helps them meet their objectives in this area, and their overall social corporate responsibility goals. Another environmentally friendly bonus to CHEP’s business model: “The majority of our pallets are made out of a renewable resource — wood — and we source our wood from sustainable tree farms,” he says. Jeff Liebesman, CEO of Orlando, Fla.-based pallet-pooling company iGPS Logistics, notes that his company’s pallets, while plastic, are 100 percent recycled. “This makes them more environmentally friendly than wooden or nonrecycled alternatives,” he says, “as well as less expensive to manufacture, as old pallets are remolded into new ones — a savings we pass on to our customers.”
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New Pallets from iGPS feature RFID technology to help with advanced shipment tracking, as well as a proprietary sanitizer to kill bacteria.
product in store. “The Pally can work with a range of reusable totes and containers for picking, restocking and multichannel purposes,” notes Ludka. Orbis has found that bulk merchandising solutions are proving popular with retailers looking to save time and effort. Its bulk milk-delivery system, for example, is a dolly paired with a removable handle and four trays to minimize physical labor at retail and streamline merchandising. “This retail-ready system holds 80 gallons of fluid milk and can be rolled off the truck and right into the cooler for consumer shopping,” observes Ludka.
Pallets’ Future Potential
When it comes to the future of pallets, it looks like even more promising solutions are on the way, particularly as pallet companies harness the potential of artificial intelligence, RFID and other digital tools. CHEP’s Brehovsky explains that the company even has a division concentrating on digital development, thanks in part to the company’s investment in BXB Digital. “Our view in the digital space is not just using it for tracking, but also for customers’ goods visibility,” he says. “What we’ve been hearing from our customers is the need for more transparency in the industry. That transparency, from our standpoint, is at the unit load level.” Continues Brehovsky: “Our vision for the future is smarter, more efficient unit loads that increase that endto-end product visibility, and also monitor the product condition and quality. We’ve been learning a lot by deploying pilots with customers, and we’re fully envisioning that this is going to become an integral part of us transitioning to an insights-based business in the future.” He adds that by using pallet data from a variety of customers, via its pooling model, CHEP’s data gathering becomes even more powerful to help with supply chain problem solving. In fact, the company is already using universal data to help tackle transportation challenges. “We’ve been able to translate pallet flow information into truckload information, and we’ve been partnering with our customers for a number of years now to collaborate on reducing, or What we’ve in a lot of cases eradicating, empty miles,” he says. been hearing from our Liebesman, at iGPS, expects the customers is the need for current focus on pallet and supply more transparency in chain technology to continue, especially as automation technolthe industry.” ogy grows so rapidly. “The supply —George Brehovsky, CHEP chain space is particularly ripe for automation, given its comparatively high level of repetitious physical tasks,” he says, “so expect more and more companies to invest in RFID-equipped systems, and more research and development to be devoted to artificial intelligence-driven shipping processes.”
Play With a Purpose MULTIFUNCTIONAL, INTER ACTIVE AND SUSTAINABLE ITEMS ARE TRENDING IN A CATEGORY THAT GROCERS NEGLECT AT THEIR PERIL. By Princess Jones Curtis
ver the past decade, Steve Ball’s Chesapeake, Va., pet supply store, Petland, has served the local community, and he’s observed the people and pets in his neighborhood change with the times. “I’ve watched puppies grow into dogs year after year,” affirms Ball. “You get to know the customers, and you get to know their pets, and there’s nothing cooler to watch than when you see a dog fall in love with his favorite toy.” Based on the numbers, Ball isn’t alone in his sentiment. According to Rockville, Md.-based market research firm Packaged Facts, Americans buy nearly $1 billion worth of pet toys each year, with that number predicted to grow by 4 percent every year through 2020. Studies show that up to 88 percent of dog owners enjoy giving their pets new toys. Only 38 percent of dog owners say that their pets play with household items rather than commercial toys. And while dog owners tend to buy more toys than cat owners, cat toys have been gaining market share over the years. All of this adds up to great news for retailers looking to use pet toys as part of a comprehensive pet sales plan.
Key Takeaways According to Packaged Facts, Americans buy almost $1 billion worth of pet toys annually, with that number predicted to grow by 4 percent every year through 2020.
Pet toys that aid dental health, create a more immersive experience and are ecofriendly are trending.
Retail merchandising strategies for this category include dedicated end caps, clip strips and placement outside the pet aisle.
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If the market doesn’t offer pet toys, they’re rewarded with missed sales.”
The world is continuing to develop in a good and humane way. Would it be wrong to say that mankind is continuing to become domesticated?”
Category Trends
Pet toys have come a long way from old shoes and sticks. Today, —Jim Glick, Pet Qwerks consumers have more choices than ever when choosing something to keep their pets occupied. Toys with a dual purpose have always been popular. For instance, Petstages, a company of Centennial, Colo.-based Outward Hound, makes dental chews that provide entertainment while improving cats’ breath. Golden, Colo.-based Kong makes chew toys that also clean a dog’s gums. “Everyone loves multitasking — even your dog,” laughs Petland’s Ball. “But seriously, people want their pets to have toys that also make a difference. So if the toy can help with their teeth, why wouldn’t they want it?” Another popular segment is the interactive pet toy. These toys require the animal to think and react to
Sarah Kronemeyer, marketing director at Harry Barker, believes that the trends in pet toy spending are rooted in the increased closeness between humans and pets: “Dogs are not just pets, they are our family members.” The New York-based company was born when founder Carol Perkins became homebound during recovery from a rare brain tumor. As a form of therapy, Perkins began pet-sitting and creating dog toys and beds. Today, the brand is sold in more than 3,500 retail stores in 19 countries, with the mission of selling products that strengthen the relationship between people, their pets and the environment. “No matter what changes are occurring in the world around us, the unconditional love of a dog is constant,” asserts Kronemeyer. “That is why as owners, we go out of our way to find a dog-friendly hotel, or why we’ll get up before our alarm ever goes off to satisfy the wet nose nudging our faces. And maybe that’s why we love bringing home a new squeaky toy or splurging on a comfy monogrammed bed.” Jim Glick is the founder of Pet Qwerks Inc., an Irvine, Calif.-based dog toy and chew manufacturer that designs all of its products from the ground up and continually re-engineers them for rewarding customer experiences. Unique, high-quality and impulse priced, the toys are well suited for the grocery marketplace. Glick also thinks that the bond between humans and pets breeds potential for big sales. “People are developing closer relationships with their pets,” he notes. “They want their pets to be healthy and happy.
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Harry Barker’s pet toys aim to strengthen the relationship between people, their pets and the environment.
stimuli, which creates a more immersive experience. These are especially well suited for pets with separation anxiety or in need of a little extra mental stimulation. “Yes, interactive toys are very popular,” affirms Glick. “Our talking Babble Balls are selling better than ever in grocery and drug.” Babble Balls make animal noises when touched. They’re sensitive enough to make noise when the pet breathes on them or creates vibrations by walking by. If not being used, the balls turn off automaticall, but they can be reactivated with another touch. Babble Balls also offer a version for cats that includes catnip, and a Blinky Babble Ball that lights up as well as plays sounds. Eco-friendly toys are also trending. The move toward sustainable materials — such as recycled plastics or raw materials from renewable resources — echoes the general move in that direction. More than ever, consumers are asking what the products they purchase are made of and where they came from, even when it comes to their pet’s toys. Harry Barker, for one, makes eco-friendliness its mission. “Many of our products are made of sustainable materials,” notes Kronemeyer. “We use materials that have been repurposed, given a second chance. It’s a lifecycle that keeps on giving back.” She adds: “We use earth-friendly fabrics, azo-free dyes and green bed inserts made from 100 percent post-consumer recycled plastics. Harry Barker features all-natural ingredients for treats and biodegradable shampoos. Whether it’s a collar made from recycled plastic bottles, a classically striped bed filled with eco-fiberfill or biodegradable pet-waste bags made from recycled plastics, Harry Barker aims to improve the lives of pets and their people.”
Pet Qwerks’ Babble Ball fulfills consumer demand for interactive pet toys.
Glick recommends using merchandising strategies like end caps and hanging displays. “Most of our product line is available on clipstrips,” he says. “If a consumer is buying dog food, they will be cruising the aisle. Perhaps their dog food brand takes up only 2 feet of space. That means the consumer needs to pass another 20 or 30 feet of brands they don’t want. Clip strips can make that space more interesting and profitable.” According to Kronemeyer, retailers don’t have to limit their pet toy merchandising to the pet aisle. Instead, they should think outside of the section. “Treat pet products more as home décor items,” she advises. “After all, [they] are very visible items in the home, and the customer should be able to visualize how [they] will add to the overall aesthetic of their home.” Displays that show the products in concert with similar products could help customers to easily see value, Kronemeyer contends: “Allowing the customer to visualize the products in their home by presenting them in a thoughtful, curated and uncluttered way is crucial to sell-through.”
Shelf Space Decisions
“Shelf space is incredibly important to the retailer. It’s where we make our money. It’s where we can also lose our money,” cautions Ball, a pet store owner for over a decade. “And pet owners don’t usually come in just for toys. They come in for food or [cat] litter and pick up toys on the way out. So the smart move is to merchandise the products so that you can leverage that.” Pet Qwerks’ Glick agrees that add-on buys are important to the pet toy category. He notes that this is especially important for retailers like grocers, which customers may visit for other items and then end up buying things on impulse. “Obviously, when a shopper impulsively buys a pet toy, it’s extra profit for the store. Many shoppers don’t frequent the traditional pet supply stores, and the market or drug store is their only exposure to these products. If the market doesn’t offer pet toys, they’re rewarded with missed sales.” PROGRESSIVE GROCER April 2019
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EDITORS’ PICKS
Food, Beverage & Nonfood Products
Fizzy and Fruity No Bones About It
These days, Americans want only the best for their furbabies — and that includes premium food that does away with the same old kibble every meal. I and Love and You’s Baked & Saucy line of dog food is oven-baked in small batches, with farm-raised meats as the first ingredient. It features real non-GMO produce and protein, is grain-free, and contains probiotics for added digestion support. Coated in savory bone broth, Baked & Saucy dog food can be served dry as an oven-baked meal or wet as a saucy bone-broth gravy. Available in two flavors — Chicken + Sweet Potatoes and Beef + Sweet Potatoes — holistic veterinarian-approved Baked & Saucy combines wholefood nutrition, freshness and premium ingredients. Made with wholesome, real ingredients like chicken, peas and sweet potatoes, the line’s two varieties offer dogs meal staples loaded with vitamins and probiotics for added nutrition support. Suitable for all ages, breeds and sizes, Baked & Saucy retails for a suggested $14.99 per 4-pound bag, $34.99 for a 10.25-pound bag, and $64.99 per 21-pound bag. www.iandloveandyou.com
Kombucha, the gut-friendly fermented tea, is an acquired taste for many — but it doesn’t necessarily have to be. Health-Ade Kombucha is rolling out six additional flavors this year, starting this summer, which are fruit-forward, Certified Organic, non-GMO, gluten-free, vegan, raw and kosher: Cherry Berry, made with sweet cherry, elderberry and hibiscus; Grapefruit, brewed with pink grapefruit and a splash of blood orange; Tropical Punch, a true “punch” flavor with a tropical twist; Passionfruit-Tangerine, with fruits sourced from Peru and the United States; Strawberry-Lemonade, which blends its namesake quaff and kombucha; and Peach-Mango, which tastes like a fresh, juicy peach, with the sweetness of mango to add depth. All Health-Ade products are brewed with only the highest-quality ingredients and are fermented in glass to prevent plastic or metal leaching. The result: a smooth, bubbly and naturally low-sugar kombucha. The SRP for each product is $3.99 per 16-ounce bottle. https://health-ade.com
Pasta Possibilities
Americans find pasta comforting and filling, but many diet-conscious consumers wish it weren’t so carb-heavy. Now, following up on its popular chickpea-based pasta, Banza has introduced Chickpea Rice, which contains three times the protein, double the fiber and 30 percent fewer net carbs versus brown rice. The high-protein, high-fiber, reduced-carb product is a suitable alternative to rice, quinoa and other grains, and is naturally gluten-free. Available in two varieties, Chickpea and Tricolor Legume (a mix of chickpea, red lentil and green pea rice), the shelf-stable items come in 8-ounce pouches for a suggested $3.99 each. www.eatbanza.com
Pear-y Dry
It’s not just hard cider that’s hot right now — it’s also pear cider. What’s more, for so many imbibers, the drier and crisper it is, the better. To that end, Crispin Cider Co. has introduced a pear-flavored hard cider of its own, Crispin Pearsecco, which comes in a new variety pack of 12-ounce slim cans that includes two other flavors: Crispin Rosé and Crispin Brut. Crispin Pearsecco is a marriage of pear-based cider with a bubbly prosecco taste, offering a uniquely crisp yet dry taste. Beginning in late spring, the new Pearsecco flavor will also be offered in stand-alone slim-can 6-packs. Meanwhile, Crispin Rosé is crafted with rose petals and hibiscus for a smooth, floral taste and a clean finish, while Crispin Brut, an existing flavor with updated packaging, is a crisp, refreshing cider that finishes extra dry and tart like a brut champagne. Each variety pack contains six cans of Crispin Rosé, three cans of Crispin Brut and three cans of Pearsecco, and retails for a suggested $16.99. www.crispincider.com
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ADVERTISER INDEX
UNITED STATES MARKETS • Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Technology • Hospitality • Apparel CANADIAN MARKETS • Convenience • Pharmacy • Foodservice ADVERTIS ING SALES & BUSINES S STAFF EXECUTIVE CHAIRMAN Alan Glass aglass@ensembleiq.com
BetterBody Foods
Cover Tip, 14-15
Biro Manufacturing
56
Brill 13 BuzzBallz 60 Calico Brands
12
Campbell Soup Company
Inside Front Cover-3
CA Tobacco Control
Regional Ad -29
Chobani 65 Coca Cola Ltd.
61
CHIEF EXECUTIVE OFFICER David Shanker dshanker@ensembleiq.com
Del Monte Fresh Produce Inc.
71
PRESIDENT, CANADIAN DIVISION & NORTH AMERICAN GROCERY Jennifer Litterick jlitterick@ensembleiq.com
E&J Gallo Winery
59
Goya Foods Inc.
19
Heineken USA Inc.
35
BRAND DIRECTOR John Schrei 248-613-8672 jschrei@ensembleiq.com
Hughes Network Systems
SOUTHEAST ACCOUNT EXECUTIVE Larry Cornick (NEW ENGLAND, SOUTHEAST) 224-632-8248 lcornick@ensembleiq.com
International Dairy Deli Bakery Association
67
Jack Link’s Beef Jerky
21
Jones Natural Chews Co
95
SENIOR SALES MANAGER Judy Hayes (CA,PACIFIC NORTHWEST) 925-785-9665 jhayes@ensembleiq.com
Jyve Corporation
24-25
9
Mars Chocolate NA/ Wrigley
17
MasonWays Indestructible Plastics
69
WESTERN REGIONAL SALES MANAGER Rick Neigher (SOUTHWEST) 818-597-9029 rneigher@ensembleiq.com
Naturipe Farms LLC
73
ADVERTISING MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com
Norwegian Seafood Council
SENIOR SALES MANAGER Theresa Kossack (MIDWEST) 214-226-6468 tkossack@ensembleiq.com
Noluma 84-85
Premier Nutrition Private Label Manufacturers Association 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 800-422-2681 Fax: 978-671-0460 www.ensembleiq.com PROGRESSIVE GROCER (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Chicago, IL 60631 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to brand, PO Box 3200 Northbrook IL 60065-3200. Copyright ©2019 EnsembleIQ All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.
Salesforce Commerce Cloud Saputo Cheese USA, Inc. Sealed Air Corporation
Back Cover 23 81 4-5 27 78-79
Supervalu Inc.
31
The Garlic Company
41
The J.M. Smucker Company
11
Thermal Technologies Inc.
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Tosca Ltd.
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Trion Industries Tyson Uncommon Flavors of Europe Uniweb Inc.
Insert 51 37, 55 54 Inside Back Cover
UPEMI 87 Uruguay Instituto Nacional de Carnes V & V Supremo Foods, Inc.
39 6
Volk Enterprises
49
World Tea Media
57 PROGRESSIVE GROCER April 2019
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INDEPENDENT THOUGHTS By Kat Martin
Where is IGA Going? CEO JOHN ROSS GIVES HIS VISION FOR THE FUTURE OF THE ORGANIZ ATION, INDUSTRY.
During the IGA Global Rally in February, CEO John Ross spoke about his vision for the future of the organization. He noted that if IGA stores were taken collectively, they would likely be the fastest-growing independent grocery chain as well as one of the larger grocery chains operating in the United States. But what does he foresee for independent grocers and the grocery industry in general? Here’s some of what he shared with me during our chat at the Rally ... You’re about 18 months in as CEO of IGA (Independent Grocers Alliance). What do you see ahead for independent grocers?
I come from the equity world, and I look at it that if I ran a fund, where I would want to invest? I’d want an industry that has wide product appeal, so everyone eats — that’s good. People express themselves through the food they eat. They’re more passionate about the relationship between food and wellness in a way that they’ve never been before. So I look at that, and, OK, the U.S. is growing in total population. People are more passionate about my product; what kind of store do they want? Everyone wants value for their money — that’s never going to change. But then their list grows: They want healthy, fresh options, and they believe that the word “local” means healthier than something that I would get from a national chain. Boy, is that good for us! How does this influence IGA and the stores operating in the system?
Our new tagline is “Local Equals Fresh.” The way the commercial goes is, local retailers working with local family farmers because local equals fresh. That’s bringing two groups together that already do what they do — we just haven’t told their story in an overt way. Being still somewhat new to it, what has surprised you the most about the independent grocery industry?
What you find is, independents are unique, but what I walked away with is the behaviors that they’re doing are completely replicable. Where you win in retail is often a combination of a lot of tactics. I visit the stores and go, “What’s driving sales?” It’s craft beer, or sushi, or it doesn’t really matter: They’re out there running these plays in categories where they think they can win, and the shoppers are responding. Then I go to another store that might be struggling a little bit. They say, “Well, sales are off a couple of percent.” So I’ll ask, “Why?” If the answer is competition, I’ll ask what they’ve done differently. If there’s a pause, I know there’s an opportunity. What surprised me is how much of 98
progressivegrocer.com
the answer to the puzzle is already in the chain. The problem is, it’s trapped in that store. We need to take those insights and those ideas, [and] we need to make them portable. You’re bullish on the future of the independent grocery industry, but where do you see some speed bumps?
Your customer service is never as good as you think it is. It’s easy to get trapped, to be lulled into thinking you’re great. Because the people you see in your store all the time, they tell you you’re great. But you never talk to the people who don’t shop here anymore. And you’re not talking to the people who should be shopping [in your store], but don’t know you. And so we’ve got to do a better job of bringing full voice to the customer. Understand your neighborhood. If you’ve been in the same location for 30 years, your impression, your instinct about who you serve, may be based on the shoppers who are in your store, not the shoppers who should be. Your community can change really fast in a way that may surprise you. Diversity of retail. Retailers, if we’re going to survive, we have to be the paragon of diversity because we serve the community that’s willing to shop us, right? Better know who they are and what they’re about. The last thing that we all face is talent and accessibility to the labor pool. This is a long-term problem. We’ve got to be an attractive place for people that want to work, and create an environment where people want to stay.
We’ve got to do a better job of bringing full voice to the customer.” —John Ross, CEO, Independent Grocers Alliance
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