PG - July 2019 by ensembleiq

PG’s 72 nd Annual Consumer Expenditures Study: Succeed by putting shoppers first

BEYOND THE BAG New lunchbox solutions draw from perimeter, snack ideas FALL FOR PRODUCE The season offers a bounty of flavorful fruits and veggies CHEDDAR AND THEN SOME Help shoppers discover a range of artisanal cheeses

KC’sshine Sun and Br The Cosentino family has a bright future after seven decades in grocery retailing

July 2019

Volume 98, Number 7 www.progressivegrocer.com

s. re also supply chain fanatic fanatics, which means we’ h fres re we’ it— p hel ’t We can s. fanatics. Food safety fanatic lity fanatics. Sustainability qua And s. atic fan tion And innova ours. g your business along with And fanatics about growin

FRESHDELMONTE.COM

1-800-950-3683

Del Monte Fresh Produce N.A., Inc

THE WORLD SHOPS DIFFERENTLY. IT’S TIME TO SHIP DIFFERENTLY. People are having more goods delivered, faster, than ever before. Which means your fleet is generating more emissions than ever before. What if you could cut your fleet’s carbon footprint to zero and save money doing it? You and your carriers can now lease or purchase a new natural gas fleet for the price of a diesel fleet through Clean Energy®. We’ll even guarantee a fuel price on Redeem™ renewable natural gas that is significantly discounted to diesel.

www.CleanEnergyFuels.com

Contents 07.19

Volume 98 Issue 7

Features

PROGRESSIVE GROCER ’S 72 ND ANNUAL CONSUMER EXPENDITURES STUDY

Going With the Grain

Personal Business Putting the shopper first is the best strategy for success.

Departments

11 INDUSTRY EVENTS

Let’s Stay Physical 10 IN-STORE EVENTS CALENDAR

12 CONSUMER INSIGHTS

September 2019

Advertising Influencers

Cover photo by Vito Palmisano

Newest store is latest example of Cosentino family’s dedication to the Kansas City-area grocery market.

Jeff Mauro Named Keynote Speaker of Total Meal Solutions Summit

8 EDITOR’S NOTE

THE COSENTINO FAMILY (From left, rear) Dante Cosentino, Victor Cosentino Jr., Don Cosentino, (front) Callie Cosentino, Jerry Cosentino, Victor Cosentino

14 MENU TRENDS

Don’t Just Say Cheese — Sample It 16 NIELSEN’S SHELF STOPPERS

18 MINTEL GLOBAL NEW PRODUCTS

Body Care and Deodorants 20 ALL’S WELLNESS

How Do Packed School Lunches Score on Nutrition? 88 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS 90 TECH TALK

Let’s Start the Conversation

Beverages PROGRESSIVE GROCER July 2019

Contents 07.19

Volume 98 Issue 7

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

51 SPECIAL SECTION

Albertsons at 80

Flagship banner marks eight decades as an industry leader.

www.ensembleiq.com CHIEF COMMERCIAL OFFICER AND PRESIDENT RETAIL Jennifer Litterick jlitterick@ensembleiq.com PUBLISHER John Schrei 248-613-8672 jschrei@ensembleiq.com

71 SOLUTIONS

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

Bento is the New Brown Bag

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

As consumers shift to more fresh-focused, snackstyle lunches, retailers are rethinking their marketing and merchandising strategies.

SENIOR EDITOR Kat Martin 224-632-8172 kmartin@ensembleiq.com SENIOR DIGITAL & TECHNOLOGY EDITOR Abby Kleckler 773-992-4405 akleckler@ensembleiq.com CONTRIBUTING EDITORS Princess Jones Curtis, Shonda Talerico Dudlicek, D. Gail Fleenor, Bob Ingram and Jenny McTaggart

74 FRESH FOOD

Fall Up

Get shoppers excited about the bounty of the season’s fruits and veggies.

ADVERTISING SALES & BUSINESS SENIOR MARKETING MANAGER Maggie Kaeppel (NEW ENGLAND, SOUTHEAST) 708-565-5350 mkaeppel@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 REGIONAL SALES MANAGER Tammy Rokowski (SOUTHWEST) 248-514-9500 trokowski@ensembleiq.com

77 FROZEN & REFRIGERATED FOODS

ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com

Cheese’s Big Moment

CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com

Retailers can help customers discover the many varieties and flavors that can be found in the category.

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

81 EQUIPMENT & DESIGN

LIST RENTAL MeritDirect Elizabeth Jackson 847-492-1350, ext. 318 ejackson@meritdirect.com

Designing Change

SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES 847-564-1468 or email at PG@Omeda.com

Retailers and store designers alike are responding to new and different aspects of food marketing. 84 PG PET

Premium Purchases

More and more, consumers are deciding that Fido and Fluffy deserve the very best.

PROJECT MANAGEMENT/PRODUCTION/ART VICE PRESIDENT OF PRODUCTION Derek Estey destey@ensembleiq.com CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com

ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com REPRINTS, PERMISSIONS AND LICENSING Wright’s Media ensembleiq@wrightsmedia.com 877-652-5295

CORPORATE OFFICERS EXECUTIVE CHAIRMAN Alan Glass CHIEF EXECUTIVE OFFICER David Shanker CHIEF FINANCIAL OFFICER Dan McCarthy CHIEF OPERATING OFFICER Joel Hughes CHIEF COMMERCIAL OFFICER AND PRESIDENT RETAIL Jennifer Litterick CHIEF INNOVATION OFFICER Tanner Van Dusen

84 6

progressivegrocer.com

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

EDITOR’S NOTE By Jim Dudlicek

Let’s Stay Physical had the opportunity to attend The Kroger Co.’s 2019 annual stockholders meeting in Cincinnati late last month. It was an occasion for the company and its ardent supporters, as well as some of its critics, to passionately voice their thoughts about the progress of the nation’s largest traditional grocery retailer. To be sure, the hour-plus session didn’t lack for sizzle reels showcasing Kroger’s dedicated workforce, omnichannel investments, sustainability initiatives and other projects. The fanfare wasn’t unjustified — Kroger has excelled at redefining what it means to be a food retailer in an age when shoppers would just as soon buy groceries from their sofas as go to the store. Yet some who addressed CEO and Chairman Rodney McMullen as he presided over the meeting expressed concerns — magnified by Kroger’s flailing stock price of late — that the retailer is focusing too many of its efforts on technology and is neglecting the in-store experience. Of course, others said, hell no, Kroger is awesome inside and out. But the concern isn’t without merit. After all, even with the very gradual increase in online grocery commerce, physical stores still have an important role to play. In fact, an NPD Group report released in late June notes that, despite the rise of online ordering, brick-and-mortar grocery stores will remain an essential method of purAre grocery chasing foods. The percentage of U.S. retailers consumers age 18 and older who shopped online for investing too groceries within a 30-day much in the period, whether for delivery or pickup at a store, digital shopping grew from 17 percent in the experience? quarter ending November 2018 to 20 percent, or about 51 million consumers, in the quarter ending February 2019, according to NPD’s study, reported at progressivegrocer.com. “Digital purchasing will accelerate in food retailing, just as it has in other retail sectors where we see much higher rates of online purchases,” notes NPD’s David Portalatin. “Still, the brick-and-mortar grocery store will always be a necessary means of acquiring foods, especially those where consumers place a premium on their sensory assessment to ensure quality, like meats, fruits and vegetables. This gives forward-thinking retailers 8 progressivegrocer.com

and their vendor partners an opportunity to truly create an omnichannel experience for the consumer and revolutionize the way we think about grocery merchandising.” And there’s ample evidence that Kroger isn’t ignoring this reality, even while aggressively pursuing its omnichannel strategy. Just a few blocks away from the meeting site, work was progressing on Kroger’s new flagship store in downtown Cincinnati, a two-story market at the base of a new residential tower. In addition to a full supermarket, the store will include a food hall featuring five restaurants, including the latest location of Kroger’s own Kitchen 1883 full-service dining concept, along with several locally known eateries, ETA September. That’s in addition to the dining solutions Kroger is installing in other stores around its network, like Chicago, where select Mariano’s stores now feature Pork & Mindy’s, the sandwich concept by Food Network star (and Progressive Grocer Total Meal Solutions Summit keynoter) Jeff Mauro, and Rouxster’s Cookhouse, serving up Nashville hot chicken and other comfort foods. Also while in Cincinnati, I got to see the northern Kentucky pilot stores in Kroger’s partnership with Walgreens, which places Kroger Express grocery centers within several Walgreens drug stores, offering produce, meat, meal kits and other grocery items. Each of these stores is also a pickup center for online Kroger orders, so these sites are leveraging both physical and digital to enhance service. Online will continue to grow, but in-store will always be important to the shopping experience. After all, what’s driving sales are those fresh areas that many folks still don’t quite trust to anonymous online ordering. Check out our annual Consumer Expenditures Study, starting on page 24 of this issue, for a deep dive into the categories that are reaping the most rewards for grocers. Jim Dudlicek Editorial Director jdudlicek@ensembleIQ.com Twitter @jimdudlicek

WILDLY APPEALING. POWER THRU WITH THE ORIGINAL GO-TO SNACK

INNOVATION AND VARIATION Jack Link’s new ﬂavors and exciting product variety continue to ring the bell at the cash register.

COLD CRAFTED LINKWICH™: COLBY JACK & HARD SALAMI, PEPPER JACK & GENOA SALAMI, CHEDDAR & HARD SALAMI Family-friendly; the ultimate breadless sandwich – keep refrigerated.

ORIGINAL RECIPE & SPICY RED PEPPER BEEF SMOKED SAUSAGES Since 1885, generations of Links have worked in the smokehouse to master the craft of making smoked sausages. That craft continues today.

ON THE HUNT FOR THE MODERN SNACKER? You need to offer products that are:

✔ PROTEIN-RICH ✔ COMPLETELY FILLING ✔ FAMILY-FRIENDLY ✔ ON-THE-GO Jack Link’s delivers snacks that defeat those daily hunger pangs while packing in the protein. It’s food that suits the latest diet trends – whether paleo, keto or diabetes-friendly – and satisfies today’s busy consumer.

ZERO SUGAR ORIGINAL BEEF JERKY An excellent source of protein without the sugar. Introducing your new zero hero.

CRACKED PEPPER & SWEET HABANERO STEAK BARS The latest steak bar flavors; 100% beef, lots of protein.

To order, contact your Jack Link’s representative. For information on all things Jack Link’s, visit www.jacklinks.com or call 715-466-2234.

In other words, your customers will eat them up!

IN-STORE EVENTS

Calendar

09.19

National Hispanic Heritage Month (begins Sept. 15) National Chicken Month National Honey Month

National Mushroom Month National Papaya Month National Potato Month National Rice Month

S M T W T F S

National Gyro Day

Labor Day National “Grits for Breakfast” Day International Bacon Day

National Welsh Rarebit Day

National Macadamia Nut Day

National Cheese Pizza Day

National Date-Nut Bread Day

The whole store can celebrate National “I Love Food” Day.

National Hot Dog Day

National Coffee Ice Cream Day

National Beer Lover’s Day

For International Day of Charity, encourage giving to local charities at checkouts.

Poll customers on whether sauces or rubs are better for National Baby Back Ribs Day.

National Read a Book Day

National Wildlife Day

National Hot Cross Bun Day

National Chocolate Milkshake Day

National Peanut Day

National CreamFilled Doughnut Day Create a children’s contest for National Coloring Day.

Natural Products Expo East begins in Baltimore and continues through Sept. 14. National Grandparents Day

National Wiener Schnitzel Day

National Crème de Menthe Day

National Guacamole Day

National Monte Cristo Day

National Cheeseburger Day

National Pepperoni Greet all customers Pizza Day with an “Arrr!” for International Talk Like a Pirate Day.

International Day of Peace

National Food Service Workers Day

National Dumpling Day

National Double Cheeseburger Day

National Cinnamon- National Apple Raisin Bread Day Dumpling Day

National Play-Doh Day

National Linguini Day

National Butterscotch Pudding Day

National Ice Cream Cone Day

National White Chocolate Day

National Coffee Day National Mulled Cider Day

National Mocha Day Rosh Hashanah

National Cherries Jubilee Day

National Lobster Day

Offer specials on cooking classes for National Cooking Day.

National Singles Day

National Love People Day

progressivegrocer.com

National Punch Day/ National Pecan Rum Punch Day Cookie Day

Run a special on German beers in honor of Oktoberfest, which begins in National Queso Day Munich.

Mexican Independence Day

National Key Lime Pie Day

National Chocolate Milk Day

National Drink a Beer Day

National Pancake Day Johnny Appleseed Day

National Strawberry Cream Pie Day

Have employees share their celebrity crush for National Crush Day.

INDUSTRY EVENTS

PG’s Total Meal Solutions Summit

Jeff Mauro Named Keynote Speaker of Total Meal Solutions Summit THE CELEBRIT Y CHEF IS PART OF A BOLD LINEUP SHOWCASING INNOVATION, INSPIR ATION AND IDE A E XCHANGE.

ulinary celebrity Jeff Mauro will be the keynote speaker for Progressive Grocer’s Total Meal Solutions Summit, taking place Sept. 9-10 in Austin, Texas. Over one and a half days, the interactive summit will equip the nation’s top retailers with proven tactics for developing a robust meal solutions program that will increase basket size and resonate with shoppers. Mauro gained fame as the winner of Season 7 of Food Network Star. His prize was his first show, the Emmy-nominated Sandwich King, which ran for five successful seasons. He also co-hosted the Food Network’s Saturday-afternoon juggernaut The Kitchen, which is now in its 22nd season. He has appeared on Late Night with Jimmy Fallon and has guest-hosted The Today Show, Good Morning America, Steve Harvey, The Talk and The Rachael Ray Show, among others. He is currently partner and executive chef of Pork and Mindy’s, a fast-casual barbecue restaurant specializing in sandwiches. Pork and Mindy’s has recently expanded into Mariano’s grocery stores in the Chicago area, bringing its signature sandwiches as well as special menus and grab-and-go items exclusively to Mariano’s stores. “We are thrilled to have Jeff Mauro sign on to PG’s Total Meal Solutions Summit,” said Jim Dudlicek, editorial director of Progressive Grocer. “His background and enthusiasm for great eating will add even more excitement to a bold lineup that showcases innovation, inspiration and an intimate exchange of ideas.” Mauro will bring his culinary experience and signature humor to Total Meal Solutions, where he will speak about his experiences in the food industry as well as the process and challenges of launching his Pork and Mindy’s concept for grocery retail foodservice. Other highlights of the Total Meal Solutions Summit include a food tour of Austin-area establishments excelling at meal solutions; the Progressive Grocer Chef Challenge, a live cooking competition with surprise ingredients; and critical research on foodservice trends from Datassential, the Food Marketing Institute and Progressive Grocer. Participants in the summit include such retailers as Whole Foods Market, Albertsons Cos., Giant Food and H-E-B, as well as companies like Tito’s Vodka, Nestlé Professional, Coca-Cola Co., Elkay Plastics and Ruiz Foods.

Latest Research

Additionally, the event will feature Marie Molde, account manager and registered dietitian at Chicago-based Datassential, presenting research on the latest menu and ingredient trends, and the state of retail foodservice. With a strong background in both nutrition and business — and a combined MBA/RD from Dominican University — Molde brings to Datassential a unique culinary perspective and health-driven point of view. Restaurant chains and suppliers have relied on her expertise in menu and product development, and for years she has helped foodservice and retail companies excel at food innovation. Molde is a member of the Menus of Change Business Leadership Council, a group of leading chefs, food and foodservice executives, entrepreneurs, investors, and social innovators working to inform, support and confront issues currently affecting the food industry. Registration is complimentary for approved retailers. Visit www. totalmealsolutions. com to learn more about the summit and reserve your spot today.

PROGRESSIVE GROCER July 2019

CONSUMER INSIGHTS

Market Research

Advertising Influencers Retailers place significantly more importance on in-store signage, digital marketing and mobile marketing than shoppers claim to, according to research conducted by Progressive Grocer. For retailers, the most important advertising strategies (by far) are in-store signage, digital marketing and mobile marketing. When shoppers are asked the importance of the same advertising outlets in terms of deciding where to shop, answers are much more evenly spread, with the top three being in-store signage, direct mail/circulars and newspaper inserts. While we’ll see things that are highly important to retailers but don’t show as important for shoppers, that’s not to say that retailers aren’t placing importance on the right things. It just may be that in the shopper’s mind, these aren’t things that they (consciously) place importance on when deciding where to shop. However, they’re likely things that subconsciously influence their feelings, perceptions and opinions of a store. Retailers were surveyed for PG’s Annual Report, which ran in the April 2019 issue. For the consumer segment, PG and sister company EIQ Research Solutions surveyed 1,000 grocery shoppers who were sourced via ProdegeMR, reinventing the research process by taking a respondent-first approach. Visit www.prodegemr.com/ ensembleiq.com for more information.

0 10% 20% 30% 40% 50% 60% 70% 80%

73%

In-store signage/ digital media

33%

39% Direct mail (circulars, etc.)

32%

33% Newspaper inserts

30%

26% TV advertising

26%

65% Digital marketing

22%

Retailer Question

How important are each of the following consumer marketing/ advertising strategies to your company?

29% Newspaper ads

21%

48% Mobile marketing

(Rate each on a scale of 1 to 6, where 1=is not at all important through 6=extremely important.

18%

Shopper Question 13% Radio advertising

13%

10% Custom magazines

Source: Progressive Grocer market research, 2019

progressivegrocer.com

How important are each of the following to you when deciding where to shop for groceries? (Rate each on a scale of 1 to 6, where 1=is not at all important through 6=extremely important.)

Technology helps bring fresh food into the future for Northgate Market T

hose in the grocery business know that fresh food is a trend that’s not going away as more and more consumers look to a healthier, more locally sourced diet. Grocers are using fresh as a differentiator to win over customers, and according to the latest from FMI, 85% of North American retailers plan on allocating more space to fresh food over the next three years. But Northgate Market, a retailer based in southern California, has already made it a priority to revamp its business processes to meet fresh food demand. In doing so, the grocer has experienced a significant increase in sales by ensuring the right product is available at the right time and reducing labour costs by aligning production with real-time sales demand. “A few years ago we decided we wanted to double down on fresh and prepared foods as that was a real differentiator for us and the DNA of our business,” says Harrison Lewis, Chief Information Officer at Northgate Market. Recognizing that Northgate was venturing into unchartered territory with existing technology systems that were only geared towards packaged goods, he put together a plan. “It was a road map of what we needed to do to facilitate this unique business process and what kind of technology partner could support us.” Northgate met with its long-time partner Invatron, the market leader in Fresh Item Management, to look at expanding their relationship and building a technology foundation focused on Fresh. Lewis was pleased to discover that Invatron could provide a solution that could take Northgate Market well into the future. “I was skeptical and didn’t think there was a system out there that would fit our needs—I figured we’d have to cobble together something already used in restaurants,” he says. Instead, Invatron took the time to understand Northgate’s long-term strategy and provided a tailored solution via its Periscope Fresh Item Management platform.

Implementing a brand new business model where store processes were standardized to improve efficiencies was not without its challenges. “In standardizing recipes and ingredients and how we do things across our stores, our employees had to learn and unlearn things they’d been doing in the past,” says Lewis. “More than just implementing new technology it was about change management.” To engage employees in the process and ensure a successful system rollout, the grocer developed a steering committee with Invatron as an active partner throughout the process. A year later, Periscope Fresh Item Management has already been launched successfully across the majority of Northgate Market locations, with the rest to follow by the end of July. “Even locations that did not have the technology in place yet were beginning to adopt these new processes because they saw the benefit,” says Lewis. With these new processes in place, Lewis says Northgate can ensure that customers are getting consistent taste, texture and high quality when it comes to fresh and prepared foods, regardless of which location they’re in. “This has absolutely given us an edge over the competition and we are very pleased with the results.” In the coming months Northgate will continue to work with Invatron to leverage other modules within the Periscope platform to further optimize their fresh operations.

“More than just implementing new technology it was about change management.”

Invatron overview Invatron is the market leader specializing exclusively in Fresh Item Management, software solutions for Food Retailers. Invatron’s software platforms (Periscope and E-Plum) are supporting more than 20,000 stores globally who are realizing their full potential by achieving operational excellence, maximizing financial performance and delivering a Fresh Food offering that exceeds their customers’ expectations.

Special promotional feature

MENU TRENDS

Research & Analysis

Don’t Just Say Cheese — Sample It This insanely versatile protein is such an integral part of the American diet that it’s hard to believe the category as a whole is still growing both on menus and in stores. Some of that growth is fueled by international influences: Every culture has its own unique approach to dairy-derived deliciousness. You can lean into these regional trends to drive traffic to the dairy case, the deli or even your fresh-prepared offerings with fresh samples. Taleggio MAC stage: Inception — Ethnic markets, ethnic independents, and fine dining

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

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

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

Taleggio is a soft, cave-aged cheese from the Lombardy region of northern Italy. Its pungent smell and mild flavor work well melted in hot sandwiches, on pizza or in fondue. It can be combined with other cheeses and proteins to infuse new life into a menu item needing a refresh.

Burrata brings a hint of theater to the deli section. This fresh Italian cheese is made from mozzarella and cream, and can be melted atop pizza, and served in pasta dishes or salads as well. Its creamy middle is a delight for cheese fans not expecting the dualtextured treat that awaits them. On 6.1% of U.S. restaurant menus

On 1.5% of U.S. restaurant menus 15% of consumers know it/ 7% have tried it Menu Example Banger’s & Lace Truffled Grilled Cheese Served on amply buttered Texas toast, with a mixture of Irish cheddar, raclette and taleggio cheeses, and dusted with black truffle

progressivegrocer.com

Up 114% on menus over the past four years 20% of consumers know it/ 10% have tried it Menu Example First Watch Heirloom Tomato & Burrata Toast Thick-cut whole grain artisan toast topped with creamy Burrata cheese and marinated heirloom cherry tomatoes, fresh herbs and Maldon sea salt

Cheese Curds MAC stage: Proliferation — Proliferation-stage trends are adjusted for mainstream appeal, and are often combined with popular applications (on a burger, pasta, etc.) Cheese curds began as a regional favorite in the Midwest (particularly Wisconsin and Minnesota), but are now growing in popularity all over the country. While “solid pieces of curdled milk” isn’t the recommended merchandising copy, these quickly growing, tasty cheese nuggets are the fried center of attention in dishes such as poutine, or can serve as a topper for pizza or burgers.

Feta MAC stage: Ubiquity — Ubiquity-stage trends have reached maturity, and can be found across all sectors of the food industry. Though often diluted by this point, their inception-stage roots are still recognizable. Feta is synonymous with Greek cuisine. Its soft, creamy sheep’s-milk flavor combines with a crumbly texture to make it ideal for salads, sandwiches and burgers. Some versions are now made with goat’s or cow’s milk, and can be aged for four to six weeks and even cured in brine. On 34% of U.S. menus

On 2.5% of U.S. restaurant menus

Up 11% over the past four years

Up 107% over the past four years

81% of consumers know it/ 59% have tried it

59% of consumers know it/ 31% have tried it

Menu Example Wendy’s Harvest Chicken Salad Fresh-cut lettuce, sliced grilled chicken, diced red and green apples, dried cranberries, feta cheese, brown sugar walnuts, and applewood-smoked bacon

Menu Example Yard House Currywurst Poutine Beer cheese, fries, cheese curds, green onion

FRONT END

Shelf Stoppers

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

Basket Size Drivers

Beverages(52 weeks ending April 2, 2016) Total Department Performance Latest 52 Wks 2 YA W/E 04/27/19

Beverages

$57,065,495,340

Latest 52 Wks YA W/E 04/28/18

Latest 52 Wks W/E 04/29/17

$54,478,312,698

$54,005,152,337

Top Beverage Categories by Dollar Sales Soft Drinks

Fruit Drinks

Sport Drinks

Dairy-Based Drinks

Consumers chose The average U.S. frozen broccoli over household spends alternatives for trip about $7.58 per variety of reasons: ona beverages. Among

various beverage products, which command the greatest averagebecause spendit’s per trip?

Aloe Drinks

12%

$20,000,000,000 18,000,000,000

quick and easy

16,000,000,000

10%

14,000,000,000

because it tastes great

12,000,000,000

$6.43 9%

10,000,000,000 8,000,000,000

Spotlight on Frozen Broccoli

6,000,000,000

WHEN ARE CONSUMERS EATING FROZEN BROCCOLI?

4,000,000,000

Broccoli as an ingredient is most commonly consumed at dinner, followed by lunch.

2,000,000,000 0

Soft Drinks

Latest 52 Wks 2 YA W/E 04/27/19

Frozen broccoli is most often used in a side dish, followed by as a main entrée.

Latest 52 Wks YA W/E 04/28/18

3% Latest 52 Wks W/E 04/29/17

CLASS

because it’s low in calories, fat and sugar

Total U.S. xAOC (all outlets combined) — includes grocery stores, drug stores, mass merchandisers, select dollar stores, select warehouse clubs, and military commissaries (DeCA) OCCASION MEAL ITEM Source: : Nielsen Retail Measurement29% Services,TYPE inclusive of62% Nielsen’s Total Food View 35%

because it’s healthy and nutritious

$5.36

Aloe Drinks

61%

Over the last several years, we have seen healthful and sustainable influences DINNER LUNCHsector OTHER SIDE DISHgoods MAIN ENTRÉE transform the face of the beverages of consumer packaged (CPG). In theOTHER latest year, mainstream U.S. retail outlets have sold over $57 billion in beverages, representing year-over-year sales growth of $2.5 billion (5 percent). Consumers of today are looking for drinks that taste good, but also provide functional benefits that improve their health or boost their energy. From kombucha to sports drinks and ready-to-drink coffee, many of today’s winning beverages showcase the changing tastes in how America drinks. Americans are seeking not just to eat, but to drink in between meals throughout the day.”

$5.28 Sport Drinks

—Lauren Fernandes, Manager-Strategy and Analytics, Nielsen

Trend Snapchat Beverages have become ever more popular in recent years. Which beverage products have seen the most growth this year?

$4.15

Kombucha

Value-Added Water

Sparkling Water

Ready-to-Drink Coffee

42.9%

17.5%

10.5%

Source: Nielsen Retail Measurement Services, Total Food View, Total U.S. xAOC, annual sales of more than $10 million, 52 weeks ended Nov. 24, 2018, UPC-coded and random-weight/non-UPC data

progressivegrocer.com

Dairy-Based Drinks

Source: Nielsen Homescan, Total U.S., 52 weeks ending Feb. 23, 2019

MINTEL CATEGORY INSIGHTS

Global New Products Database

Body Care and Deodorants Market Overview

The body care and deodorant industry continues to see slow yet steady sales growth — 3 percent in 2018 — with future trends projected to remain comparable. A focus on scent, natural ingredients and practical claims, such as staining or white marks, will continue to see success. Body care brands that pique consumer interest with secondary benefits, such as dermatologist recommended or derriere care, will continue to drive engagement.

Travel-friendly formats that emphasize convenience are a growing trend in beauty and personal care. This holds true in body care and deodorant as consumers express interest in trying various portable formats such as wipes. Body care is expanding beyond basic body lotions to include regimens for targeted areas as well as facial skin care-inspired body care. In deodorant, consumers are still gravitating toward aluminum-free formulas because of ingredient concerns, despite limited evidence.

Key Issues

Natural deodorants are a growing trend in antiperspirant/deodorant; however, 19 percent of respondents agree that natural formulas don’t work as well as regular formulas, compared with 14 percent who agree that natural formulas work just as well

progressivegrocer.com

as regular ones. Natural deodorant continues to post sales growth, with natural brands launching aluminum-free formulas and convenient formats that resonate with consumers.

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

What Does It Mean?

Body care is impacted by consumers trading body lotion for kitchen essentials, with 20 percent of consumers using natural options such as coconut oil instead of body lotions. The challenge for body care brands is how to persuade consumers that their products are just as safe and effective as what shoppers can find in their kitchens.

The deodorant category experienced a sales bump in 2018 as innovations in natural and premium-priced offerings encouraged consumer spend. Newer deodorant formats, such as wipes and sprays, are adapting to the active beauty trend seen cross-category and play into consumers’ busier lifestyles.

While body care struggles with persuading consumers to look beyond the functional nature of the category, emphasizing trendy secondary benefits, such as anti-aging or firming, may help products stand out among the competition. Similarly, highlighting both performance claims and natural ingredients may help deodorants stand out in a mature market. Emphasizing benefits could help bolster engagement in specialty. Travelfriendly formats that save time are driving both usage and interest. Consumers have less time to dedicate to beauty routines and value convenience. Additionally, a growing number of consumers are embracing an active lifestyle, which bodes well for travel-friendly sprays, wipes and in-shower products.

I found my

spark...

“Every year, Expo East sets a stage for a handful of brands to steal the show. I love watching brands bring innovation, energy and purpose as they rise to the occasion. It’s these types of companies that make their way to the top, capturing our hearts, minds...and stomachs.”

THE place to see the newest products and trends in the natural and organic industry this fall!

Fred Hart Creative Director, Interact Boulder

Education & Events September 11–14, 2019 Trade Show September 12–14, 2019 Baltimore Convention Center | Baltimore, MD USA Register online at expoeast.com Questions? Contact us at 1.866.458.4935 or 1.303.390.1776 expoeast@newhope.com Produced by:

By Informa Markets

Co-located with:

ALL’S WELLNESS By Diane Quagliani

How Do Packed School Lunches Score on Nutrition?

(97 percent) also bringing a snack. The most common lunch foods were sandwiches (59 percent), snack foods such as chips and pretzels (42 percent), fruit (34 percent), and desserts such as cookies and candy (28 percent). Dairy foods (17 percent) and vegetables (11 percent) were packed less often. Almost three-quarters (73 percent) brought along a beverage, most commonly water (28 percent), followed by sugar-sweetened beverages (24 percent), primarily in the form of portable juice drinks. Three percent of lunches included milk, and 11 percent of participants planned to buy milk at school. The bottom line: Just 27 percent of lunches met at least three of five national standards. Packed snacks didn’t fare any better. Snack foods (62 percent), desserts (35 percent) and sugar-sweetened beverages (35 percent) were most common, with fruits (30 percent), dairy foods (10 percent) and vegetables (3 percent) trailing behind. Only 4 percent of snacks met two of four national standards.

RE TAIL DIE TITIANS CAN HELP MIDDAY ME ALS MAKE THE GR ADE. he impending start of a new school year means that many shoppers will be packing school lunches. About four in 10 (41 percent) elementary-school children bring their lunch to school, according to national data from the U.S. Department of Agriculture. Shoppers may prefer to pack kids’ lunches for a variety of reasons, such as believing that a packed lunch is more nutritious, to cut costs, concerns about food allergies, and preference over foods available at school. But just how nutritious are the contents of that lunchbox? A 2014 study published in the Journal of the Academy of Nutrition and Dietetics (JAND) set out to answer that question.

Packed Lunches Need Improvement

The JAND study used a convenience sample of 626 eastern Massachusetts public elementary schoolchildren to compare the quality of packed school lunches and snacks to standards from the National School Lunch Program and the Child Involving kids in and Adult Care Food Program, respectively. choosing and packing The researchers found that close to half (48 lunches and snacks helps percent) of the children brought their lunch to school, with the vast majority of those children create “buy in” that

they’ll eat these foods — not trade or toss them.

Retail Dietitians Teach Lunch-Packing Skills

Information about how to pack a well-balanced school lunch is plentiful, but a nutritious lunch brought isn’t necessarily a lunch eaten. Retail dietitians are adept at creating promotions and communications for parents about lunchbox options that give kids the fuel and nutrition they need, but that are also appealing and fun for children to eat. In addition, dietitians can advise on good choices for kids with food allergies or other special dietary conditions, and are able to provide food safety tips to keep lunches and snacks safe. Involving children in choosing and packing lunches and snacks helps create “buy in” that they’ll eat these foods — not trade or toss them. Dietitians can use social and traditional media and in-store messaging to equip parents with tips to involve kids in the lunch-packing process. They can also develop kid-focused activities such as lunch-packing planners to fill out with parents, or in-store “cooking” classes to teach children simple recipes to make for their own lunchboxes.

Diane Quagliani, MBA, RDN, LDN, specializes in nutrition communications for consumer and health professional audiences. She has assisted national retailers and CPGs with nutrition strategy, web content development, trade show exhibiting, and the creation and implementation of shelf tag programs.

progressivegrocer.com

Fresh food, simplified. If you’re searching for: • Private label soup and salad programs for YOUR SIZE OPERATION • Fully prepared bulk meal kits and components • Organic and on-trend fresh soup flavors • The next generation of prepared salads and kits • Functional grab-and-go meal pairings Visit us at sandridge.com to find these and other chef inspired solutions.

SPECIAL REPORT

72nd Annual Consumer Expenditures Study

Personal

Business

Putting the shopper first is the best strategy for success.

By Jim Dudlicek, Bridget Goldschmidt, Abby Kleckler and Kat Martin

t’s no surprise to anyone that the pace of innovation in grocery retailing has accelerated, and for the good of the industry, let’s hope it stays that way. The announcement of Amazon’s acquisition of Whole Foods Market may be a fading memory, but it won’t ever be forgotten, and it ought to be the first thing retailers see in their rear-view mirrors when thinking about what they should do next. A year ago, we noted that understanding how consumers shop has become more important than exactly what they’re buying (though that’s certainly helpful to know, as the data that follows in this report demonstrates). But continuing to grow in importance is the why — the motivation behind increasingly personalized buying and eating habits. The Food Marketing Institute (FMI) in June released the 45th edition of its annual “U.S. Grocery Shopper Trends,” a look at grocery shopper attitudes and behavior. The 2019 report, a survey of nearly 1,800 grocery shoppers prepared by The Hartman Group Inc., studies what consumers want from their retailers when personalizing their grocery shopping. “One-third of households have at least one family member following a non-medically prescribed diet, and this rate is higher for younger generations,” says Leslie G. Sarasin, president and CEO of Arlington, Va.-based FMI. “In an effort to meet their idea of eating well, households are eating in increasingly personalized ways, challenging the food shopping experience.” To achieve this personalized shopping, consumers visit an average of 4.4 banners per month and regularly shop 3.1 channels to meet their diverse grocery needs. They also expect their grocers to evolve with these needs, and to be satisfied with their primary store’s ability to meet those needs (8.7 out of 10). As for choosing a store, quality, freshness, low prices, cleanliness and product variety are the keys to retaining shopper loyalty. Convenience is driving younger consumers to shop online. Shoppers rank their online experience slightly better than those in physical stores when it comes to transparency, convenience and personalization, but online isn’t cannibalizing in-store visits — the

progressivegrocer.com

43 percent of consumers who shop online also average 1.7 trips a week to their physical stores, higher than the national average of 1.6 trips per week, making the in-store experience an important component of the omnichannel environment. These desires for both convenience and discovery, FMI reports, also lead to shoppers experimenting with more personalized methods for retrieving their groceries, such as delivery or click-and-collect methods. “‘Trends’ explores the current food retail marketplace and the influential roles health, well-being and technology play in the experience,” Sarasin says. “Food shopping is personal, and grocers help their

shoppers navigate shifting needs, values, priorities and life pressures that require teamwork, negotiation and compromise at home.”

Moving Past Price

Consumers enjoy the shopping experience more when they believe they’re getting something special or out of the norm, even when they’re not, David Moran writes for progressivegrocer.com. “Models for pricing and promotions are guided by the assumption that shoppers are consistently rational beings,” says Moran, co-founder and chairman of Palo Alto, Calif.-based Eversight. “But according to research, they’re actually far more apt to act on impulse. To account for this fact, pricing and promotional practices need to be reconsidered.” Moran cites a recent study revealing that 94 percent of Americans indicated that they would take advantage of an exclusive offer if it weren’t typically offered to the general public. Survey participants selected this option over a price-match guarantee, and 41 percent said that they would likely seek out something to buy just to use the offer. Data also shows that the lure of a deal is sometimes too good to pass up. As Moran notes, “Discounts, coupons and other promotions spark feelings of victory and satisfaction, feelings that trump price alone.”

Methodology For the 2019 Consumer Expenditures Study, data has been provided via Nielsen’s Total Food View, an inclusive data universe of UPC and non-UPC products (which includes fresh randomweight retailer-assigned PLU [price lookup code] and system 2 sales volume). This reflects the total U.S. food market, which encompasses all grocery stores with $2 million or more in annual all-commodity value (ACV), and includes natural food retailers and discount grocers. References to “fresh” or “perishable” foods encompass the inclusive view of UPC-coded and non-UPC products found throughout the store, but most predominantly in the produce, bakery, deli, meat and seafood departments.

PROGRESSIVE GROCER July 2019

SPECIAL REPORT

72nd Annual Consumer Expenditures Study Digital coupons and in-store promotions can work together to create a single, cohesive shopper journey, regardless of whether that journey is motivated by months of product research or an impulse buy. “It’s possible to use digital coupons to inform and stimulate in-store purchases in creative ways, and vice versa,” Moran says. “These insights can then be used to better predict in-store and online engagement.” Another vital piece of the marketing technology puzzle for retailers and CPGs is artificial intelligence. AI, machine learning and data analytics are being applied to inform marketing and pricing decisions, Moran observes. “AI analyzes millions of different data points remarkably fast to deliver the information needed to drive promotions,” he says. “Systems parse data in very specific ways, enabling brands to maximize their potential. Promotions become far more customized, which places them in a better position to be redeemed, whether based on a shopper’s momentary whim or by winning on price. Intelligence, coupled with predictive analytics, offers an unparalleled level of flexibility.” Retailers would be foolish to ignore any technology or technique that helps them better understand shoppers’ behavior and predict how their needs can best be met. Doing so accurately and consistently is the formula for inspiring loyalty and driving sales.

Sales Snapshot

Total supermarket sales across all grocery, perishable, general merchandise, and health and beauty categories topped $420.9 billion, a 2.1 percent increase from 2017, Nielsen data shows. Individual products sold surpassed 146 billion, down 0.7 percent from 2017. Predictably, perishables performed the best and continue to show the most promise for the foreseeable future: nearly $217 billion in 2018, up almost 3 percent over the prior year. Driving that growth is the deli, with sales up nearly 10 percent over last year. Floral showed the next strongest sales growth, up 4.6 percent to nearly $2.5 billion. Bakery delivered sales growth of 3.6 percent, to nearly $9.7 billion. Meat and seafood followed, with sales growth of nearly 3 percent, at $53 billion, chased by produce (up 1.4 percent), frozen foods (up 1.3 percent) and dairy (up 0.9 percent). Key categories in perishables include prepared foods, beverages, eggs, desserts and dairy alternatives. Grocery sales rose 1.5 percent, just clearing $179 billion. The strongest growth among subcategories was in alcohol, with sales up nearly 3 percent to $24.3 billion. The $127 billion grocery food category rose 1.5 percent in sales over the prior year, with few significant standouts. Nonfoods remained flat, meanwhile, with sales up 0.4 percent to $27.8 billion. Health and beauty care is up 1 percent, to $19.8 billion in sales. Strengths include baby products, ear care and vitamins. General merchandise brought up the rear, with sales down 2.7 percent, at $5.4 billion. Read on for a complete category-by-category study ... 24

progressivegrocer.com

Supermarket Category Share of Sales Dollar Sales 1. 3%

Unit Sales 0. 8%

4 .7%

2 .7% 4 4%

42 . 5%

51. 5%

5 2 .4%

Grocery

General Merchandise

Perishables

Health & Beauty Care

Source: Nielsen

Top Categories by Percent Change in Dollar Sales

Breakfast Meals/Combos

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE YEAR AGO

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

$67.85

402.5%

26.08

403.7%

Meal Kits (Prepared Foods)

38.58

256.2

3.47

161.2

Naan (Bread)

10.13

190.8

2.97

158.0

Squash

31.56

182.4

11.28

93.3

Soft Drinks

16.89

155.0

12.25

149.8

Health/Nutrition Bars

27.14

99.6

11.39

112.2

Smoothies (Deli)

22.25

84.0

4.18

124.6

Butter Nondairy Yogurt Olives

18.34

59.3

1.87

57.7

132.19

47.8

77.07

30.4

12.53

45.3

1.35

38.3

Bottom Categories by Percent Change in Dollar Sales DOLLAR SALES ($ IN MILLIONS)

Yogurt (Frozen)

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

-27.7%

0.49

-24.1%

10.75

-26.8

3.42

-36.7

Cellular Phones

10.03

-26.1

0.27

-32.0

Fruit Party Platters

43.00

-20.1

5.42

-22.1

Soft-Shell Tortillas

35.66

-19.9

19.25

-13.5

Smoothies (Frozen)

Lunch Bags

$10.47

DOLLAR PERCENT CHANGE YEAR AGO

20.55

-19.7

7.36

-17.1

144.00

-19.0

22.43

-18.1

Flea and Tick Products

41.31

-17.9

4.13

-16.8

Cinnamon and Other Sweet Rolls

10.31

-17.5

3.30

-27.6

Catfish (Frozen)

64.39

-16.5

6.57

-23.6

Tilapia (Frozen)

Ranked by percent change in dollar sales. Misc. categories and those with sales of less than $10 million are not included.

Penetration of Categories by Retail Channel MASS EXCLUDING SUPERCENTERS

SUPERCENTERS

WAREHOUSE CLUBS

CONVENIENCE/ GAS

ALL OTHER OUTLETS

5.6

6.0

21.9

12.7

4.5

3.3

5.4

18.3

55.6

28.5

6.6

5.9

23.5

28.4

23.6

49.1

7.0

0.4

3.0

95.6

18.1

11.1

23.5

61.3

37.3

8.5

7.6

91.9

79.5

5.1

1.4

8.9

37.8

24.6

2.6

2.7

99.2

94.0

17.2

7.6

18.1

55.7

35.1

4.4

5.7

CATEGORY

ALL OUTLETS

DOLLAR STORES

DRUG STORES

SUPERMARKET

Alcohol

65.0

Bakery

98.5

47.9

2.0

92.1

19.9

Beauty Care

87.7

38.6

Dairy

99.6

Deli Frozen Foods General Merchandise

98.5

63.8

44.8

22.9

36.1

64.6

25.4

1.9

7.5

100.0

97.5

53.7

48.0

42.5

70.8

48.3

22.9

16.7

Health Care

98.8

71.3

30.3

50.4

28.6

59.8

31.5

2.6

4.6

Household Care

99.7

86.0

49.8

27.4

35.9

65.3

40.1

2.0

7.9

Meat

96.5

88.6

8.0

1.8

12.0

48.4

25.0

1.0

4.0

Personal Care

99.0

70.1

38.1

38.8

33.6

61.7

28.2

1.3

4.6

Pet Care

71.2

44.5

15.5

5.3

16.8

39.8

13.9

0.8

2.9

Produce

97.5

91.7

4.8

0.9

12.7

52.1

34.5

2.0

5.8

Tobacco and Tobacco Alternatives

28.9

10.1

7.6

3.3

2.0

9.4

1.0

8.1

1.4

Grocery

Includes all buyers for 52 weeks eneding Dec. 29, 2018 Source: Nielsen

SUPERVALU Professional Services is now...

OFFERING THE SAME GREAT SOLUTIONS THAT…

■ Simplify your store ■ Optimize your store

■ Grow your store ■ Drive Profit CONTACT US: PSsales@unfi.com

SPECIAL REPORT

72nd Annual Consumer Expenditures Study 2018 Supermarket Dollar Sales & Unit Volume

CATEGORY

TOTAL GROCERY ALCOHOL

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

CATEGORY

1.5%

64,567.47

-0.9%

Oils, Butter, Margarine Spreads, Substitutes

2,253.49

-0.6

542.09

-2.6

$24,313.51

2.9%

2,404.82

0.8%

Olives, Capers, Pickled and Marinated Vegetables

1,174.07

2.4

498.55

0.1

Packaged Coffee

224.30

3.6

49.08

0.5

Beer, Flavored Malt Beverages, Cider

11,314.93

2.2

1,212.44

Spirits

4,189.56

4.4

Wine

8,584.72

3.2

5,050.13

0.8

763.07

-0.1

Packaged Tea

806.38

0.1

237.06

-1.8

-0.2

Pancake, Waffle, French Toast Toppings

443.95

-1.5

118.42

-4.0

287.97

5.3

855.33

0.8

Pasta, Rice, Dry Beans and Grains

2,659.79

0.3

1,504.48

-0.9

674.32

2.9

239.19

-2.1

90.91

-2.6

22.57

-4.1

Prepared Foods

8,059.74

1.1

5,246.30

-1.0

Processed Meat

91.10

1.4

119.55

0.1

2,421.84

0.7

1,049.25

-2.5

Performance Nutrition

Bagels

$126,908.67

1.5%

55,067.55

-0.7%

620.76

6.1

197.33

0.3

Baking Mixes

1,401.94

-0.7

881.74

-2.8

Baking Staples

2,723.14

0.8

1,038.82

-0.5

224.15

2.4

78.57

0.0

Baking Supplies

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

$179,053.46

Alcoholic Beverage Mixers

GROCERY-FOOD

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

Pizza

Rolls and Buns Salad Dressing

1,325.45

-0.6

529.98

-2.9

12,142.55

3.5

4,543.20

1.0

642.17

4.0

616.81

1.6

Sauce, Gravy, Marinade

3,734.12

1.2

1,954.36

-0.9

Seafood

1,295.17

1.4

756.83

-3.9

Snack & Variety Packs

367.83

6.9

90.70

5.9

Sour Cream Products

8.46

1.4

5.02

1.2

1,592.63

-1.7

543.28

-3.2

661.29

0.3

639.89

-1.1

Salty Snacks

1,157.60

0.1

695.53

-2.4

25,257.15

3.5

11,633.56

1.5

Sauce and Seasoning Mixes

Bread

5,686.40

1.1

2,243.81

-2.8

Candy, Gum, Mints

6,153.92

1.5

3,081.64

-0.5

Cereal and Granola

6,575.22

-2.3

2,184.83

-3.0

Cheese

141.81

-0.4

36.87

-3.8

Coating Mixes and Crumbs

264.71

0.5

123.05

-2.2

Sweet Goods

307.32

-1.1

87.40

-3.4

8.82

24.4

0.80

29.0

Sweet Snacks

2,307.95

1.5

1,018.64

-1.1

Condiments

2,678.84

1.1

1,042.32

-0.9

Toaster Patries

350.88

-2.2

149.65

-2.9

Cookies and Crackers

6,747.25

0.6

2,548.86

-0.7

Vegetables

2,372.98

0.0

2,045.97

-3.3

Wraps and Tortilla Shells

1,651.63

2.8

696.82

1.2

12.36

7.1

5.92

-4.4

Beans Beverage Enhancers Beverages

Combination Packs

Cooking Wine and Vinegar

419.00

-5.7

142.99

-5.4

Creams and Nondairy Creamer

362.56

1.1

115.60

2.4

Dessert Toppings

134.06

-2.4

52.72

-3.2

Desserts

438.13

1.7

261.09

-2.8

Diet and Nutrition

1,832.49

4.4

546.50

2.1

Dips/Spreads

1,281.43

1.2

444.53

-0.6

2.39

1.7

0.57

-3.4

Dough and Batter Products Dry Salad and Potato Toppings

Sugar and Sweeteners

Yogurt GROCERY-NONFOOD

9.6

14.72

33.54

1.9

6.08

2.0

Dish Care

1,007.48

-0.1

278.85

-3.1

Food Storage

1,228.97

1.4

420.54

-3.6

778.18

1.4

248.66

-2.5

Household Cleaners and Supplies

2,066.53

1.2

533.69

-1.3

Laundry Care

3,358.00

-0.6

623.41

-3.9

Paper and Plastics

8,073.65

0.1

2,020.25

-3.7

216.69

-0.7

42.74

-1.5

Pet Food

5,586.71

1.7

2,129.59

-2.8

Pet Supplies

1,015.03

0.8

140.36

-2.8

61.74

-14.4

7.78

-10.9

109.31

0.7

40.08

-1.7

4,146.46

-0.4

583.01

-1.3

96.19

5.1

5.34

5.3

Home Air Fresheners

-2.5

1.33

3.9

0.23

21.1

Extracts, Herbs, Spices and Seasonings

2,514.62

4.1

890.67

1.2

Fruit

2,073.08

-1.5

920.24

-5.5

Fruit Snacks

430.66

-1.8

174.44

-8.2

Fully Cooked Meat

332.78

-0.1

162.02

-2.0

Marshmallows

127.27

-0.9

83.36

-3.9

Meal Combos

117.68

-4.0

59.51

-5.3

Milk Products

198.93

-5.1

79.94

-7.7

Smoking Accessories

Pest Control

Pet Treatments

150.11

0.4

56.88

-2.0

Tobacco

Nut Butters, Jam, Jellies

1,995.39

0.4

586.28

-1.6

Tobaccoo Alternatives

Nuts and Seeds

1,999.63

2.2

500.10

0.9

progressivegrocer.com

-2.9%

52.80

177.15

7,095.10

Bathroom Accessories

-0.4

Milk/Dairy Alternatives

0.4%

Baking Supplies

356.91

Eggs

$27,831.28

8.7

Cater to Your Most Loyal Customers

Loving pet parents are spending more than ever on their “fur babies” and buying their favorite foods and snacks again and again. Capture your share of category growth with these beloved brands, including new products to help you meet evolving demand. Contact your J.M. Smucker Company rep to learn more and stock up.

©/TM/® The J.M. Smucker Company ©/TM/® Big Heart Pet Brands, Inc.

Â¨

Darfresh

SPECIAL REPORT

Annual Consumer Expenditures Study

2018 Supermarket Dollar Sales & Unit Volume

CATEGORY

PERISHABLES BAKERY

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

$216,693.60

2.8%

76,903.40

-0.5%

$9,691.90

3.6%

3,430.28

-0.4%

Bagels

188.89

2.5

194.70

-3.6

Bakery-Misc.

167.59

110.0

63.50

61.0

Baking Staples

1.19

41.7

0.22

22.2

1,362.49

0.4

557.66

-0.5

Cereal and Granola

1.64

5.1

0.38

8.6

Coating Mixes and Crumbs

1.20

12.1

0.58

7.4 -38.1

Bread

Combination Packs

0.18

-50.0

0.13

Cookies and Crackers

1,238.16

6.1

314.15

3.2

Desserts

3,756.10

3.0

629.57

-0.5 -36.1

Diet and Nutrition

0.98

-14.8

0.23

711.81

2.1

503.45

-2.2

9.94

-34.7

6.34

-22.5

544.47

2.6

192.61

-0.9

1.44

23.1

0.82

24.2

Rolls and Buns

806.77

0.6

626.27

-3.5

Sweet Goods

854.94

5.1

314.84

3.4

44.11

-20.5

24.83

-20.3

Doughnuts Meal Combos Muffins Prepared Foods

Wraps and Tortilla Shells DAIRY

$44,838.59

Bagels

46.24

-4.3

Baking Staples

0.9%

17,065.64

-1.5%

26.12

-6.0 -6.5

14.84

-5.8

6.36

4,981.20

1.4

1,725.55

0.8

70.12

19.0

24.71

14.2

10,627.90

-0.5

3,465.13

-0.4

2,757.89

5.2

860.47

1.9

Dessert Toppings

322.31

5.5

107.82

2.0

Desserts

466.24

1.1

212.47

0.3

Dips and Spreads

0.18

-5.3

0.01

0.0

Dough and Batter Products

1,219.23

0.5

557.86

-0.5

Eggs

-1.4

Beverages Bread Cheese Creams and Nondairy Creamers

3,977.70

13.1

1,508.61

Meal Combos

983.40

8.5

495.75

9.3

Milk Products

7,632.49

-4.7

2,769.41

-3.5

Milk/Dairy Alternatives

1,092.97

8.6

331.94

7.6

2.75

-3.5

0.59

-6.3

2,774.98

0.9

852.70

-0.5

12.92

7.8

1.49

2.8

343.16

4.1

88.53

2.1

Nut Butters, Jam, Jellies Oils, Butter, Margarine Spreads, Substitutes Packaged Coffee Pasta, Rice, Dry Beans and Grains Prepared Foods

1,539.02

8.8

378.29

9.4

Processed Meat

0.84

-17.6

0.12

-20.0

SPECIAL REPORT

72nd Annual Consumer Expenditures Study 2018 Supermarket Dollar Sales & Unit Volume

CATEGORY

DOLLAR SALES ($ IN MILLIONS)

Rolls and Buns Sour Cream Products

6.23

4.7

2.13

1.4

0.1

434.98

-0.7

11.00

1.0

5.86

4.1

6.04

-24.3

2.14

-24.9

152.92

5.1

67.23

1.9

Vegetables

Yogurt DELI Beverages Cheese Combination Packs

4,940.17 $29,853.41

Deli-Misc.

-4.3 9.7%

3,139.37 5,840.84

-7.6 7.5%

CATEGORY

Dough and Batter Products

-0.3

57.70

-3.4

7.86

9.6

1.41

11.0

Extracts, Herbs, Spices and Seasonings

1.85

1.6

0.65

1.6

1,179.86

-2.7

174.51

-5.6

649.50

0.1

137.63

-1.8

1,712.52

-1.5

303.82

-1.2

541.62

-0.5

200.59

-2.7

Meal Combos

1.03

-29.9

0.28

-34.9

0.48

20.0

0.07

16.7

188.01

-2.0

57.13

-3.0

Fresh Meat Fruit Fully Cooked Meat Ice

824.04

1169.5

260.15

1267.8

3.0

786.85

-0.1

Muffins

175.59

10.6

20.47

18.0

Pasta, Rice, Dry Beans and Grains

62.31

1.6

19.63

-1.3

Pizza

2,846.73

3.9

801.45

0.7

111.38

13.0

36.65

10.0

Prepared Foods

9,776.92

2.3

3,173.93

-0.8

Processed Meat

454.02

2.7

167.45

2.0

Rolls and Buns

110.18

1.5

32.46

-3.1 2.8

484.41

63.2

72.85

78.4

1,977.54

5.4

534.56

1.8

Fully Cooked Meat

4,879.98

5.1

915.65

-1.2

Lunchmeat

5,475.33

4.3

782.67

0.6

Seafood

376.22

8.0

189.55

5.2

Sweet Goods

4.42

-4.9

2.64

21.1

Oils, Butter, Margarine Spreads, Substitutes Olives, Capers, Pickled & Marinated Vegetables Pizza Prepared Foods

371.00

3.9

3.1

317.50

1.3

65.31

2.2

9.7

2,040.07

5.7

5.81

17.8

1.97

20.9

132.18

4.7

34.70

3.0

5.15

63.5

2.21

88.9

Sour Cream Products FLORAL

74.91

10,330.01

Processed Meat Sauce, Gravy, Marinade

$2,486.45

Artificial

4.6%

302.25

3.1%

6.29

1.5

1.17

2.6

Decor Plant

393.90

6.5

47.89

5.5

Garden Outdoor

368.38

1.8

66.92

1.4

18.81

-1.9

2.70

-2.2

1,699.07

4.9

183.57

3.1

Outdoor Seasonal Precut FROZEN FOODS

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

210.86

Dips and Spreads

Meal Combos

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

Doughnuts

4,320.54

Condiments Desserts

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

855.85

Sweet Goods Wraps and Tortilla Shells

DOLLAR PERCENT CHANGE FROM YEAR AGO

$31,210.81

1.3%

9,134.05

-0.6%

Bagels

12.45

-5.6

5.41

-11.5

Baking Staples

66.95

-4.3

25.67

-5.4

Sauce, Gravy, Marinade

Sweet Snacks Toaster Pastries Vegetables Wraps and Tortilla Shells Yogurt MEAT AND SEAFOOD Fresh Meat

6.77

4.6

1.83

2,639.57

2.4

330.28

0.0

36.94

-4.5

9.47

-8.0

9.85

40.1

2.52

45.7

105.55

0.4

44.91

-0.5

2,048.23

4.1

1,109.20

0.7

4.08

25.2

1.36

23.6

10.75

-26.8

3.42

-36.7

$53,026.20

2.9%

14,042.92

-2.4%

34,317.12

2.9

9,458.77

-3.1

831.42

0.2

169.37

-1.2

Ham

1,248.70

1.1

477.47

-5.5

Lunchmeat

2,936.43

-1.7

927.92

-3.4

Meat-Misc.

270.70

46.3

39.46

48.5

Processed Meat

8,737.33

2.5

2,345.67

0.0

Seafood

4,645.73

4.5

621.48

-0.1

38.77

324.2

2.78

172.5

Fully Cooked Meat

Seafood-Misc. PRODUCE

$45,586.24

1.4%

27,087.42

-0.4%

Baking Staples

7.66

4.4

2.25

9.8

Combination Packs

0.41

105.0

0.04

100.0

27.14

99.6

11.39

112.1

2.41

-15.1

0.67

-19.3

785.35

5.3

534.18

4.2

21,906.01

0.3

13,890.57

-0.8

24.29

-8.6

9.08

-4.4

Diet and Nutrition

Beans

113.29

1.2

54.84

0.8

Beverages

141.35

-6.5

77.48

-8.8

Bread

365.47

-3.0

141.86

-7.7

Condiments

1.04

-3.7

0.16

0.0

Creams and Nondairy Creamers

1.05

-12.5

0.43

-15.7

206.11

-1.9

126.42

0.6

Nuts and Seeds

114.32

-7.3

24.23

-9.4

7,748.03

0.3

2,086.52

-0.1

Prepared Foods

0.89

-35.0

0.28

-22.2

11.89

11.1

3.19

5.6

70.83

99.7

31.13

125.7

Dessert Toppings Desserts Dips and Spreads

progressivegrocer.com

Dry Salad and Potato Toppings Extracts, Herbs, Spices and Seasonings Fruit Meal Combos

Produce-Misc.

2018 Supermarket Dollar Sales & Unit Volume

CATEGORY

Salad Dressing

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

CATEGORY

DOLLAR SALES ($ IN MILLIONS)

DOLLAR PERCENT CHANGE FROM YEAR AGO

UNIT VOLUME (IN MILLIONS)

UNIT PERCENT CHANGE FROM YEAR AGO

314.89

1.3

86.95

-3.2

Baby Accessories

56.23

3.9

8.08

-0.2

Vegetables

22,332.04

2.2

12,496.65

-0.4

Baby Bath

75.82

1.1

18.57

-1.3

GENERAL MERCHANDISE

$5,425.50

Baby Feeding -2.7%

1,229.98

-4.3%

Appliances

359.52

5.4

25.29

20.6

Automotive Addititves

109.51

-2.0

21.78

-4.7

Automotive Air Fresheners

52.03

3.9

15.54

0.2

Automotive Cleaners and Supplies

27.33

-4.3

6.19

-3.1

Baking Supplies

125.28

2.4

56.13

0.8

Batteries and Accessories

581.64

1.9

90.78

Candles and Candle Accessories

70.79

0.5

Combination Packs

3.29

Computer/Printer Accessories Electronics Food and Beverage Containers

4.7

3.83

3.0

Baby-Misc.

0.39

-2.5

0.09

-10.0

Baby Treatments

11.47

-2.7

1.45

-15.7

Bath and Shower

-1.2

Combination Packs

8.60

-30.9

1.04

-25.2

40.72

-0.9

Cosmetics and Nail Grooming

831.83

-1.0

185.52

-3.2

3.8

0.65

-8.5

631.17

2.6

165.31

-2.2

1,110.02

-1.4

158.38

-0.6

63.30

-23.3

2.67

-20.5

0.83

-3.5

0.03

0.0

175.33

-6.6

14.72

-4.2

Ear Care

13.61

12.0

2.00

9.9

Eye Care

343.25

0.7

41.88

-2.2

Facial Skin Care

474.65

1.9

66.79

2.4

Feminine Care

681.36

-1.3

146.07

-2.8

First Aid

452.52

2.0

125.10

-0.7

Foot Care

155.43

1.0

24.10

-2.3

1,724.51

-2.8

97.54

-5.8

63.92

-9.3

10.79

-6.8

342.53

-3.5

150.76

-7.2

Household Maintenance

118.80

-0.9

36.92

-1.8

33.10

10.2

6.29

7.3

1,061.51

-1.4

270.72

-2.2

59.13

-1.0

10.16

-2.9

296.37

-8.7

56.77

-9.4

2.16

-4.4

0.28

-9.7

Outdoor Recreation

584.73

-5.0

94.53

-5.7

Paper and Plastics

24.26

-18.2

15.55

-29.8

113.43

-2.2

48.73

-4.1

Shoe Care

21.02

0.2

Home, School, Office Supplies

Reading and Hobby

-5.5

Baby Health and Beauty Lotions

-5.6

8.9

Pest Control

3.41

0.68

2.20

Party Supplies

-7.5

408.57

9.5

Outdoor Cleaners and Supplies

11.09

3.3

43.21

Lighting

-7.6

Baby Hair Care

-0.3

-2.8

Lawn Care

-2.7

16.70

6.14

81.08

Kitchen Accessories

523.85

-5.2

1,300.76

-1.5

Ice Melt

1.8

76.16

Breast Feeding

381.19

Hair Removal

833.30

Baby Feeding Supplies

25.08

-4.5

6.83

-8.1

346.71

-11.3

69.09

-13.0

22.30

-2.4

5.91

-2.6

Storage and Space Management

111.51

0.3

24.21

6.3

Trash and Recycling

16.92

5.5

1.97

7.7

Water Filtration Products

50.52

-5.6

3.28

-9.4

Water Treatment

77.36

0.4

12.12

-2.6

Writing Tools and Supplies

146.66

-4.2

58.11

-8.2

Deodorants Diapering Needs Diet and Nutrition

Formula and Children's Nutritional Beverages Fragrances GI Care

955.67

3.7

137.04

1.3

1,830.85

0.0

390.05

-3.9

Hair Removal

585.27

-4.9

101.70

-4.5

Health and Beauty Lotions

398.57

4.5

68.74

1.3

Hair Care

Medical Accessory

120.71

1.9

14.30

1.9

1,824.09

1.1

497.48

-1.9

Pain Relief

986.89

2.4

162.35

-0.3

Sexual Health

151.96

1.1

16.54

-0.7

98.07

2.3

14.34

-2.4

217.48

1.4

26.68

2.1

6.80

8.1

2.04

12.7

Upper Respiratory

1,769.98

1.0

256.56

-1.6

Vitamins and Supplements

1,613.81

5.7

188.27

3.8

Oral Hygiene

Sleeping and Alertness Aids Sun Care Travel Sets

GRAND TOTAL HEALTH AND BEAUTY CARE Adult Incontinence

$19,814.02 369.79

1.0% 4.6

3,923.58 37.71

-1.6% 4.7

$420,986.58

2.1%

146,624.43

-0.7%

All “totals” (e.g., Total Grocery) reflect the sum of cateories depicted within this chart. Source: Nielsen Strategic Planner, Retail Measurement, Total U.S. food stores, 52 weeks ending Dec.29, 2018, UPC-coded; Nielsen FreshFacts, Total U.S., 2017, Total Perishables Database; Progressive Grocer Market Research, 2019

PROGRESSIVE GROCER July 2019

SPECIAL REPORT

72nd Annual Consumer Expenditures Study BEVERAGES

Coca-Cola has three RTD coffees in the top 10; one is through its partnership with Dunkin Donuts, a second through McCafé and a third as a distributor for Java Monster, produced by Monster Energy. Coca-Cola is a company to watch in the category, as it acquired coffee company Costa earlier this year for $4.9 billion and has already launched three RTD products in Great Britain, with plans to expand rapidly. Coffee is a $14.4 billion market, and of that, RTD is the fastest-growing segment, rising 31 percent in the past two years, according to the July 2018 “Coffee - US” report from market research firm Mintel. RTD is also the fastest-growing segment of the tea market, as well as the only segment growing in both volume and value, according to Beverage Market Corp. Lipton continues to be one of the top players, with

Refreshment Reigns, Conventional Wanes Bottled water, RTD coffee and tea are leaders in the category, with big brands and private label both represented.

onvenience is key when it comes to increasing beverage sales today. Bottled water is up 7.7 percent from a year ago, energy drinks are up 11.2 percent, and ready-to-drink (RTD) coffee and tea are up 3.7 percent, according to IRI. There’s likely no surprise regarding these increasing numbers in today’s always-on-the-go world, but some of the big players may be illuminating. The largest coffee chain in the world, Top 10 Ready-to-Drink Tea Starbucks, has five of the top 10 RTD cappuccinos or iced coffees, and these five individual Starbucks brands acDOLLAR SALES counted for more than $770 million in PERCENT sales in the past year. CHANGE

Brands DOLLAR SHARE OF TYPE CHANGE YEAR AGO

DOLLAR SALES

YEAR AGO

DOLLAR SHARE OF TYPE

UNIT SALES

UNIT SALES PERCENT CHANGE YEAR AGO

$386,816,118

3.70%

17.11

0.42

151,949,726

1.20%

Arizona

361,018,752

1.10

15.97

223,032,622

0.60

Lipton

225,135,664

-1.60

9.96

-0.27

55,920,091

-4.70

Gold Peak

213,036,262

3.80

9.42

0.25

89,531,391

-4.00

Lipton Diet

153,369,191

-2.10

6.78

-0.22

32,787,454

-4.70

Snapple

137,839,347

-4.40

6.1

-0.35

55,590,679

-0.80

Lipton Brisk

133,017,275

6.00

5.88

0.27

57,389,638

-0.10

Diet Snapple

129,238,207

0.60

5.72

-0.03

41,764,294

3.80

Arizona Arnold Palmer

77,025,463

7.60

3.41

0.2

50,950,480

3.30

Monster Rehab

65,177,405

-2.60

2.88

-0.11

19,132,339

-8.40

Lipton Pure Leaf

SPONSORED BY

Foreword A special thank you to our sponsors Specialty Lighting, Stylmark, Canada’s Best Store Fixtures Inc. and Trion for their support and also the Research Council and the ROI Standards Task Force for their work in developing this white paper. In today’s retail climate, ROI data is no longer a “nice to have.” Retailers are counting on their suppliers to provide the information they need to demon strate ROI when they implement changes in store design–whether it’s improved signage, upgraded fixtures, a new mannequin line, or a complete redesign.

A SPECIAL THANKS TO OUR STORE REDESIGN ROI STANDARDS TASK FORCE MEMBERS Madeline Baumgartner Shop! Jane Greenthal, Chair Gensler Teri Mascotti Stylmark Paul Pinkus Sharing Wisdom Michael Decker Medallion Retail Ted Flinn Tag Worldwide

In our continual effort to drive an industry dialog on ROI, Shop!, the trade associ ation focused on enhancing retail environments and experiences, is pioneering the development of industry standards for Store Redesign ROI. In 2014 Shop! worked with EWI Worldwide to gain an understanding of this topic. The EWI team surveyed retailers with physical remodels regarding their motivations, goals, and expectations of a store redesign. The information was shared in a 2015 EWI White Paper that was inserted in Retail Environments magazine. Building off of those findings, Shop! has endeavored to further understand the current ROI measurement habits of retailers, store designers, and manu facturers. Shop! conducted a survey for the first phase of the research with key industry players in retail, store design, and fixture manufacturing. The 2017 Shop! ROI Standards: Store Redesign white paper offers actionable insights, case studies, and best practices based on the findings of our recent studies. I hope the takeaways in the following pages will help you justify your investments to create and execute successful store redesign projects that ultimately enhance the retail experience for shoppers. This is the first of a series of ROI research from Shop! in 2017. Later in the year, Shop! will release results on Understanding the Effect of the Retail Workers’ Service on the Customer Experience and How it Ties Back to Return on Design. For questions or more information about the report, please visit the Shop! website at shopassociation.org, email us at info@shopassociation.org, or call Madeline Baumgartner, Shop! Director of Education & Research at 3128632917. Thank you!

Steven Weiss, CEO, Shop!

2017 Shop! ROI Standards: Store Redesign

Photo: iStock.com/fiphoto Photo: iStock.com/fiphoto

According According to to Retail RetailNext, Next,94% 94%of ofretail retailsales salesare arestill stilloccurring occurring at brick-and-mortar brick-and-mortarstores, stores,yet yetfoot foottraffic trafficisisdeclining decliningat atan anannual annualrate rate of 15% 15% and andhalf halfof ofthe thecustomers customersare areshowrooming. showrooming.

In order to combat combat the the alarming alarmingdecline declinein inthe thenumber numberof of store visits, retailers retailers need need to to motivate motivateconsumers consumersto toget get out of their chairs and and go go to to the thestore. store.Retailers Retailersneed needto to focus on giving shoppers shoppers what what they theycannot cannotget getat athome, home, in an environment environment that that entices entices them themto tomake makethe thejourney. journey.

By Byunderstanding understandingthese thesekey keyfactors factors(both (bothcurrent currentand and emerging), emerging),Shop! Shop!will willwork worktowards towardsthe thecreation creationofofROI ROI standards for store redesigns. Shop! is working collabora standards for store redesigns. Shop! is working collabora tively tivelywith withkey keyindustry industryplayers playersfrom fromthe theretailing, retailing,branding branding and store design industries to create these standards. and store design industries to create these standards.

Making Making those those changes changes require require resources resourcesand andresources resources require ROI justification, yet there are no definitive require ROI justification, yet there are no definitiveindustry industry standards for measuring the results of the investment. standards for measuring the results of the investment. Measurements Measurements that that are are available availableare areoften oftenfraught fraughtwith with caveats, varying by sector and oftentimes neglecting caveats, varying by sector and oftentimes neglecting intangible, intangible, but but significant, significant, costs costsor orbenefits. benefits.

In In2014, 2014,Shop! Shop!worked workedwith withEWI EWItotogain gainaabase baseunder under standing of the ROI on retail design. The research standing of the ROI on retail design. The researchwas was concentrated on stores with physical remodels affecting concentrated on stores with physical remodels affecting aavariety varietyof ofshopper shopperinfluencing influencingfactors. factors.The TheEWI EWIteam team cross referenced the data from the various projects crossreferenced the data from the various projectsand and gathered gathereddata datathrough throughaasurvey surveyofofcurrent currentretailers. retailers.The The surveys surveysfocused focusedon onunderstanding understandingthe theretailers’ retailers’motiva motiva tions, goals, and expectations of a store redesign, tions, goals, and expectations of a store redesign,asaswell well as, identifying the various scopes of each project. as, identifying the various scopes of each project.

At At the the same same time, time, projects projects must mustinclude includecommitment commitmentto to credible, attainable ROI, a goal that is often credible, attainable ROI, a goal that is oftenaabattle battlewith with uncertainty. uncertainty. This This is is driving driving discussions discussionsbetween betweenretailers retailers and their vendors. Discussions revolve not and their vendors. Discussions revolve notonly onlyaround around identifying identifying the the experience experience goals goalsand andexecution executionplan, plan, but also around the results the retailer but also around the results the retailercan canexpect expectto to gain from the investment. gain from the investment. To To aid aid in in the the calculation calculation of of ROI, ROI, Shop! Shop!seeks seeksto tounderstand understand key ROI variables, considerations and methodologies key ROI variables, considerations and methodologiesfor for the the industry. industry.

2017 Shop! ROI Standards: Store Redesign 2017 Shop! ROI Standards: Store Redesign

Building Buildingoff offthe thefindings findingsfrom fromthe theEWI EWIPaper Paperpublished publishedinin 2015, 2015,Shop! Shop!endeavored endeavoredtotofurther furtherunderstand understandthe thecurrent current ROI measurement habits in the retail industry. Last ROI measurement habits in the retail industry. Lastfall, fall, Shop! conducted a survey with key players in retail, store Shop! conducted a survey with key players in retail, store design, design,and andfixture fixturemanufacturing. manufacturing.

The 2016 survey was conducted to understand: • goals & metrics used to measure ROI • target levels for ROI • frequency for calculating ROI • criteria for determining if store redesign was a success • criteria for determining/evaluating the role of any specific design element(s) in the success (or failure) of the store redesign Key findings from the survey include: Definition of “store redesign” was wide ranging. There is an old truism: ask three people a question and you will receive three different interpretations of the question. Shop! found this to be true when we asked retailers, designers and store fixture manufacturers to define “store redesign.” Respondents used words like remodel, redesign, refresh, retrofit, reconfigure and renovation. The variety of terms reflected the range of design scope, from minor changes to completely new stores. Elements of redesign included everything from interiors and architecture, fix tures and flooring, graphics and branding, and everything in between. Rebranding and enhanced customer experi ence were also mentioned in describing a “redesign”. Redesign lifespan depends on whom you ask. In terms of how long a store redesign should last, the three respon dent groups again had different responses: manufacturers thought 34 years; the majority of designers believed 56 years, while retailers’ responses were spread throughout the ranges, depending on their definition of redesign. However, 90% of retailers did not expect a store rede sign to last more than 6 years before an update would be required. Not surprisingly, the smaller the remodel, the lower the expected ROI, and the lower the expected lifespan of the remodel. Conversely, the larger the remodel, the larger the expected ROI and lifespan. Perceptions of retailer motivation differs. Shop! research also found designers and manufacturers had different per ceptions of what motivates retailers to embark on a store redesign. Understanding these during the planning phases of the project will help suppliers to better serve the retailer.

MOTIVATING FACTORS Better leverage physical footprint to increase sales across all channels

34% 23% 18%

Cohesively align with a redefined/ reinvented brand

11% 29% 12%

Create a stronger connection with current consumer base

23% 16% 12%

Retailers

Designers

Manufacturers

Specifically, retailers indicated that the single biggest motivator for a store redesign was to better leverage their physical footprint to increase sales across all channels. Retailers also stated creating a stronger connection with current consumer base as a key motivator. Manufacturers aligned with retailers on the goal to leverage their physical footprint, but also felt they wanted to be seen as an innovator in their market. Designers, for their part, believed the redesign was done primarily to cohesively align with a redefined/reinvented brand and to a lesser extent, better leverage physical footprint to increase sales across all channels. This may be indicative of the designers’ scope of work, specific to more store designoriented goals, however, given retailer moti vations, it would behoove designers to assess the overall impact of their designs on sales lift across all channels.

KEY LEARNING: Designers and manufacturers need to better understand retailer motivations for a store redesign to help meet their core objectives.

2017 Shop! ROI Standards: Store Redesign

Future of Bricks and Mortar

To help ensure continued growth, the industry must innovate around three themes: Experience, Convenience, and Personalization. Store design, fixtures and visuals must support experiential and interactive environments. Investments in digital technology must support market demands for convenience. And customdesigned displays should be leveraged to create a unique, personalized value for shoppers. In the 2016 Industry Size and Composition Study, Shop! identified five retail trends that are transforming the retail landscape.

Rise of omnichannel retailing. Stores are now playing the role of showroom and distribution center, rather than buying center. In many cases, there are sepa rate areas for click and pickup Ph i oto ha : iStock om/bugp with stores are being redesigned .c to convey this multiplatform message. Innovative retailers are creating hybrid stores where the physical and online merge seamlessly, and cater to shoppers with ultimate convenience and ease of access.

2017 Shop! ROI Standards: Store Redesign

oto : iSto

nz fr a ck.com/Rido

In-store retailing becoming more interactive and experiential. Retailers are seeking fixtures and displays that are customized to meet new interactive and experiential retailing strategies. Designs must aid in the creation of Ph er oto esh : iSto ck.com/skyn the store itself as a brand, as well as a place for customers to experience brands. Refreshing/remodeling/ redesigning of stores is happening faster. Successful retailers will have the ability to change rapidly. Stores are refreshing, remodeling, and ho n to sI : iS ge redesigning themselves much toc Ima k.com / Weekend faster than they were able to do even a few years ago. There is a higher demand for fast turnkey solutions, along with an increased pressure on suppliers to remain aware of and anticipate trends. P

Shrinking selling space. Stores are getting smaller, and the number of outlets is shrinking, even as U.S. retail value sales are growing. Consumers are cutting back on the number of trips and doing Ph sr more bigbox, onestop shopping oto : iStock.com/andre trips and shopping online. As such, store fixtures need to maximize space utilization and do more with less. Portable, movable and/or adjustable fixtures will be increasingly important.

Online retailers opening physical stores. A growing number of suc cessful online retailers are open ing physical locations to create a more indepth experience for their customers. Fixtures can help bridge the gap between the online and physical realms by carrying themes and colors from online to instore.

According to Shop! Research, retailers almost unanimously agreed that the instore customer experience is very or extremely important to them. Retailers also see brickand mortar stores as extremely important to their business and foresee its importance continuing, if not growing, for the next five to ten years.

KEY LEARNING: Larger industry trends indicate that stores must deliver more experiential environments that seamlessly merge the physical and digital. Consequently, store design needs to keep up with rapidly changing technologies and shopper expectations to be successful.

Lighting for a Store Redesign

BY SPECIALTY LIGHTING

Retail Lighting Historically, retailers have been limited to the types of lighting and lighting capabilities they can use in a store redesign project. Until recently, light fixtures had to be designed around traditional light sources (e.g., incandesÂ cent, halogen and fluorescent lamps). This limited not only the style of the lighting fixtures, but also the function of the lighting. The past five years has brought about numerous changes in the lighting industry. In an industry once dominated by incandescent and fluorescent lighting, LED (lightÂemitting diode) has quickly emerged as the preferred lighting source of many lighting designers. LEDs provide numerous benefits to the designers includÂ ing the flexibility to change lighting design without being held to traditional light sources. This allows designers to more easily create different moods within the store. LEDs also enable designers to create a more inviting shopping experience by not only having the capability to enhance products, but also product colors and textures.

Project Management The key to a successful lighting project is to have the project specifics identified at the start of the project. Most designers understand lighting needs to be changed in the redesign, but they do not necessarily know what specific lighting fixtures are needed. Lighting suppliers can assist

with these decisions by understanding the environmental needs of the light, the mood the retailer is trying to create, what products and store fixtures need to be illuminated, and how flexible the lighting has to be. Does the retailer need the capability of adjusting the color temperature of the light or the light levels to enhance a product or change a mood within the store? This is especially important for retailers who routinely change the content and location of their product displays.

Success Metrics ROI on lighting products is calculated in many different ways. Cost for the product and installation is usually included, as is life of the fixture and light source, and product maintenance. Energy savings associated with the use of new light fixtures is another key metric. Retailers can measure ROI on replacement lighting projects in terms of energy savings, often measured as wattage savings per square foot and/or wattage savings per store. Customer Satisfaction with the shopping experience is another key metric. Traditional light sources (namely incandescent and halogen) not only create added ambient heat within the environment, but can be harsh on the eyes without proper optics and reflectors LED fixtures, when designed correctly, generate very little ambient heat. This not only makes for better shopping experience, but helps to lower the cost associated with operating the heating & air system. Customer research can provide additional insight into the effectiveness of the overall environment. 2017 Shop! ROI Standards: Store Redesign 2017 Shop! ROI Standards: Store Redesign

Store Redesign Internal Stakeholders

Photo: iStock.com/NicoElNino

When working with a retail partner, knowing who is ultimately responsible for the store redesign is critical. Shop! found that for most retailers, the Store Design team usually had ultimate responsibility for redesigns. However, other responsi ble departments included; Marketing, Operations, Visual Merchandising and Construction.

Retailers are investing more into unique designs and tech nology in order to create an interesting, interactive, and memorable experience for customers. At the same time, Allocating budget to hybrid stores and online platform online retailers are starting to open brickandmortar stores development affects the budget allocated to traditional to augment the online experience. Their stores are not instore marketing and store fixtures/visual merchan necessarily a place to buy the product, but to dising. Store designs must support new have physical interactions, including cus technology and new business models. tomer service and product trial before Brands are creating their own stores, Marketing deciding to purchase it. This trend is and traditional businesses are beneficial for instore marketing looking to reinvent themselves, Merchanand store fixtures/visual mer which is leading to more store Operations dising chandising suppliers. renovations.

STORE

Retailers are moving away Industry experts believe DESIGN from “cookie cutter designs“ retailers are in the midst of by integrating technology and a “fullscale transformation” Store Visual Planning Mdse. inter action with technology as retailers become more in stores, such as using tablets comfortable with data and are Confor POS screens, and replacing merging the data with creative struction static messaging with touchscreen and personalization initiatives. engagement. As mobile usage continues Retailers are trying to refresh, remodel, to grow, retailers are seeking ways to capture and reinvigorate their stores. But, they are the attention of people on mobile devices. Retailers spending less money in terms of visual merchandising are experimenting with iBeacons and other devices to push and are looking for less expensive solutions. There is also a information to customers as they walk through different push for localization. Companies are adding a greater level areas of the store. of local relevance to what is right now a chain solution.

2017 Shop! ROI Standards: Store Redesign

CASE STUDY: Storefront ROI in the United States

BY STYLMARK

QUICK FACTS Motivation: New Storefront Look Sector: Women’s Apparel Number of Stores: Ten Project Budget: N/A Desired ROI: N/A Retailer Victoria’s Secret approached Stylmark to develop an anodized aluminum extrusion that could replace the current steel extrusion they were using on their store fronts. Victoria’s Secret existing storefronts were made from a mirrored stainless steel. These steel extrusions used for the storefront were heavy, very difficult and time consuming to install.

Design Elements To begin the project, Stylmark developed a die similar to the existing steel extrusion that was twelve inches tall and developed a special finishing machine to achieve the same look as the current steel extrusion. Next, Stylmark developed a concept die drawing that was approved by Victoria’s Secret’s store design team based off the current

steel storefront extrusion being used. Then, working with Stylmark’s aluminum extruding partner, they finished the drawing, developed the tooling and did a die trial that took about four to five weeks. Once the die trial was approved, production on material began which took about two weeks.

Project Management There were ten stores in the redesign program. A Stylmark account manager worked directly with the store design team from Victoria’s Secret. The account manager brought the design vision to the Stylmark engineering team who developed the die. Once the die was developed, Stylmark’s purchasing manager worked with their extruding part ner on the die trial and then once the trial material was approved, storeready extrusions were run. Those extru sions were then anodized to the 118 Victoria “Steel” finish and delivered to the customer. The finished product can be seen in the picture below.

Outcomes While both the steel extrusion and the anodized aluminum extrusion are very durable, the anodized extrusion installed in less time, required less labor on site and cost less to ship. The original cost per square foot was $220 and using the new material reduced the cost to $20 per square foot.

Return on Investment This was a 60% savings on material – and about 25% savings on labor. This was an immediate return for the retailer. Ten stores received the new storefront aluminum extrusion during this rollout. 8

2017 Shop! ROI Standards: Store Redesign 2017 Shop! ROI Standards: Store Redesign

Store Redesign Metrics Understanding what motivates retailers to execute a redeÂ sign will help suppliers better serve their client. Knowing the key metrics and how to measure them, that will help suppliers show their value to the retailer. Shop! found some variation in the importance of variÂ ous metrics as ratings varied among survey respondent groups. The key to every successful project is making sure these metrics are clearly defined and agreed upon at the start of a project.

Designers on the other hand stated that sales per square foot (23%) was the most important metric in determining the success of a store redesign, followed by overall stores sales (15%) and sales lift across all channels (15%). When asked about the relative importance of other metrics, 96% of respondents stated brand perception was very/ extremely important and 82% stated brand awareness as very/extremely important. Finally, manufacturers stated overall sales and ROI were the most important metrics in determining the success of a store redesign (tied at 25% each). When asked about the relative importance of other metrics, 88% stated brand awareness and sales per square foot were very/extremely important.

Photo: iStock.com/fiphoto

For retailers, ROI (23%) was the most important metric in determining the success of a store design followed by overall store sales (17%), market share (10%) and conversion rates (10%). However, when asked about the relative importance of other metrics, 91% of respondents stated brand perception was very/extremely important. 81% of respondents stated brand awareness was very/extremely important.

KEY LEARNING: Ultimately, a store is the reflection of its brand and thus any design/redesign must reflect the values and value of that brand. Helping the retailer achieve such brand alignment and sales increases will help ensure a continued position as a valued partner.

KEY SUCCESS METRICS: RETAILERS % Very/Extremely Important

91%

87%

81%

72%

71%

69%

Brand Perception

Overall Store Sales

Brand Awareness

Brand Loyalty

ROI

Footfall (inÂstore traffic)

Category Sales

Sales per Square Ft.

Source: 2016 Shop! ROI Standards: Store Redesign Survey

2017 Shop! ROI Standards: Store Redesign

CASE STUDY: Relocation to New Retail Space in Canada BY CANADA’S BEST STORE FIXTURES INC. (CBSF INC.) QUICK FACTS Motivation: New concept in relocation Sector: Commercial Supplier: Electrical Supply & Power Alternatives Number of Stores: 103 across Canada Project Budget: ~$75,000 CDN Desired ROI: % increase in sales After working with CBSF Inc. to complete market analysis and develop their retail strategy, Westburne Electric had the opportunity to implement its new concept store in an existing market. Designed by CBSF Inc., this concept was the first to create the physical retail manifestation of the brand and experience.

Design Elements The retailer wanted to create a retail experience that celebrated the company brand and make their customers feel comfortable, which is not characteristic of its compet itors. It was important the concept be flexible to adapt to varying sized locations in their network of stores, ranging from 700 square feet to 3400 square feet, and showcase a wide range of products. Durability and quality were key to ensure their investment has a strong ROI (3 years).

Two key features of this concept were the Power Lab and branded signage. The Power Lab was a designated area that served as a place for contractors to get their devices charged while they waited for orders. The area also provided contractors with information about alternative power sources, full energy solutions and other services the client provides. Information was presented in printed form through signage, supporting material on table top and trained staff on site to support and encourage discussion. The Power Lab consisted of laminate and metal tables with stools, and colored walls to promote the brand and create a focal area. The original intent was to leverage tablets and digital content, but as CBFS Inc. saw consistently across retailers in all markets, the task of content creation and management was typically a forgotten element and felt like a daunt ing task with little to no resources allocated to support inhouse, and no budget to hire external management. Celebrating the retailer brand in store was not common in the industry. Branded signage to promote the retailer was pushed as the primary focus, with secondary status given to vendor and supplier branding. In this market, the retailer branding reminded the customer where they are

2017 Shop! ROI Standards: Store Redesign 2017 Shop! ROI Standards: Store Redesign

shopping, and the vendor and sup plier branding was important to retain credibility in offering. A combination of snap frames, printed vinyl applied direct to wall, along with card stock in acrylic sleeves were leveraged for both brand and category messaging.

Metrics of Success The redesign of a store at any level isn’t just a new look; it typically leads to store operations changes. This is why CBSF Inc. encourages retailers use metrics that measure staff adoption along with customer perceptions and finan cial. In this particular project the metrics were as follows: • Staff adoption of new processes, customer service training • Increase in customer loyalty program subscriptions • Increase in sales – especially over the counter. • Project cost ($/sf costs) a key factor.

Costs & Capital Investments Westburne’s costs covered everything from services, to fixtures, to team training. In particular, the costs used to calculate the costs ($/SF cost) for this particular proj ect included software licensing and hardware costs for customer tracking analysis to understand current shop ping patterns; store design, planning and graphic services; manufacturing of custom retail elements and sourcing of commodity fixtures; printing of large and small format signage; installation of retail elements including some GC work; and Westburne team member time for training to learn how to conduct business in the new store concept.

2017 Shop! ROI Standards: StoreStore Redesign 2017 Shop! ROI Standards: Redesign

Outcome vs. Expectations Outcomes exceeded expectations on all fronts. From a store operations perspec tive, staff are embrac ing the new concept and the opportunities it provides to enable a better experience for customers. For the customers, surveys and focus groups provided insights to the concept with potential minor improvements recommended. The biggest feedback is this Westburne store really differentiates from competitors, making customers linger in store longer with the feeling of being serviced quicker. The new format has seen steady growth at or above targets as compared to previous year same store sales. As for the costs, the project was on bud get for design, manufacture and installation. As CBSF Inc. continues to work with Westburne to implement more of these concept stores, we continue to value engineer to be more cost effective.

Lessons Learned From the perspective of the retailer, partner selection is key. Westburne credits the continuity CBSF Inc. was able to provide in doing the research, designing the retail environ ment and manufacturing all retail elements in house as an invaluable benefit to them as a retailer. Westburne appre ciated CBSF Inc.’s flexibility, team work, and ability to create practical solutions that look great and don’t compromise on capacity or operations. From the perspective of CBSF Inc. the customer service they provide their customers – the retailers – is key to enabling retailers to move through a redesign process. Any redesign process, regardless of scale or definition, can seem daunting and expensive to most who aren’t familiar with it. It can be a great expense and a risk for retailers to move through change so transparency is key.

11 2017 Shop! ROI Standards: Store Redesign

Calculating ROI ROI Calculation is Not Widespread While ROI may be important as a desired metric, few respondent companies actually calculated it. ROI, when calculated, also varied among all the respondents regard less of company type. Answers ranged from payback on capital investments, to energy savings and customer feedback. Those who do calculate ROI, however, do it consistently; the majority of whom calculated it on all their projects. While desired ROI outcomes vary among groups, one aspect was consistent among the three: the typical timeframe for calculating ROI was relatively short term (more than 1 year, but less than 3 years).

“

It’s impossible to know how long a redesign will last. We used to believe seven years, but now we are looking at five. Maybe this too will change soon, but if so, we need to really look at how to assess ROI and our whole way of what

”

redesign looks like.

— retailer

Photo: iStock.com/Yahor Piaskouski

Shop! found that 60% of retailer respondents calculated ROI on a store redesign. Only 27% of the designer respondents calculated ROI on a store redesign, and 19% of manufacturer respondents calculated ROI on products sold for store design. ROI is greater when a holistic approach is taken. When the moti vators are focused on subjective as well as objective goals, the scope becomes robust and impacts more customer touch points, resulting in a cohesive instore experience that inherently reaps tangible results. While objective goals of overall sales and instore traf fic continue to be of high importance, more subjective goals of brand perceptions and shopper engagement are undeniably proving to hold significant value as they often drive overall sales, albeit less directly and immediately. The power of “buzz,” online reviews, bloggers, and others are highly influential, whether positive or negative. The store experience is a key touchpoint that can create passionate brand advocates, or detractors.

KEY LEARNING: Given the importance of ROI for retailers in evaluating store design success, designers and manufacturers must strive for the same metrics. Tangible impacts on sales/profits, foot traffic, and conversion rates are important, as are less tangible impacts on brand perceptions, loyalty, shopper engagement and experience.

2017 Shop! ROI Standards: Store Redesign

CASE Experience in in India India BY BYGENSLER GENSLER CASESTUDY: STUDY:Rethinking Rethinking the Customer Experience QUICKFACTS FACTS QUICK Motivation: RelaunchReadytoWear ReadytoWearBBrand rand Motivation: Relaunch Sector:Men’s Men’sApparel Apparel Sector: Number of Stores: prototypes(mall (mall++flagship) flagship) in India Number of Stores: 22prototypes ProjectBudget: Budget:N/A N/A Project Desired ROI: N/A Desired ROI: N/A

TheRaymond RaymondGroup Groupisisone oneof ofIndia’s India’slargest largest branded branded fabric fabric The andfashion fashionretailers retailerswith withover over700 700stores storesin in over over 200 200 cities. cities. and As a leader in luxury textiles and madetomeasure mens As a leader in luxury textiles and madetomeasure mens tailoring,Raymond Raymondwas waslooking lookingto toexpand expand into into the the ready ready tailoring, towear category. After closing all its existing stores due towear category. After closing all its existing stores due lacklusterperformance, performance,Raymond Raymondturned turned to to Gensler Gensler to to totolackluster assist in crafting its readytowear brand story and creating assist in crafting its readytowear brand story and creating newconcept conceptprototype prototypestores. stores. new

DesignElements Elements Design

keycomponent componentof ofdeveloping developingthe thestore store design design strategy strategy AAkey wasaafocus focuson onmarket marketresearch researchand andconsumer consumer insights insights to to was refine the brand story, define the customer journey, and refine the brand story, define the customer journey, and identify key storytelling moments, leading to an innovative identify key storytelling moments, leading to an innovative concept addressing the modern Indian male. Given the concept addressing the modern Indian male. Given the enormous brand recognition for its textiles and custom tai enormous brand recognition for its textiles and custom tai loring, the challenge was to leverage the brand’s strengths loring, the challenge was to leverage the brand’s strengths while appealing to a different target audience and avoid while appealing to a different target audience and avoid ing brand confusion. Purposeful curation of merchandise, ing brand confusion. Purposeful curation of merchandise, “dioramas” that styled that latest fashions, attentive service “dioramas” that styled that latest fashions, attentive service

evoking evoking the the tailoring tailoringexperience, experience,and andseamless seamlesstechnol technol ogy enabled a customer experience that ogy enabled a customer experience thatcombined combinedthe the convenience and speed of modern shopping with the convenience and speed of modern shopping with thehigh high touch of a personalized, bespoke encounter. touch of a personalized, bespoke encounter.

Outcomes Outcomes

The results were literally awardwinning, with several The results were literally awardwinning, with several industry awards since opening, but most importantly, industry awards since opening, but most importantly, they exceeded business objectives. they exceeded business objectives.

Key Metrics Key Metrics

The client measured success in terms of store sales, The client measured success in terms of store sales, footfall, conversion rates and media “buzz”. footfall, conversion rates and media “buzz”. The project resulted in: The project resulted in: • Product sales increase of 25% • Product sales increase of 25% • Conversion of footfalls of 80% • Conversion of footfalls of 80% (industry avg. ~60%) (industry avg. ~60%) • Average Bill Value up by 50% • Average Bill Value up by 50% • Setting of retail benchmarks • Setting of retail benchmarks in Bangalore in Bangalore

2017 Shop! ROI Standards: StoreStore Redesign 2017 Shop! ROI Standards: Redesign 2017 Shop! ROI Standards: Store Redesign

13 2017 Shop! ROI Standards: Store Redesign 13

KEY TAKE AWAYS AND RECOMMENDATIONS The key to success is to align store redesign goals and objectives with larger client strategic objectives, com pany culture, consumer expectations and empowered resources. In addition, the research showed that strategic, differentiated, instore brand positioning with clear goals provide an ironclad framework for success. Creating a relevant space that truly engages with the customer while elevating and building memorable instore experi ences, will set the retailer apart from the competition. The factors influencing ROI on store design are multi faceted. There are tangible and intangible gains, measured through traditional and nontraditional metrics, supported by objective and subjective goals. The more holistic the approach, the more lucrative the results. Success is depen dent upon the scope you are willing to embrace, the clarity of the goals identified and the steadfast commitment to achieve articulated objectives.

STORE REDESIGN It is extremely important to outline and understand the metrics for success and outcomes based on the impact to staff, customers, and sales, as well as project costs. Often overlooked in the analysis is the employee whose produc tivity and customer interactions are also impacted by store design. Any challenges faced by store staff can ripple to the customer experience. Service interactions are a critical part of the store experience that must also be “designed.” Thus, staff should understand the impact to their operations with the new concept early on, be provided training and support to manage through any changes, and given the other tools to help them deliver the full sensory experience for shoppers.

MOTIVATING FACTORS Designers and manufacturers need to better understand retailer motivations and budgets for a store redesign to help meet their core objectives. Clients typically come with a budget number in mind and some ideas on what they’d like to see. Be able to read the client as quickly as possible to determine if the budget or the ideas are what is motivating them – if it’s budget, then set expectations early on if their inspiration is not inline with what they can afford; if it’s inspiration, then push to create something that will meet their expectations and not disappoint/restrict based on costs.

KEY SUCCESS METRICS In this everchanging landscape, ROI has become a con tinuous process rather than an annual one. The evaluation process itself needs to be more fluid and more focused to ensure it continues to advance the organization toward its vision and goals. These midcourse corrections also include more frequent competitive reviews. Those who aren’t keeping an eye on the industry changes and the competition will be leapfrogged. We have seen the recent flurry of downsizing and store closures and wonder what metric were, or were not, measured.

2017 Shop! ROI Standards: Store Redesign

REFERENCE NOTES

ABOUT SHOP!

Canada’s Best Store Fixtures Inc., Case Study: Relocation to New Retail Space in Canada

Shop! (www.shopassociation.org) is the global non-

EWI Worldwide, The ROI on Retail Design, 2015

environments and experiences. Shop! represents more

Gensler, Case Study: Rethinking the Customer Experience in India

vides value to the global retail market-place through

profit trade association dedicated to enhancing retail than 2,000 member companies worldwide and proits leadership in: Research (consumer behavior, trends,

Retail Next, http://retailnext.net/en/blog/ brickandmortarvsonlineretail/

and futures); Design (customer experience design,

Shop! 2016 Industry Size and Composition Report

(manufacturing, construction, materials, methods,

store design, display design, fixture design); Build logistics, and installation); Marketing (in-store

Specialty Lighting, Industry Insight: Lighting for a Store Redesign

communications, in-store marketing, technology, visual merchandising); and Evaluation (ROI, analytics,

Stylmark, Case Studies: Storefront ROI in the United States

recognition/awards).

For additional questions about the data or information contained in this White Paper please contact us at: mbaumgartner@shopassociation.org shopassociation.org, or call us at (312) 863-2900

@shopassociation

Florida Office

Illinois Office

@shopassociation

4651 Sheridan Street, Suite 470 Hollywood, FL 33021 (954) 893-7300

440 N. Wells Street, Suite 740 Chicago, IL 60654 (312) 863-2900

2017 Shop! ROI Standards: Store Redesign

No part of this report may be reproduced for distribution without the express written permission of the publisher.

A R T

T H E

O F

M E R C H A N D I S I N G

THE ART OF MERCHANDISING

Merchandising is more than ﬁtout and ﬁxtures. It’s the art of creating an attractive, well-organized retail presentation. As with any artistic composition, a wide variety of tools

may

used

create

your

masterpiece. In retail Visual Merchandising, a gondola, pegboard, slatwall or shelf is your blank canvas. When combined with tools such as display hooks, label and sign holders, bar merchandisers, tray systems, and merchandising accessories, there are endless ways to effectively display all kinds of products and inspire your target audience to make a purchase. As one of the world’s top retail ﬁxture manufacturers, Trion offers a generous supply of over 25,000 components and over 50 years of experience using them to execute precise planogram solutions, store designs and retail displays. Call us to turn your vision into an inspirational retail masterpiece. DISPLAY AND SCAN HOOKS LABEL HOLDER SYSTEMS DIVIDER AND PUSHER SYSTEMS BAR MERCHANDISING SYSTEMS COOLER MERCHANDISING SYSTEMS

WWW.TRIONONLINE.COM/ART | 800-444-4665

THE A MERCHA

MEAL KITS

Time to Pivot Opportunities abound if grocers can come up with the right formula.

hat you’d think would be a slam dunk for grocers continues to be a work in progress as grocery retailers attempt to make a go of meal kits, searching for a profitable middle ground somewhere between the flailing subscription model and the in-store solution that leverages the broad competencies of the supermarket. Since they launched in the United States more than five years ago, “time has tempered both growth and expectations for meal kits, though the future remains promising,” says market researcher Packaged Facts, which, in its report “Meal Kits: Trend and Opportunities in the U.S., 3rd Edition,” forecasts that the meal-kit category will continue to expand and grow healthily over the next four years, but at rates more modest than previously anticipated. Packaged Facts estimates the U.S. meal-kit market had sales of $2.6 billion in 2017 and would grow almost 22 percent by the end of 2018 to reach $3.1 billion. Growth is forecasted to steadily decline from double-digit gains over the next few years to single-digit gains by 2023. Long term, as more traditional stores offer meal kits as a product rather than as a service, Packaged Facts contends that the market will stabilize and become similar to other convenience grocery items that sell for a premium, such as precut fresh produce. “The meal-kit market is highly dynamic and prone to fluctuations, with the top meal-kit providers falling in and out of favor since their introduction in the past few years,” says David Sprinkle, research director for Packaged Facts. “Further complicating things, market expansion is expected to be much more reliant on alternative purchase venues than the traditional subscription delivery model, due in part to the convenience and flexibility of online shopping.” To be sure, grocery retailers have been investing in the category. Last May, The Kroger Co. and its Home Chef subsidiary added three new options to the meal kits already sold in more than 900 stores across the country: Oven-Ready meals, designed to serve two people for $8.50 per serving; Heat & Eat meals, ready in five minutes; and Lunch Kits, a range of salads, grain bowls, sandwiches and tacos that run about $6 per serving. Ahold Delhaize USA’s Peapod partnered with cookbook author Mark Bittman on an exclusive Vietnamese-inspired meal kit, Fast Pho. According to Peapod’s third annual meal-planning forecast, more than 40 percent of Americans value meal kits as a tool to make cooking at home easier, with other welcomed shortcuts including premeasured ingredients and grocery delivery. On the other hand, Albertsons-owned meal-kit service Plated laid off 25 staffers, following the January departure of its CEO, and pioneering service Blue Apron experienced an executive shakeup in April. “The current meal-kit business doesn’t seem to be winning the mealtime battle for retailers, so it’s time for retailers to

rethink their meal-kit strategy,” argues Dr. Marcia Schurer, president of Chicago-based Culinary Connections, a food consulting and training company specializing in convenient fresh prepared foods, meal solutions and snacks. Schurer suggests moving from offering a limited number of SKUs for dinnertime to a storewide strategy that includes ready-to-eat, -heat and -cook; made-to-order; already prepped; and value-added options for all dayparts. “With questionable track records for sales and profitability, it’s time for retailers to pivot and come up with different options with greater customer appeal, popular taste profiles, fresh and local ingredients, can be customizable, fit dietary lifestyles, priced reasonably, encourage repeat purchases, and encourage the purchasing of complementary items from perishable and nonperishable store departments, to increase each customer’s mealtime purchase and total store sales,” Schurer urges. A key demographic that shouldn’t be overlooked: older adults, for whom meal prep may be a challenge. “Sales of meal kits to older consumers compete with delivery or carryout meals from restaurants. Many older customers already order a lot of food from restaurants,” says Packaged Facts’ Sprinkle. “However, many of these customers may miss being able to cook or could benefit from a simplified cooking process. Additionally, the restaurant and home delivery options available for them might not be as healthy or as fresh as they desire.” Dr. Marcia Schurer is slated to speak about winning the battle for mealtime profits with meal kits at Progressive Grocer’s Total Meal Solutions Summit, Sept. 9-10 in Austin, Texas. Find more information and register to attend at www.totalmealsolutions.com.

PROGRESSIVE GROCER July 2019

SPECIAL REPORT

72nd Annual Consumer Expenditures Study SMOOTHIES

Global Growth These meal-replacing drinks keep evolving in terms of ingredients, functionality and form.

moothies have become ubiquitous, often the beverage of choice for health-conscious adults and trend-setting teens alike. Their benefits are many, mostly health-related, such as that they contain fiber, are often low in carbohydrates if they donâ&#x20AC;&#x2122;t include sugar in their ingredients, and are perceived as healthier than fruit juice. Smoothies accounted for 22.6 million in dollar sales in grocery stores last year, up 84 percent over the previous year, according to Nielsen data. The global smoothie market is expected to achieve an impressive CAGR of nearly 9 percent by 2022, according to market research by Technavio. Much of the growth is due to consumersâ&#x20AC;&#x2122; demand for healthier food and beverage alternatives, with fruit-based smoothies accounting for the largest segment of the global smoothie market.

Waste / Recycle Island

Dunnage Racks

Pallet Guards

Economically Priced Molded Plastic Dunnage Racks, Bases and Merchandisers BOOTH #3617

progressivegrocer.com

www.masonways.com | 800-837-2881

Technavio also released the top smoothie market trends to watch. It’s no surprise that organic has also hit the smoothie category, and the resulting products are rich in minerals and antioxidants that also boost the price point. Gluten-free is another top food trend that’s impacting smoothies, with the common reasons for choosing gluten-free smoothies being weight management and digestive health issues. As the food market in general becomes more global in flavor and spice, so, too, does the smoothie category. Increasingly, herbs like rosemary, basil, cayenne, cilantro, fennel or turmeric are being added to smoothies to create bolder flavors or add a warm kick to cool drinks. With the addition of savory spices, smoothies have also become more than a quick pick-me-up and are instead being consumed as a meal replacement. Many consumers are turning to smoothies as a convenient way to consume fruit, vegetables and superfoods, and are opting for them instead of cereal for breakfast or salads for lunch. While the allure of smoothies has long been the fact that they’re portable and easy to consume on the go, smoothie bowls are lighting up social media feeds due to the addition of highly photogenic flowers, seeds, fruits and other toppings. Bowls, which are often thicker than traditional smoothies, frequently contain superfoods like flax or chia seeds, goji berries, and hemp protein. The added nutrients of these superfoods are also helping drive the meal replacement trend. Further, the concept of superfoods as health boosters is a draw for smoothies that incorporate such ingredients. Acai, chia seeds and protein can transform a simple smoothie into a functional supplement by boosting the immune system. Even CPG companies are introducing their own smoothie bowls. Kraft Heinz recently launched Fruitlove, a spoonable, single-serving smoothie that combines yogurt with three or more fruits and vegetables. Similarly, earlier this year, Dole debuted Spoonable Smoothies that are sold frozen. Another trend driving the popularity of smoothies is that they’re often totally customizable — a big draw for today’s consumer. Popular additions to smoothies include protein, probiotics, vitamins, nuts, minerals, grains and seeds. The customization can begin with the base as consumers turn to an increasing number of options beyond milk and nut milks like almond and cashew. Other alternatives can include oat, pea, hemp and coconut milks. Bone broth is another popular smoothie additive, as it’s purported to promote gut health, relieve arthritis, boost weight loss, and be high in collagen to improve hair, skin and nails. In addition, consumers are turning to a wider variety of colorful vegetables to add flavor to the more traditional favorites of spinach and kale. Some popular options are beets, pumpkins, cabbage and carrots. Health concerns often drive smoothie sales, but the addition of alcohol for an alternative adult beverage is gaining traction in the category. Also, while seasonal fruits will always be favorite ingredients, exotic fruits like yuzu are gaining popularity. Activated charcoal, which is a growing health trend, is also having an effect on the smoothie category. The ingredient creates a sweet and creamy beverage when added to smoothies, as well as providing naturally detoxifying benefits.

CERTIFIED PREMIUM BEEF

top shelf. bottom line.

one Reserve. The standards for Chairman’s Reserve® Certified Premium Beef are simple — it’s the best or nothing. Our strict certification process ensures that only beef meeting an elevated standard of quality is called “Reserve,” delivering a product superior in taste and unrivaled in flavor every time.

ChooseChairmans.com

SPECIAL REPORT

72nd Annual Consumer Expenditures Study SNACK BARS

Good, and Good for You Finding a balance between health and indulgence increasingly guides consumers’ choices of such items.

he snack bar market — expected to reach $8.8 billion by 2023, according to Research and Markets — saw an increase of 2.7 percent in dollar sales for the latest 52 weeks ending May 19, according to IRI data, due in large part to the growing popularity of the nutritional/intrinsic health value segment, which grew 5.8 percent in dollar sales, while granola bars’ dollar sales declined 4.6 percent. But while the health attributes touted by the makers of nutritional/intrinsic health value bars are important draws for consumers seeking wellness in convenient forms, that doesn’t mean that snacking for its own sake has gone by the wayside: Sales dollars for the breakfast/cereal/snack bar and all other snack and granola bar segments were both up, by 5.7 percent and 3.1 percent, respectively, although unit sales for the latter were down 4.2 percent. Indeed, when it comes to snacking, it seems that consumers want to have their better-for-you bar and enjoy it, too. This attitude to snacking tracks with findings by the NPD Group, whose recently released “Future of Snacking” report notes that brands are meeting consumers’ needs in this regard with snacks that provide both health and indulgence through such solutions as portion-control packs, “thinner” versions of established products, or nutrient-enriched sweet and savory items. “The role of snack food is changing in different ways in reaction to Americans’ desire for balance, portable snack foods and holistic wellness,” observes David Portalatin, NPD’s food

progressivegrocer.com

industry advisor. “It’s no longer about depriving yourself of something you enjoy eating. Today, it’s about giving yourself permission to eat indulgent snack foods in moderation.” That permission naturally extends to items like cereal bars, which are practically the definition of a portable snack, and, according to NPD, will be one of the snack items whose growth over the next five years will be driven by consumers older than 40, Gen Xers and younger Boomers. In its 2019 “How America Eats: The State of the Snack Industry” research, IRI specifically points to snack and granola bars with Non-GMO and nutritional claims as meeting consumers’ wellness needs, while those without such claims fall into the “permissible indulgence” slot. The research also shows that snack and granola bars with grain and 100 percent natural claims were among the growth-rate “winners” when looking at categories across the store. When it comes to variety, the market researcher notes, “It’s table stakes to have a benefit within the bars category — from protein to cheese to free-range chicken — [and] this year’s innovation delivered.” Examples included offerings from Purely Elizabeth (grain-free), Sonoma Creamery (cheese), One (Protein), That’s It (probiotics), Luna (gluten-free), and DNX (free-range chicken and grass-fed beef). One snack bar brand, Kind, which shows up among the top manufacturers and brands in three out of the four snack/granola bar segments ranked by IRI, recently unveiled a Be Kind to Yourself platform highlighting self-care and healthy choices, which will run on national TV and across digital channels, as well as being promoted via email, field marketing and public relations. The first national snack brand to disclose added sugar content across its portfolio, the company has also hosted an educational pop-up to draw attention to the 100-plus sweeteners in popular snacks, and urged the food industry to more clearly disclose sweeteners and sources of sugar. “Our longstanding belief at Kind is to craft snacks made with a nutrient-dense first ingredient, like whole nuts, whole grains or whole fruits,” says Mike Barkley, the company’s president and COO. “Through this new platform, we want to spark a dialogue and remind people to look at what ingredients are most prominent in their snacks.” That level of nutritional and ingredient awareness is rising among snack bar consumers — even as they clamor for great-tasting products — and the grocery channel ignores this trend at its peril.

PLANT-BASED YOGURT

Culture Clash As nondairy yogurt grows more popular, it could steal share from traditional counterparts.

here’s no doubt about it: Plantbased foods continue to rise in popularity, and that includes dairy-alternative products such as yogurt. In its 2018 report “The Yogurt Market and Yogurt Innovation, 3rd Edition,” Packaged Facts singled out dairyfree, plant-based yogurt as the new market disrupter, replacing the now mainstream Greek yogurt trend. As David Sprinkle, the company’s market researcher, pointed out, “The segment is following more familiar dairy-alternative beverage ingredient trends, especially as dairy-free yogurt moves beyond soy to feature coconut, almond and cashew, as well as more exotic variations such as pea-based yogurt.” Recent product rollouts and updates in this space include products from Follow Your Heart (coconut); Blue Diamond (almond); Kite Hill (almond); Simply Free (acacia fiber and konjac); Lavva (coconut, plantain, cassava root, pili nut); and Israeli brand Yofix (oats, legumes and seeds). Sales of plant-based dairy products, excluding milk, came to $697 million for the 52 weeks ending June 2018, according to Nielsen data, representing an increase of 50 percent year over year. The nondairy ice cream and frozen dessert, yogurt, cheese, creamer, butter, and dressing sales included in these figures all saw double-digit growth of more than 20 percent during the same period. A study from IRI, meanwhile, identified plant-based yogurt among eight categories (the others being milk, ice cream, creamers, meat substitutes, protein bars and supplements, frozen meals, and mayonnaise) that earned more than $100 million in annual plant-based dollar sales in 2018. Additionally, in an April 2019 blog post discussing some of their findings, study authors John Crawford and Tim Grzebinski wrote, “Plant-based foods are now in 53 percent of households, and we expect that this trend will continue to grow.” Crawford and Grzebinski primarily attributed this rising interest, and resulting higher sales, to Millennials, noting, for instance, “In general, younger consumers have a far more positive view of the health aspects of plant-based milks than older generations.” Fellow market researcher Future Market Insights concurs, observing of the much-studied demographic: “This population segment is active and diet-conscious. They prefer products with low sugar, fat and lactose as well. Plant-based products are one of the ideal products they desire.” Other groups that IRI found more likely to purchase plant-based items were those with higher incomes, and acculturated Hispanics. The IRI study also showed that the main drivers for purchasing plant-based food alternatives are health and diet, particularly in relation to weight management. As for why shoppers seek plant-based yogurt specifically, other market researchers have noted the growing number of people with lactose intolerance, the rise of vegetarianism and veganism,

and consumer concerns about the health effects of consuming dairy. Further, beyond the wish to improve one’s personal health, a desire to promote better planetary health through environmental sustainability was cited by Hexa Research. What’s to come in the plant-based yogurt segment? Future Market Insights believes “that the demand for plant-based probiotic yogurt will rise in forthcoming years, on the back of robust popularity of animal-based probiotic yogurt,” while various industry observers point to continuing innovation in ingredients, formulations, flavors and convenient packaging. Rather ominously for the traditional yogurt category, “nondairy yogurt takes probiotics and high protein, both hot nutritional trends, and transfers these trump cards to the plant-based product trend’s bag of tricks,” noted Packaged Facts last year. “With the plant-based trend, many younger and trendier American eaters are switching lanes from ‘leaning more vegetarian’ to ‘leaning more veganish,’ and thereby cutting back on or forgoing dairy.” Having already “seen the dairy-free messaging on the wall,” as Packaged Facts put it, traditional yogurt companies have gotten in on the plant-based act as well, making sure to call out their products’ health benefits, with Chobani launching a gluten-free, lower-sugar nondairy line, and Danone, which already offers Silk almond- and soy-based yogurt alternatives, introducing the Good Plants line, said to contain 40 percent fewer calories and 70 percent less sugar than most almond milk yogurt alternatives, and Silk Oat Yeah oat milk yogurt alternative in four gluten- and allergen-free varieties. PROGRESSIVE GROCER July 2019

JULY 2019

Store of the Month

GOING WITH THE

progressivegrocer.com

Cosentino’s Price Chopper

Grain Valley, Mo.

Newest store is latest example of Cosentino family’s dedication to the Kansas City-area grocery market. By Jim Dudlicek Photography by Vito Palmisano

t’s early May, and the team at Cosentino’s Price Chopper in Grain Valley, Mo., is bracing for the next seasonal push. “The team’s gonna be busy the next couple of weeks,” says Victor Cosentino, VP of Cosentino Enterprises Inc. and second-generation family member in the Prairie Village, Kan.based business, noting that there are two major high schools nearby in this rural community about a half-hour east of Kansas City. Graduation week is coming, and that means a surge in catering and specialty cake orders. But Cosentino’s is no stranger to such demands, just as few Kansas City-area folks are strangers to Cosentino’s. This year, the family is celebrating 71 years in the grocery business, 38 of them with the Price Chopper banner, which the Cosentinos coown with three other families in the KC market.

PROGRESSIVE GROCER July 2019

STORE OF THE MONTH

Cosentino’s Price Chopper Grain Valley is one of Cosentino’s newest locations, a store of some 60,000 square feet offering all of the basics, with a special emphasis on fresh — prepared foods, local meats, a scratch bakery — and a commitment to quality, service and community that has made the family’s Price Chopper banner a beloved hometown grocer. There’s also local produce, a full-service floral department, a Starbucks coffee stand and a drive-up pharmacy. “We try to get as in- “The community volved in the communi- has embraced us ty as possible, because tremendously. they support us so well,” We have always says Store Director Kevin Brown, who spent the focused on morning of PG’s visit at taking care of our a leadership day at a lo- customers. We cal elementary school. know them, and It’s a valuable partnership: “We do store tours, they know us.” one class at a time,” —Victor Cosentino, Brown says, explaining vice president that many area teachers include the visits in their yearly curricula. “All the teachers shop here, the principals shop here.” Beyond the outreach, it’s the associates that help endear Cosentino’s to the community. “We have amazing people here,” Brown says of his team. “The vibe is always positive.”

Taking Pride

Being on the far outskirts of Kansas City’s metro area, Cosentino’s Price Chopper in Grain Valley offers cuisine otherwise not available locally. “We’re kind of in a rural community, so there are no other opportunities for people to get sushi,” Cosentino notes, pointing out the Hissho Sushi station where items are made fresh daily. But even basics like the salad bar are a huge

draw, especially with the store’s offer of all you can eat for $8.99, versus a per-pound price of $5.99. “People flock to this,” Cosentino says, warning, “You’re here around noon, get outta the way.” Of course, Kansas City is world-famous for its barbecue. Not to be outdone, the store offers ribs, pulled pork and brisket smoked on the premises. In fact, barbecue is another form of community outreach for Cosentino’s. “We have a traveling smoker that we put out on the sidewalk,” Cosentino says. “We’ll sell 500 slabs of ribs on a weekend.” In addition, there’s plenty of hot food to grab and go: meatloaf, sausage and peppers, pizza, side dishes, and what Cosentino says is the “best fried 42

progressivegrocer.com

chicken in town.” (Sampling it for lunch, PG is hardpressed to argue.) Convenient food to go extends to an island display stocked with chicken, entreés, sandwiches and salads. “People don’t want to wait,” Cosentino remarks. Also keeping the crowds moving: luncheon meats pre-sliced in the deli case for speedy ordering; the display is fully stocked and stunning. “It looks like this every day,” Cosentino says of the abundant deli case, heaping praise on store associates. “They take pride in what they do. We can still slice to order, but with the volume we do, we need to serve people quicker. It’s labor-saving, and I think it looks better. Kretschmer has been a great partner.” Also a time-saver: the produce chop shop that puts out

Fresh offerings at Cosentino’s Price Chopper include local produce, fresh-cut fruits and vegetables, and an all-you-can-eat salad bar.

a daily supply of pre-cut fruits and vegetables. Of course, while the store helps folks get out the door more quickly, visitors can linger over meals as well. The cafe adjoining the deli in the front corner of the market offers seating for 60 and wi-fi service. “It gets used,” Cosentino says. “Our events at night, breakfast and lunch have been good.” There’s a dinner special every night of the week, including the popular “Chopper Chicken Tuesdays,” featuring fried or rotisserie chicken, sides, and rolls. In the bakery, bread and rolls are baked on site under the family’s own label, part of a broader line of Cosentino’s-branded products. Cosentino anticipates further expansion of crusty breads. “This department keeps changing all the time,” he PROGRESSIVE GROCER July 2019

STORE OF THE MONTH

Cosentino’s Price Chopper

Satisfy Your Soul Fresh side dishes make for a colorful deli case (top), as do sliced deli meats, along with fried chicken among hot food selections (above center). A wide variety of local barbecue sauces is displayed near the meat case, where steaks from local purveyors are in high demand (above).

www.usabq.com 800.306.1071

says. “People were off bread; now it’s about ancient grains.” Additionally, the single-serve dessert category is getting “bigger all the time,” with growing sales of pie and cake slices. “People might not want to pay $8.99 for a pie, but they will pay $2 for a slice.” Custom-decorated cakes are also a key offering of the bake shop and its expertly trained team.

Family Recipe

Staffed by in-store butchers, the meat department offers KC Pride meats, locally raised Valley Oaks beef cuts and Certified Angus Beef. There’s also

When others manage, Loomis solves. Loomis is changing business-as-usual with solutions that do more than manage—they transform the industry. Today, the Titan R® is doing the same for retail. Powered by the latest technology and industry-leading support, the Titan R reduces cost, improves fund availability, and enables precise cash reconciliation.

Turnkey cash automation

Tailored to achieve maximum ROI

Efficient cash reconciliation

Best-in-class support

STORE OF THE MONTH

Cosentino’s Price Chopper 1191 N.E. McQuerry Road Grain Valley, MO 64029

Grand opening:

Jan. 17, 2018 Total square footage

60,729 Selling area

42,000 square feet

Employees: 174 Checkouts: 9 Hours: 6 a.m. to midnight Designer: Design Services Group

house-made Italian sausage: “Our family recipe, been doing it for years,” Cosentino says, noting that the daily made cased meats once won first place at a local barbecue contest. The well-stocked meat case showcases 14-ounce twice-baked potatoes alongside seasoned meats, bacon-wrapped chicken, stuffed and skewered proteins, and ribs. There are special $5 grilling packs, with Cosentino’s house sausage and meatballs, grinds, steaks, and poultry sharing caseready space with branded items. “We do our own chicken, all hand-cut,” Cosentino says, pointing out a window, above an extensive display of local barbecue sauces, allowing shoppers to watch butchers in action. “We want our customers to see production as it happens.” Beyond meat, there’s wild and farm-raised seafood, including trout, yellowfin tuna, shrimp and little-neck clams. A large spice display island dominates the aisle facing the meat and seafood department. Why here instead of in center store like most markets? “It’s a great tie-in,” Cosentino says of the positioning designed to inspire. “Often, people can’t find spices; here, they can find whatever they need.” Also prominently displayed is Cosentino’s-branded pasta sauce, “Grandma’s recipe,” Cosentino boasts. “We’ve got our own pasta sauces. We’ve got beef snack sticks that we sell at the checkstands. We’re adding 46

progressivegrocer.com

more to that [house-brand product line] all the time.” Cosentino noted that his brother Jimmy Cosentino oversees all of the liquor departments for the family business, where they’re seeing growth in sales of spiked sodas and waters. The store partners with Instacart for home delivery, although Cosentino says the company is looking into bringing

About Price Chopper and Cosentino’s Food Stores

Preseasoned and stuffed items are popular meat case selections (clockwise from upper left). Crusty breads and custom cakes are swift movers at the store’s scratch bakery. The pharmacy offers inside and drive-up service. The 60-seat cafe is routinely filled with folks enjoying nightly dinner specials. Spiked sodas and waters are gaining fans in the wine and spirits department.

Price Chopper has more than 55 stores across the greater Kansas City metro area and Des Moines, Iowa. The banner’s 51 Kansas City stores are locally owned by the Ball, Cosentino, McKeever and Queen families, all of whom live in Kansas City and oversee daily store operations. The stores are serviced by Associated Wholesale Grocers, also based in Kansas City. Cosentino’s Food Stores began in 1948, when Dante Cosentino Sr., an artist who made his living painting frescoes on the ceilings of Catholic churches, purchased a small fruit stand for his children to operate in downtown Kansas City. With the help of Dante’s brothers, Jim and Jerry, the enterprise would eventually grow into one of the country’s best regional community grocers. Today, the company is led by the family’s second generation: Donnie, David, Victor, Jamie, Jimmy and John Cosentino. Cosentino’s Food Stores currently operates 30 stores in the Kansas City area under the Price Chopper, Cosentino’s Market, Sun Fresh Market and Apple Market banners. The owners and more than 10,000 employees of Price Chopper are “passionate about providing the best selection of products at the lowest prices with the friendliest customer service. Feeding the communities we serve is at the heart and soul of what we do.” Offerings include produce, much of it procured locally from more than 150 family farms; in-house butchers; on-site scratch bakeries; deli departments with catering services; and professional floral designers. To fight hunger in Kansas City, Price Chopper partners year-round with Harvesters, the Community Food Network through the CHOP Hunger initiative. Stores collect canned goods, gather perishable food donations with the Fill the Fridge drive, and host an annual fundraiser to fight summer childhood hunger through the No School = No Lunch program. Sources: www.mypricechopper.com, corporate facts sheet; www.cosentinos.com PROGRESSIVE GROCER July 2019

STORE OF THE MONTH

Cosentino’s Price Chopper The Starbucks Coffee shop is a mainstay at Cosentino’s Price Chopper in the Kansas City suburb of Grain Valley, Mo.

the service in house. Delivery has been embraced by the community, Brown notes: “Instacart people are here multiple times a day. Some people in this rural area, they can’t get out, so they just love the service.”

‘The Local Guys’

The goal with this store was to “provide a first-class grocery operation for the area,” Cosentino says. “Our family has been looking at the Grain Valley market for many years, so when the opportunity presented itself, we were ready to move forward.” The store is a smaller footprint than the company’s previous stores, Cosentino says, “but has as much, if not more, perishables. Just like the whole industry, as center store shrinks, our perishable departments expand.”

progressivegrocer.com

Restaurant Home Delivery to Hit $76 Billion in 3 Years Grocerant Can Do It Better!

FREE SAMPLES To Test Your Food 30minHD.com/PG

Crisp Food Technologies Containers ®

Keeps Fried Foods Hot & Crispy for 30-Minute Delivery Fried Foods Stay Crispy up to 3 Hours in Hot Case Fresh & Appealing Food Visibility with No-Fog Lids Used by Over 14,000 Locations Today Microwavable, Reusable, Recyclable

anchorpac.com

STORE OF THE MONTH

Cosentino’s Price Chopper

Hometown pride is displayed on the banners above the checkout lanes at the Grain Valley, Mo., store.

COLOGNE, GERMANY, OCT. 5-9, 2019

AMAZING Meet old and new friends. Priceless networking since 1919.

Koelnmesse Inc. 8600 West Bryn Mawr Avenue Suite 410 North 60631 Chicago IL, USA Telefon +1 (773) 326 9922 v.woods@koelnmessenafta.com

progressivegrocer.com

Secure admission tickets at www.anuga.com/tickets

The Cosentinos take advantage of opportunities to collaborate with suppliers on new products that better meet consumers’ needs. “We partner with our suppliers, and are always testing new items throughout the different departments, like different-size chicken tenders in the deli and wild flavors of fresh brats in the meat department,” Cosentino explains. “It’s a team effort.” The Grain Valley store is creating new best practices for the company. “We really like the size and flow of this store, so we will probably use this as a starting point for future locations, along with the customary tweaks of new stores,” Cosentino says. But most rewarding has been the ability to serve the hometown market whose support has helped make the Cosentino family the successful grocers they’ve become. “The community has embraced us tremendously,” Cosentino says. “Our family is born and raised in Kansas City, so I think that makes us the local guys. We have always focused on taking care of our customers. We know them, and they know us.”

INSIDE 80 Years of Innovation Message from the CEO Transforming the Shopping Experience Making Every Day a Better Day Connected to Customers and Values The Next Generation

A2 A8 A10 A12 A16 A18

Flagship banner marks eight decades as an industry leader

SPECIAL SECTION

Albertsons at 80

80 Years of Innovation FROM ONE STORE AND A DRE AM GRE W A LE ADER IN GROCERY RE TAILING.

Albertsons storefront, circa 1958

hen Joe Albertson opened his very first grocery store at 16th and State streets in Boise, Idaho, on July 21, 1939, his aim was to give customers what they wanted. Those early customers could buy 3 pounds of tomatoes, a pound of coffee and a 1-pound roast for just over 75 cents. They could also enjoy handmade “Big Joe’s” ice cream cones for a nickel from the in-store scoop shop. “When Joe Albertson opened his first

store in 1939, he knew the key to running good stores was working hard for the customer: Give them the products they want, at a fair price, with great customer service. Those principles still hold true today,” says Jim Donald, co-chairman of Albertsons and the retailer’s outgoing president and CEO. “We work every day to be the favorite local supermarket, providing the freshest, highest-quality products at a fair price. That’s it, that’s all. As Joe said, ‘Anyone can sell a can of beans; we sell good service.’” Thirty people were employed at the 10,000-square-foot store, with de-

partment managers on a salary of $40 per week. The first year’s sales totaled over $170,000, with a net profit of almost $10,000. Eighty years later, through growth, innovation and solid leadership, Albertsons Co. encompasses more than 2,300 stores, about 275,000 employees and millions of customers. The company is one of the largest food and drug retailers in the United States, with both a strong local presence and national scale — born from that single namesake banner now celebrating eight decades of innovation.

ALBERTSONS MILESTONES The War Years 1939-1946 1939 Joe Albertson opened his first 10,000-squarefoot store at the corner of 16th and State in Boise, Idaho. The first store

employed about 30 people, with department managers on a salary of $40 per week. First year’s sales surpassed $170,000, with a net profit of almost $10,000. 1941 Sales topped $1 million, with three stores in operation.

1945 Albertsons Corp. was formed. 1946 A complete poultry operation, known as Stone Poultry Co., opened. Six Albertsons Food Centers were in operation, with sales approaching $3 million.

progressivegrocer.com

1958 A frozen food storage facility was constructed in Boise.

The Postwar Boom 1947-1959 1949 The Dutch Girl Ice Cream plant opened in Boise, Idaho.

1954 Albertsons acquired two stores in Salt Lake City.

1959 Albertsons went public with its stock. The Janet Lee private label name was created by Joe Albertson and company executive Wally Jordan, named after Wally’s daughter, Janet Lee.

Greek seeks the real deal. Nothing artificial. New Chobani® Greek Yogurt with Nut Butter. It’s a perfect match.

SPECIAL SECTION

Albertsons at 80 Albertsons on Broadway, Boise, Idaho

Photo by V ito Palmis a no

Growth

From those early beginnings as a local grocery store, Albertsons has bloomed into a company that owns 21 wellknown banners in 35 states and the District of Columbia. Taking inspiration from Texas-based subsidiary United Supermarkets, Albertsons introduced a new concept, its next-generation store, in 2018. Referred to as a “food paradise” by John Colgrove, president of Albertsons’ Intermountain Division, Boise’s Broadway Avenue store offers ready-to-cook dinner solutions, exotic meats, a fresh prepared department, a food court and a full bar. The store’s vast offerings embody the store’s tagline: Eat Life Up. “We leveraged that great brand name into something that’s distinctly Idaho.

Featuring all things local and fresh, it is a destination getaway,” Colgrove told PG when it profiled the store in January 2019. Albertsons on Broadway opened 79 years to the day of the opening of Joe Albertson’s first store at 16th and State streets in Boise. “Joe was always an innovator,” says Susan Morris, EVP and COO. “His stores were the first ever to have magazine racks, the first to serve hand-scooped ice cream cones, and he was also the first merchant to bring grocery and household needs under one roof. He always sought to make his stores a special destination for customers. Joe’s legacy lives on through our employee promise today: Make Every Day a Better Day for everyone who walks through our doors.”

Morris knows all about the employee promise, as she started working at Albertsons as a teenager: “At 16 years old, I never expected the wide variety of career choices that exist at Albertsons. I am so happy and proud my part-time job became my lifelong dream.” The Man in Gold program, introduced in 1973, featured all store directors wearing bright-gold blazers that identified them as being in charge. Local Boise radio man Jack Link wore the trademark uniform in TV ads in the 1970s. The popular TV spots declaring, “It’s Joe Albertson’s Supermarket, but the bakery department is mine!” aired in 1977 and are still counted as a favorite among employees and customers alike. Albertsons’ Think Fast, Friendly Service campaign was introduced in 1984

ALBERTSONS MILESTONES The Baby Boomers Come of Age 1960-1969

1965 Albertsons purchased six Northern California stores.

1963 Wyoming was added to Albertsons’ operating states, with the acquisition of three food stores in Casper. 1964 Albertsons celebrated its 25th anniversary and being the 25thlargest food retailer in the U.S.

progressivegrocer.com

A partnership formed between Skaggs Cos. Inc. and Albertsons to operate large combination foodand-drug units.

1975 Total sales reached $1 billion.

The Age of Consumerism 1970-1978 1972 Albertsons purchased a wholesale company in Boise (Sundries Center) as a first step toward establishing a distribution system. 1969 Albertsons was listed on the New York Stock Exchange with the assigned ticker symbol ABS.

1973 The Man in Gold program was introduced, with all store directors wearing bright-gold blazers identifying them as the persons in charge.

1976 A new corporate identification program included a new logo, private label design and store signage package. 1977 “It’s Joe Albertson’s Supermarket” television ads aired for the first time. Albertsons’ corporate philosophy became part of Americana.

CHEERS TO 80 YEARS!

CONGRATULATIONS ALBERTSONS

SPECIAL SECTION

Albertsons at 80 to re-emphasize the company’s ongoing commitment to service. That slogan has aptly described the company since its early days and continues to do so today as Albertsons adapts to meet customers’ changing needs.

Digital

Today, technology affects everything customers routinely do in their daily lives. They turn to their phones for almost everything, from finding the fastest route to work to looking for weekend entertainment. How can grocers help make the shopping trip a value-added experience? Albertsons focuses on how technology can help better serve customers with a digital transformation that enables the company to meet its customers whenever and however they want to shop. Albertsons empowers consumers with fast and convenient in-store checkout experiences by implementing Toshiba Global Commerce Solutions’ self-checkout systems. By leveraging Toshiba’s focus on front end store optimization, expected checkout times will speed up — from wait time in line to payment — to improve operational throughput and reduce shopper interventions, with the ultimate goal of improving the customer’s grocery store experience. Albertsons’ home delivery services are available in 11 of the top 15 U.S. markets. The company has enhanced its ecom-

merce platform with Glympse, a location-sharing technology that will give shoppers real-time status of their grocery deliveries or Drive Up & Go orders. In April, Albertsons joined the blockchain-based IBM Food Trust network and began piloting the technology to improve how food is traced from farm to store shelf. The Food Trust enables greater transparency, collaboration and a safer food supply.

Albertsons’ home delivery services are available in 11 of the top 15 U.S. markets.

Branding, Branching Out

With more than 11,000 products in the Albertsons portfolio, its Own Brands offer quality and value for every shopper in every corner of the store. The 80th year brings the launch of a plant-based protein platform, expansion of the Season brand’s limited-time offerings and rollout of Signature Reserve, a newly launched top-shelf specialty brand, into numerous categories, including ice cream, pasta and pasta sauce. Last year, Own Brands introduced 1,100 new products. The company operates 23 distribution centers and 20 food and beverage plants. Albertsons operates more than 400 fuel centers, including nearly three dozen convenience stores, offering customers savings at the pumps and some of the grocer’s best products from its stores in a quick, convenient place.

The 1,000th Albertsons store, opened in 1999 at 3614 W. State St. in Boise, is a one-stop shop where customers can bank, pick up dry cleaning, grab dinner or file a police report.

The Future

Fifty-four years after he opened his first grocery store, founder Joe Albertson died in Boise at the age of 86 in 1993. He worked tirelessly to open his first store and make it successful for his customers, and was focused on providing the right products at the right price with great attention to service. After 80 years of serving the hometown Boise market and expanding into markets throughout the country, Albertsons continues to give shoppers what they want.

ALBERTSONS MILESTONES 1978 New corporate headquarters were constructed in Boise.

Retail operations were divided into four regions: California, Northwest, Intermountain and Southco.

Growing the Company 1979-1998

1984 Albertsons re-entered the Dallas area with the first of many combination food-and-drug units. The “Think Fast, Friendly Service” tagline was introduced to reemphasize Albertsons’ ongoing commitment to service.

1981 Albertsons entered a new operating area in Omaha, Neb., with a 60,000-square-foot combination food-and-drug store.

progressivegrocer.com

1989 Albertsons operated 497 stores in 17 western and southern states, including 127 combination food-anddrug units, 175 superstores, 167 conventional supermarkets, and 28 warehouse stores, making it the sixthlargest food and drug chain in the U.S.

1991 Warren McCain retired as CEO and appointed Gary G. Michael as his successor. 1993 Joe Albertson passed away on Jan. 20, leaving behind an indelible legacy of philanthropy. 1998 Albertsons and American Stores Co. began talks about acquisition.

Mergers, Acquisitions & Change 1999-2006 1999 American Stores Co. joined forces with Albertsons in June, making Albertsons one of the largest supermarket chains in the country. 2001 Lawrence R. Johnston was named to succeed Gary G. Michael as CEO of Albertsons. 2004 Albertsons acquired Shaw’s Supermarkets in New England.

This calls for a celebration! Congratulations to Albertsons on providing 80 years of service to countless families! We look forward to continuing our partnership for years to come!

SPECIAL SECTION

Albertsons at 80

Vivek Sankaran, president and CEO

MESSAGE FROM THE CEO

Nimble ‘Startup’ Answers Shifting Customer Demands ’WE THINK LIKE OWNERS, AND WE AREN’T AFR AID TO MAKE TOUGH CALLS IN THE MARKE TPL ACE TO WIN.’ ivek Sankaran, who joined Albertsons Cos. as its president and CEO in late April 2019, has said the company is much like “a $60 billion startup,” a unique point of view, considering the Albertsons banner is celebrating its 80th anniversary. Here, Sankaran discusses what makes Albertsons a startup in his eyes, and what he’s already learned, during his brief time at the helm, about Albertsons’ heritage that’s still part of the culture today: “The Albertsons and Safeway merger in 2015 created the second-largest food and drug retailer in the United States, bringing together some of the most iconic brands in American retail. It also created a new company, one that

“We’re entrepreneurial and scrappy. We think like owners, and we aren’t afraid to make tough calls in the marketplace to win.”

has made immense strides in a rapidly evolving industry in a very short space of time, and it has a startup feel to it. “We’re entrepreneurial and scrappy. We think like owners, and we aren’t afraid to make tough calls in the marketplace to win. “Those attributes are like the steps Joe Albertson took 80 years ago. Joe worked tirelessly to open his first store and make it successful for his customers, and he was focused on providing the right products at the right price, with great attention to service. That customer-centric approach is the lens we use today, from our Own Brands innovation to developing new ways to delight our shoppers in our stores and through our digital options. “Culturally, we know that consumers have access to more information than ever before, as do companies. The majority of people don’t go to a movie, pick out a restaurant or buy a new car without interacting with technology in some way, so we take our responsibility toward innovating our customer experiences seriously.

“The digital transformation at Albertsons Cos. will empower all of our stores to be nimble and adaptable to shifting customer demands. Moreover, technology and data science allow us to understand the customer and serve them in ways that weren’t possible before, from developing and launching 300 new Signature Select Own Brands products, to optimizing our print ads for how shoppers prepare their grocery lists, to predicting when shoppers will be at our stores. We understand that making the shopping experience both seamless and rewarding is key to creating and maintaining loyal customers. “And yet, the most important intangible asset will always be our people. During my first few months, I have been consistently impressed by our passion for serving customers, our commitment to excellence and our team spirit. We have 275,000 employees with the common purpose of making every day a better day for everyone who walks through our doors. I am humbled to lead this team, and excited about what the future holds at Albertsons Cos.”

ALBERTSONS MILESTONES 2006 Albertson’s Inc. accepted an offer from Supervalu for 1,110 stores, and from CVS for 700-plus standalone drug stores; Bob Miller formed Albertson’s LLC for the remaining 661 stores, backed by Cerberus Capital Management. The Revival of a Company 2007-2014 2007 Albertsons LLC sold the Northern California division to Save Mart and began the pattern of making strategic sales and acquisitions with the purchase of 10 Raley’s stores in New Mexico.

progressivegrocer.com

2016 Albertsons Cos. was the first and largest retail grocer to commit to selling only cage-free eggs for its store operations by 2025, based on available supply.

2012 Albertsons began making money and continued to seek deals that would strengthen the company. 2013 Albertsons announced the Supervalu acquisition, which put all of the original Albertsons stores back under one company, and also bought United Supermarkets, a 51-store chain based in Lubbock, Texas. 2014 Albertsons and Safeway announced a definitive merger agreement. The merger created a diversified network that included 2,400-plus stores, 27 distribution facilities, and 20 manufacturing plants, with more than 250,000 dedicated and loyal employees.

2015 The merger between Albertsons and Safeway was completed in January. Albertsons Cos. acquired 76 A&P stores in Connecticut, Delaware, Maryland, New Jersey, New York and Pennsylvania under the A&P, Superfresh and Pathmark banners.

For increasing awareness of products that are safer for people and the environment, Albertsons Cos. received the U.S. Environmental Protection Agency’s Safer Choice Partner of the Year Award. Digital Transformation 2017-2019 2017 Albertsons Cos. acquired the Plated meal-kit startup, making it the first national grocer to acquire a meal-kit company.

Hereâ&#x20AC;&#x2122;s to Congratulations on this momentous achievement. Weâ&#x20AC;&#x2122;re incredibly grateful for our enduring partnership.

As we celebrate 80 years of service and collaboration, we look forward to continued success in the future.

SPECIAL SECTION

Albertsons at 80

Transforming the Shopping Experience

Jim Donald, co-chairman

ALBERTSONS IMPROVES CUSTOMER E XPERIENCES WITH ECOMMERCE, TECHNOLOGY.

lbertsons’ core principles of giving customers the products they want with great customer service are top of mind in the technology age. The company’s digital transformation enables it to meet customers when, where and how they want to shop. Albertsons aspires to be both the favorite local supermarket and the favorite digital supermarket. Jim Donald, Albertsons’ co-chairman and its outgoing president and CEO, shares his thoughts on the impact of technology on the Albertsons banner:

Progressive Grocer: What has made Albertsons a leader among grocery retailers?

PG: What has been the impact of technology on the Albertsons banner? JD: Today, technology affects everything

Jim Donald: When Joe Albertson opened

his first store in 1939 at the corner of 16th and State in Boise, he knew the key to running good stores was working hard for the customer: Give them the products they want, at a fair price, with great customer service. Those principles still hold true today. We work every day to be the favorite local supermarket, providing the freshest, highest-quality products at a fair price. That’s it, that’s all. As Joe said, “Anyone can sell a can of beans; we sell good service.”

we do. We turn to our phones for almost everything, from finding the fastest route to work to looking for weekend entertainment. At Albertsons, we are always looking at how technology can help us better serve our customers. Our digital transformation enables us to meet our customers whenever and however they want to shop. Albertsons is moving the dial in ecommerce and improving customer experiences with technology. For example, our One Touch Fuel app eliminates the

Congratulations Albertsons Companies! Here’s to 80 more incredible years, — from your friends at RecorGroup! RecorGroup is a brokerage of high-integrity, fun and actionable people who come to work every day to solve problems. It’s our job is to foster and grow long-lasting relationships between clients and customers. Our passion is real, and our “can do” attitudes get results. Learn more about us at recorgroup.com

A10 progressivegrocer.com RCG9387-Alb80Anniversary-HpgPrintAd-FINAL.indd

6/20/19 12:01 PM

hassle of fuel-pump prompts and saves an average of at least 90 seconds during a fill-up. Our Albertsons Digital Marketplace launched last fall with thousands of specialty products and was recently honored with Adobe’s Most Innovative Commerce Experience Award for 2019. We will begin piloting micro-fulfillment centers later this year. We also have a partnership with Microsoft to transform the shopping experience. The future is now at Albertsons. PG: How has Albertsons been able to so effectively serve consumers, and what role is technology playing in this?

PG: Which best practices at Albertsons are examples of industry-wide good business? JD: In April 2019, Albertsons joined the

blockchain-based IBM Food Trust network and began piloting the technology to improve how food is traced from farm to store shelf. The Food Trust enables greater transparency and collaboration, and, ultimately, a safer food supply. Joe Albertson cared deeply about the communities he served, which is something that will always be part of our DNA. In 2018 alone, along with the Albertsons Cos. Foundation, the company

gave nearly $262 million in food and financial support to help millions of people through hunger relief, education, cancer research and treatment, programs for people with disabilities, and veterans outreach. Albertsons is also committed to integrating sustainability into our everyday business decisions to enable our employees, customers and stakeholders to create better lives, vibrant neighborhoods and a healthier planet. PG: What factors will be most important to Albertsons in the years ahead? JD: We are still a fresh, perishable-driven

JD: That answer is simple: Albertsons

serves customers by putting them first. Technology helps us meet our customers when, where and how they want to shop. Our goal remains to be the favorite local supermarket. At the same time, we aspire to become the favorite digital supermarket, anchored by our in-store experience.

Albertsons serves customers by putting them first. Technology helps us meet our customers when, where and how they want to shop.

company. To succeed in today’s omnichannel retail environment, we think an outstanding brick-and-mortar operation provides the foundation for a leading ecommerce business. Our ability to deliver what the customer needs in both the four-wall and no-wall environment is what will define our future success.

TIME TO C E L E B R AT E T H E FRUITS OF YOUR L ABOR

Congratulations to Albertsons on an exceptional 80 years.

PROGRESSIVE GROCER July 2019

A11

SPECIAL SECTION

Albertsons at 80

Making Every Day a Better Day

Susan Morris, EVP of operations

ALBERTSONS LE ADS THE WAY IN INNOVATIVE SHOPPING E XPERIENCES.

lbertsons led the way with a lot of firsts in the grocery store space. Managers were given the autonomy to run their stores to best serve their individual communities. Joe Albertson himself always sought to make his stores a special destination for customers. Susan Morris, EVP of operations, outlines the Albertsons experience — and what she thinks the man himself would think of his stores today:

es they are willing to pay, and lots of tender loving care. Joe was always an innovator. His stores were the first ever to have magazine racks, the first to serve hand-scooped Big Joe ice cream cones, and he was also the first merchant to bring grocery and household needs under one roof. He always sought to make his stores a special destination for customers. Joe’s legacy lives on through our employee promise today: Make Every Day a Better Day for everyone who walks through our doors.

Progressive Grocer: How has the Albertsons banner changed since Joe Albertson launched it?

PG: How have changes in the industry affected operations at Albertsons? SM: We have an overall four-wall and

Susan Morris: From its humble begin-

nings in 1939 to its rebirth in 2006 to its digital transformation in recent years, Albertsons has seen many changes — however, what made us strong in the past is that we still stand by the commitment Joe made to his customers all those years ago: Give customers the fresh products they want to buy at pric-

no-wall strategy of delivering differentiated in-store experiences to consumers when, where and how they want to shop. We are removing friction throughout the in-store journey while creating a more seamless checkout experience. We are also using forecasting and replenishment technology to ensure our customers have the best possible quality

of goods on our shelves. We are working with our technology partners to improve daily in-stock position, so that the products our customers want are readily available. PG: What are the most significant innovations that Albertsons has introduced to the industry? SM: We’ve undergone a rapid digital

transformation in the past couple of years. We will be the first national grocer to pilot Takeoff’s automated micro-fulfillment centers. We launched Albertsons Digital Marketplace, a unique online destination for specialty and hard-to-find products. Our new One Touch Fuel app removes the hassles at the pump. And we’re excited about the innovations to come from our partnership with Microsoft to create a frictionless shopping experience. When it comes to innovations in brick and mortar, the conversation has to start with our next-generation stores. They are culinary destinations where customers can explore, consume and learn about

ALBERTSONS MILESTONES Albertsons Cos. invested in El Ranchero Supermercado, a Texas-based retailer that focuses on stores for Latino customers. Albertsons Cos. inked a deal with Instacart to provide on-demand grocery delivery offering same-day delivery in as little as one hour.

Albertsons Cos. launched Albertsons Performance Media, powered by Quotient, providing brands the opportunity to use proprietary shopper data to drive sales across Albertsons Cos.’ network of more than 2,300 stores in 35 states. Albertsons Cos. appointed Jim Donald president and CEO; Bob Miller continued as chairman of the board.

2018 Albertsons Cos.’ O Organics hit the $1 billion brand milestone.

A12

progressivegrocer.com

Albertsons Cos. announced Albertsons Digital Marketplace with thousands of specialty products, including hard-to-find spices and condiments, unique beauty products, and other healthand-wellness items.

Albertsons Cos. partnered with Microsoft to transform shopping experiences. Albertsons opened its new flagship store, Albertsons on Broadway, in Boise. Venture capital firm Greycroft and Albertsons Cos. created a fund, up to $50 million over time, that will invest in and aim to help grow emerging companies and technologies in the grocery sector. Albertsons Cos. was the first national grocer to implement AI-driven microfulfillment ecommerce solution. 2019 Albertsons opened its nextgeneration store, Albertsons Market Street, in Meridian, Idaho.

Albertsons Cos. appointed Vivek Sankaran CEO, Jim Donald continued as chairman of the board, and Bob Miller was named chairman emeritus. The Open Nature brand expanded its sustainable portfolio with new compostable and bamboo products. Albertsons Cos. joined the blockchainbased IBM Food Trust Network to improve food supply safety.

Happy 80

Anniversary Albertsons! Thank you for partnering with Kimberly-Clark to help people live better lives.

SPECIAL SECTION

Albertsons at 80 food in a relaxed and fun environment. In every store, we take pride in our fresh and local products. We never lose focus on offering a tremendous assortment that surprises and delights the shopper each time they walk through our doors. PG: What factors will be most important to Albertsons in the years ahead? SM: It’s simple: We need to take care of

our customers by listening to their needs, focusing on freshness and offering great selections. We want to meet the shopper with the right product and the right price wherever and whenever they want to shop. That all starts with people. Recruiting, developing and retaining talent is crucially important to our business. We work hard to help our employees reach their goals and keep this a fun place to learn and grow. When employees are happy, they do amazing things to Make Every Day a Better Day for our customers.

When it comes to innovations in brick and mortar, the conversation has to start with our next-generation stores. They are culinary destinations where customers can explore, consume and learn about food in a relaxed and fun environment. PG: What would Joe Albertson think of the company today? SM: I hope he would be very proud. In

each neighborhood we serve, customers turn to Albertsons for the best in fresh, whether that’s top-quality meats or local and abundant produce. We do that so well because we’ve stuck to Joe’s principle of giving managers and employees the autonomy to run their stores to best serve the uniqueness of their community. I like to think he would grab the family and take them to our new Broadway or Market Street store and show them the amazing things we’re doing today. A14

progressivegrocer.com

From in-store bakeries to service deli departments to the pharmacy, Albertsons associates offer shoppers a high level of service.

HEREâ&#x20AC;&#x2122;S TO

The Clorox Company congratulates Albertsons on their 80th anniversary, and is proud to honor the legacy of American grocery legend and company founder, Joe Albertson. Hereâ&#x20AC;&#x2122;s to the next 80 years.

ÂŠ2019 The Clorox Company

SPECIAL SECTION

Albertsons at 80

Connected to Customers and Values

Shane Sampson, chief marketing and merchandising officer

WINNING STR ATEGY REINVENTS SHOPPING E XPERIENCE AT ALBERTSONS. lbertsons’ company values stem from founder Joe Albertson’s values of looking for new ways to improve customers’ shopping experience. Shane Sampson, chief marketing and merchandising officer, describes the way the company changed how shoppers discover, purchase, receive and experience food: Progressive Grocer: How has Albertsons Cos. been able to so effectively serve consumers? Shane Sampson: As Joe Albertson put

A16

progressivegrocer.com

it, “We must always look to the future and take advantage of every minute to produce the kind of professional team that will always top the league.” Joe’s values are fundamental to our culture. We are never satisfied with the status quo. We are always looking for new products and new ways to improve the customer experience.

SS: More than anything else, it’s our con-

an important part of family traditions. It’s where you go for a birthday cake for your child, for prime rib for Christmas dinner or to pick up your favorite snacks for a family road trip. No matter the event, you turn to your local Albertsons. We don’t take for granted that we are an integral part of our customers’ lives. Albertsons provides for neighborhoods in much the same way Joe envisioned. The heart of Joe’s philosophy was to provide great customer service to all guests and keep it simple. We work hard to stay connected to those values every day.

nection with our customers. At a recent grand reopening of one of our stores, a local mayor spoke about how Albertsons is

PG: What makes Albertsons stand out as a leader in its key markets?

PG: Which factors have been most important to the banner’s success?

We’re creating next-generation stores today by combining a superior level of fresh mix, the highest-quality products and a really fun atAlbertsons’ mosphere. The result next-gen store is an electricity in the store that can’t be beat. Our Albertsons Market Street store in Meridian, Idaho, has been open for months, and there isn’t a day that I go in there that I don’t hear someone say how remarkable it is.

We’re still surprising people with great food and new finds every day. More broadly, we are always looking for unique items that are on-trend and in demand. We not only listen to our customers and offer products and features that are relevant, we also look at small merchants offering niche items in our markets who are making noise locally. We’re structured to serve customers on that level and to carry items that are fresh, unique, specialized and hyperlocal.

We’re creating nextgeneration stores today by combining a superior level of fresh mix, the highestquality products and a really fun atmosphere.

SS: Staying true to Joe’s philosophy and

SS:

SS: Winning in the retail grocery in-

dustry takes bold moves, quick actions and a clear focus on our customers. Our strategy is to reinvent the way consumers discover, purchase, receive and experience food. We are committed to meeting our customers how, when and where they choose to shop for groceries: They can shop our stores themselves, drive up and go with prompt curbside service, or enjoy delivery right to their doorstep. PG: Which merchandising practices have been most effective?

PG: Which factors will be most important to the banner’s success in the years ahead?

values has inspired us to where we are today. His principles are as relevant now as they were when he founded his first store. Regardless of whether we’re in the store or online, if we continue to provide customers with the items they want at a value and make it a great experience, we will win.

CONGRATULATIONS ON YOUR

80TH ANNIVERSARY AND WELCOME TO NEW PRESIDENT & CEO VIVEK SANKARAN! THANK YOU FOR YOUR PARTNERSHIP!

PROGRESSIVE GROCER July 2019

A17

SPECIAL SECTION

Albertsons at 80

The Next Generation ALBERTSONS ENTERS ITS NINTH DECADE WITH A BOLD NE W STORE CONCEPT. EDITOR’S NOTE: Albertsons on Broadway was Progressive Grocer’s January 2019 Store of the Month

hen it came time to replace its decades-old store on Broadway Avenue near its headquarters in Boise, Idaho, Albertsons decided to launch a whole new experiential concept. Following that up a year later, Albertsons pulled out all of the stops with a market nearly twice Broadway’s size, located in the Boise suburb of Meridian. Albertsons Intermountain Division President John Colgrove and Gineal Davidson, VP of merchandising and marketing for the Intermountain Division, share their thoughts on the journey toward these landmark stores: Progressive Grocer: What were the motivations behind Albertsons on Broadway? John Colgrove: When we built the Alb-

ertsons on Broadway, we knew it was a totally new concept for a grocery store in the Treasure Valley. We felt it was the right time to bring Boise the culinary experiences many are hungry for. The store features all things local and

John Colgrove, Intermountain Division president

fresh. It is a destination food getaway and a gathering place where guests can enjoy the exploration, education, preparation and consumption of food in a relaxed and trendy environment, surrounded by employees whose sole purpose is to help them enjoy time with food, family and friends. PG: How did Broadway beget Albertsons Market Street in Meridian? JC: We wanted to bring something fresh

and new to Boise and felt the Market Street brand would resonate. Both the Broadway and Meridian stores are next-generation stores, each with great ideas and innovation. In the Broadway store, due to the size, we could not offer the full assortment and experiences that are a part of the Market Street concept, a concept which was developed by one of our company’s subsidiaries, United Supermarkets, several years ago. The new Meridian store has a much larger layout, and therefore allowed us to merchandise to meet the goals and objectives of the Market Street concept. PG: What have been the most successful teachings from these stores?

Gineal Davidson, VP of merchandising and marketing, Intermountain Division

JC: Reaching a new customer and the

broader needs of our current customer base. With the uniqueness of these stores, and the wide variety of items in our fresh departments and center store, we are observing larger market baskets at checkout. But our shoppers are not coming to our stores just to buy their groceries. They are looking to experience the enjoyment of food among expert chefs, wizards of wine, fabulous foodies and lifelong friends. We love seeing and hearing from our customers who share their experience of shopping in our two new stores. PG: Which concepts are being scaled to roll out throughout the banner? Gineal Davidson: It is still early to make

decisions on which concepts will be rolled out in other markets. We are encouraged by the many different unique categories and varieties these two stores offer. We are still in the process of reviewing to see what product items or offerings are the right fit for other stores within our division. We want to ensure the items and categories we offer in our stores are meeting our customers’ needs. PG: In what other ways is Albertsons as a brand — both concept and product — being used as competitive leverage in an increasingly competitive marketplace? GD: We have many great stores and have

Albertsons on Broadway is a destination getaway and gathering place where guests can enjoy food in a relaxed and trendy environment.

A18

progressivegrocer.com

been successful with the concept in these two new premium stores; however, we make sure we stay relevant and fresh. ... Our success is not just with one item or one category; it is the total store. That total package is what drives our customers to shop with us again and again. It starts with the store layout and includes the feeling shoppers get when they’re inside the store, all wrapped up with the customer experience we offer them. We aim to maintain that excitement every day.

Campbell congratulates Albertsons on its 80th Anniversary and celebrates our continued partnership

ÂŠ2019 Campbell Soup Company

SOLUTIONS

Lunchbox Ideas

Bento is the New Brown Bag AS CONSUMERS SHIF T TO MORE FRESH-FOCUSED, SNACK-ST YLE LUNCHES, RE TAILERS ARE RE THINKING THEIR MARKE TING AND MERCHANDISING STR ATEGIES. By Jenny McTaggart

Key Takeaways Consumers are gravitating toward more fresh-focused, snack-style lunches, in which they can incorporate numerous bite-sized items, including essential meal components. Food retailers have begun innovating to help shoppers develop creative lunch ideas from items available across the store. Cross-merchandising and presentation are key to spurring sales, along with promoting ontrend plant-based and free-from items, and ethnic flavors.

n Japan, bento is a lacquered or decorated lunchbox, traditionally containing such items as rice, vegetables and sashimi (raw fish with condiments). But the term has taken on a new meaning among U.S. consumers, particularly for busy moms who are looking for more creative and healthy ways to package their children’s lunches. All you have to do is type #bentobox on Instagram to see the many ways that people are getting creative with their midday meals. At the center of this trend is a move toward more fresh-focused, snack-style lunches — in which consumers can incorporate numerous bite-sized tastes, while hopefully including essential meal components such as protein, whole grains, fruits and vegetables. Examples include cut vegetables with dips, fruit cut in star shapes, cubed cheese, whole wheat crackers and turkey roll-ups. With this growing trend, grocers have an important role to play — as well as an opportunity to grow sales in several fresh categories — by merchandising these bento-type meal ideas in the front of their stores, in the deli and in other sections. They can also educate and inspire their shoppers with lunch meal ideas and preparation tips to help save time. Several retailers around the country are already innovating to help their shoppers think “out of the brown bag,” so to speak. PROGRESSIVE GROCER July 2019

SOLUTIONS

Lunchbox Ideas

“Retailers are embracing new ways of merchandising lunchtime solutions by breaking down category boundaries to create onestop-shopping destinations inspired by the modern-day shop,” observes Nicole Peranick, senior director of retail transformation at Daymon, based in Stamford, Conn. “Traditionally, center store was the star of lunchboxes — think chips, drink boxes and shelf-stable snack packs, to name a few. However, as more and more consumers shift focus to the perimeter of the store, retailers are evolving their approaches and embracing new tactics such as cross-merchandising fresh and center store items, creating healthy snacking destinations at the front end of the store, and curating assortments around new, trend-forward lunchtime solutions that educate shoppers while encouraging experimentation.” Peranick adds that retailers have an opportunity to build their private-brand strategies in regard to lunch-related categories, and she cites two “emerging lunchtime disruptors” — The LunchMaster, in San Francisco, and Red Apple Lunch, in Boston — as examples of school lunch providers that should inspire retailers. By offering curated lunchbox solutions, these providers beg the question of whether bento boxes could eventually become a new iteration of meal kits.

Weis Does Lunch Ideas

Sunbury, Pa.-based regional grocery chain Weis Markets is providing lunchbox ideas to shoppers through educational resources provided by its staff of dietitians, comprising five in-store dietitians and two corporate dietitians. The retailer has discussed snacking and lunch meal preparation in its Healthy Bites magazine, and also provides tips via in-store radio messaging, Facebook Live videos and social media. Additionally, in August, Weis offers kids’ cooking classes with

Lunchbox Power Orlando, Fla.-based Produce for Kids (PFK) is gearing up for its sixth annual Power Your Lunchbox promotion, which will launch on Aug. 5. The digital campaign is aimed at helping families pack and eat healthier lunches throughout the school year. Its website, www.poweryourlunchbox.com, features family-tested lunchbox ideas that include fresh produce as both main ingredients and sides. The campaign also includes messaging across social media and e-newsletters. Amber Gray, digital marketing manager for PFK, says that produce is definitely gaining more attention at lunchtime. “We’re seeing a lot of parents step away from the simple sandwich-chipsand-apple combination, and get more creative,” Gray asserts. “Our goal is to give them easy solutions for healthy lunches. It doesn’t have to be difficult to add more produce to the lunchbox and get kids to eat it. Fun ideas include cutting fruits and veggies into shapes using small cookie cutters, adding them to dishes they already like, or giving the lunchbox a theme.”

progressivegrocer.com

a back-to-school theme, including ideas for packing lunches. Some of its stores also feature a storewide back-to-school fest in the fall, which includes sampling different items throughout the store. Beth Stark, lifestyles initiatives manager at Weis, notes that snack-type lunches appeal to children and adults alike for different reasons. “We know that a lot of adults aren’t taking a true lunch break, so that can hamper their afternoon productivity and zap their energy level, and it may lead them to overeat later on in the day,” Stark says. “So it’s really about emphasizing the importance of taking some time, even if it’s just 15 to 20 minutes, to step away from their desks and their screens and refresh, and eat a nutritious lunch.” Meanwhile, although most children do have a dedicated lunch break, their parents are looking for quick, nutritious ingredients that don’t take a lot of time to put together, observes Stark. “Parents can even work with the child to come up with some different solutions following a general formula: a fruit, vegetable, some type of whole grain and protein, and then maybe a dip or small treat,” she suggests. “They can come up with a list of items that fit into each category, and then rotate those.” Stark notes that lunchbox innovation is found throughout the supermarket these days, whether in deli, produce, dairy or center store. “From the deli, hummus and guacamole work great as dips, while rotisserie chicken can be another meal component,” she says. “In dairy, yogurts are another great lunch option.” She also sees plant-based products gaining ground, citing such examples as nondairy yogurt, chickpea snacks, edamame and sunflower seed butter. “This is another way people can add more veggies and cut back on animal proteins if they want,” Stark explains. “I think a lot of people are still dabbling in this category, so we’re trying to offer education and encourage them to start by trying some plant-based snacks.” Even in center store, stalwart categories such as granola bars and canned soup are seeing innovation that could help boost sales in the next several years, she continues. In one example, Camden, N.J.-based Campbell Soup Co. recently revealed plans to upgrade its traditional canned soups with more fresh ingredients, while also introducing bone broth to-go products. Lakeland, Fla.-based Publix Super Markets is another retailer that has recognized the importance of offering quick lunch solutions for its shoppers. The retailer merchandises salads, cut fruit, veggie-and-dip snack packs, and prepared sandwiches, traditionally in the deli but also in other areas of the store. “We continue to work on grab-and-go offerings that provide convenience for our customers,” says Maria Brous, director of media and community relations. “The perimeter of the store is as important as, if not more than, center store in terms of fresh, convenient, appealing offerings.”

Products Fit for a Lunchbox What’s for lunch? Suppliers are on the case when it comes to product innovation. Here’s just a sampling of new items and campaigns: Lorissa’s Kitchen is launching Lunchbox Packs that come in two variations: Tender Bites and 100 Percent Grass-Fed Beef Sticks. Each line includes multiple globally inspired flavors. The packs don’t require refrigeration and come in 5-count individually wrapped pouches and sticks. The products will be available nationwide in August. The California Prune Board is rebranding California Prunes with a new logo and tagline, “Prunes. For life.” to highlight the dried fruits’ premium nature and health benefits. Lunchbox recipes promoted by the board include Turkey and California Prune Roll Ups, as shown on page 71, as well as California Prunes on a Log. Nature Valley has introduced Crispy Creamy Wafer Bars, a new spin on the brand’s popular namesake bars offering crisp layers of crunchy wafer alongside creamy peanut butter. TreeTop offers apple sauce pouches that are clear so that consumers can see exactly what’s in them. Made with 100 percent fruit, the line’s flavors are Apple, Cinnamon, Strawberry, Mango, Tropical, Mixed Berry and Organic Apple. Coleman Natural Foods has a new line of charcuterie snack packs that are ideal for the adult lunchbox. Varieties are Genoa Salame, Provolone and Taralli Bread; Pepperoni, Provolone and Dark Chocolate Almonds; and Hot Sopressata, Provolone and Olives. The products feature American-raised pork and all-natural ingredients that are free from nitrates, nitrites, antibiotics and added hormones. Jack Link’s recently debuted Zero Sugar Beef Jerky, marking the company’s first zero-sugar offering on the market. The jerky is made with 100 percent beef, no added MSG and no preservatives.

What’s in Store

The importance of fresh categories at lunchtime was on full display during this year’s International Dairy-Deli-Bakery Association (IDDBA) Show, held June 2-4 in Orlando, Fla. Among the merchandising displays included in IDDBA’s What’s in Store Live section, there were grab-and-go cases dedicated to both kids and adults. “Today, you have shoppers looking for immediate consumption, but you also have those looking to prepare lunch the next day,” notes Eric Richard, education coordinator for Madison, Wis.-based IDDBA. “It’s not only about convenience, but there’s also the freshness factor. This creates the perfect opportunity for delis to connect with their shoppers.”

Richard encourages retailers to look at interdepartmental relationships in the store and explore new cross-merchandising ideas, such as using bread from the fresh bakery for prepared sandwiches sold in the deli. Presentation is also key, he adds. “You can use signage to call attention to ‘school lunch’ or ‘work lunch,’ and display products that are good for the next day’s lunch.” Meanwhile, retailers should highlight plant-based and free-from offerings as they continue to gain in popularity, and also consider promoting ethnic flavors. “Younger consumers are more open to experimentation,” Richard advises, “so you want to give them new flavors in your salads and sandwiches.”

We are Coca-Cola and so much more, offering the preferred categories and leading brands that have added the most dollar value growth to the industry of any company across the total store.* To learn more about driving your sales and proﬁt growth, contact your Coca-Cola representative, call 1-800-241-COKE, or visit www.ccrrc.org

FRESH FOOD

Seasonal Produce

Fall Up GE T SHOPPERS E XCITED ABOUT THE BOUNT Y OF THE SE ASON’S FRUITS AND VEGGIES. By D. Gail Fleenor

utumn is the time of year when most green plants turn brown, and the air can be too nippy to linger outside, depending on where you live. However, it’s also a time of holidays, and not just the big ones like Halloween and Thanksgiving. There are holiday opportunities to promote and sell fall produce from September to November. This year seems to be the year of the color purple, with purple cauliflower, asparagus and sweet potatoes set to brighten the Thanksgiving table. Plan displays, festivals and samplings to help your customers enjoy fall produce for each holiday and the times in between.

Celebrate Fall

As fall is the time to “get back to business” and prepare for holidays and winter, how do supermarkets draw customer interest to the tastes of fall produce? “Many departments will remerchandise so the first thing you see is a massive display of fresh apples and complementary items,” says Maria Brous, director of media and community relations for Lakeland, Fla.-based Publix Super Markets. “We work with our Aprons team to pair items such as cubed butternut squash and spirals in recipes featured during the fall. Our floral departments will have many bouquets transition into seasonal colors.” Publix’s weekly ad will features apples, hard squash and pumpkins, along with mums, cinnamon brooms, candy apples and cider. Coborn’s Inc., based in St. Cloud, Minn., has a dietitian team that works with local schools to promote in-season produce. All age groups participate in fruit and veggie taste testing of both common and more unique

progressivegrocer.com

Key Takeaways Plan events throughout the fall season for families, and consider the demographics of the area your store serves when planning fall holidays. There’s no better time to sprinkle recipes throughout the produce department than when customers leave the barbecue and head back to the kitchen; also, cornstalks and hay bales used as seasonal decorations can be attractive, but a wide array of colorful new or unusual fruits and vegetables can encourage autumn feasts. New fruits and vegetables should be displayed with information for customers, which is available through wholesalers and suppliers, and will result in greater fall sales.

Asian Butterscotch Pears and rambutan can bring color and taste to the table.

seasonal produce. These have proved highly popular with kids and their parents, according to Bridget Winkelman, Farmers Market and floral manager at Coborn’s. Autumn in particular can be an exciting time in produce, featuring rarely seen fruits and vegetables and old favorites alike. “Fall is about quince, persimmons, pomegranates, variety pears and apples,” says Robert Schueller, director of public relations at Melissa’s/World Variety Produce, in Los Angeles. “On the veggie side, there are new-crop potatoes and onions, and winter squash season.” New fall produce items this year at Melissa’s include Fioretto or Flowering Cauliflower, Colorful Sugar Snap Peas, Cinnamon Spice Clean Snax, Butterscotch Pears, Green Dragon Apples and Purple Brussels Sprouts. Cinnamon Spice Clean Snax is the 10th variety of a limited-ingredient product line introduced by Melissa’s — a line that especially appeals to Millennials and Gen Z. Frieda’s Specialty Produce, based in Los Alamitos, Calif., will feature Stokes purple sweet potatoes, colored cauliflower, Meyer lemons, shallots, Cipolline onions and fresh ginger this fall, according to Alex Berkley, sales manager.

Survey Says

In a 2019 survey conducted for Frieda’s in partnership with Chicago-based C+R Research, 66 percent of consumers said that they would “trade up” for unique ingredients when entertaining, especially during the holidays, and 69 percent of consumers said that it would be worth it to splurge on better ingredients during the holidays. “Interestingly, 60 percent of consumers said that they are more likely than in the past to include at least one plant-based main dish on their holiday table, so we predict that items like whole roasted colored cauliflower will take off,” Berkley says. Further, 72 percent of surveyed shoppers said that they’re most likely to use fresh ginger instead of ground ginger, and 63 percent responded that they’re most likely to use shallots instead of onions, while more than half of consumers said that they’d be likely to trade up to Stokes purple sweet potatoes from traditional sweet potatoes, which “fits nicely with the factoid that 64 percent of consumers said they want to include more colorful dishes on their holiday table this year,” Berkley notes. Trends for fall produce can vary widely based on geographic region, according to Andrew Moberly, director of category solu-

tions at Stamford, Conn.-based Daymon. For this fall, longer-growth-cycle crops are just being harvested and long-ignored items are regaining popularity, such as parsnips, kohlrabi, sunchokes and squashes. “The real win is introducing these items to customers with a cooking technique — nontraditional or traditional — as many of these items are unfamiliar to shoppers like Millennials,” Moberly notes. Another growing trend is to consider produce that is meat-substitute friendly, as more consumers are cooking meals without a traditional protein in stews and braises. S-G-S Produce recommends keeping variety high during the fall season. “Offering a variety of hard squashes in the same area gives customers a glimpse of how beautiful their table or mantel can be,” says Talia Shandler, VP at Los Angeles-based S-G-S. Offering usage suggestions for the Castilla and pumpkin squashes gives customers more incentive to buy multiple types of squashes along with other produce, justifying a more expensive purchase, she notes. While squash and exotics are fun for the holidays, colorful apples are a fall staple and can’t be overlooked for the season, Shandler warns, and the fruit’s new varieties make for a colorful and attractive produce department. “Featuring a new variety of apple each week keeps it fresh and consumers increasing their purchases,” she observes. “While apples are traditional, we also see exotic fruit as being great to use for [decorations] and then transition to eating.” For instance, Shandler notes that green and gold Italian kiwi fruits, which reach their peak during fall, are “as sweet as can be.” PROGRESSIVE GROCER July 2019

FRESH FOOD

Seasonal Produce

A Calendar of Fall Produce There are as many holidays during fall as in summer, including that blockbuster occasion, Thanksgiving. Follow this calendar of holidays and fall produce to harvest more sales:

parsnips, horseradish, celery root, and kohlrabi, in addition to several types of squash. Displays and signage pointing out the important produce elements of Rosh Hashanah can be helpful to customers.

Labor Day: Sept. 2, 2019

Labor Day? Sure, it’s a holiday, but how does fall produce fit into this day of leisure? Actually, fall produce and barbecues are a perfect combination. Many consumers plan barbecues and picnics for Labor Day. Almost any vegetable or fruit can be grilled, from corn to asparagus, cauliflower to Brussels sprouts, zucchini to potatoes. Just use your imagination and pick some veggies. Hatch chile peppers, named for the original growing area in Hatch, N.M., are great when roasted and added to salads, soups, dips and sandwiches. Los Angelesbased Melissa’s/World Variety Produce even has a cookbook with recipes for this one pepper. Hatch peppers have mild to medium heat, making them the pepper to use in chile con queso, chile rellenos and chile verde. Try an in-store indoor or outdoor barbecue before Labor Day, using produce that will attract customer attention and purchases. Customers may be reluctant to buy dragon fruit or other new produce items, but they may love them if they sample them, so provide that impetus for them to purchase such items.

National Hispanic Heritage Month: Sept. 15-Oct. 15, 2019

When you stock up for National Hispanic Heritage Month, you may discover that Hispanic customers aren’t the only ones purchasing traditional Latino items. Specialty food companies offer a wide variety of dried chiles, tamales, guacamole and salsa kits, as well as such items as red Caribbean papaya, cactus pear, chayote squash and tatuma squash. This is a good time to have recipes available and sampling when possible. A mini festival during this heritage month can be an attraction for customers. Music, samples, decorations (for sale) and recipes can attract customers and lead to sales.

Rosh Hashanah: Sundown Sept. 30-Nightfall Oct. 1, 2019

The Jewish new year features many traditional foods that involve produce and can be highlighted in the department. Culinary traditions include eating lots of honey, apples, quince, pomegranates and other seasonal fruits to symbolize the year ahead. Vegetables for the festival include leeks and onions, potatoes and

progressivegrocer.com

Halloween: Oct. 31, 2019

Spooky television shows and movies are more popular than ever. Try a frightful produce end cap for Halloween, and scare up more sales. In 2018, 175 million people celebrated Halloween, spending $9 billion — a new record, according to the National Retail Federation Annual Survey. Spending per person was $86.79, another new record, the survey additionally found. Melissa’s has promoted “Freaky Fruit” for several years, using jackfruit, Buddha’s hand, dragon fruit and rambutan. Arranging the fruit to look like a cemetery with accompanying monsters is easy and draws customer attention and sales. Melissa’s website has directions near Halloween. “At S-G-S, we believe in zero waste and using everything first as decorations and then eating it,” says Talia Shandler, VP of the Los Angeles-based wholesale produce company S-G-S Produce, whose initials stand for Shapiro-Gilman-Shandler. “We call it ‘table-to-table.’” Halloween ideas for consumers that can be first displayed in the produce department include making a “kiwi creature,” and then cutting it up for a colorful treat; putting googly eyes on a dragon fruit, and then later slicing it into a cool cocktail salad; transforming a jackfruit into a monster, and then enjoying it either raw or cooked; and fashioning rambutan into creepy dragon eyes for parties.

Thanksgiving: Nov. 28, 2019

Turkey Day comes later in the year, expanding the sales period, but also demanding that produce departments stay fresh, full and inviting to customers for a longer time frame. This year, pre-sliced, chopped and measured produce items

should be even more popular, given the number of them available. Fresh herbs will spike in sales this year, according to Melissa’s Schueller. While some customers will want small packets of fresh herbs, others will want larger sizes such as those offered by Melissa’s Spice Grinders. The company offers peeled and steamed chestnuts, and also butternut squash. Shallots, boiler onions and pearl onions will be popular, with organic green beans and baby Dutch yellow potatoes rounding out the list. As consumers become more aware of recycling, S-G-S Produce has ideas for using fruits and vegetables first as Thanksgiving decorations and then for consumption. For the festive table, centerpieces of hard squash are decorative and reduce the need for temporary paper decorations. “The tan Castilla squash, also called Fairytale pumpkin squash, along with its cousins, the blue Jarrahdale pumpkin squash and the orange Cinderella squash, make the prefect trifecta for the dinner table,” Shandler observes. After the holiday, Castilla squash can be baked or candied for a sweet healthy treat, or any of the three can be roasted or added to soups or stews. Pre-decorated pumpkins are all the rage, she also notes, and can be decorated with painted faces or a stenciled message of welcome, resulting in great table centerpieces. The upshot is that fall holidays can be fun, with produce varieties ranging from traditional orange pumpkins to purple sweet potatoes, the latter of which would be the key ingredient in an eye-catching seasonal pie.

REFRIGERATED & FROZEN FOODS

Dairy

Cheese’s Big Moment RE TAILERS CAN HELP CUSTOMERS DISCOVER THE MANY VARIE TIES AND FL AVORS THAT CAN BE FOUND IN THE CATEGORY. By Kat Martin

he heyday of plain old cheese and crackers is long gone. While many consumers still embrace this popular combination, the game has been upped significantly. As consumers have become more willing to experiment with food, what they look for in cheese has changed accordingly. “A desire to be a little more experimental and adventurous in flavors is driving artisanal cheese as well, because of unique flavor profiles out there, but also variations of cheese,” says Jim Low, EVP of marketing and sales for Fairfield, N.J.-based Schuman Cheese. That means more interest in products like rubbed fontinas or the company’s Copper Kettle, a unique Parmesan-style cheese. “Those unique flavors are appealing to people’s desire to experiment and find something new.” At Oliver’s Market, which operates four stores in Sonoma County, Calif., customers tend to be highly knowledgeable about food, and cheese is no exception. Its customers are “leaning towards grass-fed milk or raw milk, organic, those kinds of things,” affirms Emily O’Connor, gourmet cheese coordinator for the independent grocer.

Key Takeaways Consumers’ increasing willingness to take an experimental approach to food holds true for cheese, resulting in more shopper interest in artisanal varieties that are grassfed, organic or made with raw milk, among other attributes. Education, messaging and engaging backstories help sell such cheeses at retail, along with dispelling any intimidation shoppers might feel about purchasing unfamiliar cheese varieties. Upcoming trends include greater convenience in forms and packaging, providing more usage occasions and ideas, stressing the authenticity of products, and creating greater accessibility to a wider range of cheeses.

PROGRESSIVE GROCER July 2019

REFRIGERATED & FROZEN FOODS

Dairy

The raw-milk trend is driven largely by health concerns, she notes. Customers tend to like raw milk if they’re trying to go gluten-free or need a cheese that’s easier to digest. Milk from Jersey cows (the brown ones) also tends to be popular for that reason, as Jersey cows produce A2 milk, which is claimed to be easier to digest or cause fewer issues than A1 milk, primarily produced by Holstein cows (the spotted ones). Raw milk has strict federal regulations surrounding its production and importation, and sometimes can have a bad rap, O’Connor acknowledges. Those regulations have also led to some European cheeses disappearing from U.S. shelves, however, as producers haven’t wanted to pay for the FDA-required testing to enable raw-milk cheese to be imported. Oliver’s Market has several local producers that have learned how to properly age their raw-milk cheeses to help fill the demand. Interestingly, “there are a lot of raw-milk cheeses that we eat every day that a lot of people might not realize are raw,” O’Connor explains. “Gruyere is an AOC-protected [appellation d’origine controlee, or protected designation of origin] cheese and needs to be made from raw milk. Same with Parmigiano-Reggiano — always made with raw milk. It’s funny that you don’t even realize that you’re consuming these raw-milk cheeses.”

ONE OF THE

BEST CHEESES IN THE WORLD

Oliver’s Market serves a customer that typically is very knowledgeable about food, so its cheesemongers can experiment with the varieties available.

Importance of Messaging

This is where education and messaging can play a big role. At The International Dairy Deli Bakery Association’s (IDDBA) recent trade show, the What’s In-store Live installation (formerly Show & Sell Center) focused in large part on messaging and how consumers can use cheese while also giving direction and providing education to consumers, according to Eric Richard, industry relations coordinator for the Madison, Wis.-based trade association. An example at the show was calling out cheeses that are high in protein, such as gouda, provolone and gruyere, as consumers are looking to beef up their protein consumption right now. Retailers themselves also need to know more about cheeses as consumers become more interested in the foods they’re consuming, and often look to retailers for more information. “Customers are being more mindful about products as a whole,” Low says. “[There’s a] desire to understand a little bit more about where products are coming from and what their ingredients are. For that, artisan cheese — essentially, cheese as a whole — is really well positioned because it’s inherently a natural product with good things in it.”

HANDCRAFTED. FARMSTEAD. SUSTAINABLE. AWARD WINNING CRAVE BROTHERS MARINATED FRESH MOZZARELLA

CRAVECHEESE.COM

progressivegrocer.com

What’s the Story?

Like almost every other product, customers want to know the “story” behind the cheese they buy. Transparency on how the product is made and knowing the backstory are becoming increasingly important to customers. “When you take a

unique color and flavor profile. “That’s the kind of thing we would tell a retailer, and we would want to make sure that Obscure cheeses from the monger knew that they could pass obscure places are becoming more [that information] on.” and more fun for us to find. The While educating customers is important, it’s equally important to know your custommore fun the mongers have with it, er. Oliver’s Market, due to its location in the more they will pass that along Sonoma County, has an extremely well-edto our customers.” ucated foodie customer base to begin —Emily O’Connor, Oliver’s Market with, and its cheesemongers, many with 30 years-plus of experience, know what their customers are looking for and that piece of cheese home, or you take it to a friend’s house, and you they can be more experimental than in other regions. sit down and open it up, sure, you could just eat that piece of “Sometimes, we will bring in a really obscure cheese cheese and drink your wine and talk about whatever happened that is astronomically priced, and we will take almost that day,” O’Connor says. “But if you can have that little story to no margin on it, just so we can give the experience and share, it just enriches the experience.” share the experience with our customer,” O’Connor Low agrees that ensuring people understand what’s special says. “We have regular customers that we save special about a cheese is important. For example, he notes that Cello varieties for, because we know they get so excited.” Copper Kettle cheese is the only parmesan-style cheese proSchuman Cheese also knows that its core customers duced in commercial quantities out of copper kettles in the tend to be food-aware people, Low notes. “They tend United States. The manufacturing process is what gives it its to be really creative in terms of their culinary outlook,”

*The absence of lactose is a natural consequence of the traditional Grana Padano production process. It contains less than 10 mg/100 g of galactose.

A TASTE OF ITALIAN HISTORY.

GRANA PADANO, THE WORLD’S BEST-SELLING PDO CHEESE. A Grana Padano wheel of cheese speaks for itself. It tells us to enjoy life, to embrace a delicate and delicious flavor and to celebrate age-old Italian traditions. Intrinsically linked to the climate, culture and people of Northern Italy, Grana Padano reminds us that life has a wonderful taste. PDO: Protected Designation of Origin

PROUD FRIEND OF

ITALIAN EXCELLENCE

PROGRESSIVE GROCER July 2019 1440GE9_184,150x123,825-ProgressiveGroucer-GP-USA@1.indd 1

18/06/19 16:33

REFRIGERATED & FROZEN FOODS

Dairy

he observes. “They are a little bit more adventurous, they tend to lead, or they’re creative in the sense that they’re storytellers and they want to share a wonderful story about what food they’re sharing with their family and friends.”

Upcoming Trends

As for where cheese is heading in the future, Low sees several trends that retailers will need to address. First is convenience. That includes both making cheese available in the most convenient form for consumers, such as having it already cut into whatever shapes they need, but also providing usage occasions and ideas. For instance, keep customers interested in the department by rotating new flavors into the department and telling consumers what they can do with them. Going a step further, Issaquah, Wash.-based Costco has introduced its private label Kirkland Cheese Flight, which packages five wedges of a variety of cheeses together, with the packaging providing a brief description of each variety, as well as suggesting wine pairings for each. Some new flavors or varieties that might garner some attention could be small-production alpine styles, O’Connor adds, which are receiving increasing attention at Oliver’s Market. “Obscure cheeses from obscure places are becoming more and more fun for us to find,” she notes. “The more fun the mongers have with it, the more they will pass that along to our customers.” Another trend will be continued authenticity. “Specialty cheese has a great backstory as well as great product attributes like flavor, color and texture,” Low says. “Make that more accessible to people, as more and more people are interested in specialty

cheese. It’s our job to make the whole cheese area more inviting and more welcoming to people who appreciate the stories and the great cheese that’s there that’s so different from what you can find in other parts of the store.”

Remove the Mystique

Specialty cheese can be intimidating to some consumers, so it’s up to retailers to remove that mystique from the department. Producers like Schuman can help. For example, the company recently introduced Chisels, which offers convenient bite-size cheese pieces, but also introduces customers to the idea that “fancy” cheese doesn’t have to be for a special occasion. “The idea that you don’t have to reserve this amazing cheese for anything other than an ordinary occasion is a great thing for the case and a great thing for people who love good food,” Low notes. “Food is a way that I can participate in the good life,” he continues. “Not all of us can go on really expensive vacations or buy amazing cars, but the vast majority of us can afford that little treat that’s involved in buying a special piece of cheese. Because even though it may be expensive relative to other things or other types of cheese, it’s not, in an absolute sense, expensive. It’s accessible to a lot of the people. If you have price points that are within reach of most people to treat themselves, the only barrier you have is making it more welcoming and broadening the number of occasions. That’s a lot of opportunity for people who love cheese and want people to enjoy it.”

Cheese Boards Made Easy Cheese boards have boomed in popularity, but they can be daunting for customers to put together on their own. The International Dairy Deli Bakery Association’s (IDDBA) What’s In-store Live installation at its recent trade show in Orlando, Fla., offered a few ideas for retailers to help customers create perfectly paired cheese boards. The first, and easiest for the customers, is to prepare cheese boards (including the board) with a variety of cheeses, charcuterie, nuts, olives, fruits and breads/crackers already paired and packaged for easy grab-and-go convenience. You can offer a variety of price points, from the type of board used to the products packaged on it, to meet all levels of customers. (Producers also are getting into this game, which makes it even easier for retailers to offer that perfectly paired board.)

progressivegrocer.com

For customers who want a more hands-on approach, but still need a little guidance, you can create a build-yourown-board display. The display is created to be as easy as 1-2-3. Further, the customer can be guided through the experience by the cheesemonger, or not. (The display can be stocked so that all offerings on it pair well with each other, no matter what combinations the customer chooses.) To begin, the customer chooses the board in the style and price she wants. Then the journey begins. First, the customer chooses three cheeses, then she chooses three accompaniments like nuts or fruit, and finally, she chooses one meat. The display is also a perfect place to merchandise all of the other accoutrements, like cheese knives or even wine, that a customer may need to properly serve the products on the board.

EQUIPMENT & DESIGN

Store Design

Designing Change RE TAILERS AND STORE DESIGNERS ALIKE ARE RESPONDING TO NE W AND DIFFERENT ASPECTS OF FOOD MARKE TING. By Bob Ingram

he architect Louis Sullivan coined the well-known expression “form follows function,” and today’s supermarkets are a reflection of this mantra, albeit with the caveat that if the architecture dictates how the business actually operates, it runs the risks of inflexibility and an inability to adapt to change. Bradley Anderson, owner and operator of Anderson’s Market, in Glenn Arbor, Mich., says of a complete store remodel in 2014, “We began by tailoring the layout toward functionality, with an eye on each department being its own profit center, giving it individuality as well as flow.” According to Anderson, the remodel was designed to provide better customer interaction through lower-profile merchandising and open-air employee work areas. “An emphasis was put on lighting, with a centerpiece skylight to allow natural sunlight to flood customer gathering areas,” he explains. “We also added a ‘Michigan Made’ section next to our deli to showcase our in-state products.” Anderson collaborated with design professionals and used trade magazines like Progressive Grocer to help spot trends and make

The design of Metcalfe’s Market, in Wauwatosa, Wis., by Mehmert Store Services reinforces the shopping experience.

Key Takeaways When it comes to designing grocery stores, operators are increasingly following the mantra of “form follows function,” while at the same time endeavoring to remain flexible and adaptable. Companies are providing an increasing array of services to accommodate retailers in a onestop design experience. The future of store design is customization, which includes a blurring of the lines between physical and digital environments.

PROGRESSIVE GROCER July 2019

EQUIPMENT & DESIGN

Store Design

Photos by Michael O’Neill

things more efficient for both customers and employees. Eric White, director of marketing at Reading, Pa.based Redner’s Markets Inc., observes that a recent conversion of an existing Warehouse Market into a new-concept Redner’s Fresh Market involved changes to interior design and décor, outdoor facia updates, new branding, and a refreshed color palette, as well as merchandising updates and the moving of departments. The project was a collaboration between the Redner’s design team and the outside design firm L&H Cos., also based in Reading, as well as Eden Prairie, Minn.-based wholesaler Supervalu. “Our process is to involve operations to determine any additions to our model — operational and physical — and work on the layout with our construction and design firm,” White says.

Redner’s Markets Inc. partnered with a design firm and wholesaler Supervalu on the look of the regional chain’s stores.

Service Stars

On the designer side, companies are providing an increasing array of services to accommodate retailers in a one-stop design experience. Food Market Designs, in Langley, Va., provides a multitude of design services, among them store planning for retail grocery, foodservice, commercial kitchen and specialty applications, as well as fixture drawings,

progressivegrocer.com

Mehmert Store Services lets clients like Niemann’s Family Market in St. Clair, Mich., see the store concept before it’s built.

equipment specifications, procurement, lighting design, working drawings, décor, refrigeration, project management and 3D renderings. “We have recently upgraded our 3D-rendering software and equipment,” says Dan Phillips, president of Food Market Designs. “Our projects are located all over the United States, so having an accurate visual representation of a proposed interior concept is vital for the end user’s decision-making process.” His company’s lighting designs have been the most impactful, Phillips says: “We helped develop a linear LED fixture for gondola runs that has completely changed the feel of aisle shopping.” In the store design future, Phillips believes that the checkout-free Amazon Go concept is “extremely intriguing and could be a standard in the future of grocery. Labor and shrink are the biggest killers in grocery operations, so anything that can tackle reducing those percentages would only benefit the bottom line of an already small profit margin.” Brad Knab, co-owner of Pewaukee, Wis.-based Mehmert Store Services, notes that his company has recently added 3D modeling and animation, which “enable our designs to come to life and communicate our clients’ vision graphically, so they can see it before they build it.” Mehmert — which offers complete store design services, including site planning, store programming and fixture planning, as well as interior design and branding, exterior design, and composition — is customer-focused, meaning the shopper, Knab declares, adding that job No. 1 is reinforcing or changing the shopper’s experience. “We can design cool new departments, suggest fresh offerings in stunning cases, or create a dynamic flow to help drive sales or attract new customers, but it really comes down to how the customer reacts to it,” he says. “Our focus is on the independent, and every independent’s store out there naturally has a demographic and a character. Most importantly, we understand that one innovation to one retailer might not be as successful to another.”

Photo by Fo o d Ma r ket D e signs /A nthony Pro duc tions

Future Form and Function

Regarding the future, Knab says that there are physical innovations that are creating disconnections from human contact and driving store design, at least at the front end and on the sidewalk. For example, click-and-collect and curbside pickup: What can be different? “It comes down to customer service or no customer service,” Knab says. “It’s a thin line. Some shoppers don’t want the attention. But for many customers, service is what sets the experience apart. Thus the design trinity: adaptation, versatility and flexibility. Future store design needs to be ahead of the client and customers.” According to Wess Luke, principal at Cuhaci & Peterson Architects, Engineers and Planners’ Philadelphia office, the firm’s most recent design service addition is that it’s almost exclusively employing laser-scanning technology for existingconditions surveys. “The price point for this service has gone down enough that it fits within most budgets, and our clients see the value it provides to the overall project,” Luke says of the laser-scanning technology. Orlando, Fla.-based Cuhaci & Peterson already provides a full menu of architectural and engineering design services, from hand-drawn sketches to photorealistic 3D renderings, along with programming, space planning, store planning, interior design, and fire alarm and fire protection. Luke notes that two recent hot topics are working with clients to adapt stores to handle pickup of online orders, and the reduction of sales floor area to accommodate on-site fulfillment — micro-fulfillment — and other omnichannel capabilities. “It’s clear that the industry hasn’t settled on a best practice yet, as each client is integrating these concepts differently,” he adds. Another design innovation he’s observed is in energy efficiency and recycling. Cuhaci & Peterson’s clients are instituting programs to collect waste from stores using the same infrastructure as product distribution, and collecting non-landfill waste from stores at the same frequency as product delivery has enabled his company to reduce the area in retail locations dedicated to handling or storing waste, both exterior and interior. “We are also seeing increased interest in other energy-efficient options, such as site lighting with integrated solar panels,” Luke adds. “The future of store design is customization,” he asserts. “Store design will be more kit-of-parts, focused and regional. As enterprises understand their consumers on a more personal level, we will see the overall customer experience being tailored to a degree not yet realized. The digital experience obviously further augments customization. As designers, our challenge will be to blur the lines between physical and digital environments and truly partner with our clients to achieve business outcomes. Gathering and sharing data from multiple sources will be key to fine-tuning this process.” Thus, different forms and different functions herald change — design change.

Food Market Designs has recently developed a linear LED fixture for grocery stores.

WE MAKE YOUR

BUNS LOOK

GOOD

DESIGN | PRODUCTION | PROJECT MANAGEMENT | INSTALLATION

ALL UNDER ONE ROOF 610.965.9400 • sales@precisepa.com

precisedesigngroup.com PROGRESSIVE GROCER July 2019

Premium Purchases MORE AND MORE, CONSUMERS ARE DECIDING THAT FIDO AND FLUFF Y DESERVE THE VERY BEST. By Princess Jones Curtis

e spend more of our lives enjoying the discomfort of harmful blue light slowly burning our retinas than we do looking into the eyes of other human beings,” says Travis Day, founder and CEO of Bingin Dog. Named for Day’s favorite beach in Bali, the Tualatin, Ore.-based brand offers ultra-soft and durable premium neoprene dog accessories incorporating surf style. “Dogs provide us with relief in the form of companionship and more human interaction,” Day continues. “Dogs aren’t shy; they aren’t worried about judgment or rejection; they greet everyone with excitement and the possibility of being best friends. In our new age of keeping to ourselves, dogs give us permission to get back to our roots, let down our guard and say the hardest thing for so many people: ‘Hi.’” It’s not just dogs carrying the load: Animals have been shown to be a great source of emotional support. Interacting with pets has been shown to decrease stress and lower blood pressure. Research carried out by the National Institutes of Health (NIH) in partnership with the Mars Corp.’s Waltham Centre for Pet Nutrition (https://newsinhealth. nih.gov/2018/02/power-pets) has found that animals can reduce the overall feeling of loneliness, as well as boost mood. From autism to ADHD to diabetes, there are studies to support the idea that caring for an animal can have positive effects on many human health conditions. As a result, grateful humans want to give back to their pet companions.

Buying Better

Pet owners wanting the best for their companions isn’t anything new, as David Hoper, owner of Dia’s Market & Deli, a neighborhood specialty grocery store and deli in Austin, Texas, knows well. Dia’s curates its products, from wine and cheese to trail mix and vegan snacks. It makes a lot of its own products, including granola, pesto

progressivegrocer.com

Key Takeaways Caring for an animal can have beneficial effects on many human health conditions, inspiring grateful humans to give back to their faithful pet companions. As a result, pets have become part of the family, with their human “parents” treating them and spending on them accordingly. Stocking and prominently merchandising premium pet products in this quickly evolving segment is a win for both the retailer and the consumer; pricing and consumer education are also key considerations.

Wet Cat Food Refreshes the Category Q&A Q &A with Joee Toscano, Vice President, P dent, Trade and Industry Development, Purina

Progressive Grocer: Is wet cat food experiencing a sort of “resurgence” today? If so, to what do you attribute its current popularity? Joe Toscano: Yes, our sales data and research indicate that wet cat food is on the rise. In fact, 62 percent of the 45 million cat food buyers have added wet cat food to their regular shopping lists. We attribute this increase in popularity to two key factors. First off, parents are learning about the health benefits of feeding cats wet food, as it ensures the cat is well hydrated and also provides highquality protein to support lean muscles. Second, cats naturally crave a range of flavors and textures, many of which are closer to how their ancestors ate in nature. In order to share all the benefits of feeding wet cat food, we recently launched

a new online resource for cat owners on Purina.com. PG: Why is it important for grocery retailers to dedicate space to the wet cat food category? JT: Wet cat food is currently the third fastest growing segment within the pet food category, and it’s expected to grow nearly 7 percent over each of the next three years. What’s more, sales tend to be incremental, with 54 percent of shoppers purchasing both dry and wet cat food (1). Wet cat households also make 12.6 trips and spend an average of $105 on wet cat food over the course of the year. That’s compared to 6.5 trips and $82 spent per year by dry cat food shoppers (2). With the increased consumer awareness around the benefits of wet cat food, and the strong bond between owners and their variety-seeking companions, the wet cat food market is primed for growth over the next several years. PG: How important is variety when it comes to wet cat food, and how should that factor into a grocer’s inventory decisions? JT: Because cats instinctually crave variety in their diets, cat owners tend to be drawn to S P O N S O R E D CO N TE N T

a variety of inventory when they shop. This is actually the top consideration when wet cat food shoppers choose a retailer, with one in five shoppers leaving the store if their retailer doesn’t offer the variety they are looking for (3). Wet cat food shoppers are not only looking for variety of flavors and forms, but also package size and price tiers. Currently, many wet cat food sections are only eight feet. Expanding to 12 feet allows retailers to dramatically increase their assortment and sheer presence in wet cat. PG: What should these retailers consider when deciding the kind and amount of wet cat food to carry in-store? And how should they merchandise their wet cat food offerings to boost sales? JT: Forty-six percent of wet cat feeders reported feeling that they wish they could feed more wet food to their cats more often. That considered, retailers can encourage increased purchase through ongoing promotion on larger wet cat variety packs and also higher multiples pricing—10 or 20 count, for example. The larger the multiple, the higher potential purchase from your shoppers. Sales of larger variety packs in multiples of 32 or 40 count are up 3.6 percent and driving growth in the segment. Variety packs and multiples pricing drive more units per trip and ultimately move more units per year. Retailers can also emphasize new opportunities for cat owners to feed wet. Feeding wet cat food is not only good for cats, but it allows owners to connect with their pets. There is a new trend towards wet cat complements and treats, like Fancy Feast Broths and Purely Fancy Feast Filets, which provide new feeding occasions for cats and the people who love them. Consider featuring these products on an endcap as a basket builder. (1) Nielsen Purchase Behavior Summary Q3 2016 52 wks ending 10/8/16 (2) Nielsen Homescan Panel Data 52 weeks ending 12/30/17 (3) Cat QFD 2017 and Walk Rates Research 2018

Over 75 percent of pet parents see their pet as part of the family, and 50 percent see their pet as their child. We’re seeing that translate into the food people are feeding their pets.” —Jake Trainor, Freshpet and rotisserie chickens. And it carries only all-natural pet foods and treats. “It’s been a trend for about 20 years that pets are considered more a part of the household,” Hoper observes. “The Baby Boomers are becoming empty nesters now and need [company], and the younger generation of couples are opting for a ‘fur baby’ instead of a baby to begin their families,” he continues. “Naturally, there are more services, food options and insurance to help your pet live a healthier and longer life.” For many, this means seeking out premium pet products that are better for their pets and better quality in general. “Pets really have become part of the family, and we’re treating and spending on them in that way,” agrees Jake Trainor, director of marketing at Secaucus, N.J.-based Freshpet, which created the fresh/ refrigerated pet food segment in the United States back in 2006. The company’s co-founders saw a big shift taking place in the way that consumers were feeding themselves and their families — fresher, less processed, healthy food — but nothing had fundamentally changed in pet food in the last 50 years. Freshpet’s products start with using the freshest ingredients and only high-quality U.S. farm-raised poultry, beef and fish. “Over 75 percent of pet parents see their pet as part of the

family, and 50 percent see their pet as their child,” asserts Trainor. “We’re seeing that translate into the food people are feeding [their pets,] and Freshpet is gaining loyal fans every day.”

Defining Premium

The term “premium,” like many things, is subjective. For many, it’s the combination of quality and a differentiating factor that causes it to stand alone, above the competition. “For ages, innovation in the pet industry has been slapping a new color on the same old piece of nylon,” explains Day, of Bingin Dog. He goes on to tick off the signs that denote a premium pet product: “The material being used is of higher quality than your standard nylon. Every detail is taken into consideration, from stitching to the way the product is packaged. Continuity in branding and a clear representation of what the company stands for. The product is unique in its style, comfort and functionality. You are proud of your purchase and want to show off the product!” For food products, it can be slightly different. Freshpet’s Trainor believes that premium pet food can attract a wide variety of consumers as long as they have one thing in common: “Anyone that sees their pet as part of their family and wants to feed or treat them in that way would fit in the premium consideration set.” He adds: “For us, a premium product isn’t just about using natural ingredients. Premium is about giving your pet food that is as close as possible to a home-cooked meal, using whole, real ingredients you can see, that are cooked or steamed so the end product looks, smells and tastes as close as possible

Wegmans Now Offers Portland Pet Food Co. Portland Pet Food Company (PPFC), a Portland, Ore.-based natural pet nutrition manufacturer, of human-grade dog meals and treats will now be available on the East Coast in all Wegmans Food Markets stores. All 99 of the Rochester, N.Y.-based grocer’s locations New York, Pennsylvania, New Jersey, Maryland, Massachusetts and Virginia will carry PPFC’s Rosie’s Beef N’ Rice (wheatand gluten-free) and Hopkin’s Pork N’ Potato (grain-, wheat- and gluten-free) meal pouches. “With the addition of Wegmans, our East Coast expansion follows the same pattern that defined our West Coast growth,” says Kate McCarron, PPFC’s “top dog.” “Our market footprint has

progressivegrocer.com

grown dramatically in the natural grocery segment of retail food sales. We are in West Coast stores from Seattle to San Diego, including Whole Foods NW, New Seasons Market, Market of Choice, Zupans, Metropolitan Markets, PCC Markets, Gelson’s and Bristol Farms, to name a few. Further contracts in the East, South, Southeast,

Mid-South, Midwest and Northern California are coming this year.” In response to the rising need for simple, clean-label products for pets, PPFC is the first pet food company to use 100 percent human-grade USDA meats and ingredients in its products, which are all sourced and prepared in the United States. The company’s presence in highend natural grocery stores and pet specialty stores has placed PPFC products in major metropolitan regions where its target customers — millennials and baby boomers — live. Additionally, 5 percent of all PPFC sales are donated to nonprofits that support animals. www.portlandpetfoodcompany.com

Fresh from the Kitchen is one of Freshpet’s bestselling premium products, offering a pet meal similar to something owners might prepare for their furry friends.

to something you’d make in your own kitchen.” One of Freshpet’s best-selling premium products is Fresh from the Kitchen. “We hear from pet parents that this product is the next best thing to a home-cooked meal for their dog,” notes Trainor. “We start with locally sourced fresh chicken, then shred and combine [it] with carrots, spinach and cranberries for a complete and balanced meal.” The brand has also just recently launched a Multi-Protein Roll and Multi-Protein Meal, both of which combine high-quality meats and vegetables.

POP displays to showcase our products in store,” he says. “The display tells our unique story; gives off our fun, beachy vibe; and gives customers an entire experience into what we do and why our products are superior.” Selection also plays a part in retailer success, explains Hoper, of Dia’s. “Having a nice variety of both cat and dog products [food and treats] is important,” he counsels. “Also make sure to have both dry and canned options for both. Pricing your items is important because of online ordering ease of use.” Simply having premium pet items on the shelves shows consumers that grocers care about the brands they offer. “It matches our philosophy and mission to provide a store with high-quality products in mind,” says Hoper. “This helps customers to know they can trust the brands we select for both them and their pets.”

Upselling and Merchandising

Day believes that stocking premium pet products is a win for both the retailer and the consumer. “When stocking premium products, retailers get to advertise fun and unique brands not available at your typical big-box store,” he observes. “Retailers get to educate buyers about the benefits of these products, showing they care about the health and well-being of each pet. Retailers get to be at the forefront of innovation and new industry trends.” He continues: “Consumers get more options. The pet industry continues to explode, and the selection of premium products and accessories is slow to catch up. Customers are dying for more options.” Grocers can sell more premium pet products through careful curation and presentation of premium brands. For Freshpet, the solution is a refrigerated display in the pet food section. The fridge serves to make the product stand out among all of the other ones that sit on the shelves. “The entire pet category has seen a consumer shift from value brands to premium and super-premium offerings as pet parents look to upgrade what they feed their pets,” notes Trainor. “Retailers are seeing larger baskets due to this trade-up, and consumers are seeing higher-quality offerings they can choose from for their pet.” He advises: “The biggest thing I’d recommend is for retailers to move fast. The category is evolving very quickly, and having unique offerings with shorter purchase cycles is key to continually bringing consumers back into their stores.” Day agrees that eye-catching displays can be highly effective in attracting buyers. “We’ve had huge success providing PROGRESSIVE GROCER July 2019

EDITORS’ PICKS

Food, Beverage & Nonfood Products

Better Beginnings

Pour it On

Having launched better-for-you pancakes and waffles, Birch Benders has now come out with the perfect accompaniment: a first-to-market line of Paleo- and keto-friendly Magic Syrups sweetened with monk fruit. Available in three varieties — Classic Maple, Maple Bourbon and Mind Body Maple — the syrups contain only up to 15 calories, 0 grams of sugar and 1 gram of net carbs per serving, with the Mind Body Maple variety also offering grass-fed collagen and MCT oil, which, according to the brand, is a first for the syrup category. The line retails for a suggested price range of $7.99-$8.99 per 13-fluid-ounce bottle. https://birchbenders.com/

Sargento Sunrise Balanced Breaks help consumers start the day right with nutritious sweetand-savory combinations of natural cheese, dried fruit and other healthful morning ingredients. The convenient items are suitable for a quick morning meal or pre-/post-workout snack. The line is available in the following varieties: Natural Double Cheddar Cheese, Vanilla Blueberry Quinoa Clusters with Other Natural Flavors and Blueberry Juice-Infused Dried Cranberries; Colby-Jack Natural Cheese, Coconut Clusters with Seed Medley and Dried Cranberries; Natural Medium Cheddar Cheese, Raisins and Maple Pumpkin Seeds with Other Natural Flavors; and Monterey Jack Natural Cheese, Walnut Oat Granola with Dark Chocolate and Golden Raisins. A 3-pack of any of the low-calorie, protein-rich varieties retails for a suggested $3.99. https://www.sargento.com/our-cheese/sunrise-balanced-breaks

Travel Well

Designed specifically for travelers, the WOLO WanderBar, the first product launched under the WOLO WanderSnacks brand, provides convenience without compromising nutritional benefits. Providing antioxidants to boost immunity, fiber to aid digestion and 15 grams of energy-producing protein, the 100 percent soy-and gluten-free bars have under 6 grams of sugar, aren’t covered in chocolate, and won’t crumble. Unique to the product line are its three layers: a crispy bottom layer, a velvety nougat-like consistency on the second and flavorful toppings on the third. The bars’ natural ingredients include coconut oil, zinc and turmeric, all known for their positive and effective health benefits. Available in vibrant packaging inspired by vintage travel posters, the line comes in the whimsically named Cocoa Crunch Frequent Flyer, Mint Chocolate Chip Lost Weekend, Peanut Butter Road Tripper, Lemon Cake Dessert Oasis, S’Mores Happy Camper and Salted Caramel Bon-Bon Voyage varieties. A 12-pack retails for a suggested $26.99 and a 6-pack goes for a suggested $14.99, while a single bar has a suggested retail price of $2.49. https://wolosnacks.com/

Pop Goes the Cake

Responding to the growing demand for its products and increased consumer interest in a wide variety of uniquely flavored baked goods, ready-to-eat bakery brand Café Valley has teamed with 7Up on bite-sized cakes featuring the taste of the iconic lemon-lime soda brand. Suitable as an onthe-go dessert or snack, the light, moist and tangy treats join a lineup of cakebite varieties incorporating the flavors of popular sodas. A 12-count package retails for a suggested price range of $3.99-4.99. www.cafevalley.com/

progressivegrocer.com

ADVERTISER INDEX

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

American Greetings Corporation

A16

Anchor Packaging

Biro Manufacturing

CANADIAN MARKETS • Convenience • Pharmacy • Foodservice

Campbell Soup Company

ADVERTIS ING SALES & BUSINES S STAFF

Consorzio Tutela Del Formaggio Grana Padano

Crave Brothers Farmstead Cheese, LLC

EXECUTIVE CHAIRMAN Alan Glass aglass@ensembleiq.com CHIEF EXECUTIVE OFFICER David Shanker dshanker@ensembleiq.com CHIEF OPERATING OFFICER Joel Hughes jhughes@ensembleiq.com

A19

Chobani A3 Clean Energy

Creekstone Farms Del Monte Fresh Produce NA Inc. General Mills Inc.

Inside Front Cover 3 17

Invatron 13

CHIEF COMMERCIAL OFFICER AND PRESIDENT RETAIL Jennifer Litterick jlitterick@ensembleiq.com

Iovate Health Sciences Int’l Inc.

PUBLISHER John Schrei 248-613-8672 jschrei@ensembleiq.com

Jones Natural Chews Co

Kellogg Company

SENIOR MARKETING MANAGER (NEW ENGLAND, SOUTHEAST) Maggie Kaeppel 708-565-5350 mkaeppel@ensembleiq.com

Jack Link’s Beef Jerky

33 9

Kimberly-Clark A13 Koelnmesse GMBH

SENIOR MARKETING MANAGER (CA, PACIFIC NORTHWEST) Judy Hayes 925-785-9665 jhayes@ensembleiq.com

Loomis 45

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

MillerCoors LLC

REGIONAL SALES MANAGER (SOUTHWEST) Tammy Rokowski 248-514-9500 trokowski@ensembleiq.com

Nestlé-Purina 85 New Hope Network

ADVERTISING MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com

Precise Design Group

MasonWays Indestructible Plastics

Naturipe Farms LLC

36 A5 Inside Back Cover

Quotient A20 Recor Group 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 $20, except selected special issues. Foreign single copy price $85, except selected special issues. Subscription: $125 a year; Canada $190 (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.

A10

Sandridge Food Corp

Saputo Cheese USA, Inc.

Sealed Air Corporation Shoptalk Supervalu Inc. The Clorox Company The Coca-Cola Company The J.M. Smucker Company Treasury Wine Estates Trion Industries

28-29 Back Cover 25 A15 73 27, A11 7 Insert 35

Tyson - Chairman’s Reserve Beef

Tyson Foods

Unilever North America

A17

USA Bouquet Company

44 PROGRESSIVE GROCER July 2019

TECH TALK

By Abby Kleckler

Let’s Start the Conversation THE CUSTOMER IS THE MOST IMPORTANT PART OF A RE TAILERS’ BUSINESS, AND I’M COMING TO YOU WITH A NE W CUSTOMER PERSPECTIVE AND A PASSION FOR RE TAIL TECHNOLOGY. ou may have already noticed that the name at the top of this column is not whom you’re used to reading. I started as the senior digital and technology editor for Progressive Grocer in May, and I wanted to take this opportunity for you to learn a little about me. When you open the page to Tech Talk or reach out to me, I hope you know a bit of what you’re getting. I am a Millennial — that broad but often highly loaded distinction for those born between 1981 and 1996 — and I live in a densely urban environment, downtown Chicago. My grocery shopping consists of multiple trips to a traditional store every week, looking at getting in and out as quickly as possible. I primarily split my shopping between Albertsons banner Jewel-Osco, Amazon-owned Whole Foods Market, Kroger banner Mariano’s, and a small specialty independent grocer, Potash Market. For me, it’s about convenience. I don’t have favorite stores — barring certain preferences when it comes to prepared foods — so it’s more about what’s on the way home from work or the gym, or what’s closest to my apartment. I’ve been covering retail in a different industry for the past seven years, and I’ve already seen some parallels. Amazon has everyone wondering what the digital giant, with an increasing presence in physical stores, is going to do next. Brick-and-mortar retail is elevating the shopper experience through in-store events and demonstrations, along with implementing technology to eliminate some friction and provide a more personalized experience. And now, more than ever before, customers are the driving factor behind all of these changes.

The Value Perception

At U.K.-based customer data science company Dunnhumby’s North America (N.A.) Partner Summit in June, N.A. President Jose Gomes emphasized a customer-first strategy to survive and thrive in the retail revolution. Three of his tips for being successful were to reduce friction, create value and lower costs. All three of these tips are very customer driven. There’s so much competition for customers’ stomachs that everything you do as a business needs to address one of these three areas, or customers could go elsewhere. “Elsewhere” is not just to a different grocery store, either — it could be restaurants, convenience stores, fast food, online grocery delivery, prepared meal kits, and more. In true Millennial fashion, I tried meal delivery service Blue Apron for a few weeks and thoroughly enjoyed it. The convenience factor was there, and the value was the ability 90

progressivegrocer.com

to try new foods in small quantities, but the price was a little high for me. I also tried Instacart delivery once. The costs seemed equivalent to in-store at Mariano’s, and the friction of driving or walking on a snowy day in Chicago was completely eliminated, but I realized I value choosing my groceries instead of having someone else do it. Both retailers and customers make tradeoffs on all three of these elements on a regular basis, though, and I would absolutely use either of these services again if the situation were right.

Adapting Technologies

I’m excited to dive more deeply into technology in the grocery space and how it’s solving many customer woes. Please reach out to me to introduce yourself, and I’m always open to talking tech trends. We’re seeing lots of new, exciting things already, such as cashierless and checkout-free stores, both in-store and warehouse robots, improved omnichannel shopping, and autonomous vehicles for grocery delivery. These are just some examples, and even these are in their infancy. They all, however, help to solve that trifecta of reducing friction, creating value and lowering costs. The technologies that are sure to take off are those that are advantageous for both the changing retailer and the changing consumer, and with those technologies, the possibilities are endless.

I’m excited to dive more deeply into technology in the grocery space and how it’s solving many customer woes.

Snacking Simplified Excellent source of calcium Packed with fiber and flavor

with s e h s i Nour protein

3.5 oz of fresh fruit

1 oz of nuts

1 oz of cheese

the perfectly portioned 5.5 oz snack under 400 calories

naturipesnacks.com snacks@naturipefarms.com