Progressive Grocer - October 2016

Page 1

2016 Retailer of the Year

Sewing the Threads of

SucceSS Page 32

October 2016 • Volume 95 Number 10 $10 •


Smithfield is always keeping an eye on consumer trends and innovating. We know your customers will love our new flavors. Total basket dollars double when the category leader is in the basket – stocking Smithfield Marinated Fresh Pork is the winning recipe you’ll want to get a taste of.1

©2016 Smithfield Farmland Sales Corp. All Rights Reserved.

Driving Marinated Category Growth

Growing Total Meat Department Sales

Increasing Total Basket Ring

For more information about Smithfield Marinated Fresh Pork, contact your Smithfield Sales Representative or email 1

IRI Total US 52 Weeks Ending 6/12/16

WE BUILD CONNECTIONS FOR GROWTH We live in an ever-changing world full of exciting possibilities where it’s important to build meaningful connections. At CROSSMARK, we passionately forge strong bonds on many levels. Whether it’s linking consumers to brands, or insights to ideas, these connections fuel growth for our valued clients and customers. As a trusted partner, we nurture these connections with a smart, inventive approach and talented people that make it personal. Our team builds genuine relationships every day through their spirit of collaboration and excellence.

Take A Closer Look At Our Approach

Retail Merchandising

• Product Selling and On-shelf Availability

• Shelf Planograms and Resets • Promotion Display Selling, Set-up, and POP Placement

• Pricing Audits and IRC

Headquarter Representation

• Customer Relationship Management

• Joint Business Planning • Category Management • Space Optimization • Administrative Services


Consumer Engagement

• Experiential Marketing • Hyper-local & Multicultural Marketing

• Street Teams & Brand Ambassadors

• Digital/Social Media Integration






1 Nielsen Homescan Premium, all Grocery Store Grocery with Mass Supers, 2015



Volume 95, Issue 10


PG’s Retailer of the Year

Sewing the Threads of Succcess

“It’s like we have a house that was built on these values, but we keep remodeling it. We can do that because the foundation is so good.” — Giant Eagle Inc. CEO Laura Karet

Photo by Charles LeClaire

80 / Category Management Fresh Thinking Smart merchandising can use the perimeter to boost center store.

99 / Baking Ingredients Baked Goodness In line with current demand, baking ingredients and even mixes mixe are cleaner than ever.

113 / Progressive Grocer’s Retail Produce & Floral Review

Fruitful Competition Grocers take a strategic approach to produce departments that speak volumes to their customers and their bottom lines.

132 / Produce

142 / General

Grocers expand nut and dried fruit offerings that appeal to health-minded consumers.

Best Sellers

Driven Nuts

138 / Guest Perspectives


To keep sales turning over, grocers must tailor publication assortment and placement.

Harnessing Connections to Move More Produce Industry, customers unite businesses to succeed.


104 / Progressive Grocer’s Grocerant Summit

Building an Experience

Conference offers best practices for supermarket prepared foods.

October 2016 | |




570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 224 632-8200 • SVP, Brand Director 201-855-7621

148 145 / Signage

Sending a Message Supermarket signage is becoming a versatile merchandising tool.

148 / E-commerce

Lessons Learned, Challenges Ahead Winners will provide convenience and outstanding service.

153 / Supply Chain


Jeff Friedman

EDITORIAL Editorial Director Joan Driggs 224-632-8211 Chief Content Editor Meg Major 724-453-3545 Editor-in-Chief James Dudlicek 224-632-8238 Managing Editor Bridget Goldschmidt 201-855-7603 Senior Editor Randy Hofbauer 224-632-8240 Senior Editor Katie Martin 224-632-8172 Senior Editor Anna Wolfe 207-773-1154 Technology Editor John Karolefski 440-582-1889 Art Director Bill Antkowiak Contributing Editors Bob Ingram, Jenny McTaggart, Barbara Sax and Jennifer Strailey ADVERTISING SALES & BUSINESS Associate Brand Director Janet Blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 Midwest Marketing Manager John Huff 224-632-8174 Eastern Marketing Manager Maggie Kaeppel 630-364-2150 • Mobile: 708-565-5350 Western Regional Marketing Manager Rick Neigher (CA, OR, WA) 818-597-9029 Northeast Marketing Manager Mike Shaw 201-855-7631 • Mobile: 201-281-9100 Account Executive/ Classified Advertising Terry Kanganis 201-855-7615 • Fax: 201-855-7373 Advertising/Production Manager Jackie Batson 224-632-8183 • Fax: 888-316-7987 Classified Production Manager Mary Beth Medley 856-809-0050

Playing by the Rules FSMA legislation, while daunting at first, is poised to sharpen the fragmented food supply chain.

8 / Editor’s Note: On Eagle’s Wings

26 / Guest Perspectives: Keeping it Simple

12 / PG Pulse

28 / NEW Horizons Common Truths

16 / Nielsen’s Shelf Stoppers/Spotlight Dairy/Eggs

20 / Mintel Global

New Products

Fruit and Vegetables

156 / What’s Next 158 / The Supplier Side 161 / The Last Word: Flying in Formation

22 / All’s Wellness: Whole-store Health Solutions


| Progressive Grocer | October 2016

EvEnts • MarkEting • Digital • rEsEarch • circulation VP/Custom Media Division Pierce Hollingsworth 224-632-8229 Production Manager Anngail Norris Corporate Marketing Director Bruce Hendrickson 224-632-8214 Promotion Director Robert Kuwada 201-855-7616 Director of Events Pat Benkner 973-607-1330 Director of Market Research Debra Chanil 201-855-7605 Audience Development Manager Shelly Patton 215-301-0593 List Rental The Information Refinery 800-529-9020 Brian Clotworthy Subscriber Services/Single-copy Purchases 978-671-0449 or email at CORPORATE OFFICERS Executive Chairman Alan Glass President & CEO Peter Hoyt Chief Customer Officer Ned Bardic Chief Digital Officer Joel Hughes Chief Operating Officer Korry Stagnito Chief Financial Officer Chris Stark

The Grocery Success Company


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Note By Jim Dudlicek

On Eagle’s Wings


ne of the key selling points of grocery store fresh prepared foods is that they offer a higher-quality, more wholesome meal option for working families, especially for those evening commuters who still don’t know what to do about dinner but want to avoid the guilt of copping out with a spin past a fast-food drive-up window. To be sure, fresh, hot, prepared foods at the supermarket deliver a better food value, but for one thing: the convenience of that drive-through lane. But the folks at Giant Eagle may have that licked. When Progressive Grocer Chief Content Editor Meg Major and I recently interviewed the management team for our feature on the Pittsburgh-based grocery chain, our 2016 Retailer of the Year (the story starts on page 32), Giant Eagle leaders recounted the creation of their GetGo convenience store operations and how they realized the company could leverage the common strengths of its supermarkets and c-stores to more effectively serve consumers. CEO Laura Karet summed it up thusly: People constantly need two things: gasoline and groceries. Why not make it easier to get both? C-stores have been upping their fresh food game for some time now, but a c-store backed by a grocery retailer skilled at deliveringg a dazzling food experience, especiallyy in its Market District stores — now that’s hat’s powerful. Giant Eagle took its commissary from

preparing food just for supermarkets to also creating items for GetGo stores, which receive daily deliveries of fresh garden salads, sandwiches and prepared entrées. “It really ups the quality and trust” of the c-store experience, says EVP of Merchandising and Marketing Jerry LeClair, and expands the reach of the core grocery brand. Meanwhile, Giant Eagle is poised to brilliantly take the concept a step further, by positioning GetGo as an element of the retailer’s Curbside Express clickand-collect service. In areas where there’s a GetGo fuel station and c-store in the parking lot outside a Giant Eagle supermarket, the retailer can save consumers time by combining getting gas and picking up groceries into one simple step. “It is much more convenient for customers to pick up their orders at a GetGo, where grocery orders are loading in their car while they’re filling up their gas tanks,” LeClair says. And in its new markets like Indianapolis, where Giant Eagle is getting ready to open five GetGo Café + Market stores as spokes off the hub of its Market District store in the Indy suburb of Carmel, it’s an ideal combination. With innovations like this, Giant Eagle is moving shoppers toward a time when picking up groceries for the week, that night’s dinner and a tank of gas, all in one stop, could be routine. Says Karet: “We can really grow the business and leverage this opportunity of people’s lifestyle changes, the way people eat and how that’s changed, and how to use a small format to deliver food in a different way.” It’s definitely a concept worth exploring for any retailer looking to enhance their click-and-collect services as well as their grocerant operations. There will be plenty to discuss about the latter at PG’s second annual Grocerant Summit this month — read more about it, starting on page 104. PG

Supermarket prepared foods are a better value than fast food except for one thing: the convenience of the drive-thru.

Jim Dudlicek

Editor-in-Chief Twitter @jimdudlicek


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

What makes

CALIFORNIA RIPE OLIVES SPECIAL ARE... the multi-generation farming families that work hard to bring high-quality olives from the grove to the pantry. With hard-working grower families, across the Golden State, California Ripe Olives are a truly farm-to-table choice for shoppers.

Stock up your shelves today.

Made in California Š Copyright 2016 California Olive Committee






THE DELEONARDIS FAMILY In 1922, Vito DeLeonardis and Natalie Jameson’s grandfather came to the United States from Italy to pursue his dream of farming. He started in the California Ripe Olive business grafting and budding trees in a nursery before purchasing his own land to grow and harvest olives in California’s Central Valley. Today, Vito and his brotherin-law Johnny manage the family olive nursery alongside their many acres of olive groves.

COWBOY CAVIAR • • • • • • •

2 cups chopped tomato 3 green onions, sliced 1 avocado, peeled, pitted and cut into small cubes 1 (15-oz) can black beans, rinsed and drained 1 (6 ounce) can California Ripe Olives, drained and coarsely chopped 1/2 cup prepared vinaigrette dressing Corn chips

Stir together tomato, green onions, avocado, black beans and olives in a medium bowl. Toss with dressing and serve with corn chips. Makes 8 to 10 appetizer servings.

For more California Ripe Olive grower stories, please visit

The growing of olives continues to be a family affair with Grandma Mary not far from the everyday operations and Vito and Natalie’s children learning the unique and careful process of growing California Ripe Olives. Looking for new ways to enjoy olives? Try this flavorful appetizer, courtesy of California Ripe Olive grower, Natalie Jameson.

What’s trending on …

Fitting with the industry’s enduring practice of keeping a close eye on its most formidable contender, the early-September news that Wal-Mart Stores Inc. will eliminate 7,000 back-office positions over the next few months, in favor of filling more customer-facing roles, landed at the top of’s story leaderboard between Aug. 15 and Sept. 15, 2016. In a close second for the most reader clicks was the departure of Target Corp. CMO Jeff Jones, who peeled out of Minneapolis to join the growing San Francisco-based rideshare company Uber.

Walmart Cutting 7K Jobs: Report

Target Suffers Uber Loss of CMO Jeff Jones

Hy-Vee Delays Latest Minneapolis Store Plans

H-E-B Family’s Eldest Member Dies at 89

Giant Eagle Unveils First Two-story Market District Express


Trader Joe’s Lawsuit Against Canadian Clone Back On Publix Tops Employee Ownership 100 List

Target’s Evolving Food Strategy Aims for ‘Meaningful Differentiation’

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


December 2016 is...

National Eggnog Month National Fruitcake Month National Stress-free Family Holiday Month Universal Human Rights Month National Pear Month







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Front End

Market Intelligence By The Numbers

Shelf Stoppers

Dairy ToTal dairy sales reached $70.5 billion in The pasT year

Which food allergies and/ or intolerances affect american households the most?

(52 weeks ending Aug. 27, 2016)

Top 5 dairy categories $18,000,000,000 16,000,000,000 14,000,000,000 12,000,000,000 10,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000


2,000,000,000 0 52 Wks - W/e 08/27/16 cheese milk

52 Wks - W/e 08/29/15 yogurT eggs

52 Wks - W/e 08/30/14

52 Wks - W/e 08/31/13

52 Wks - W/e 09/01/12

are affected by dairy (cow’s) milk or lactose

refrigeraTed Juice drinks

“The 1 percent decline in sales that we’ve seen across dairy is attributable to softness across the category with younger, single-member households. across all dairy aisles, single-member households are consuming 39 percent less than their expected share of products, including milk, cheese, yogurt and eggs. While it’s clear that families are buying dairy products, in order to deliver new growth, there’s an opportunity for manufacturers to ensure products are offered in pack sizes that appeal to smaller households.”


are affected by peanuts

—nielsen Vp of consumer insights Jordan rost Source: nielsen

Spotlight on Eggs consumers of eggs are mosT likely To purchase:



desserts, gelatins, syrups

baking mixes

Category desserts, gelatins, syrups baking mixes breakfast food cereal


77.6% breakfast food


are affected by shellfish

93.4% cereal

Index 110 109 109 109

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


are affected by eggs Source: nielsen global health and ingredient sentiment survey, Q1 2016

Ireland’s dairy industry. Proof of sustainability from the ground up.

Today, leading businesses and their customers are increasingly looking for evidence of the care with which their dairy products and ingredients are produced and sourced. Origin Green, Ireland’s worldleading sustainability program, can uniquely provide the reassurance that is needed. Origin Green operates on a national scale, already encompassing 90% of all dairy farms. Each participating farm is audited and carbon footprinted every 18 months, through a cycle of measurement, feedback and continuous improvement. Ireland’s dairy industry is rooted in an outdoor-reared, grass based system, with cows free to graze outdoors 24 hours a day. Our rigorous Origin Green program protects and builds on these natural assets. It’s what the world needs now and it can help your business grow more resilient.

See how our dairy industry delivers for business at Bord Bia Irish Food Board, 345 Park Avenue, Ireland House, 17th Floor, New York, NY 10154. Tel: (212) 935 4505

an initiative by


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TOTINO’S EPIC GOOD TIMES • Favorite family tastes – grab & go convenience • Crisper crust improvements and packaging innovation

Mintel Global New Products Database Category Insights

Fruit and Vegetables Market OVerView Sixty-six percent of the total new product launches in North America consisted of vegetables, followed by potato products and fruit. Convenience was the main area of innovation, with more than 50 percent of the total launches featuring convenience-related claims. key issues Natural products have risen steadily as a result of the growing number of safety scares and concerns about harmful additives. This has forced manufacturers to invest more time in reassuring consumers about the safety and quality of their products. “Cleaner� labels with claims such as no additives/preservatives, organic and GMO-free have therefore been heavily used by brands. An increasing number of brands have promoted the inherent health benefits of their fruit and vegetable innovations to increase consumption.


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

Organic foods continue to gain ground, due to concerns over the presence of chemicals and pesticides in fruit and vegetables. GMO-free products have been an extremely fast-growing segment in the fruit and vegetable category. Likely driven by environmental consciousness, Millennials are the main consumer group to look for GMOfree products. Brands in the fruit and vegetable category have been keen to highlight GMO-free certification explicitly on-pack. Interest in locally grown produce has continued to increase, reflecting the broader trend of consumers seeking more information about and connection with the food they eat. This trend is being driven by perceptions of superior freshness, rising support for local economies, and alignment with environmental and ethical ideologies relative to the category.

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

Consumer perception of the naturalness of processed fruit and vegetables remains a key challenge for the category. While manufacturers have stepped up clean-label efforts, opportunities remain to increase the development of products that address food safety concerns. With Millennials citing health, nutrition and food safety as prime motivators for purchasing GMO-free items, strengthening certification programs and supporting product integrity will remain key to segment growth. Calling out the inherent health benefits of fruit and vegetables remains an underexploited opportunity, and brands can do more to drive this effort. For instance, functional and high-protein positioning has only been lightly explored in the fruit and vegetable category. Significant consumer interest in high-protein and functional foods creates opportunities for fruit and vegetable suppliers/ manufacturers to pursue new product development catering to this growing demand.

©2016 POM Wonderful LLC. All Rights Reserved. POM POMS, POM POMS WONDERFUL and the accompanying logos are trademarks of POM Wonderful LLC or its affiliates. PA16087

Together, they mean business.

When you have delicious P∂M P∂MS in your berry cooler, you’re in store for big sales. In fact, your profits could quadruple. Not only are they the #1 seller in the pomegranate arils category, 9 out of 10 berry buyers say they are open to trying P∂M P∂MS. Our sales are also supported by P∂M’s largest advertising campaign to date, including TV commercials, FSIs, digital and PR. So stock your produce section with P∂M P∂MS, and you’ll see they are berry, berry good for business. Order P∂M P∂MS now at or contact your W∑nderful Brands sales representative at 877-328-7667.

Source: POM Fresh Consumer Landscape Study, nationally representative online survey, March 2013. IRI 12 weeks ending December 31, 2015. 2015 Average Velocity Unit/Store/Week, berry cooler vs. shelf placement, Regional Account

All’s By Karen Buch

Whole-store Health Solutions Take the following steps to encourage customers to eat better — no matter which part of the supermarket they shop.


onsumers want to shop in supermarkets that support, rather than dictate, healthful food options. They want a shopping environment that presents healthful and delicious meal solutions, yet allows them to maintain the freedom to choose the foods they believe are right for themselves and their families. To this end, customers expect high levels of food variety, freshness and nutritional quality, and demand greater transparency, accuracy and detail in food information supplied by both food manufacturers and food retailers. The term “healthy” now equates to a broader consumer expectation for nutritious, delicious, safe foods produced with integrity and sustainability in mind. Grocers can become preferred health-andwellness destinations by delivering authentic guidance and solutions across the whole store.

Beyond the Perimeter Without question, the store’s perimeter — stocked with fresh produce and high-quality seafood, meats, deli and prepared foods — is the first place that core wellness shoppers will look for foods that support health. It shouldn’t the only place, however. Health solutions can be found in unexpected places throughout the store. It’s now become part of a grocer’s job to explain the health benefits and provenance of these items and make them easier for customers to find.

Grocers can become preferred health-andwellness destinations by delivering authentic guidance and solutions across the whole store.

Nudge Shoppers Toward Nutritious Choices While working as a director for a grocery retailer, I created a superfoods program — still in use today— to guide shoppers toward highly nutritious, whole foods sold throughout the store. Using a combination of in-store signage, a superfoods shopping list and in-ad messaging, the program highlights dozens of specific superfoods across the produce, center store, frozen, dairy, seafood, meat and deli departments, and tells what makes each food so nutritious. The initiative works in synergy with ongoing efforts — nutrition attribute tagging, nutrition education store tours, healthy recipes with instructional videos, a bimonthly magazine and blog — designed to nudge shoppers toward nutritious choices.


It’s Not Just About ‘Free-From’ The latest foods being introduced in the natural and organic space often include a host of claims of what they’re “free from,” including GMOs, additives, preservatives, dyes, corn syrup, allergens and gluten. However, retail dietitians must remind customers that what the food includes is as important as what it excludes, when it comes to overall nutritional value. A gluten-free, non-GMO, organic chip is still a chip. Nevertheless, sales data suggest wellness-seeking customers are redefining health and wellness to include a balance of both indulgent and more sensible choices as part of an overall healthy dietary pattern. Make ‘Healthy’ Easy and Affordable Try featuring a meal solution or recipe of the week that meets healthy criteria and is easy to prepare. Make it an affordable choice for customers by offering price savings on at least one or two key recipe ingredients, merchandise ingredients together for convenience, and offer recipe sampling during high-traffic hours to dispel the consumer myth that “eating healthy won’t taste good.” Suggest a portioncontrolled, indulgent dessert that contains at least one healthful ingredient.

Progressive Prepared Foods Meet demands for prepared foods that are healthful options. Create menu selections and meal kits that support wellness goals and help trim the time and energy required to prepare meals from scratch. Short-cut solutions, including delicious veggies, whole grain side dishes and healthy main dishes, can conveniently combine with other foods sold in the aisles to create semi-homemade meals. Be transparent by disclosing ingredients, origins, nutrition facts and production methods to help guide customer purchasing decisions. PG Karen Buch, RDN, LDN, is a registered dietitian/nutritionist who specializes in retail nutrition marketing and communications. One of the first supermarket dietitians, she’s now founder of and principal consultant at Nutrition Connections LLC, providing consulting services nationwide. She can be reached on Twitter @karenbuch and at

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

New Researc Explores Effects of Moderate Fat Diets T at Include Avocados Study Examines Avocado’s Effects on CVD Risk Factors

if. – Jan. 8, 2015 – A moderate fat diet t at includes one fres avocado ent in certain blood lipid markers markers w en compared to an energy matc ed moderate fat diet ocado or a low fat diet wit out avocado, according to new researc publis ed in t e Journal rican Heart Association.

olesterol in t e blood can increase risk factors for cardiovascular cardiovascular disease, t e eat in t e United States. A eart ealt y diet can play an important role in keeping your levels wit in a normal range. For example, t e 2010 Dietary Guidelines ds limiting saturated fat and replacing it wit wit unsaturated fats egetables egetables.

c , “T e Effect of a Moderate Fat Diet Wit and Wit out Avocados on Lipoprotein Particle ze and Subclasses in Overweig t and Obese Adults – A Randomized, Controlled Trial at Pennsylvania State University, niversity evaluated w et er incorporating ily for five weeks could could reduce bad c olesterol levels more t an turated fat from vegetable oils ig in oleic acid as a substitute for one fres avocado matc ed for calories and macronutrients, but not for fiber, p yto

c ers found t at only t e avocado diet significantly improved ood” c olesterol (TC-­‐HDL/C) ood C) and t e ratio of LDL, or “bad” c olesterol, t -­‐C). C). T e low fat diet did not reduce t ese ratios, and t e reduction wit t e avocado diet cantly greater t an wit t e moderate fat diet.[1f pg. 30]. 0] Additionally, e greatest reduction in LDL-­‐c DL olesterol compared to t e low ocados ocados.

offers several possible explanations as to w y t e moderate fat diet wit avocado ad a more effect on certain biomarkers t an t e moderate fat diet wit out avocado. que combination of vitamins, minerals, fiber, p ytosterols, and ot er dietary bioactives t at



YOUR BOTTOM LINE. Fresh Hass Avocados deserve all the attention. They’re already a hit with consumers, and support will only grow the category. The Hass Avocado Board is dedicated to understanding avocados’ health benefits and industry trends, so we can better market to an increasingly nutrition-focused audience. Learn more about the Love One Today® initiative at

© 2016 Hass Avocado Board. All rights reserved.


Unwrapping the different growth opportunities in snacks

As the snacks category becomes more challenging, it’s tempting to seek very simple, decisive answers for where growth can be found. Those simple answers are available—but they are far from the only route to success. ‘Show me the Growth!’, Cuba Gooding Jr. might have bellowed

In the map that Growth Point generates for the snacks

down the phone at Tom Cruise if they were discussing strategy

category, these sit in the top right-hand corner—and they

for snacks. In a category where competition is intensifying

are dominated by protein-based snacks that have a strong

and growth has become increasingly difficult to achieve,

association with health in consumer perceptions: nuts, yogurt

businesses are seeking out sub-categories that offer a surer

and protein-based sandwiches, for example. These snacking

route to driving the bottom line upwards. It’s tempting to

areas with the highest potential will reward an aggressive

demand a simple, straightforward answer.

investment and marketing strategy, and especially one focused on the occasions where existing products fall short of

Growth Point from TNS has been developed to provide that

what consumers are looking for. For snacks, these include

simple answer—but also several more complicated and

the healthy nibble at a desk or guilt-free additions

equally valuable ones. As a first-of-its-kind measure of growth

to children’s pack-ups (nuts and rice cakes, for example),

potential, it uses a unique combination analysis of consumer

a quick, healthy start to the day (oatmeal in a cup and

momentum (the snack sub-categories that people intend to

health-oriented cereal), and healthy group snacking

buy more of) and unmet needs (the occasions underserved

(guacamole and nuts again).

by existing snacks and other product types). This quickly shows where the greatest potential exists for both brands

Why all protein snacks are not equal

and retailers, before they start spending their marketing and

Although the highest potential quadrant in the Growth Point

research dollars. However, it also shows how those dollars

chart is dominated by protein-based snacks, not every

would need to be invested by brands looking to unearth

protein-based snack makes it into this group. Meat-based

growth in more challenging areas of snacks.

snacks are an obvious exception. Despite the growth this

Growth Point isn’t just a compass pointing to one type of

category has shown in recent years, consumers are now

investment opportunity—it’s a guide to the different types of

indicating less of an appetite for purchasing meat snacks in

growth strategy required for different categories of snacks.

the same quantities in the future. It’s this loss of momentum that has pushed them out of the highest potential group.

The simple answer: high momentum, under-served needs

In the bottom right quadrant of the Growth Point chart, we

The simple answer to ‘Where is the Growth’ is in the snacking

find categories that are suffering a more significant lack of

sub-categories that consumers say they would like to buy

momentum—despite the fact that they cater to needs that are

more of—but where their needs are currently under-served.

still largely under- served. Here future growth is still possible


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

but tapping the opportunity will require a change in consumer

Fighting for fast-growing share

perceptions. It’s noticeable, for example, that many of the

Such concerns are not the issue for categories in the top

categories in this quadrant have been accepted as permissible

left quadrant. Health-conscious consumers have put strong

indulgences—but lack the fruit or protein halo that ignites

momentum behind fresh fruit and vegetables, smoothies and

momentum for many of those near the top of the chart.

soups, multigrain products and protein bars.

Could portion control persuade consumers to take another

However, these consumers are already well-served with

look at these snacks on the occasions they are suitable for?

acceptable choices for healthy snacking on-the-go. In what is

A closer investigation of the unmet needs for these categories

primarily an occasion share game, brands require a detailed

could provide the answer.

understanding of the occasions when people consume, so as to develop a differentiated, needs-based proposition.

Growth Potential




Primarily about shares. Focus on which needs are most important

§ Vegetable/ fruit/green juice smoothies

§ Vegetable-based smoothies/juices made at home

§ Frozen fruit in bag § All-family cereal

§ Fresh fruit—whole or pre-cut

§ Multigrain chips

§ Homemade soup

§ Bars—granola/ protein

§ Sliced whole wheat/ multigrain bread § Fresh vegetables— raw § Dried fruit

Must have § Individually significant wrapped snack product news or cakes breakthrough § Regular potato innovation to chips reignite category § Brownies— reduced calorie § Pastries/Danishes § Sandwich cookies § Packaged chocolate chip § Donuts cookies

Capitalize on high potential with an aggressive strategy and investment

§ Nuts—any

§ Cottage cheese

§ Yogurt-regular/ greek

§ Peanut butter

Must change consumer perception to capitalize on unmet needs

§ Premium dark chocolate

§ Cheese/queso dips

§ Gelato

§ Fast food hamburger

§ Almond/cashew milk

§ Peanut butter in on-the-go cups § Frozen pocket sandwiches § Fruit-flavored candy

§ Protein-based salad sandwiches

§ Iced or frozen coffee—all types

§ Rice cakes § Oatmeal or grains § Hot specialty in a cup coffee drinks § Health-oriented § Guacamole cereal

§ Low fat ice cream § Canned pasta § Sweetened cereal

§ Cookies you make at home

§ Frozen fried chicken pieces

§ Packaged brownies


High Undermet needs

Finding the right approach to reinvention

The Growth Point analysis shows the potential for growth in

What of the snacking categories in the lower-left portion of

many areas of snacks – but these growth opportunities are

our chart? When consumers are trending away from your

markedly different from one another. Where momentum

product and consumers’ needs are already being met, is there

drives consumers towards a category fulfilling previously

any growth to be found? Although categories such as pastries,

unmet needs, growth is available for many—but the greatest

donuts, sandwich cookies and potato chips are already very

rewards are likely to be gained by those making the most

large, the opportunity for new growth is the lowest of all.

aggressive investment.

Established brands (of which there are many) fight to retain share, while smaller challengers use non-mainstream tactics

In the categories those consumers are moving away from, by

to attempt to steal it.

contrast, growth is only likely for those willing to understand their needs and invest in changing their perceptions.

However, for both leaders and challengers the real opportunity

The choice of which growth game to play remains with brands

for sustained growth lies in meaningful innovation. The right

and retailers themselves.

product reinvention can address unmet consumer needs in new, different and unexpected ways, to meet the requirements of the “ideal” product in their specific occasions. As with any successful innovation strategy, this will involve focusing investment and research on reducing barriers to consideration.

To find out more, visit

October 2016 | |



Guest Perspectives By Michael Forhez

Keeping it Simple

On product transparency and an industry renewing its purpose.


o to a store. Pick up a food product. Read the ingredient label. You might see words like acetic anhydride, benzoin resin, benzoyl peroxide, calcium hypochiorite, lactylic sterate, paracetic acid, spermoil hydrogenated, xanthan gum or zinc gluconate. All are permissible ingredients in food products and are listed in the FDA’s Generally Recognized as Safe (GRAS) list. Today, consumers are having a moment of hesitation and taking a pause. More and more consumers are asking, “What’s in this food?” That simple question has become a great challenge to the industry, as it has for similar reasons in health and beauty care, household products, and hard goods. Surveys indicate that nearly two-thirds of consumers want more product knowledge from the agriculture community and food companies. For the past 50 years, large brand-name products in supermarkets have commanded more demand and higher prices. Those days, however, may be numbered. As shoppers in greater numbers turn their backs on artificial ingredients and increasingly select organic and non-GMO foods, national brands are responding with reformulation efforts, hoping to win back these ingredient-conscious consumers. Edward Jones Analyst Jack Russo says of the major packaged-food companies: “In some ways it’s a strange turn of events. The idea of ‘processing’ — from ancient techniques of salting and curing to the modern arsenal of artificial preservatives — arose to make sure the food we ate didn’t make us sick. Today, many fear that it’s the processed food itself that’s making us unhealthy.” Analyst Robert Moskow notes that today consumers “have more and more questions about why this bread lasts 25 days without going stale.” Brand manufacturers are responding to this shift in consumer interest. Richard Smucker, CEO of his family’s namesake jelly giant, observes, “We look at our business and say, ‘How can we remake ourselves?’” And Campbell President and CEO Denise Morrison pointed out at a recent investor conference that 400 food startups have absorbed more than $6 billion in funding, which raises the stakes for big consumer brands that want to remain relevant. “We understand that increasing numbers of con-


sumers are seeking authentic, genuine food experiences,” she said during the conference, “and we know that they are skeptical of the ability of large, long-established food companies to deliver them.” The question is, what can brands do to restore consumer trust in the food we eat?

An Opportunity With steadily increasingly interest in understanding what’s in their food, consumers want — are hungering for — a farm-to-fork view. They want to know where it was grown, how it was grown, and how the animals and workers and environments were treated. Today, consumers have health-and-wellness goals, and so need more information for special diets, including potential ingredient allergens. They’re also looking for and demanding total product information transparency. In contrast with previous generational expectations for convenience, price and taste, today’s consumers additionally want more information

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

position themselves as trusted sources of information about food safety, nutrition and social responsibility. on industry-related topics.” Consumers want simplicity in their food. They want On enhanced product-specific data access, the joint their meals to contain ingredients that they can actually initiative of the Grocery Manufacturers Association picture in their heads and pronounce, with words they actu(GMA) and Food Marketing Institute (FMI) known ally understand. as SmartLabel — supported by a broad coalition — is Evidence of an industry and government response another example of how enhanced technology can be shifting toward more transparency is mounting: used to meet consumer demand for transparency. McDonald’s announced in August that it will eliminate SmartLabel recognizes the need for brands to create undesirable ingredients from its food. Chicken McNuggets a standardized method for sharing product informaand other items will be made without artificial preservation in a convenient, easy-to-understand digital format. tives; high-fructose corn syrup will vanish from its burger SmartLabel seeks to meet this need, giving consumers buns; margarine will give way to butter in its Egg McMufeasy, instant access to detailed product information. Acfins; and its salad mixture will include kale and spinach. cording to GMA and FMI, SmartLabel features include Dunkin’ Donuts has promised to put more egg in its egg “online landing pages that are accessible by patty. Taco Bell has announced that it will smartphones, tablets and desktops. Consumswitch to actual black pepper rather than the Consumers are ers can find product information organized current “black pepper flavor.” demanding in a consistent manner, including allergens, FDA’s new Nutrition Label requirements total product ingredient sourcing practices, third-party cerare final, and all U.S. brands must comply information tifications, social compliance and sustainabilwith updated packaging by July 26, 2018. transparency. ity programs, usage instructions, advisories Some brands might see these requirements In contrast and safe-handling instructions, and company as either unnecessary or burdensome. Others with previous and brand information. will see them as an opportunity to help congenerational “Going beyond the product label makes sumers make better-informed decisions for expectations for sharing additional product information with healthier eating. convenience, consumers more attainable and sustainable for brands and retailers,” the groups assert. Super-transparency price and “The result is more information and, conseA new, more informative on-package infortaste, today’s quently, more transparency.” mation format is a much-needed, imporconsumers tant step. However, today’s consumers are also want more different. They’re tech-savvy and, health, Making Inroads information environmentally and socially conscious. Here’s a final question: Is there any evidence about food They’re connected to countless intersecting that these efforts are having an effect on consafety, nutrition sumer perceptions concerning transparency? online communities that search for and share and social information in real time, making them brand Yes. The Sullivan Higdon & Sink 2016 responsibility. stewards in their own right. survey also found: “Food production knowlDuring this continued transformation in the edge is increasing. More than one-third way in which we consume and think about food, (35 percent) of consumers indicate good or consumers — all of us, actually — aren’t just calling for more excellent food production knowledge, a significant imtransparency, we’re also asking specific questions, and we’re provement compared to 24 percent in 2014. There has willing to devote time and effort to our search for answers. also been a discernable shift from those with average, Consumers want to know more about our food fair or poor knowledge to those who claim to have good than can fit on a standard product label, demanding or excellent knowledge.” “super-transparency.” Two other technology trends are Perhaps not since the inception of our industry beginning to answer this requisite: blogs and enhanced has there been such a groundswell of interest and product-specific data access. energy for understanding not just what manufacturThe trustworthiness of blogs and social media is ers and retailers think consumers want and need, but increasing, according to a 2016 Sullivan Higdon & Sink also for using the power of social listening in a digisurvey of more than 2,000 adults — up from 18 percent tal age. In these efforts, we see an industry recomin 2012 to 33 percent in 2016. “Blogs are becoming more mitting itself to providing what consumers actually trusted, mainstream and legitimate sources of informasay they want and need. tion about food production processes and practices,” the Hail the consumer! PG survey notes. “The credibility and trustworthiness of blogs may depend on the established reputation of the Michael Forhez is global VP for consumer markets at blogger or the brand as a whole. Food companies who Lawrenceville, N.J.-based 1WorldSync. aim to produce unique and brand-specific blogs must October 2016 | |


NEW By Joan Toth

Common Truths For these leaders, gender equality is more than an abstract concept.


sk any successful woman in the grocery business about her career, and she’ll probably tell you about overcoming gender stereotypes, the importance of having a sponsor, and her personal struggle to balance work and family.

Women face common career headwinds like these and others: Corporate cultures that reward assertiveness and ambition in men — and penalize those same traits in women — while overlooking the effectiveness of other leadership styles A lack of leadership development Few role models at the top False assumptions about their career goals The double bind of gender bias — being perceived as “too nice” or “too bossy” And, for many, the added barriers of racial, ethnic, religious, cultural, age or sexual-orientation bias At the NEW Executive Leaders Forum 2016, 300 senior industry leaders heard from a diverse panel of women who shared their personal stories. NEW board member Dorria Ball, past VP of human resources for Mondelez International and founder of Global Ballance Group; Valerie Oswalt, president of U.S. sales for Mondelez International; Marie Quintana, president of Velocity Group; Sabrina Wiewel, SVP and chief customer officer at Hallmark Cards Inc.; and Nicole Wright, mandate market manager at Acosta, discussed the career barriers they’ve faced, and offered insights on ways we all can help women realize their full potential and contribute at the highest level.


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

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NEW Facing Career Headwinds Dorria Ball: “One of the main challenges is getting real feedback. As a woman of color, this can be especially more difficult to overcome. It’s important to know the narrative about you, whether it is credible or not. If you have no idea what people are really saying about you, you can’t begin to address it. We often receive feedback about technical skills and competencies, but the real truths about the things that are holding us back are not typically the technical competencies — they are usually the style and ‘fit’ things typically associated with the nuances of diversity. Getting someone who you have a lot in common with to share honest, stripped-down feedback is difficult. Layer Lay in culture, l race, age, gender or sexual orientation, orientat and it’s even more complicated to get to truthful tru feedback.”

If we want to have the right people with the right skills in the right positions at the right time, we must face head-on the headwinds that hold women back.

Valerie Oswalt: “The challenge ch for many

women is managing relocation relo in a dualcareer household with kids. k Opportunities that don’t require relocation relocat become less available as you advance adva in your career. I’ve had seven mo moves, some driven by my caree career, others driven by my husband. husban I’ve been open to taking positions pos cross-functionally, and roles r others weren’t willing to take on, while being present as a mother and wife of a working spouse. I’ve also been in the position to ssay, ‘Thanks for the opportunity, opportu but it’s not right for me and my family right now. My current situation will change, so let’s continue to have this conversation as time progresses and other opportunities arise.’” Sabrina Wiewel: “As an Asian-American, people judge you

and think you have a lot of skills, just because you’re Asian. I must be great at math! Well, not so much. When I broke into the c-suite, I knew I had to become best friends with the CFO — fast. He became an advocate and spent hours teaching me how to talk to the board and prepare for meetings. Get to know people; don’t prejudge them.” Nicole Wright: “Speaking as a Millennial and woman of color, my obstacles have been a lack of leadership awareness and visibility. Millennials want to be motivated, engaged and challenged. We want to go to work and be excited every day. We want to share our thoughts and be encouraged to think outside the box. But sometimes, I feel that not everyone in management understands the importance of being a great leader, and in these instances, we need others to champion for us to get to the next rung on the ladder.” Marie Quintana: “As a Latina, I see the pressure to con-


form and not being encouraged to be authentic. Latinas often feel that being Latina is somehow a negative and to succeed they need to fully assimilate. While many Latinas are comfortable talking about leadership skills, many more are uncomfortable about having authentic conversations about the cultural traits that helped them become successful. Not being able to express yourself or having an equal voice as others in the room is a headwind.”

Finding Solutions Ball: “When you talk about the power of diversity and getting unique insights and the benefit of experiences others may not have, the opportunity is to ensure that h there h e is a respectful space created for those insights to emerge, exist, and for the he uniqueness of the differences in all to be nurtured and not forced rced into conformity.” Oswalt: “If there is a discussion about out someone not in the room about ut something that is holding that person erson back, what are we doing to get that issue sue on the table and help this person [get the development velopment they need]?” Wiewel: “I mentor 27 peoplee — 20 are women

and seven are diverse, from a male member of the LGBT community, a veteran, ran, Millennials. But I see it as a reverse mentorship rship — I ask them to help make me a better leader.” der.” Wright: “Leaders should get to know w Millennials on a

personal level in order to advocate and support them, because many times, managers just focus on the day-to-day business.” Quintana: “We need to rethink how we mentor, how

we build relationships inside and outside our companies. Start by understanding what beliefs others have and how we influence others. It’s important to improve the visibility of Latina managers in our organizations and across the industry.” By sharing their individual stories, these women revealed a common truth: If we want to have the right people with the right skills in the right positions at the right time, we must face head-on the undercurrents of bias and the corporate and societal headwinds that hold women back. PG Joan Toth is president and CEO of the Network of Executive Women, Retail and Consumer Goods (NEW), a learning and leadership community representing 10,000 members, 750 companies, more than 100 corporate partners, and 20 regional groups in the United States and Canada. Learn more at

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

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

Strong values, innovation and a constant drive are woven into Giant Eagle’s splendid tapestry. By Meg Major and Jim Dudlicek

ike a carefully crafted patchwork quilt whose individual pieces — each of which is original, with a beauty of its own — have been sewn together over time, stitched intricately by hand and designed to stand the test of time, the splendid tapestry created by Giant Eagle Inc. over the past 85 years is a work of art. Indeed, the careful selection of the various fabrics, and the unique placement of each, embodies the Pittsburgh-based retailer’s admirable abilities to weave its various elements into a uniquely distinctive, highly durable heirloom to be passed on for future generations to nurture, preserve and further enhance. As one of the 40 largest privately held companies in the United States, standing at No. 16 on Progressive Grocer’s Super 50 ranking of the nation’s leading food retailers, Giant Eagle exhibits many hallmarks of a company setting the pace for its peers, including continued strategic expansion; multiformat store designs tailored to specific commu-

nity needs; an expanding focus on culinary, wellness and convenience-oriented offerings; demonstrated investments in technology, infrastructure and logistics; an ongoing commitment to providing quality goods to consumers hungry for value; and extraordinary success and leadership not only in the industry, but also in local communities. For these important reasons, and numerous others, PG is proud to recognize the extended Giant Eagle family — including its pioneering corporate visionaries, dedicated corporate support teams and thousands of outstanding store associates — as its 2016 Retailer of the Year, an honor bestowed annually on one select retailer that truly stands apart in the highly competitive food industry. While officials from the regional food, fuel and pharmacy retailer are fiercely proud of its vibrant heritage and superior track record, they’re equally enthusiastic about perpetuating their diverse and dynamic organization by adhering to the foundational threads woven into Giant Eagle’s DNA, which, as CEO Laura Karet explains, are its strong values, innovation and constant drive to reinvent itself for shoppers in a changing marketplace.

October 2016 | |


“We have a unique blend of an incredibly strong value system that came from our founders that I think is one of the key reasons we’ve been able to stick together so long,” she says. “It’s a pretty unique thing that five families have stuck together for four generations, combined with a very strong entrepreneurial drive to constantly better ourselves. It’s like we have a house that was built on these values, but we keep remodeling it. We can do that because the foundation is so good.”

—Laura Karet, CEO


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

Photo by Charles LeClaire

“We want to be profitable like everyone else, and we hold ourselves accountable to public company standards, but we think for the long run, not quarter to quarter.”

Photo by Charles LeClaire

CarEEr buiLdEr Giant Eagle Seven Fields associates (from left) Joe Seibel, meat merchandising support leader; dan Clunan, senior store leader; and Shannon Christy, seafood team leader, with CEO Laura Karet and EVP Jerry LeClair.

Giant Eagle’s value system rests upon four pillars — four key constituencies in which the company’s leadership firmly believes: team members, or associates; customers; communities; and shareholders. The order is deliberate, Karet explains: “We put our shareholders last purposely. We strongly believe that if you do the right things for the first three, good things happen for them. It’s allowed us to really think long-term about the business and doing the right things for the right reasons. We want to be profitable like everyone else, and we hold ourselves accountable to public company standards, but we think for the long run, not quarter to quarter.” This philosophy helps to explain and support the family environment at Giant Eagle, adds Jerry LeClair, EVP of merchandising and marketing. “Any time you talk to a team member, the first thing that comes up is that ‘I’m part of this family.’ It’s because of how the board has put the order, with team members being held out there first,” he says.

Photo by Charles LeClaire

“It is an extremely competitive environment. You have to be true to what you are known for, and also be innovative enough to remain relevant.” —Jerry LeClair, EVP of merchandising and marketing

“It truly is an environment where we care about each and every person in the company. A lot of people say it, but Giant Eagle walks the walk.” Karet feels it more than most, because she grew up in the business. “I believe that we operate like a family. It’s always helpful when you have someone who has experienced other things that come and reaffirm that we truly do have that,” she says. “It truly is different — you’re a part of something.”

Tree-mendous Longevity And when you grow up in a business, you’re justifiably proud of many things. As far as Karet is con-

sTronG as oak Giant Eagle associates with four decades of service are honored on the 40-year wall at the grocer’s corporate headquarters.


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

cerned, however, the collective longevity of Giant Eagle’s workforce tops them all. “At the lobby of our corporate office, we have something called the 40-year wall,” she says, explaining how company associates with four decades of service are honored with their own leaf on the intertwined branches of a sprawling tree mural. “It’s filled with more than 3,000 people, which I just think is stunning. “I’m watching my kids grow up and looking at the world through their lenses, and how they think about their careers,” she continues. “No one talks about being at a company for their whole career anymore — it just doesn’t happen. To be a company where people want to and can make a lifetime career is just awesome.” Karet is also exhilarated by the number of intergenerational families working side by side at Giant Eagle. “When you talk to someone who’s been here a long time, inevitably they met their spouse here, their kids work here, and their aunt works here,” she says. “Beyond being a place where people can make their own careers, being a place where people

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Multiformat Overview Giant Eagle Inc.

One of nation’s largest multiformat food, fuel and pharmacy retailers, Giant Eagle Inc. operates 425 stores throughout western Pennsylvania, north central Ohio, northern West Virginia, Maryland and Indiana. Total supermarket count: 223 In-store pharmacies: 219

Banner breakout

Giant Eagle

Traditional supermarket stock-up trips Store count: 208

GetGo Convenience Stores

(including newer GetGo Café + Market locations) Store count: 202 (72 feature made-to-order foods found in the café/market concept, while nine locations have Café + Market on the marquee) Description: In the GetGo café, customers can custom-order meal selections nearly exactly the way they want them, from subs, burgers and wraps, to breakfast sandwiches and burritos, as well as an array of beverages at the Smoothie & Espresso bar. Light, refreshing meal options are also available, including oatmeal, flatbread sandwiches and madeto-order salads. For those who want to dine comfortably, the GetGo café offers indoor seating for 38 and outdoor seating for 12. GetGo’s market aisles are stocked with sweet and salty snacks, along with a selection of traditional grocery store staples, including cereals, condiments and canned soups. Fresh-cut veggies and fruit, yogurt parfaits and to-go salads are also within arm’s reach. Added to these delicious foods options are an assortment of frozen drinks, fresh-brewed iced tea and cold sodas. The adjacent fuel station offers 100 percent guaranteed fuel at 16 outdoor pumps, including dispensers for those with diesel fuel vehicles. In addition, the format offers customers a surcharge-free PNC Bank ATM, full-service lottery, free wi-fi and free air for vehicle tires, as well as no-contract and pre-paid wireless phones and more than 150 retailer gift cards.

Market District

Destination shopping/dining experience for food enthusiasts Store count: 13

Market District Express

The best of Market District in a more intimate, neighborhood grocery setting Store count: 2


Adjacent car washes at select GetGos


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

would recommend their family should come work makes me proud.” It all starts with respect for people, Karet notes. “This is a business where Jerry and I are the least important part of the whole thing,” she insists. “The people that make our system work — such as the teams picking cases in the warehouse, or managing the parking lots — if they don’t show up, we have problems. If Jerry and I don’t show up, the world goes on. The respect for people is incredibly important, and we try to live up to it every day.”

Get Up and Go Integral to Giant Eagle’s continued success in the years ahead, according to Karet, is the company’s development over the recent past as a multiformat retailer. “I’d like to say that we had agreed on a plan and knew that the world was going to change the way that it did,” she says, in a nod to Giant Eagle’s varied retail banners. “What actually happened was we ‘entrepreneured’ our way into a bunch of different formats. It ended up that the world had changed in such a way that being a multiformat retailer has been a huge advantage to us. In the last two years, we’ve really focused on a couple of the formats that we think have huge growth potential.” The first of these is GetGo, Giant Eagle’s convenience format, which, beyond the ability to capture grab-and-go business as well as fuel sales, is emerging as an innovative cog in the retailer’s click-and-collect grocery machine. GetGo began as an outgrowth of Giant Eagle’s pioneering and highly successful Fuelperks loyalty program. “It’s an incredibly strong program, and we found our way into convenience stores because we needed a redemption system,” Karet explains. “We still thought about ourselves as a supermarket retailer. But we knew that gas was an important way to benefit the ‘big box,’” and with it, the potential to build a new business platform, for two reasons: “One, gasoline is something you need all the time,” and two, “because of the changes in the way people eat as a result of changing lifestyles.” Using her own family as an example,

Karet says: “I have a 14-year-old, a 12-year-old and a 10-year-old. In the last two days, we’ve had three soccer practices, two soccer games, tae kwon do, four hours of homework for each kid, guitar lessons. Somewhere in there, we’re supposed to sleep, go to school and go to work. The hours between 4:30 and 9:00 p.m. are insane. When I wake up in the morning, I’m not thinking about how I’m

going to feed these kids. I’m thinking about how I’m going to get all these kids to the places they need to be and not forget anything.” Positioning GetGo as a place where busy families and other folks on the run can get all of the things they need and feel good about it “is a really big idea,” Karet says. “What we’ve been doing with GetGo is figuring out how to position it to grow

Powering the Omnichannel Crusade

What’s most interesting, she notes, is that the grocery sector — Giant Eagle included — “has been behind the curve of digital engagement, and also with transactional e-commerce properties. But Giant Eagle is positioned to be As the decided grocery market leader in its hometown of able to accelerate over its competitors, and catch up with Pittsburgh, and a complementary strong presence in its some of the leading pure-play digital front-runners. It’s a adjacent core markets of Akron-Cleveland and Columbus, great opportunity,” which Aylward equates to “countries Ohio, Giant Eagle enjoys some unique advantages while that never built landlines for telecommunications infrafacing some equally unique challenges, notes Kimberly Aylstructure, and then, all of a sudden, everybody has a cellward, VP of marketing and e-commerce. phone, and the countries now have more cell service than “Our geographic marketing territory is certainly unique, they ever would have had, had they built landlines.” and Pittsburgh in particular,” says Aylward, who’s been And so it goes for Giant Eagle’s rapidly expandlearning a lot about regional nuances and corollary cusing digital enhancements, which she tomer peccadilloes since joining Giant Eagle a says include transformative efforts “with little less than one year ago. online transactional capabilities, as well “While Giant Eagle is the hometown, local grocer, as engaging customers through multiple it gives us a competitive advantage, but because touchpoints across both in-store and we’ve been in the marketplace for so long, expecdigital properties. It’s a new state of mind,” tations are set high for us,” observes Aylward. affirms Aylward, who gives vigorous props “Therefore, we have to hold ourselves to very to CEO Laura Karet, whom she describes as high standards, from what we do in stores from a “innovative, full of passion and an excepcustomer service perspective, to our fresh prepared tional leader who continues to follow in the foods, to our produce, meat and seafood. We have footsteps of all of the company’s innovaa deep sense of pride, and I see [it] in the local folks tors of the past.” that work in our stores. It also shows with our emReflecting on the retail food industry’s ployees, as well as in our customer base.” ongoing gradual migration with e-commerce, Formerly chief commerce officer at Famous Aylward says, “The dynamics, and the way Brands International, parent company of TCBY consumers shop for everything but grocerYogurt and Mrs. Fields Cookies, and prior to that, ies, has evolved dramatically in the past 15 VP of e-commerce for Ascena Retail Group Inc., years. But we are at the point where there’s Aylward provides tremendous talent and experigoing to be a massive shift, and we’re going ence that serve as linchpins in Giant Eagle’s rapidly —Kimberly Aylward, to see this industry take off. And we will not evolving digital-first strategy. Involved in the digiVP of marketing and only be a full participant in the growth, but tal arena since 2000, she considers herself “a real e-commerce in some cases, a pioneer.” e-commerce person through and through.” Giant Eagle is no stranger to pioneering, as Originally hired as GM of digital marketing and evidenced by its forerunner role in customer customer experience, Aylward was quickly promotloyalty with the Advantage card, Fuelperks ed to VP of marketing and e-commerce, which she gasoline rewards, in-store pharmacies and gift believes “really speaks volumes about Giant Eagle,” cards, among other efforts. Aylward credits for taking the leap with someone whose main focus Giant Eagle’s pervasive entrepreneurial edge was on digital, and quickly realizing the benefits of as being key. “For a $10 billion company, this is overlaying those talents with corporate marketing. the nimblest place I’ve ever worked at in terms of being able to spin on a dime, roll up your Digital-first Takes Hold sleeves and get things done,” she enthuses. “We are moving in a digital-first mindset, and we’re “And I think that all plays back to the heritage at the beginning of a true enterprise-wide omof not only Pittsburgh, but of this region.” nichannel strategy,” Aylward asserts.

“We are moving in a digital-first mindset, and we’re at the beginning of a true enterprise-wide omnichannel strategy.”


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

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ComPetItve advantaGe Giant eagle will open five additional GetGo Café + market locations in its newest expansion market, Indianapolis, beginning this month.

Fast Fact No. 16 on Progressive Grocer’s Super 50 ranking of the nation’s leading food retailers

and leverage the opportunity of a small format to deliver food in a different way to meet people’s changing lifestyles.” The idea of tapping GetGo as a pickup point for deliveries from the core supermarket business took on new momentum after Polly Flinn joined the company earlier this year as Giant Eagle’s new SVP and general manager. “She realized right off the bat that she had a great source with our big-box format by using Market District as a platform to deliver healthy, good prepared foods,” LeClair says. “She’s jumped on the bandwagon of everything that we’re doing in terms” of cross-category synergies such as soft drinks or snacks. “We take the insights and ensure that what works in a GetGo environment is passed through in what they’re doing in their sets. Along with that, we’ve taken

Saluting the ‘Immeasurable’ Contributions of John Lucot After 42 years at Giant Eagle, most recently as president and COO, John Lucot retired this past June 30. As one of the company’s most instrumental leaders, Lucot was a member of the senior management team that orchestrated some of Giant Eagle’s most important initiatives during a period of significant growth and diversification, including the launch of its multiformat strategy and the popular Fuelperks customer loyalty program. Lucot, who began his career in 1974 as a Giant Eagle supermarket clerk, equated his longevity with the company to its dynamic role as John Lucot an employer and community emiswith Ceo sary. “The fact that I have spent my Laura Karet entire career with Giant Eagle is a testament to the compassionate spirit and commitment to the personal growth of others that is at the core of our wonderful organization,” he said, “and it is this commitment to serving others, including our tens of thousands of team members and millions of customers, that I will miss most.”


our fresh food manufacturing facility, where we’ve traditionally made products for the big box, and are now delivering fresh food every day to a number of GetGo locations, such as garden salads, sandwiches and prepared entrées. It really ups the quality and trust of our offerings.” As such, Giant Eagle is looking to boost the

CEO Laura Karet, who has added his COO duties to her role, lauded Lucot’s legacy of contributions and dedicated service: “John’s value to Giant Eagle is immeasurable. In addition to his expertise, steadfast leadership, and competitive and fiery spirit, the profound and positive impact he has had on the lives of our team members cannot be understated.” During Lucot’s leadership tenure, Giant Eagle experienced significant growth, entering new markets while expanding throughout its primary communities and launching such new banners as Market District. Additionally, Giant Eagle launched the Fuelperks customer loyalty initiative, which is regarded as an industry-best fuel rewards program, and also significantly enhanced its own-brands program, which now offers more than 12,000 private brands. Lucot took on his most recent role in January 2012, prior to which he held executive positions in distribution, retail development, real estate and operations. Lucot was also instrumental in the development of Giant Eagle’s GetGo, real estate and independentoperations businesses, while investing hundreds of millions of dollars in capital expenditures to ensure that the company’s stores deliver a world-class shopping experience.

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


2016 Retailer of the Year


Photo by Charles LeClaire

image of convenience store foods, much like fellow Pennsylvania-based c-store chains Wawa and Sheetz have done. “We consider ourselves lucky to compete against Sheetz in some ways,” Karet says, “because they have redefined what convenience store food is.” From a strategic standpoint, she continues, “We see the [grocery/c-store] interplay as being a key differentiator and competitive advantage. The supermarket business and the convenience store business have a lot of overlap, but they also are different businesses. We’re trying to manage them in such a way that we can tap specific expertise that we need, when it makes sense from an industry perspective.” But while they’re distinct and separate busi-

nesses, the supermarket and c-store sides offer unique potential career paths for Giant Eagle associates. “We have people that go back and forth between the businesses all the time,” Karet notes. “If you think, for example, about someone who’s a first-time manager, managing a smaller format like GetGo is a wonderful place to get experience. We have people that go over to a GetGo, figure out how to manage a box, go back to Giant Eagle, manage a department, then go back to GetGo. It’s seen as an expansion of development opportunities. It’s a really nice platform to have.” LeClair adds: “Then you have Market District, so that keeps our innovation alive. We utilize Market District for Giant Eagle and for GetGo to bring those foods down that are on trend and making sure that happens.”

CUstomized ConvenienCe GetGo cafés feature kiosks where patrons can custom-order meal selections and beverages.

Unleashing the eAdvantage Assets Having joined the company as EVP of merchandising and marketing three years ago, LeClair has brought a fresh set of eyes to the company, as well as

Photo by Charles LeClaire

Local motion “Local is a definite focus point for us,” affirms Jerry LeClair, EVP of merchandising and marketing. As such, the retailer has recently consolidated its local platform to one back-door delivery truck from the previous 50 deliveries from various suppliers. “Unfortunately, there’s a lot of paperwork that has to be done to set up a single vendor, so establishing a single-source, local product presence improves across the entire store with enhanced variety, which is what was really needed.” From a product penetration and popularity standpoint, LeClair says Giant Eagle has seen its greatest success with local perishable vendors, particularly produce. “We’ve had great response with our farmers’ training programs, which are designed to enable them to pass the required inspections,” he notes. “It give our customers the ability to purchase some absolutely great-quality produce in our stores.” In the meat department, the company’s local beef and Berkshire pork programs continue to expand from their initial launch in Market District, which is often the case with specialty line additions. “But it’s now found in our signature conventional

homeGrown edGe Giant eagle has had great success with local produce, which is a credit to its front-line store teams, including Produce Leaders dan Lewis (left) and dan henry.

stores, which [comprise] roughly 30 stores, and it’s doing very well,” LeClair says. “It’s pretty neat to be able to tell the story about our local beef and pork products,” the quality of which, he notes, also speaks nicely for itself.

October 2016 | |


considerable talent and enthusiasm, the last of which was particularly roused by the rich assets residing in Giant Eagle’s pioneering Advantage loyalty card, insights from which are used for “category plans, targeted customer marketing and better overall decisions for our entire team,” he notes. One of the most recent ways Giant Eagle has become more digitally engaged, says LeClair, is through its eAdvantage program. Piloted in Giant Eagle’s Columbus, Ohio, market stores in late 2014, eAdvantage comprises three unique digital elements: the new Offer of the Week, the integration of the popular eOffers program, and optional eReceipts. The digital savings program provides Giant Eagle Advantage Card customers with exclusive free products and deep-discount offers, which are automatically loaded to registered Giant Eagle Advantage cards. Shoppers are notified of the —Laura Karet, CEO Offer of the Week through weekly emails, in-

“We see the [grocery/ c-store] interplay as being a key differentiator and competitive advantage.”

Giant Eagle First Pennsylvania Grocer to Pop Corks Under New State Law Less than two weeks after historic liquor reforms took effect across Pennsylvania, Giant Eagle’s Market District store in Robinson Township, Pa., became the first grocery store in the Keystone State to sell wine since before Prohibition, following the August passage of a wine privatization bill to allow wine sales in the state’s supermarkets. The store hosted a ceremonial champagne toast on the morning of Aug. 19, attended by Giant Eagle officials and Pennsylvania House Speaker Mike Turzai, the bill’s primary sponsor. Under the new law, businesses with restaurant or hotel liquor licenses may sell up to three liters of wine to go per customer. So far, nearly 200 stores have applied for wine permits, and 81 have received approval. Currently, 10,000 businesses in the state hold restaurant liquor licenses, including about 300 grocery and convenience stores currently allowed to sell beer.

store signage, Giant Eagle social media communication and other avenues. The eOffers program allows Giant Eagle customers to choose from more than 100 electronic coupons on popular products ranging from parmesan cheese and ice cream to shampoo and paper towels. New offers on favorite brands are added every week. After a consumer signs up on the retailer’s website, all clipped eOffers are automatically applied to a purchase when scanning the shopper’s registered Giant Eagle Advantage Card. The new eAdvantage program combines the best of the company’s digital savings opportunities, and builds on the exclusive offerings and other compelling customer-facing programs, including 10-cent Fuelperks gasoline discounts offered for every $50 purchase when scanning a Giant Eagle Advantage Card, weekly specials and a strong pharmacy offering.

Giant Eagle and the Pennsylvania Liquor Control Board (PLCB) first met in early August to collaborate on planning and developing the processes for a system-wide rollout of wine to go at many of the chain’s stores in Pennsylvania. A limited pilot program, which is intended to test and refine processes for forecasting product needs, planning replenishment orders and delivering wine from a PLCB distribution center directly to the store, was developed for one Giant Eagle location. So far, 32 Giant Eagle stores have been granted expanded wine permits. The PLCB is currently in discussions with a number of large chain retailers interested in selling wine to go and will encourage the development of similar limited pilot programs with each retailer that intends to sell wine at multiple locations. “Since Act 39 was signed into law, we’ve been stressing that we want to bring wine to go to consumers as quickly as possible, but that we’re determined to do it right,” said PLCB member Mike Negra. “Giant Eagle’s introduction of wine-to-go sales is the culmination of a lot of hard work by individuals across all of the PLCB’s departments, and the PLCB is ready and eager to achieve similar success with retail chains across Pennsylvania.” One of Giant Eagle’s guiding forces, Giant Eagle EVP of Merchandising and Marketing Jerry LeClair, toasted the development as “a tremendous convenience for our customers.” VINTAGE CONVENIENCE Giant Eagle’s Market District store in Robinson Township, Pa., became the first supermarket in the Keystone State to sell wine since before Prohibition, following the August passage of a wine privatization law. From left: Giant Eagle execs Jerry LeClair and Laura Karet join Rep. Dan Frankel (D-23, Allegheny County); Erin Molchany, of Gov. Tom Wolf’s staff; and Pennsylvania House Speaker Mike Turzai (R-28, Allegheny County) to toast the occasion.


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


Congratulations to Giant Eagle for XXXXXXXXXXXXXX being selected as Progressive Grocer Retailer of the Year!

Customer Logo Here

©2016 The Coca-Cola Company. “Coca-Cola” and the Contour Bottle are registered trademarks of The Coca-Cola Company.

©2016 The Coca-Cola Company. “Coca-Cola” and the Contour Bottle are registered trademarks of The Coca-Cola Company.

Easy eadvanTagEs giant Eagle’s eadvantage program provides exclusive free products and deep-discount offers.

Twinkies on Top When discussing consumers’ evolving preferences for receiving information, discounts and promotional offers, LeClair says that while digital delivery is expanding, it’s not a onesize-fits-all conversion process. “We know that we can communicate with shoppers two, three and possibly four times a week digitally, whereas a circular will make it into a home one time a week. With digital delivery, we can provide the latest offers much more frequently, which helps foster more of the value of what they’re getting from Giant Eagle,” LeClair says, noting that this vastly enhances the value proposition and customer engagement during the pre-shop, in-store and post-visit, by offering value, planning and savings options for both time- and price-conscious shoppers, and everyone in between. The eAdvantage program is seeing “some great

redemption rates,” LeClair affirms, noting that it first started with GetGo items. To date, Twinkies have been the biggest success. Of the many free or deeply discounted products offered weekly, he muses: “Who would think that a single Twinkie for nothing would generate the highest redemption rate?”

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to its customers, LeClair says, including when and where customers want it.

When asked what’s been learned about redemption patterns, LeClair says that “the shocking thing is that if it’s a free event, 55 percent is redeemed, with the other 45 percent purchased.” Equally impressive, he adds, is the strong repeat purchase patterns generated by free eAdvantage items. “What we’re seeing, especially on a new item, is that shoppers are repeating trial,” a scenario which, he notes, “is spectacularly improved if it is an eAdvantage item versus just on the shelf with a ‘new’ tag clip. It’s been an amazing success” for both participating vendors and team members, the latter of whom get an opportunity to try the products and gain familiarity with them for customer inquiries. Considering that loyalty is key to engagement, Giant Eagle will continue to build on its well-established strategy to deliver what’s most relevant

Maximizing Curbside Convenience Indeed, as Giant Eagle expands its digital talons, its click-andcollect Curbside Express has expanded to 24 stores in the past 18 months, from the initial four pilot stores. “In some cases, we’re doing hub-and-spoke, which means that we pick the order in one store and deliver to another,” LeClair says. One of these locations is a GetGo convenience store located in close proximity to the retailer’s expansive Market District store in Robinson Township, Pa., which has an equally expansive parking lot. “It is much more convenient for customers to pick up their orders at the Robinson GetGo, where grocery orders are loading in their car while they’re filling up their gas tanks,” he explains. LeClair says it’s a model that can potentially be replicated in other areas, including in its newest expansion market, Indianapolis, where the chain is opening five additional GetGos beginning this month, all of which will have Curbside service, to complement Giant Eagle’s Market District store in the Indy suburb of Carmel. “Rather than just having our one Carmel Market District, we’ll be able to expand the service to customers in a full 30-mile radius,” he says, despite the fact that roughly 7 percent of the store’s existing customer base drives more than 20 miles to shop there.

Catalyst of Change For 85 years, Giant Eagle has been dedicated to giving back to the communities it serves, including as a stalwart champion of employment for people with disabilities. Proof of the same can be found in the company’s recent honor, The Arc’s 2016 Regional Business Employer of the Year Catalyst award, which recognizes industry leaders that have made extraordinary contributions in the lives of people with intellectual and developmental disabilities. Team members with disabilities are treated just as they should be at Giant Eagle — no differently from their colleagues without disabilities. People with disabilities thrive in a variety of positions throughout the company’s 423 retail locations, where individuals aren’t limited, but rather given the opportunity to find a job that best fits their skill sets and interests.

CurbsidE CLiCKs Giant Eagle’s click-and-collect Curbside Express service has expanded to 24 stores from the initial four pilot locations, to great success.

“We are upping our ante as it relates to our ability to innovate.” —Laura Karet, CEO

Giant Eagle also has disability awareness training for its associates, which includes a review of the Americans with Disabilities Act, interviewing skills for hiring people with disabilities, and disability simulations. The goal is not just to promote employment for people with disabilities within the company, but also to educate, empower and enable other companies to follow in its footsteps. The grocer is advocating in communities and working with other companies to help them begin employing people with intellectual or developmental disabilities. Additionally, Giant Eagle is focused on expanding its liaison project with its community partners Blind and Vision Rehabilitation Services, Achieva, New Avenues to Independence, and Goodwill. In this project, outside job coaches are embedded into the company to help facilitate hiring and retaining more people with disabilities. Each of Giant Eagle’s major markets has at least one liaison.

October 2016 | |


Nestlé Congratulates

and its 34,000 employees

Progressive Grocer 2016 Retailer of the Year

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland, or are used with permission.

Photo by Charles LeClaire

aPPle PIe order Market district Pine Township’s team includes (from left) Tami Nemeth, executive store leader; Toni Gallo, deli team leader; ricky Barnes, senior grocery team leader; and Jackie Parker, senior team leader.

Photo by Charles LeClaire

Expanding Curbside to its GetGo c-stores — some of which also boast the Café + Market format, including the one in Carmel, which is on the other side of the Market District parking lot — offers a twofold advantage, notes LeClair. Since Fuelperks isn’t offered in Indianapolis, he says, “it’s another way to introduce something to the area by expanding our delivery options while also enhancing our presence” in an important, albeit one-store, market. All five central Indiana GetGo Café + Market stores are currently under construction and will be open by the end of this year, which LeClair says will boost the retailer’s brand and provide richer opportunities to shine with its signature specialty products and premier-quality perishable items “that really get people excited and interested in that visit. Over time, I think it will just

continue to build. We’re not washing our hands [of] it. We are definitely there for the long haul, and we’ll continue to improve.” After opening its first Café + Market location in 2015, the company is transitioning more stores to the bigger, brighter, fresh-focused format, which LeClair says reflects Giant Eagle’s overarching strategy to put the customer first. “The most important thing we want to do is treat our customers right, beginning with quality products that solidify our quest to be the perishable leader in every market that we operate in, followed next by offering value to every customer that comes through our doors. It’s having a strong opening price point, all the way up to having the most impressive olive oil that you can find in the country, if not in the world. That is really what we’re all about,” says LeClair, “along with our Advantage program, our fuel program and closing the loop once again with putting our customers’ needs first.”

Fast Fact Number of unique items carried in each supermarket: 20,000-60,000

Platform for Innovation Giant Eagle launched its Market District format about a decade ago as consumers were starting to get more interested in food as an experience. ToP PIcks curbside lead Megan caputo prepares a click-and-collect grocery order for pickup.

October 2016 | |


Photos by Charles LeClaire

cook’s tour chefs Brandon rogozinski (left) and Dagan Gabany are among the driving forces behind Giant Eagle’s culinary offerings.

“It came from a combination of the Food Network and its explosion into people’s consciousness,” Karet says. “Whole Foods was part of this, too, and Trader Joe’s and Wegmans. We started seeing people being interested in learning more about food, trying new things. ‘I really don’t know how to

cook the way that my mom used to cook. Teach me all of that stuff.’” Around this time, Giant Eagle opened its Shadyside store, in Pittsburgh’s East End. As Karet recalls, the company set up a skunkworks project group within the development team, “and we said to


Photo by Charles LeClaire

them, ‘We want to be the best passion-for-food store in North America. Use any resource you want,’ and they went off and created this fantastic thing.” say cheese! Giant Eagle got the ball Deli Team Leader eli Green guides rolling by remodeling two shoppers in of its best stores to create search of the the Market District format, latest specialty varieties. experimenting with different concepts. “We actually took our single best store in the South Hills, which at that time was doing something like $1.6 million a week,” Karet says. “It was mid-remodel and we got so excited about doing this concept, we stopped the remodel and remodeled it Fast Fact again as a Market District. People thought we were insane.” Annual sales of That led to the Market District in Robinson approximately Township, the first ground-up location for the for$9.5 billion mat. “We had been somewhat constrained by one of the stores, a slightly smaller store for us. It was a city

store; you couldn’t expand it more than it already had been. We did what we could with the space we had,” Karet says. “Then came an opportunity that doesn’t happen very often in Pittsburgh, to do a ground-up store in a part of town that was growing, had great access, all the things you’d want.”

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Interestingly, Giant Eagle’s No. 4 store, freshly remodeled, just happened to be sitting next door to the new site. “We said, ‘If we’re going to do we have to do it right and close that store Fast Fact this, and build a new store,’” Karet recalls. “There, we Number of got to try everything we ever wanted to try. We team members will never build another one of them. Because we employed: 34,000 don’t need to, because we learned so much from that. What it did for us is it significantly im-

Giant Eagle’s Chicken Truck Rolls On One of Giant Eagle’s most recent successes was the launch of its fried chicken Express food truck, which serves the retailer’s signature fried chicken at stops in Pittsburgh and throughout western Pennsyvania. It’s the retailer’s second food-truck venture; the first, the Market District Foodie Truck, has been operating in Columbus, Ohio, since 2012. With a fanatical fan base clamoring for its menu of chicken-centric items,

proved our ability to innovate.” With its vast high ceilings, sweeping floor plan and open terminal market look and feel, the 150,000-square-foot Robinson store features extensive offerings in every category, from produce, to prepared foods, to meat and seafood, to deli and bakery. “When we developed Market District, we tried to find the best of whatever we were trying to do,” Karet explains. “We went to farmers’ markets and

which are priced comparably to parity items in its stores, Steel City’s Chicken Express features the Firecracker Chicken Sandwich, an eightpiece bucket of fried chicken, and individual meals, fajitas, salads, wraps, chili, and side dishes such as Market District macaroni and potato salads. Giant Eagle employs social media to update the public about where and when to find the truck via dedicated Facebook and Twitter pages.

Photo by Charles LeClaire

Something for everyone giant eagle’s market Districts — and many of its traditional banner stores — feature an extensive collection of prepared foods, ranging from made-fromscratch pizza, sandwiches and rotisserie meats, to self-serve salad bars, sushi, grab-and-go dinners, and an array of soups and wet salads.

produce markets, and said, ‘How do we make that happen in this building?’” European charcuterie influenced the deli, Italy inspired the cheese shop, French patisseries inspired the bakery. “In the restaurant, we tried to do an Asian thing over here, a hamburger thing over here, so you could sample your way through lunch,” she says. “It’s been very successful.” The experience proved to Giant Eagle that the idea of “food as an experience” was an opportunity worth seizing, Karet acknowledges. “All 220 of our stores are not going to be those stores. We decided to do enough of them so that each of our key regions would have one or two of them. They could be the center of innovation for the stores around them and create an overall halo effect for the rest of our stores, which, in fact, has proved to be true,”

she says, noting that in the past two years, Giant Eagle reached its goal of getting Market District stores into every one of its key regions, opening five new Market District locations in that period. With this solidified platform, Giant Eagle is well positioned to learn what works, as well as what

Photo by Charles LeClaire

showcasinG seasonal Favorites seasonal displays factor heavily in Giant eagle’s merchandising schemes, particularly for its own brands, which feature on-trend flavors and relevant packaging.

doesn’t. Like when the grocer decided to get into in-store dining, as Karet relates: “We decided we would have real silverware. We had the silverware, but we didn’t have a system to get the silverware back from the dishwasher out to where you’re supposed to pick it up. It was just all sitting back there. We know how to stock shelves, but we had never thought about getting someone to actually get the forks back out to where people can get them.” The team also underestimated the consumer response, she observes: “The store opened at about double the volume that we expected. It was all hands on deck. I actually made pizza for three weeks. Our CFO at that time washed dishes, because the dishwasher was not big enough. It was actually fabulous. We figured all that stuff out.” Indeed, because within the past couple of years, Karet declares that “we’ve gotten the right number

of stores, we’ve gotten the stability of operation. We are upping our ante as it relates to our ability to innovate, for the kind of personnel that we have in terms of food, as well as our fresh food manufacturing facility. That’s going to be a very important growth platform for us going forward.”


Talking with Eric Frank President, Tosca The USDA & EPA announced that food waste needs to be reduced by 50% by 2030. What impact can reusable plastic containers (RPCs) have on this initiative Eric Frank: According to the National Resources Defense Council, as much as 40% of food is wasted in the U.S. each year. Waste can happen at any number of points along the food supply chain: on farms; during processing, handling, and storage; during transport; and/or at retail. Reusable plastic containers, or RPCs, can be instrumental in helping to reduce food waste because their durability provides much better protection of what’s inside. When product arrives in better condition with little to no damage, there is less shrink and, therefore, less food waste. All in all, RPCs allow for a much better journey from farm to store. Tosca had great success implementing their innovative egg RPC with a national retailer and reducing shrink by 50%. What other opportunities exist to leverage RPCs to reduce food waste Eric Frank: Based on the fragile nature of perishables and the success of the egg RPC,


we knew there were other products that could benefit by being transported in RPCs. The price per pound is significantly higher for case-ready meat, so it makes sense to leverage a packaging solution that can provide greater product protection and reduce damage. Because Tosca has a proven packaging solution for the case-ready meat industry, we were able to demonstrate the value of making this change.

To that end, we are implementing a caseready meat RPC solution with a national retailer in the majority of their DCs for select cuts of meat. This promises to reduce food and packaging waste while ensuring higher quality products and an improved customer experience – a win for customers and the retailer.

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

Speaking of packaging waste, many retailers have announced zero waste initiatives as part of their sustainability goals. How can reusables support their efforts Eric Frank: Reducing waste is a key priority for many of our customers and it's at the heart of all we do. Reusable packaging not only reduces product damage and food waste from supplier to shelf, it is also a more sustainable solution. In a year, about $11.4 billion of disposable packaging ends up in landfills, according to research by the nonprofit organization As You Sow. The very nature of reusables supports a zero waste vision. The containers can be used over and over again, eliminating waste from even entering the supply chain. For every RPC used, approximately 1-1.5 lbs of corrugated is eradicated. For a grocery store, this means millions of tons of corrugated can be eliminated by using reusable containers in its place. Just as one-time-use shopping bags are being used to take product out of the store in a more environmentally responsible way, why not bring product into your stores with reusables - the more environmentally preferred packaging solution.

Proven Packaging. Superior Service.

A smarter way to move meat From farm to store, Tosca moves your product more efficiently. Our reusable plastic containers (RPCs) provide superior product protection while reducing waste - product waste, packaging waste and labor waste. They also offer greater supply chain efficiencies with increased cube and reduced freight resulting in lower costs. RPCs - the right packaging solution to optimize your supply chain. |

At every turn.




R E TA I L E R O F T H E Y E A R |

All Formats, Big and Small Flush with the success of its huge Robinson Township, Pa., Market District store, Giant Eagle cast its experimental eye in the other direction. “We decided to try a really small store,” Karet says of the first Market District Express, in the South Hills of Pittsburgh, which runs about 20,000 square feet. “The idea was that it would be a restaurant plus a fill-in shop. That’s been a huge success in

Specialty Pharmacy Earns Full URAC Accreditation Giant Eagle’s specialty pharmacy subsidiary has received full specialty pharmacy accreditation from URAC, a Washington, D.C.-based independent health care accrediting organization that assesses quality standards for the health care industry. “Attaining URAC accreditation is especially exciting, given our ability to offer specialty pharmacy customers the unique convenience of our retail pharmacy presence,” says Mark Doerr, SVP of pharmacy for the Pittsburgh-based retailer. Noting that URAC is a symbol of excellence for commitment to quality and accountability, Doerr says that the combination of a “high level of specialty service and the personal support available in-store has helped to encourage medication adherence, which is critically important to patients taking specialty medications.” Giant Eagle Specialty Pharmacy is dedicated to providing both choice and convenience, in addition to offering patients personal support as they manage complex medical conditions including hepatitis C, cancer, rheumatoid arthritis, psoriasis, Crohn’s disease, multiple sclerosis, HIV, human growth hormone deficiency, and osteoporosis. Patients can choose to have their specialty medications delivered directly to their home, or they can pick up their medication from one of more than 200 Giant Eagle pharmacy locations where they can receive face-to-face support like injection training and medication counseling.

“We cannot lose sight of center store, which continues to hold opportunities.” —Jerry LeClair. EVP of merchandising and marketing

Fast Fact Amount of material Giant Eagle recycles in one year: 141 million pounds

terms of customer acceptance.” South Hills delivered the learnings that Giant Eagle needed to launch its newest store, in Bexley, Ohio, near Columbus (to be featured in PG’s November 2016 issue). “We think we’re really on to something with that store,” Karet says of the two-story, 30,000-square-foot market, which features a restaurant that allows diners to consume wine they’ve purchased in the store’s spirits department. “It’s a really interesting concept. I am so proud of what we have accomplished,” she says. “When I walked in, I had this overwhelming rush of emotion because I was so proud to be associated with it. It’s just great.” The Bexley store further exemplifies Giant Eagle’s ongoing mission to deliver a unique, diverse, relevant shopper experience. “We started as corner grocers. We didn’t have refrigeration. One of the first big debates in the company was should we put in delis,” Karet says. “Looking back, it was a huge risk,” that sparked a heated discussion among the five founders. “The same thing happened when we put in scanning, because it was a huge investment. No one was doing it at that time,” and the the decision to proceed, she notes, required a big leap of faith. To be sure, Giant Eagle has been an industry leader in introducing many new concepts to the public. “To be totally frank, when we decided to be the best passion-for-food company, and we had said we wanted to be a restaurant, it was hard for us to convince people that supermarkets could be a place that you could do that. There were vendors that wouldn’t sell to us because they said, ‘You’re a supermarket.’ We had a hard time at the very beginning hiring chefs,” Karet admits.

Eagle-eye Vision As a majority shareholder in Seegrid — a fellow Pittsburgh-based company that makes vision-guided vehicles (VGVs) used in factories and warehouses — Giant Eagle recently invested an additional $12 million in equity to help the company develop new products, enhance customer support resources, and accelerate operational efficiencies with optimized workflow processes, increased productivity, and reduced labor and operating costs, all while improving workplace safety. The regional retailer has also agreed to provide an additional $13

million on an as-needed basis. A pioneering leader in visionbased autonomous industrial vehicles, Seegrid equips forklifts and other industrial vehicles with cameras and computers that enable them to move safely to and from loading docks, warehouses, production lines and other industrial settings. In addition to Giant Eagle, Seegrid’s customer portfolio includes leading global companies such as Whirlpool, Daimler and Jaguar Land Rover, all of which use its driverless autonomousvehicle robots to streamline their manufacturing and distribution operations and improve their outstanding safety processes.

Photo by Charles LeClaire

But today, supermarket foodservice is considered a highly desirable culinary venue. “I shouldn’t say we can’t keep chefs away, but people perceive that working in a Market District is a compelling business opportunity, and the lifestyle that goes along with it is extremely appealing,” Karet says. “I think 10 years ago, if someone had said I would see someone in one of our stores having a drink at 2 o’clock in the afternoon, I would have had a hard time picturing that.”

Owning the Brand Giant Eagle enjoys a broad customer following for its own-brand products, which encompass nearly every category throughout the store. The retailer freely admits that it looks to other industry leaders for cues on best practices in private label. “We’re not shy about” researching best-inclass concepts and heeding their lead, Karet says, pointing to several success models, including Canadian grocer Loblaw’s President’s Choice (“a fabulous brand”) and Trader Joe’s (“their overall brand marketing is just spectacular”). Leveraging these success stories with a hometown spin has given Giant Eagle a winning program, placed in the capable hands of “a team of folks that are unbelievably good,” she declares. At the time of PG’s visit with the Giant Eagle team in mid-September, the retailer was rolling out its fall merchandising programs, featuring many store-brand products such as apple cider, including a salted caramel flavor, an uncommon profile for a beverage, as well as pear ginger. “Food as an experience brings with it a sense of discovery and joy,” Karet affirms.

Icing on the Own-brand Cake Giant Eagle’s robust own-brands program, which includes more than 10,000 products that offer name-brand quality at various value-driven price points, is backed by a double-money-back guarantee. “One of our major objectives has been, and will continue to be, a keen focus on improving our quality, variety, and really differentiating our products against the national brand,” says LeClair. “As innovation has slowed down for some national-brand manufacturers, we’ve actually had to pick up where they have left off, so there are plenty of opportunities for new items and new growth in the segment.” Accordingly, Giant Eagle’s teams stay abreast and attuned to inspiration to be drawn from all channels, including restaurants, to study toptrending items to continuously expand and further perfect the grocer’s private-brand portfolio. Seasonal items are particularly ripe for further expansion, affirms LeClair, and serve as the “icing” on Giant Eagle’s own-brands R&D cake. It’s an imperative to do so, he adds, because the intensifying competition has “made it a tough place out there right now,” with much more to follow from the likes of Aldi, Lidl, 365 by Whole Foods Market, more dollar stores, Walmart, Kroger and Meijer, the last of which is planning to open as many as 10 stores in the Cleveland-Akron area — one of Giant Eagle’s principal markets — over the next four or five years. “It is an extremely competitive environment,” LeClair confirms. “You have to be true to what you are known for, and also be innovative enough to remain relevant.” Centrally Filling the Need In the realm of meeting — and ambitiously seeking to exceed — its customers’ needs, Giant Eagle’s in-store pharmacies are integral. “Pharmacy represents a tremendous percentage of our business,” asserts LeClair, who marvels at the “daunting number of prescriptions filled by our store teams,” which tallies an estimated 150,000 per week. Mirroring the pharmacy segment’s growth is an automated central-fill facility opened in the past year, which LeClair describes as “truly

ExtraOrdINary OILs a highlight of Market district’s bulk food department is a collection of extra-virgin olive oils and gourmet balsamic vinegars that provide a tasty and economical way to select personal favorites.

“Food as an experience brings with it a sense of discovery and joy.” —Laura Karet, CEO

October 2016 | |


Photo by Charles LeClaire

innovate For good giant eagle’s in-store pharmacies are integral to its overall business, which is underscored by its store teams filling an estimated 150,000 prescriptions per week.

awesome. We have five robots that are filling scripts,” which are married with a sorting mechanism for daily deliveries to every store with a pharmacy. The new central-fill hub is co-located in Giant Eagle’s Freedom, Pa.-based Fresh Foods Manufacturing facility, which is a varied and manysplendored thing. The complex houses the grocer’s central kitchen products, as well as the provisions and supplies for its GetGo stores and WetGo car washes. “It really gives us the opportunity to enhance our internal supply chain with the ability to pick up everything and deliver it to stores at once,” LeClair says.

Welcome to the Future Looking ahead, LeClair alludes to a potential home delivery model in the offing while describing Curbside as the stepping stone.

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Progressive Grocer Retailer of the Year! 5 Generation Bakers is proud to be a partner with Giant Eagle!

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

“We’re seeing all kinds of different startups trying different things, but we believe that with our model, we can do it better and faster. But it represents a great service for our customers, and is something that will definitely help us better meet their needs,” he says. Addressing the brewing e-commerce battle, LeClair minces no words: “We cannot let Amazon, or Walmart, take over. We are really focused on getting our digital properties up to speed in order to deliver the basics and more. Gift cards are a big part of our business,” he continues, noting the retailer’s existing digital gift card site, which is being continuously improved. “Soon, customers will be able to load gift cards to their mobile devices, instead of having to stop at a store to make a purchase. They’ll be able to download their gift card and use it within minutes of their purchase,” or use it for e-gifts for others in the same way. Giant Eagle is also hard at work on building similar platform efficiencies for its internal and local business affiliate teams, “which will enable us to take all the things that we did on index cards and transform them to digital,” a development LeClair describes as both “very promising and very exciting.” So, too, are the opportunities with the company’s trading partners, the underpinnings for its Customer Connect CRM program, which LeClair says has dramatically evolved over the past three years as a result of tapping the insights it’s harnessed. “Our vendor portal is live right now, and many of our manufacturer partners are already engaged by looking at the insights, and coming to us with the targeted offers” featuring mutually advantageous rewards. “We’ve had some great success stories, and this is clearly the future.”

The Center of Super When asked to assess the intersection of the instore experience and higher-growth categories, LeClair replies that while perishables will undoubtedly remain an area of continued focus for all food retailers, “we cannot lose sight of center store, which continues to hold opportunities.” Future Millennial parents in particular, who’ve deferred having children until their late 20s and early 30s, will help center store “come alive again,” LeClair predicts. “If you’ve let it die, you’re in trouble, so I think we’re in a very good position today. We’ve reset our stores with a total moving of categories, aisles and adjacencies, and are 85 percent complete throughout the company to make sure that we have the give and take within the center store to really look at the categories that have high growth. We now have the flexibility to flex where something’s growing, and contract when something is not.” PG

sponsored Content

5 Ways

to Tap the Hidden Power of the

Frozen Food Aisle


onsumers tend to have a complicated relationship with frozen foods. They rely on frozen fare for a convenient shortcut when schedules are tight—but they may feel guilty for not whipping

up a meal from scratch using fresh foods. They reach for frozen favorites to quickly satisfy an off-hours craving—yet they question the health and quality quotient of many frozen items. It all adds up to a category fraught with unique challenges, as well as undeniable strengths and opportunities that manufacturers and grocery retailers can work together to leverage and monetize.


Tap The hidden power of The frozen food aisle

“It’s important to understand shoppers’ [frozen] usage and shopping habits so retailers and manufacturers can work together to reinvigorate that part of center store.” — David Lundahl, CEO of InsightsNow

versatility of frozen certainly appeals to parents, adults-only households are just as likely as households with children to purchase frozen foods and to say they will continue purchasing frozen foods in the future.2

Convenience has always been one of the primary drivers of this major $22 billion category (including dinners/ entrees, pizzas, side dishes, and appetizers/snacks), projected to continue growing steadily to $23 billion in sales in 2019, according to Packaged Facts research. Consumers also turn to frozen foods for ease of storage and use, whole-family appeal and taste.1 Shifts in shopping and eating behaviors, however, are posing challenges to the frozen category, with competition for the frozen food dollar coming from other supermarket

“Frozen is extremely relevant for the time-starved busy family of today, as well as the staying-single-longer millennial.” — Bob Shaw, founding partner of Concentric

departments, restaurants and non-grocery retail outlets. To keep loyal customers from migrating away from frozen foods, grocery retailers will need to rethink their approach to the frozen aisle, starting with defining the area’s target shopper.

Anatomy of a happy frozen food buyer Just about everyone eats frozen foods: Consumption cuts across age, income and ethnicity. While the convenience and

Frozen food consumption habits are also often linked to life events. 3 For example, a new job can bring about stress, unpredictable hours and a shift in the routine. As a result, those with new jobs are more likely than average to take advantage of frozen foods’ convenience and taste benefits,4 suggesting that consumers in the throes of a big life change are prime candidates for boosting frozen food purchases. “Frozen is extremely relevant for the time-starved busy family of today, as well as the staying-single-longer millennial,” notes Bob Shaw, founding partner of Concentric, a branding, marketing and innovation agency in Charlotte, N.C. In fact, millennial shoppers in particular are key targets for frozen food purchases linked to life stages: This demographic group of consumers ages 18 to 34 ranges from recent high school graduates to working adults living in the suburbs with a spouse and kids, with shopping habits that vary accordingly. In addition, they’re currently projected to outspend every other generation by 2017. 5

De-mystifying frozen for the nay-sayers When consumers opt not to buy frozen, research suggests it’s less a function of traditional demographic variables than a reflection of certain attitudes and beliefs. Exploring these attitudinal barriers is a crucial first step for breathing new life—and sales—into the frozen aisle. “It’s important to understand shoppers’ [frozen] usage and shopping habits so retailers and manufacturers can work together to reinvigorate that part of center store,” says David Lundahl, chief executive officer of InsightsNow, a consumer research firm in Corvallis, Ore. “You have to go deeper into understanding consumers’ behavior.”

Tap The hidden power of The frozen food aisle

How consumers really feel about frozen foods % Top 2 box agreemenT T

Consumers who have purchased the same or more in any of the key frozen product categories in past 6 months vs. previous 6 months

Consumers who have purchased less in any of the key frozen product categories in past 6 months vs. previous 6 months








Made with natural ingredients




Something I am proud to serve




Good quality brands are available

Helps me reduce waste/save in freezer

Source: Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016

Many consumers, for example, see frozen as a compromise, a trade-off in which certain benefits are sacrificed for the sake of convenience. For some, serving frozen fare can even feel like a copout: Among those who report buying frozen foods less often than they used to, just 30 percent describe frozen products as something they are proud to serve, compared with 52 percent of those who continue to buy as much frozen food.6 The growing frenzy for fresh has also proven challenging to the frozen food category. Fresh food and beverage consumption is at a 30-year high,7 and the trend has hit frozen hard: A preference for fresh is the No. 1 reason consumers say they are purchasing frozen foods less often.8 The related trend toward grocery shoppers sticking to the perimeter (i.e., the produce, meat and dairy aisles) rather than center store is also an important factor,9 reinforcing consumers’ tendency to stigmatize packaged foods.



Tap The hidden power of The frozen food aisle

Top reasons for buying fewer frozen food products among consumers who have purchased less in desser t, dinner, pizza, break fast, and meat/seafood product categories in past 6 months vs. previous 6 months


Using more fresh options 45%

Health barriers 23%

Price sensitivity Issues with storage


Avoiding freezer section

12% 11%

Replacing with alternatives Limited availability


Issues with taste/quality


Source: Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016

Informing consumers about the reality of frozen food benefits vs. outdated perceptions is vital to growing the aisle, says Tom Gillpatrick, a food marketing professor at Portland State University in Oregon. “[Retailers will need to] educate consumers about healthiness and freshness that can be achieved in frozen—most consumers do not understand,” he says. “For example, frozen fish can be

fresher than fish that is not frozen,” and studies also show that frozen fruits and vegetables can be just as nutritious as or more nutritious than their shelf-dwelling counterparts.10 The widespread use of frozen products to produce dinerpleasing dishes at restaurants is another myth-buster that retailers and manufacturers alike can exploit to boost frozen food product appeal to savvy shoppers. “I do see the benefits of frozen, and so do many restaurant chefs,” says Seattle chef Dana Tough, a member of Schwan’s Chef Collective. “Frozen food companies have access to high-quality, consistent ingredients that are convenient and delicious, and I know I can count on them when needed.” “Most people are unaware that the majority of chefs and restaurants use frozen food as core staples supporting their menu,” adds Stacey Fowler Meittunen, senior vice president of Product Innovation & Development for Schwan’s Shared Services, LLC. “The convenience and consistency of experience that frozen provides is enormous. Chefs understand that there is a compelling argument for frozen as a viable solution for busier-than-ever consumers who want to eat on their own terms without compromising experience for the sake of convenience.”

Tap The hidden power of The frozen food aisle

The frozen aisle: Friend or foe to shoppers? Making the case for frozen foods is just half of the battle to take back the aisles, however. The physical setup of traditional frozen food aisles can also contribute to negative consumer perceptions of frozen food products. For starters, the frozen food aisle is usually cold both literally and figuratively. “Frozen aisles are typically long straight runs of (sometimes garishly) packaged boxes, bags and tubs behind glass that are essentially a ‘zero experience factor’ for the shopper,” says Christopher Studach, creative director for King Retail Solutions, a retail design firm based in Eugene, Ore.

“I do see the benefits of frozen, and so do many restaurant chefs.” — Chef Dana Tough, Schwan’s Chef Collective

Concentric’s Bob Shaw agrees that the frosty, sterile setting of a typical frozen food aisle can be off-putting to shoppers, especially compared with other parts of the store. “This [sterility] is the greatest challenge [in frozen food merchandising], especially when the perimeter has continued to evolve its sense of food theater,” he says. The frozen aisles can also induce choice fatigue. Often the extensive shelf sets feel overwhelming, prompting consumers to use shortcuts like signage or trusted brands to find what they need as quickly as possible rather than taking time to browse. The frozen aisles do win points with shoppers for cleanliness and organization, making it easy for them to find great deals and discounts, especially in endcap freezers. Ultimately, consumers see many of the same benefits in the frozen food shopping experience—convenience, ease, affordability—as they do in the products themselves. And just as manufacturers can go beyond the convenience factor by adding health, taste and quality benefits to their frozen offerings, retailers can amp up the aisle and the frozen food shopping experience as a whole by thinking bigger than convenience.

Sub-category success stories Several sub-categories within frozen continue to thrive with increasing sales and/or strong positive consumer sentiment: frozen snacks/appetizers, fruit, vegetables, and ice cream/novelties. These items sell well in part because they align with broader consumer expectations for frozen foods. All of them score points for delivering convenience and an easy shopping experience.11 But they also win on attributes not typically associated with the arctic aisle. Consumers rate the frozen fruit, vegetables and ice cream/novelties sub-categories high on quality12—the very characteristic that declining sub-categories like breakfast and pizza get dinged for. Frozen fruits and veggies are profiting from manufacturers’ investments in organic, natural and other key health attributes, research supporting their nutritional credentials, and explicit positioning around the healthy/easy/family-friendly trifecta. Meanwhile, the success of frozen snacks/appetizers and ice cream/novelties proves there’s still a place for indulgence and impulse purchases in the frozen aisle. These sub-categories have capitalized on consumers’ love of rich, luscious flavors that can’t be replicated by the average home chef. But they also appeal to the practical side of indulgence, emphasizing flexibility of use and portion control options. “Products like frozen pizzas and party snacks fit very well with different ‘moments,’” says David Lundahl, chief executive officer of InsightsNow, a consumer research firm based in Corvallis, Ore. “They don’t have to be aligned with the idea of ‘fresh,’ and are more of an indulgence. Focus on growing [these kinds of] items . . . by identifying more of those moments or occasions that fit with frozen and processed products.”



Tap The hidden power of The frozen food aisle

5 Ways to power up

Frozen Food Aisle Sales Grocery shoppers may not currently feel a strong emotional connection to the frozen food aisles, but retailers have plenty of opportunities to build those connections. Here are five highimpact, research-based strategies for creating frozen food aisles that can compete profitably in the evolving retail food marketplace.


Make frozen food aisles easier to shop “Creating ambiance in frozen is key to driving consumers [there],” advises Meittunen.

Consider breaking things up a bit, for example, to eliminate the warehouse feel of long rows of products behind doors. “Physically give the area unique characteristics, and locate the department in a non-typical way,” advises Studach. “While you can’t completely get away from a linear arrangement, you can arrange a series of liner cases to create segmentation, organization and interest.” He also suggests treating frozen foods—or at least some “qualifying products”—as a specialty section devoted to healthy, easy meals. “Actively promote those ‘qualifying products’ to differentiate and communicate their quality aspects,” he adds. Expand frozen food placement beyond the traditional center store aisles for even more purchase opportunities. For instance, add a freezer in the deli area near complementary items like

semi-prepared foods and refrigerated pizzas, or near the checkout to capture shoppers who might not be planning a trek down the frozen food aisle on that shopping occasion.


Broaden shoppers’ horizons about frozen food benefits

Pad Thai may be delicious, but it’s not exactly easy to make at home. Help shoppers see the benefits of trying unfamiliar or complicated dishes via convenient frozen meal solutions. To alleviate shoppers’ quality concerns, emphasize that professional chefs often start with frozen foods to create delicious dishes and that many frozen food manufacturers have pros on staff. Schwan’s, for example, “incorporates specialty chefs early on in the design process,” says Meittunen. Bring in-store chefs into the process too by having them develop and sample inspired gourmet meals based on frozen products, promoted with FSIs and retailer recipe cards. “The key is providing products that can compete with ‘away from home’ restaurant quality and bringing more of those purchases back to the grocery store,” notes Rick Shea, president of Shea Food Consultants in Minneapolis.


Stay ahead of trends

“Expand your variety [of frozen products] by looking past overall sales by SKU to a bigger picture view of driving new consumers and incrementality,” says Shaw. “Continue to shift your mix to the more interesting and innovative products.”

Tap The hidden power of The frozen food aisle

In addition to experimenting with the latest new ethnic dishes and flavors, consumers will respond to new frozen products that appeal to what matters most to them, such as health, notes Todd Hale, principal at Cincinnati-based Todd Hale LLC and a consumer research industry veteran. Frozen foods with the wellness claim “free from” artificial flavors or artificial colors delivered solid sales growth during the past year,13 and Nielsen reports near or better than doubledigit growth both near- and long-term for frozen firms with wellness claims such as GMO-free, gluten-free, natural, and organic. “Achieving the right [shelf] mix of the tried-and-true and more exploratory products is the ‘holy grail,’” says Meittunen. “Just like any great restaurant menu, retail frozen needs to offer the right balance of traditional favorites and new offerings that reflect consumers’ insatiable appetite to explore and experience new foods with unique flavors, aroma and texture combinations.”


Play up staple frozen items

A well-stocked freezer is a busy consumer’s best friend, so regularly remind shoppers to load up on frozen staples that can stand in for fresh or perishable items. And don’t forget to promote the green side of using frozen staple foods—less waste, says Karen Wilder, senior director, Health and Wellness for The Schwan Food Company. “People are coming to appreciate the fact that using frozen food helps reduce food waste because frozen foods have a longer shelf life,” she explains.


Leave ’em wanting more

Shoppers tend to make the frozen section the last stop on their grocery runs. By that point they may be ready to finish shopping and revert to a get-whatI-need-then-get-going mindset. Unless, that is, retailers give them cause to linger in the frozen aisles via sampling, exciting offers or a more sensory-stimulating aisle experience. Promote just as creatively in the frozen food aisles as you do in the rest of your store. Endcap freezers, for example, are a great place to navigate special offers, promotions or sales, along with bundled deals with other items in the store. “Providing helpful tips and tricks and information that describes the [frozen] food, its history, origin and special features and benefits is helpful to consumers,” says Meittunen. “Preparation and showcasing how the food can be used in multiple settings and occasions is also very powerful and compelling.” Ultimately, it’s essential to build trust among shoppers in both frozen food products and the frozen food aisle to create and reinforce their long-term loyalty to the category. By turning the section into a discovery-filled, linger-worthy destination, retailers will not only draw more carts down the frozen aisle, they’ll amplify the entire shopping experience—and boost store sales to boot.



Tap The hidden power of The frozen food aisle

Schwan’S conSumer BrandS, Inc. Now, more than ever, consumers want authentic food choices with simple ingredient statements that they can feel good about serving their families. Schwan’s Consumer Brands, Inc. conducted research for its exclusive Reinvigorating Frozen Foods Report 2016 to start a conversation about how food makers and retailers can communicate the benefits of frozen foods to consumers both inside and outside of retail stores. Schwan’s Consumer Brands, Inc., a subsidiary of The Schwan Food Company, offers trusted brands such as Red Baron®, Freschetta®, Bon Appétit™ and Tony’s® pizza, Mrs. Smith’s® and Edwards® desserts and Pagoda® Asian-style snacks. Its products can be found in grocery and club stores throughout the United States.

Schwan’s Consumer Brands, Inc. 8500 Normandale Lake Blvd., Suite 2000 Bloomington, MN 55437

FoLLow the Schwan Food Company on:

LearN More at:


1 Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016 2 Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016 3 Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016 4 Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016 5 SMARTeam Market Research, “The Evolving Millennial” 6 Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016

7 The NPD Group’s National Eating Trends® service, years ending February; Schwan’s Existing Knowledge Report 8 Acosta AMG Strategic Advisors Hot Topic Report, March 2013 9 Acosta AMG Strategic Advisors Hot Topic Report, March 2013 10 new-study-reinforces-nutritional-benefitsfrozen-fruits-and-vegetables 11 Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016 12 Reinvigorating Frozen Foods Report, Schwan’s Consumer Brands, Inc., June 2016 13 Nielsen Wellness Track, 52 weeks ending 4/30/16




CA RTS Congratulations to Giant Eagle! SAFETY





Category Management




Smart merchandising can use the perimeter to boost center store. By Randy Hofbauer


t’s no secret that in the grocery channel, growth among perimeter departments is outpacing that of center store, and is anticipated to continue doing so through the rest of the decade. While center store sales are projected to grow from $205 billion in 2015 to $216 billion by 2020, perimeter sales are anticipated to rise from $296 billion in 2014 to $346 billion by 2019 — a


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

whopping $50 billion, according to Chicago-based market research firm Mintel. The reason behind this switch is clear: Americans are increasingly “counting ingredients, not calories,” eschewing heavily processed foods for fresh and natural offerings, says Euromonitor, a market researcher based in Chicago, in its April 2016 “Fresh Food in the U.S.” report. With the rise in e-commerce, however, trips to

Category Management


brick-and-mortar grocery stores are on the decline, warns Stacey Ring-Sanders, VP of o category management with Battle Creek, Mich.M based Kellogg Co. As a result, grocers aare feeling increased pressure to ensure tha that they’re meeting their shoppers’ needs, making it important to develop solutions and pair items across the store to maximize sales as much as possible. A good way to do this is to work with w suppliers and across departments, leveraging leve It’s critical the perimeter’s booming popularity to boost ex exthat retailers posure and sales of products typically seen as more have category processed — namely, shelf-stable and frozen items.

assortments that more completely meet the different and relevant health needs of their shoppers.” —Nicolas Martinez, ConAgra Foods

Shelf-stable Opportunities Abound Shelf-stable products are relatively easy to move to other areas of the store and promote alongside complementary fresh items. To do so, however, grocers must understand consumers’ attitudes, lifestyles and purchase behavior. One major consumer behavior worth noting: The busy world and increasing access to exotic flavors are pulling consumers in two different directions, pitting a desire for more exotic, complex

dishes that often incorporate fresh ingredients against a cramped schedule barely allowing for a phone call to order pizza. Matt Pabst, director of shopper marketing at Omaha, Neb.-based ConAgra Foods, suggests that marrying the convenience of shelf-stable products with the desirability of fresh products is a critical way of approaching cross-merchandising and -promotions in the center store category. For instance, ConAgra partnered with its retailer clients to share with customers its “Rockin’ Guac” recipe, which pairs Ro-Tel’s canned diced tomatoes and green chilies with Avocados From

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Category Management


Mexico avocados and perimeter items. Doing so removes a time-consuming step from preparation — dicing the tomatoes and peppers — while still giving consumers the feeling that they created something by mashing the avocados and mixing them with the other ingredients, as well as imparting the satisfaction of enjoying fresh foods. Beyond tastes, time of year also can lend itself to convenience-minded crossmerchandising and -promotion solutions between shelf-stable and fresh. One of the more stressful periods for time-starved families is the back-to-school season, which can leave parents with little time to put together a healthful lunch or snack for their kids. And considering that parents today are more interested than ever in having their kids eat fresh, less-processed foods, adding fresh components to cross-merchandised and -promoted solutions can help retailers give parents peace of mind while driving sales. As an example, shelf-stable peanut butter Continued on page 88


A growing category creates demand for variety and flavor. The US Fish and shellfish category is one that grew moderately between 2009 and 2014, and is expected to continue growing into 2019. Consumer perceptions and understanding that fish and shellfish are healthier alternatives to other meats is driving sales. With consumers getting hooked on seafood, now more than ever it’s important to stock a variety of options that deliver on quality, taste, and flavor. Sea Best® branded frozen seafood brings all of this to the table. With innovative product offerings we cover the category so you can satisfy your seafood shoppers taste for the healthier alternative. Meet the demands of your shoppers with Sea Best frozen seafood in your case, and be on your way to strong category growth. Source: Fish and Shellfish-US-October 2014



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



Fish Fillets | Breaded | Shrimp | Shellfish | Value-Added | Oven Ready | Soup Bowls Ourfi quafiifiyfi frozfinfi fifiafoodfi producfififi incfiudfifi afi varififiyfi offi frozfinfi fifififi fifififififififi vafiufi-addfidfifi rfififiauranfifi quafiifiyfi brfiadfidfi ififimfififi fioupfi bowfifififi andfi morfi!fifi Tfififi Sfiafi BfififiÂŽfi brandfi rfiprfififinfififi afi compfififififi fiinfifi fifiafifi appfiafififi fiofi afififi fifivfifififi offififiafoodfifiovfirfififi makingfiifififiafiyfifiofifiakfifififiafoodfifiofifififififiabfifi.fiAfifionfifioffififififi fifiadingfififiafoodfibrandfififiSfiafiBfififififiafifiyourficafififiandficufifiomfirfificovfirfid.

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what’s coming





Whether you attribute it to the infectious “millennial mindset,” digital empowerment, reactions to macroeconomic

forces or some combination thereof, the reality is, a new normal has emerged in modern-day eating culture. There’s a lot to be excited about for the remainder of 2016 and 2017 in the food world. Let’s take a closer look:

NEXT GENERATION CATEGORIES EMERGE Consumers today shop differently. They seek solutions, not just products on a shelf. Traditional categories will be redefined as more and more uniquely targeted products and services come onto the scene. We will see more crossover categories – think edible beverages, savory desserts, beverages made into bars – “instagram-worthy” hybrids, and positioning to pop culture. We are nearing the end of traditional category delineations as we know them.

GLOBAL FLAVORS – THE 80/20 WAY Global flavors are a staple in the modern-day diet. Adults and kids alike continue to experiment with a wider variety of cuisines. While no longer niche, the right balance is still needed to reduce the risk of trying something new. We think of it as the 80/20 approach - that is, 80% approachable, 20% innovative to intrigue but not turn off - Korean fried chicken, “bowlified” Indian dishes, Moroccan shareables and more. Don’t forget the kids, the same ol’ simply won’t cut it.

HEALTHY MEETS CRAVEABILITY Consumers do not want to be forced to choose between taste and health anymore. Thanks to new culinary ingenuity, consumers no longer have to compromise. One such example is the evolution of “veg-centric” eating – not vegetarian, not vegan, just giving some culinary love to vegetables to make them more craveable and relevant. We have seen the explosion of zucchini noodles, rotisserie beets, cauliflower steaks and more. In 2017, we will see even more assortments of these “veg-centric” solutions, including reimagined ready meals, snacks and even services – think while-you-wait veggie grinding and spiraling.

“MEGAHEALTH” – A STEP ABOVE WELLNESS As 2016 comes to a close, it’s more apparent that health has become a cost of entry. From expanding organic, cleaning up labels, storytelling for transparency, all the way to aligning with social consciousness, it’s clear that the impact of health and wellness has been profound. As with all other things, consumers continue to raise the bar and industry will step up. In 2017, amplified health messaging, hyper-targeting to emerging needs and curating around wellness solutions will address the evolution in this space. The race to align further with self-quantification is on!

MULTI-SENSORY AS THE NEW INNOVATION MANTRA Expectations are at an all-time high and consumers are not just choosing with their taste buds. Dynamic flavors and food experiences are all the rage. Cooking methods and food textures are getting more experimental and exciting. Even color is being used as a platform for innovation – remember the infamous “rainbow bagel” phenomenon? 2017 will see the continued application of multi-sensory, including gamification, food theater, interactive digital and consumer co-creation to fuel stronger connectivity and loyalty.

Remember, conventional is a thing of the past. Consumers are breaking all the rules and progressive retailers and manufacturers are being agile. The time is now to act. Those who don’t will be left behind.


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Category Management

Cross-merchandising Cross-mer

Continued from page 84

could pair well with fresh sliced breads in the bakery section, especially around back-to-school season, and offer a strong sampling opportunity. Bria Brian Evangelista, brand man manager with ConAgra, notes no that during that period in 22015, its Peter Pan brand partne partnered with retailer clients to create trial programs based around its new Simply Ground peanut butter, which boasts a texture somewhere between be creamy and crunchy peanut butters. bu “To bring the first texture te innovation in this category for many years, we needed to focus on in-store dem demonstrations to share the exper experience with consumers,” he sa says. “Simply Ground is very important to the lunchbox occasion because it is the only sp spreadable

crunch nch on the market,” as traditional crunchy peanut butter is more likely to tear bread read apart when spread ad with a knife. Additionally, dditionally, category managers ers could work to cross-merchandise rchandise and -promote on health-and-wellness ealth-and-wellness messaging. For instance, pairing free-from shelf-stable lf-stable products with complementary entary perimeter items sporting similar milar free-from statements could help lp drive basket ring. “It’s critical that retailers etailers have category assortments that more ore completely meet the different and relevant levant health needs of their shoppers,” ers,” says Nicolas Martinez, director rector of shopper insightss with ConAgra. “This includes ludes specific health needs like natural, glutenfree and organic.” nic.”


SUSTAINABLE RETAILING May 23–25, 2017 Renaissance Chicago O’Hare Suites Hotel • Chicago, Illinois The Green Retail Decisions De Innovation n Summit is an invitation-only event that brings retailers retailer of all channels an and solutions olutions providers to discuss technology, innovation, innov sustainability tai and the he future of green retailing. Now in its sixth year, this year’s ye summit will ill offer high-quality networking, keynotes and pa panels discussing uss hott industry indust topics,, one-to-one ne-to-one meetings and boardroom briefings. s. Past attendees have great at things ng to sayy abou about the summit: ummit:

“Always time well spent.” “The best part is leaving with an action plan!” to meet and discuss how to improve our “Fantastic chance energy efficiency and sustainability.”


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

Retailers: For more information or to request an invitation, contact Laura Liebeck, or at 845-440-7974

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Frozen Tougher to Crack While cross-merchandising or -promoting shelfstable products around the perimeter requires just a bit of creative thinking, doing the same with frozen items can be far trickier. For one, such products can’t easily be merchandised outside of the frozen aisle, meaning that cross-promotions tend to be easier. “You need to have wheel-able cases to actually cross-merchandise,” points out Todd Maute, partner with New York-based retail branding firm CBX. But the even bigger concern here is that grocers in recent years are seeing a trend in frozen foods opposite of the one in fresh perimeter departments, given consumers’ desire for more natural, less-processed foods. A good example is ready meals: The largest frozen subcategory, with sales of $8.1 billion in 2015, it fell $1 billion at the same time that the second-largest subcategory, prepared salads, with sales of $4.8 billion in 2015, grew 25 percent in value, Euromonitor notes in its December 2015 “Ready Meals in the U.S.” report. These results reflect Americans’ increasing preference for freshness, and their rising disposable incomes. There are two areas, however, that could help with fresh-frozen cross-merchandising and -promotion: specialty and better-for-you. According to Saj Khan, VP of grocery operations and purchasing with Woodland, Calif.-based grocery chain Nugget Markets, if a frozen food doesn’t fall into either of these two categories, then it’s probably seen as loaded with preservatives. “I’m not going to have Eggo waffles or Hot Pockets or frozen pizza over in those areas,” he says. Volume sales of ice cream, for instance, are down, Mintel notes. However, interest in premium offerings here has been on the rise, helping keep market sales afloat, as many consumers are willing to pay a premium for these products. Sales of Nugget’s superpremium ice cream are “through the roof,” Khan says, which also helps with cross-promotions: The ice cream pairs well with “super-decadent” desserts, pies and breads. “Stuff like that is what’s really selling for us,” Khan observes.

But it can’t always be just the frozen specialty items like ice cream and fresh strawberries; specialty fresh items among the staples, especially in produce, also are important, according to Scottsdale, Ariz.-based produce supplier AmeriFresh in its March 2015 “Ten Tips for Retail Produce Merchandising” blog entry. Such items can pique the curiosity of patrons, bringing more of them

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Category Management

Frozen manufacturers, as well as some of the fresh providers, could collaborate on creating those solutions, and the retailer could be the conduit to actually pull those together.” —Todd Maute, CBX

Cross-merchandising Cross-me

into the department and a leading to more visibility of all products in the program. As for Nugget’s betterfor-you items, frozen fruit is a good example of a betterfor-you frozen product that’s a big seller, Kha Khan says, and one that has potential for cross-promoting with fresh products product such as other types of fruit, considering how many consumers use them to make smoothies or protein shakes. s While frozen sales are struggling, frozen fruit frui does well because consumers see it as minimally processed and as healthful as its fresh counterpart, making products like this suitable for cross-promoting with fresh, suggests Euromonitor in “Fresh Food in the U.S.” The reverse of cross-merchandising or -promoting frozen in the perimeter also can work for some grocers, although it might not be easy. While many grocers house most of their frozen foods in upright

freezer cases with doors, for instance, Trader Joe’s uses coffin cases solely, allowing the grocer to place shelves above the cases for cross-merchandising purposes. Although the Monrovia, Calif.-based grocer typically merchandises shelf-stable offerings — some of which are cross-merchandised — above the coffin cases, it has

cross-merchandised some fresh items in that area, such as lemons, CBX’s Maute notes.

Simplicity Succeeds Whatever formats are being cross-merchandised or -promoted — frozen with fresh, shelf-stable with fresh, etc. — ultimately, no effort will be successful without full communication and collaboration between category managers. After all, why would a frozen buyer whose only job is to grow the frozen category want to work with someone handling fresh produce? “I think there’s got to be some overall company initiative, like ‘What problem are we going to solve?’ — whether it’s to increase frozen sales, increase meal solutions or give consumers the convenience they need,” Maute says. “In addition to that, both the frozen manufacturers, as well as some of the fresh providers, could collaborate on creating those solutions, and the retailer could be the conduit to actually pull those together.” And as is the case in many promotional and merchandising practices, grocers need to remember that simplicity typically succeeds. Retailers need to keep in mind their size and volume limita-

tions with displays, as well as the type of product they’re trying to move. They also need not to overcomplicate promotions. In its blog entry, AmeriFresh noted that piling on too many complementary items can cause customers to lose focus on the product the retailer is trying to move in the first place, resulting in less impact. Ultimately, retailers should position each item on display as a good deal that also provides customers with a unique culinary opportunity. PG

October 2016 | |


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Investing in Visibility

How Grocers are Gaining Deeper Insights and Driving Operational Success


ith the proliferation of emerging technologies and ever-growing competition from new channels, grocers are seeking increased visibility into store operations to help them optimally fulfill demand and enhance profitability.


Full visibility is essential for ensuring that business processes are carried out in line with a company’s objectives. It can also help control costs—something that is of critical importance for grocers. Time and resources wasted by associates can represent a significant cost, and it’s one that retailers simply cannot afford.

Making Strides toward eCommerce Excellence For best results, store operations must be as efficient, customer-focused, consistent and secure as possible. To achieve this, retailers need to find the right mix of tools—both instore and at the corporate level—to provide real-time visibility into operations that can automate routine tasks and assist in effective decision-making. In the past, visibility within grocery has been limited to point-of-sale data, inventory updates and staff schedules. In recent years, however, retailers have become increasingly interested in store visibility, which allows them to gain a clearer picture of their business and leverage those insights for operational advantage.

The eCommerce Edge A benefit commonly cited by eCommerce retailers is the level of visibility they have into the sales process compared with their brick-and-mortar counterparts. Because interactions with customers take place online, data can be recorded and subsequently mined for information. What’s more, because the customer experience is removed from in-store operations, closer monitoring of inventory and service levels is possible. A significant challenge for brick-and-mortar retailers in the digital age is learning how best to compete with, complement and learn from the eCommerce channel. Part of the solution is gaining better visibility into and control over the in-store environment. This is being made possible through the emergence of modern technologies that promise to revolutionize retail operations by offering visibility at a more granular level.

Visibility from a Retailer’s Perspective What does visibility look like from a retailer’s perspective? Here are some examples: Efficient Use of In-Store Resources

Ensuring you have the right amount of food preparation staff based on demand, while meeting budget targets and complying with labor laws, is a difficult job if done manually or with old-fashioned tools. Modern technologies help address these challenges by ensuring that in-store resources are allocated in the most efficient way possible and in accordance with current task requirements.

Open Communication between Head Office and Stores

This is an important factor when it comes to corporate initiatives for promotions, pricing and brand experience. However, in this day and age, traditional modes of communication like phone calls, emails and faxes simply aren’t enough. Store managers and head office personnel require a structured and automated approach that prioritizes tasks and provides detailed instructions, as well as a means of verifying completion and transmitting feedback.

A “Single Version of the Truth”

When it comes to grocery eCommerce, the ability to analyze site performance at aggregate levels is critical to improving service and reducing costs. It requires integration with multiple data sources to acquire timely,

meaningful information that can be presented on dashboards and graphical displays tailored to each individual user. Visibility provides an effective solution by offering a “single version of the truth” to aid in effective decisionmaking. With greater visibility into all systems, data can be easily synchronized and transformed into actionable business intelligence that can be leveraged to improve operations and customer experience.

Intervention Made Easy

Visibility also allows intervention at the store level when required. For example, if a particular order is delayed, visibility into store operations allows managers to intervene by allocating more resources to that order. Alternatively, if an associate has a low success rate for substituting products, visibility enables a retailer to intervene by providing more training in that area. Lastly, visibility allows an assessment of the efficiency of a store’s pick strategy. Instead of doing single-order picks, for instance, a store could use multi-order (or wave) picks for greater efficiency. When a grocery business is viewed as a single unified system, its underlying core processes become clear. By managing and improving these processes as components of an integrated system, a retailer can make significant improvements to critical success factors, such as lead-time requirements and the exact availability of stock when required throughout the supply chain.


Benefits Extend to Customers Greater visibility benefits customers in myriad ways. For example, visibility into inventory levels means that if a product is out of stock, both employees and customers are able to obtain information about the estimated time of arrival. Better yet, thanks to product availability and movement information that is up to date, out-of-stocks


will be reduced significantly, assuring that customers get what they came for. Visibility can also refer to the customer’s ability to track an order through the operations process. A shopper can follow the progress of a delivery online, for example, or retail store orders can be purchased over the counter after they are picked, packed and ready for collection.

Visibility Empowers retailers to: Learn and evolve: Visibility acts as a continual feedback loop, allowing retailers to implement new things and evolve. react and intervene: Retailers can intervene and take reactive measures to a situation that’s unfolding. Increase efficiency: With full visibility into business processes, retailers can continuously look to improve and optimize systems and processes in order to reach a higher level of efficiency. This helps to reduce unwanted costs and remove unnecessary manual steps, which can be time-consuming and invariably lead to errors. Enhance quality: There is greater consistency as employees follow the same optimized and standardized processes, which in turn can reduce costs. Improve agility: With full visibility, grocers can respond faster to changes in business conditions and update multiple processes easily. Compare and contrast: Retailers can look at the same subject and information but view it from a different angle, allowing them to better spot trends and correlations—for example, correlating basket size with service/ order type, or cart abandonment rates with the launch of a new front-end system. Results can be represented through metrics, allowing grocers to compare and contrast different elements of the business.

Food For thought

Visit our hub for industry insights & additional resources.


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Baking Ingredients



Goodness In line with current demand, baking ingredients and even mixes are cleaner than ever. By Bridget Goldschmidt


aking, g as retailers know well, encompasses a broad spectrum of skill levels, from utter beginner all the way up to those capable of producing restaurant-quality breads, cakes, pastries and the like. During Progressive Grocer’s visit to the Food City store in Johnson City, Tenn., our September 2016 Store of the Month, Dan Glei, EVP of merchandising and marketing at the Abingdon, Va.-based grocer, pointed out this fact during a brief stop in the baking aisle: “We have a strong [number] of customers that seek a high level of convenience, and many customers, still, that are very, very basic, scratch-made cookers at their house.” Given this wide divergence in ability among home bakers, the trending demand for clean ingredients can be more easily met by some products than others. For scratch bakers who control every item they include in their creations, it’s a relatively straightfoward process —

depending p g on market availability, y of course — to source organic, all-natural, non-GMO or freefrom ingredients, but for consumers dependent on mixes for their bake-at-home treats, it’s been somewhat more tricky — until now. Suzy Monford, CEO of Emeryville, Calif.based Andronico’s Community Markets, which operates five stores in the Bay Area, acknowledges that while baking products were slower to follow the trend toward cleaner cooking ingredients that began more than a decade ago with the elimination of trans fats, the category is seeing what she calls a “massive emphasis” on lowersugar and lower-sodium solutions, as well as such innovations as gluten-free, ancient grains and even cricket flours. Andronico’s flags these types of ingredients in the baking aisle with its FitMarket attribute, creates eye-catching end cap displays, and offers clean options in its bulk sections, as well as promoting items online via its e-newsletter and website. Meanwhile, the baking ingredient category “has been performing well over the past year and

Consumer trends are toward cleaner, less refined products, more organic, more natural, less artificial colors and less highfructose corn syrups.” —Jeff Culhane, Tops Markets LLC

October 2016 | |



Consumers are looking for quality products that are made with natural ingredients — a trend that directly ties into how they approach baking at home.” —Hannah Hershey, Pamela’s Products


Baking Ingredients

continues to grow,” notes no Jeff Culhane, SVP merchandising merchandi at Williamsville, N.Y.-based Tops Markets LLC, which operates more than 170 stores in upstate New Y York, northern Pennsylvania, western Vermont and north central Massach Massachusetts. “Consumer trend trends are toward cleaner, les less refined products, more organic, more natural, less artificial colors and an less high-fructose corn syrups.” Private label offerings, offerin as well as an integrated product assortment, can help draw shoppers to cleaner baking ingredients. “We promote Tops brand products in conjunction with other brands,” explains Culhane. “We traditionally merchandise these alongside one another, so in some cases you’ll see an integration of cleaner-label flours and organic flours. Even in our bulk section, we’ve introduced more organic and more natural products like oats, flours and cornmeal for [consumers’] baking needs. We promote these both in our fliers and TPR during key baking seasons, so we will run them in conjunction with more traditional, conventional products like Tops Sugar or Pillsbury flour, or if we’re adding in the whole wheat flour or organic flours into our promotional plan.”

Sweet Stuff “Parents want to instill the values of making healthier lifestyle choices in their families,” notes Russ Moroz, VP of research, development and quality at South Bend, Ind.-based Whole Earth Sweetener Co., a maker of baking-friendly zeroand lower-calorie sweeteners incorporating natural ingredients such as stevia and monk fruit. “While they want to be mindful of where their food is coming from, they don’t want to sacrifice the recipes, ingredients or tastes that they love.” When it comes to encouraging trial, Moroz says Whole Earth “[works] closely with retailers to co-promote and leverage the baking season starting in October and the New Year resolution period to promote healthier ingredients for baking.” The company has also teamed with celebrity chef Buddy Valastro — TV’s “Cake Boss” — on a campaign to get consumers to Rethink Sweet, which includes easy-to-prepare recipes for lower-calorie baked goods. Recent introductions, such

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

as zero-calorie Nature Sweet packets and Monk Fruit Juice Concentrate, and lower-calorie lower calorie BakBak ing Blend, Turbinado Raw Cane 50, Whole Earth Sweetener Honey 50 and Whole Earth Sweetener Agave 50 (the last three blended with stevia extract for half the calories and sugar of their traditional counterparts), receive particular emphasis. “When introducing a new product … we make sure we are properly educating the consumer at the point of purchase, with shelf and floor signage detailing the nutritional facts and information,” adds Moroz. Sugar 2.0 + Probiotics, launched in March 2016, is “marketed as a clean-label product with just three natural ingredients [and] no artificial ingredients or high-intensity sweeteners,” says Trong Nguyen, CEO of Riverside, Calif.-based Foods 2.0 LLC, who describes the product as “a healthier sugar replacement that aims to fill the gap between regular sugar and artificial sweeteners.” To promote such items in-store, Nguyen suggests: “Retailers can place ‘call tags’ in-store to promote clean baking ingredients. Such call tags could effectively identify clean-label products in the store and highlight the benefits of using [them].”

Mixing it Up “Now, more than ever, consumers are looking for quality products that are made with natural ingredients — a trend that directly ties into how they approach baking at home,” asserts Hannah Hershey, marketing manager at Ukiah, Calif.-based Pamela’s Products, which offers items that “are always made with natural ingredients that are non-GMO and meet gluten-free certification standards as well.” Pamela’s latest product rollouts include a GrainFree line offering a Nut Flour Blend of almonds, coconuts, pecans and walnuts. “We have marketed this line as gluten-free, vegan and Paleo-friendly, dairy-free, sugar-free, and non-GMO, which are attributes that we call out on the package and highlight in our marketing messages,” says Hershey. “These products are being merchandised with other products like almond meal and Paleo baking mixes.” Hershey recommends merchandising such items

as a group. “Categorizing products together that feature these ingredients makes it easy, so consumers don’t have to sift through the entire store to find what they are looking for,” she notes. “Highlighting product certifications such as Non-GMO Project Verified, which consumers have come to expect from brands and the ingredients they use, [is] also a great way to promote and merchandise these ingredients.” In common with Pamela’s, which has sourced clean ingredients since its founding in 1988, the folks at Norwich, Vt.-based King Arthur Flour believe that “scratch baking and clean ingredients have always gone hand in hand,” according to Brand Manager Erika Randolph. The venerable company, which has been around since 1790, is still coming up with new products, having introduced this past summer a line of Essential Goodness baking mixes containing no preservatives, artificial colors, flavors, corn syrup and hydrogenated oils. “To make it feel even more like scratch baking, [the] line is supported on our website with recipe content and ideas to transform each mix into a creative, decadent treat,” notes Randolph, who says that

the products’ “appeal to t retailers is driven in part pa by the opportunity these the mixes present to reinvigoreinvig rate a flagging category.” category. According to Schaumbu Schaumburg, Ill.-based Nielsen, total baking mix sales dollars fell 4.8 percent for the 52 5 weeks ending July 2. Meanwhile, the pack packaging combines an on-trend on-tren ingredient deck with retro ret styling. “The back panel harkens to the old-school old-schoo recipe cards you remember rememb from your mom’s or grandgrand ma’s kitchen, and the line represents a blend of classic baked goods like Everyone’s Favorite Chocolate Chip Cookie ... to unique products like our Cinnamon Sugar Puff Muffin,” observes Randolph. She explains that “the consumer trend toward understanding their food has allowed us to broaden our horizons. The mix section of the baking aisle

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Retailers can pair clean bakingmix products with other complementary clean products, providing the consumer with a full solution versus just a piece of a puzzle.” —Katlin Smith, Simple Mills

Baking Ingredients

has long been dominated by highly processed, low-cost mixes that consumers have known for a long time. … That’s scary for a consumer looking to nourish their family with a quick, convenient alternative to baking from scratch.” “Many consumers are now baking their own breads, muffins and cookies with specialty ingredients because they can’t find what they’re looking for in stores,” notes Katlin Smith, founder and CEO of Chicago-based Simple Mills, which she says is the third-largest natural baking mix company by dollars sold and No. 1 for dollar sales per point of distribution. “For example, almond flour is now one of the best-selling flours in grocery stores because it enables consumers to bake with simple, nutrient-rich ingredients.” Simple Mills’ success “is indicative of a larger trend,” Smith believes. “As you look at the baking shelves, you often find a lot of carbohydrates, sugar or ingredients you can’t pronounce. … This is true even in natural grocery stores.” The company’s newest product is Organic Frosting in

Vanilla and Chocolate flavors. Notes Smith: “Our baking mixes have less than half the sugar and carbohydrates of leading brands of baking mixes, and we clearly indicate our sugar content on the front of our packages. Retailers that have created a strong brand block of our products have been effective in grabbing the consumer’s attention at shelf and bringing them back into the category with this simple messaging. Additionally, we have conducted many in-store demonstrations, which have been a great educational opportunity.” She advises that “the best way to promote clean baking products in-store is by giving them display space, as this grabs the consumer’s attention outside of the baking aisle, where many consumers may not have walked down for years. Retailers can increase the value of the display by pairing the clean baking-mix products with other complementary clean products, providing the consumer with a full solution versus just a piece of a puzzle, and thereby increasing basket ring. For example, our products are often merchandised with products like pure maple syrup, coconut oil, organic vanilla extract or

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organic dark-chocolate chips.” Smith further observes that “our products do incredibly well when on displays for Paleo products, grain-free products or lower-sugar products. In addition to in-store displays, these product bundles also work incredibly well when featured in store ads or included in in-store demonstrations.”

The Raw or the Cooked “Home bakers are experimenting more with clean substitutions, for instance replacing eggs with other binding agents such as flax or chia, and refined flours with nutrient-rich alternatives such as chickpea flour, coconut flour and root vegetables,” observes Chef Franklin Becker, cofounder and head of culinary development at New York-based Hungryroot, whose inventive products include Almond Chickpea Cookie Dough and Black Bean Brownie Batter, which are gluten-, dairy-, soy- and preservative-free, as well as vegan, and can be eaten either raw or baked. Becker teases that an “exciting new dessert [is] launching this fall that will capture the flavor of the season, and several more desserts [are] on the product roadmap for the remainder of the year.” At the Whole Foods in the Williamsburg section of Brooklyn where the shelf-stable cookie dough and brownie batter made their debut, and from which they are “quickly expanding throughout the region,” the products “are merchandised in the dairy aisle alongside other cookie dough products,” notes Becker. “As the category of clean baking continues to expand, retailers can help build awareness for these ingredients and products through in-store signage, displays and strategic placement.” Retailers and manufacturers agree that the enthusiasm for clean baking will only grow, with Becker the chef placing particular emphasis on a related rise in culinary experimentation. “We foresee that there will be a shift towards the increased inclusion of less conventional baking ingredients that are healthy and clean as a way of reinventing traditional baked goods and making them healthier,” he says. “This will include everything from substituting healthy fats such as almond butter and tahini to creating new binding agents

through ingredients such as seeds and legumes.” Tops’ Culhane believes that “we’ll see a trend more toward non-GMO products from the larger brands, [while] more smaller brands [will] pop out and evolve from local communities as that expands and grows, and you’ll see more evolution in this category, because that’s where all of the consumer trends are pointing.” PG

Keeping your perimeter fresh…

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Industry Events

Progressive Grocer’s Grocerant Summit

Building an


Grocerant Summit offers best practices for supermarket prepared foods.


By Jim Dudlicek

henever Progressive Grocer’s editorial team visits a new supermarket, all of the stores have one thing in common: enhanced prepared food programs. As we look back on the past year of PG Store of the Month features, grocery retailers’ commitment to foodservice is crystal-clear — from chef-driven menus of specialties prepared to order, to diverse food courts offering myriad selections, to full-service restaurants with table and bar service. “Grocery stores have it all. They compete in every food category and have a great reputation for variety and freshness. The marketing of prepared foods by grocers has expanded with increased participation, because prepared foods add


meaningful sales for top grocers,” says a March 2016 report from The NPD Group, offering data showing in-store dining and takeout of prepared foods from grocers have grown nearly 30 percent since 2008. “Estimates of the market size for grocery prepared foods are now nearly $29 billion. The success of prepared food offerings at grocery has contributed to traditional QSRs’ traffic losses,” Port Washington, N.Y.-based NPD reports. With foodservice presenting such an important and lucrative opportunity for grocers, PG is dedicated to connecting them with the tools, information and networking needed for success. A key component of that is PG’s second annual Grocerant Summit, taking place Oct. 25-26 at the Renaissance Schaumburg Convention Center, in Schaumburg, Ill.

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

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Industry Events

Progressive Grocer’s Grocerant Summit

Grocerant Summit at a Glance Tuesday, Oct. 25 2-2:15 p.m. Welcome Remarks 2:15-3 p.m. Embracing Grocerant Success 3-3:15 p.m. Transition 3:15-4 p.m. Execute. Educate. Inspire. 4-4:45 p.m. Break in the Grocerant Solution Center 4:45-5:15 p.m. Capturing Destination Shoppers with Fresh, Premium Ingredients 5:15-5:45 p.m. Giving Shoppers a Clear, Convenient Choice 5:45-8 p.m. Cocktail and Dinner in the Grocerant Solution Center Wednesday, Oct. 26 7-8 a.m. Breakfast Buffet in the Grocerant Solution Center 8-8:30 a.m. Make the Experience Real 8:30-9 a.m. From Insight to Action: Translating Restaurant Trends to Retail Execution 9-10:30 a.m. Break in the Grocerant Solution Center 10:30-11:15 a.m: Culinary Blueprint for Grocerant Success 11:15 a.m.-Noon Retail Dietitians: A Vital Ingredient for Customer Engagement Noon-2 p.m. Lunch in the Grocerant Solution Center 2-2:30 p.m. Grocerant Messaging in an Omnichannel World 2:30-3:30 p.m. Grocerant Interactive: Building the Experience 3:30-3:45 p.m. Closing Remarks For more information, visit grocerant-summit

Expanding Culinary Reach More than 40 percent of the U.S. population purchases prepared foods from grocery stores, according to NPD data. “From a potential purchaser perspective, grocery is more than half the size of QSR reach. The purchase rate at grocery lags QSR’s frequency by nearly 10 visits in a four-week period. Yet the purchase rate is impressive, given that grocery has far fewer units than QSRs,” NPD reports. Grocerants are scoring with the all-important Millennial demographic as well. While Millennials use grocery stores less than other generational groups, retail foodservice is gaining traction with them, according to a more recent NPD report, “A Generational Study: The Evolution of Eating.” Key reasons grocerants are a hit with Millennials: variety, healthy options, freshness, quality. Further, grocerants offer an experience, with diverse culinary offerings typically at a lower cost than full-service or some fast-casual restaurants.


PG’s Grocerant Summit will tackle challenges and opportunities head-on, giving retailers access to insights and strategies that will ensure their programs are the most relevant for their banners and desirable for their customers. The event will feature assessments of shopper insights, the competitive landscape and case studies; interactive food preparation demonstrations; and samples from more than 30 sponsors.

Session Lineup Guidance, data and analysis will be presented by leading culinary, retail, supplier and analytics leaders. General sessions include the following: Embracing Grocerant Success. William Rosenzweig, dean and executive director, The Food Business School of The Culinary Institute of America, will address trends of growing importance in fresh food programs, including health and sustainability, focusing on how creating a shared vision can unify all participants, and the importance of being customer-centric in the design and execution of the grocerant experience. Execute. Educate. Inspire. Presented by Tyson Foods Marketing Managers Brad Bennett and Amber Langston, Director of Marketing for Retail Foodservice Eric Le Blanc, and Senior Brand Manager Scott Moses, the session addresses the idea that the love — or disdain — shoppers have for the grocerant experience isn’t based on the banner, department footprint, price point or even assortment. The difference is shopper education. The key to helping the shopper create a convenient meal has more to do with communication than any product innovation. Capturing Destination Shoppers with Fresh, Premium Ingredients. Shenoa French, director of innovation and product solutions for the National Cattlemen’s Beef Association, and Kevin Walker, director of foodservice and business development at Niemann Foods Inc., review a retailer’s journey into foodservice with an innovative fresh-prepared product line; capture new traffic with restaurant-quality meals; and show how grocerants can profit from proven beef strategies. Giving Shoppers a Clear, Convenient Choice. Emily Blair, business development manager for Milliken & Co., discusses how shoppers’ demands are driving strong growth of fresh-prepared food programs. Innovative packaging solutions are becoming increasingly important to success. Transparent, microwaveable and recyclable packaging options have emerged to deliver freshness and convenience.

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

idaho¨ potato field force

Even when he’s hiking his favorite Colorado trails on the weekend, super sales rep Kent Beesley is still brainstorming powerful ideas to increase your business through marketing and promotions, competitive research, point of sale materials and more. The Idaho® Potato Field Force – They never stop thinking about your business.

Industry Events

Progressive Grocer’s Grocerant Summit

Make the Experience Real. Kim Camp, manager of learning center programs at Hillphoenix, tells how a winning grocerant experience captivates shoppers and supports the culinary staff. Elements of design, equipment, lighting and mood come together to showcase what’s on offer, how it’s prepared and by whom, in a variety of applications, from fullscale restaurants to strategically designed sampling stations. From Insight to Action: Translating Restaurant Trends to Retail Execution. Hormel Foods Brand Manager Sebastian Friedman, National Sales Manager of Deli John Kenyon and VP of Marketing Steve Venenga provide retailers with a roadmap to uncover food trends and translate them into action through back-of-house preparation techniques, safe handling practices, development of standard operation procedures, and hospitality and merchandising strategies. Culinary Blueprint for Grocerant Success. A grocerant’s success has been determined by buy-in from the top and a cultural commitment throughout the organization. Chefs Charlie Baggs and Steven Petusevsky discuss the critical elements that bridge internal buy-in with customers’ takeaway. Plus: the importance of mission, menuing for shopper and banner, training and culture, and metrics to measure results. Retail Dietitians: A Vital Ingredient for Customer Engagement. Retail dietitians Lisa Brandt, of Hy-Vee;

Alyson Fendrick, of HAC Retail; and Melissa O’Brien, of Jewel-Osco, show how retailers that employ dietitians have a competitive advantage by communicating with shoppers, helping develop menu label messaging and promoting the value of family meals. Grocerant Messaging in an Omnichannel World. To create an experience that both informs and delights shoppers, grocery retailers need to make the most of all mediums. In this session, Joe Michaels, VP of new product development at Tebo, enlists the support of grocery retailers and solution providers to demonstrate how various mediums not only work better together, but also help communicate various messages most effectively. Grocerant Interactive: Building the Experience. Retailer attendees will see common foibles in action, and easy strategies for course correction.

Speaker Insights The Grocerant Summit’s speaker lineup includes presenters from the academic, culinary and supplier worlds. A few of them spoke with PG to share their thoughts about the grocerant phenomenon.

culture and a shared vision and values to unify the organization’s purpose. I’ll show how this can lead to collaborative approaches that work with the creative tension inherent in operating two different business models within one business.

William Rosenzweig

PG: What innovations are important for successful grocerants? WR: I’ll emphasize the importance of being customer-cen-

Dean and Executive Director, The Food Business School of The Culinary Institute of America Embracing Grocerant Success PG: What do you hope summit attendees take away from your session? WR: My goal is to inspire participants to be innovative

and successful with their grocerant operations, and give them some practical guidance that they can put to work in their operations to deliver deliciousness to customers and profits to the bottom line. PG: What trends will you explore that are shaping foodservice operations? WR: I’ll touch on the plethora of new eating options, the

preferences of Millennials, and the growing importance of being attuned to health and sustainability issues as they relate to food. I’ll focus on the importance of organizational


tric in the design and execution of the grocerant experience. I’ll discuss ways that innovative teams can identify customer preferences and disrupt existing models.

Steven Petusevsky

Chef, Culinary Consultant Culinary: The Cornerstone of Grocerant PG: What are the top three things supermarket operators need to understand when developing grocerants in their stores? SP: It’s an entirely different culture and financial platform

then traditional supermarkets. Grocerant operations are about the long haul and growth. They are not about turning quick profits. Full support by all corporate levels is needed for success

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

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In Billions


Pompeian, the leading brand of Organic Extra Virgin Olive Oil, launches a new line of Organics!

$30 $20 $10 $0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

U.S. organic sales post a new record of $43.3 billion in 2015! *

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To help you profit from the continuously growing popularity of organic products, Pompeian has expanded its USDA Certified Organic line to now include Organic EVOO Cooking Spray and 3 new Vinegars. Like all of our products, they are direct from our farmers to assure your customers of fresh, great tasting products that are fully traceable.

Better Cooking Begins with Pompeian! *The Organic Trade Association

Industry Events

Progressive Grocer’s Grocerant Summit

PG: How can the culinary and operations sides most effectively work together? SP: They need to establish a winning

culture that includes writing a food mission statement; creating a realistic culinary organizational chart, with a carefully chosen leader reporting to a manager who is committed to this; setting realistic expectations and budgets for a five-year plan; and focusing on purpose. PG: What will be most important to the success of grocerants in the coming years? SP: Innovation, customer service, em-

ployee hiring, training is essential, and knowing your customer is very important. Well-being and health must be part of the culinary program moving forward.

Jennifer Johnson

Director of Sales and Marketing, Hormel Foods Sales From Insight to Action: Translating Restaurant Trends to Retail Execution PG: What are the top three things supermarket operators need to understand when developing grocerants in their stores? JJ: Food safety is of the utmost importance. Opera-

tors must put this as their highest priority and take the necessary steps to protect their shoppers and, ultimately, themselves. Creating an enjoyable or interesting experience for customers is also critical. The array of choices for shoppers is becoming increasingly diverse as QSRs and home food delivery grow. Retailers must be able to provide a satisfying in-store experience beyond the food by having a superbly trained staff and maintaining a clean and inviting environment. Operators need to balance experimenting with today’s culinary trends without straying too far from the DNA of their store, or run the risk of alienating the core consumer base. PG: What cues can grocers take from foodservice operators? JJ: Keep things simple and look to execute a few varia-

tions on a simple product with efficiency. Well-trained staff is critically important in the front and back of house. The best-running foodservice operators ensure they have a smooth-running operation from setup to tear-down. PG: What will be most important to the success of grocerants in the coming years? JJ: Operators need to be willing to adapt and embrace pre-

pared foods. The industry is changing rapidly, and now more than ever, retailers must be willing to invest resources into building a successful prepared foods business in their stores. It’s time to take risks and be bold in order to thrive.


Emily Blair

Business Development Manager, NX UltraClear, Milliken & Co. Giving Shoppers a Clear Choice PG: From your point of view as a supplier, what are the top three things supermarket operators need to understand when developing grocerants in their stores? EB: Innovative food packaging materials that are highly

transparent, conveniently heat-resistant and easily recyclable are now available. Freshness and convenience are paramount. Shoppers demand visibly fresh food that can easily be heated on display or reheated in the microwave, at home or on-the-go, in the same packaging in which it was purchased. There is a growing demand for more sustainable packaging, especially among Millennials, so grocery stores must respond with more responsible packaging materials. Supermarkets have the opportunity to market their packaging material decisions to consumers, who see value in recyclable packaging. PG: What role does packaging play in making fresh prepared foods more appealing to consumers? EB: Highly transparent food packaging showcases the fresh-

ness and quality of the food inside. Consumers are craving authenticity, and the ability to clearly see what they are buying and eating is a very attractive attribute. Additionally, the convenience that comes with heat-resistant and microwavable packaging is a progressively appealing feature for the typical on-the-go shopper. The combination of both clarity and convenience in a package is very powerful and compelling. PG: What will be most important to the success of grocerants in the coming years? EB: The fresh-prepared section of the grocery store is in

competition with dine-in, carry-out, fast-casual and fast-food restaurants. To succeed, it is critical that retailers respond to consumer demands for fresh, high-quality and convenient products. As the Millennial demographic continues to outpace other market segments, it is also important to focus on multicultural food options that are packaged in clear, convenient, sustainable and easily recyclable containers. PG

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

Delicious Food Begins With Real Ingredients.

There’s Only One Original. After all, kids ask for Cuties by name. No wonder Cuties is America’s fastest-selling clementine. This season, choose Cuties, the original California clementine that moms and kids love. PMA Booth #417 | 213-612-9957

Cuties is a trademark of Sun Pacific. Based in part on data reported by Nielsen through its Perishables Group FreshFacts® Service for Sun Pacific’s custom citrus category, $/d-store/week for brands with sales of over +$200K for the 13-week period ending 1/30/16, for the Total US. Copyright © 2016 Nielsen

2016 Retail Produce & Floral Review



Grocers take a strategic approach to produce departments that speak volumes to their customers and their bottom lines. By Jennifer Strailey


resh produce is a dynamic multibillion-dollar industry, and as for growth, the sky may just be the limit. A key driver in why consumers shop a particular supermarket, the produce department is a crucial part of the decision-making process for grocery shoppers. “Right now in grocery, produce, meat, deli and bakery are carrying the industry,” asserts Keith Turner, store manager for C&R Supermarkets, a Macon, Mo.-based chain of 12 super-

markets, and a participant in Progressive Grocer’s 2016 Retail Produce & Floral Review, which surveyed 100 grocers nationally. When executed successfully, the produce department exudes quality, freshness, convenience and a healthy lifestyle, and it’s where shoppers want to be. According to PG’s July 2016 Consumer Expenditures Study, supermarket produce sales hit $58.3 billion in 2015. If the 4.2 percent increase predicted by respondents to this year’s Retail Produce & Floral Review survey is realized, that number will reach $60.5 billion by year’s end.

October 2016 | |


2016 Retail Produce & Floral Review The industry’s potential is great, but so are its challenges. Interestingly, when asked to rate the seriousness of the challenges facing produce/floral departments, competition from other supermarkets and other outlets (farmers’ markets, etc.) was at the bottom of the list. Competition from Walmart rated dead last. Topping the list of challenges was profits, at No. 1. Quality Quality li off product, d price i perception i off fresh f h produce, d

What percent of your fruit sales are ... Random-weight


current 37.8%

62.2% .2%

year ago 65.1% .1%


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how to increase consumption, and labor/recruitment costs cos rounded out the top five. It seems that retail produce decision-makers are focusin focusing more on what they can do to appeal to today’s increasingly health-conscious, convenience-seeking, variety-hungry shopper, and less on what the folks up the street are doing doing.

Methodology In August 2016, Progressive Grocer fielded a study to grocery retailers involved in produce operations. A total of 100 retailers responded to the survey. Among these retailers, 51 percent operate one to 10 stores, while 49 percent represent chains with 11 or more stores. A total of 64 percent of respondents are produce category managers, merchandisers or buyers; 16 percent are owners, CEOs or presidents; 11 percent are store managers; and 9 percent are produce executives.

What percent of your vegetable sales are ... Unbranded

National Brands

compared to a year ago, sales of organic produce ...

Store Brands



current 34.9%


Stayed the Same



46.6% year ago 15.1%

year ago 36.5%



48.4% Source: Progressive Grocer Market Research, 2016

Source: Progressive Grocer Market Research, 2016

October 2016 | |


2016 Retail Produce & Floral Review Crazy About Convenience Whether it’s packaged and ready to go, fresh-cut or valueadded, flavorful fresh produce that’s also convenient is winning over consumers across the nation.

Produce oPerations current Year average Produce deP Partment (square feet)


average total store (square feet)


Percent of total store


gross margin Percent


net Profit Percent


Source: Progressive Grocer Market Research, 2016

“People are looking for quick and convenient. They want to open a bag, throw the contents in a bowl, and it’s ready to go,” says Turner. At C&R, packaged salads are a top seller in produce, a fact that Turner believes correlates to frequent promotion.

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



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2016 Retail Produce & Floral Review Produce SaleS by Segment 2.2%


1.7% 1.8%


44.1% Source: Progressive Grocer Market Research, 2016

While survey respondents report that sales of packaged/ value-added/fresh-cut vegetables are relatively flat this year versus last, fruit is a different story. Sales of packaged/value-added/fresh-cut fruit are up nearly 3 percentage points, representing 37.8 percent of total fruit sales versus 34.9 percent last year, according to PG research. “Fresh-cut is flying off the shelves,” enthuses Alex Scott, store manager for Shaw’s Supermarkets, a 154-store chain (including the Star Market banner) based in West Bridgewater, Mass. Parent company Albertsons Cos., which launched the Signature family of store brands earlier this year, recently added cut fruit and pre-cut vegetables to the line’s offerings. At Shaw’s, Signature family trays and 2- and 4-packs of washed, cut and ready-to-eat fruit are resonating with customers. Scott points to such popular items as 2-packs of grapes and strawberries, and trays of cheese, crackers and VegetableS hummus with a fruit Fruit or vegetable. nutS Hannaford SureFrigerated Salad dreSSingS and diPS permarkets, a grocer Premium JuiceS with more than 180 locations, has also all other (including exotics, mixes, etc.) witnessed a boost in

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Speaking with...

Angelica Lasley Brand Marketing Manager Calbee North America

Calbee North America, a company with roots in Japan and a headquarters in Boardman, Ore., harvests the power of nature to make natural, delicious snacks that are healthier alternatives to traditional chips. The company’s lineup includes Harvest Snaps, Whole Cuts and an assortment of Asian-flavored snacks, which fit into today’s lifestyles and diets in many ways. Progressive Grocer: How are Calbee’s savory snacks on trend with what today’s consumers are looking for in snacking? Angelica Lasley: The United Nations has declared 2016 as “The Year of Pulses.” Pulses consist of lentils, dried beans and peas, and there are many benefits to eating them, particularly because they contain high levels of protein and fiber. Pulses can lower blood cholesterol levels, they aid in digestion, help you stay fuller longer and have a low glycemic index, which prevents blood sugars from spiking after eating. From a farming standpoint, they take less water to grow; they have a low carbon footprint and enrich the soil they are planted in. This makes pulses a cheaper and greener source of protein. Pulses are being touted as one of the principal ways in which we can reduce global hunger.

As you can imagine, social and digital media has brought consumer insights from all over the globe – therefore new flavors that were once exotic are becoming mainstream (i.e., sriracha, exotic peppers, curries, etc.). Bold flavors generate excitement. Our Black Bean Harvest Snaps just launched in Mango Chile Lime and Habanero. There is a dearth of black bean snacks and we believe we have 2 flavors that are really tasty – and they offer 5 grams of protein per serving, 13% of your daily fiber, and less sodium than most snacks. Plus we believe this introduction will bring more male shoppers into the category. We pride ourselves on the fact that consumers can enjoy a really tasty and satisfyingly crunchy snack and still get the benefits of plant protein and fiber with less fat and sodium than traditional chips. For more information, visit

Our Harvest Snaps are made from pulses with green peas, lentils or black beans as the principal ingredient. In fact, in our Lightly Salted Snapea Crisps, the green pea content is 70% of the finished product. The high percentage of the principal ingredients gives our product the maximum benefit of each pulse we use, making our snacks not only taste great, but provide a good source of plant protein and fiber, while offering less sodium and fat than traditional potato chips. At a time when consumers are looking for protein from different food sources, the plant protein in our snacks meets their interest and taste in a big-flavor way. PG: How do your new products reflect growing interest in bolder flavors and guilt-free snacks? AL: In the salty snack category, we are seeing a significant emergence of more global flavors. October 2016 | |


Rating PRoblems Facing PRoduce/FloRal dePaRtment

2016 Retail Produce & Floral Review

Rated on a scale of 1-6, where 1=not serious through 6=extremely serious

fresh-cut, fueled in part by an upgraded program, says Manager Chris Hadie. “We expanded our offerings in the cut-fruit section about nine months ago,” he notes. “Sales jumped significantly when we added fresh-cut watermelon and other items that are easier for people to eat than the whole fruit or vegetable.”

cuRRent YeaR

YeaR ago




QualitYY oFF PRoduct



PRice PeRceP Ption oFF FResh PRoduce



how to incR Rease consumP Ption



laboR R/RecR Ruitment costs



em mPloYYee tR Raining



wholesale PRices



tRansP PoRtation costs



sh hRink/s ink/sP Poilage



tRaceabilitYY (P Point oFF oR Rigin)



outbR Reaks/R Recalls



PRoduce/FFloR Ral deP PaRtment oveR Rhead (building uP PkeeP P, eneR RgY costs, etc.)



comPPetition FRom otheR R suP PeRmaR Rkets



comPPetition FRom otheR R outlets (FaR RmeR Rs’ maR Rkets, natuR Ral Food stoR Res, etc.)



leveRRaging PRoduce as snacks



comP Petition FRom walmaR Rt



Source: Progressive Grocer Market Research, 2016

Can you train tomatoes to be sweet?

As a matter of fact, yes. If you give them a good greenhouse home and mix in a lot of love and attention, you’ll get the sweetest tomatoes you, and your customers, have ever tasted.

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Tomatoe aised ight.

2016 Retail Produce & Floral Review

Produce SaleS change Increased


Stayed the Same


FirSt 6 MonthS 2016 vS. Year ago 43.3%


Stayed the Same

Projected total 2016 44.8%




net change (%)



net change (%)

Source: Progressive Grocer Market Research, 2016

Part of Ahold Delhaize, Scarborough, Maine-based Hannaford has also expanded its cross-promotional efforts with value-added produce in the meat department, which Hadie believes is contributing to the sales lift.

WHEN IT COMES TO MUSHROOMS WE ARE AT THE SUMMIT. Giorgio Fresh, America’s Favorite Mushroom Company, welcomes you to visit us at the Fresh Summit in Orlando. Come get a close up look at our latest products and learn more about our ever-expanding range of fresh, exotic and organic mushrooms. You’ll also learn about our commitment to sustainable agriculture and how we are innovators in Vendor Managed Inventory which benefits our customers’ bottom line. If you’re looking for an informative and interactive experience at the Fresh Summit, you can’t pick a better booth than Giorgio Fresh. Stop by Booth 2073 at the PMA Show.

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

The Boost in Store Brands Increasingly, grocers are expanding store brands throughout the supermarket, including the produce department. While sales of store-branded fruit remain flat, PG’s survey found that sales of store-branded vegetables increased 3.4 percent to 18.5 percent, up from 15.1 percent of sales last year. C&R, Shaw’s and Hannaford all report that sales of store-branded produce are up, and all three say potatoes are a particularly popular store-branded item. Store-brand lemons, bagged apples and celery were also mentioned as strong sellers. Grocers indicated that while price is often driving sales of store brands, quality remains critical to ensure repeat purchases. Despite the rise in store brands, national brands still comprise 50 percent of fruit sales and 46.6 percent of vegetable sales.

2016 Retail Produce & Floral Review Organic Expansion According to the Organic Trade Association’s (OTA) 2015 Organic Industry Survey, organic fruits and vegetables are the No. 1 category in organic food, with just more than $13 billion in sales. Organics represent 12 percent of the fruits and vegetables sold in the United States notes Washington, D.C.-based OTA, and organic produce now accounts for nearly 40 per-

cent of the entire organic sector. PG’s survey finds that 32.6 percent of supermarkets surveyed increased organic fruit and vegetable sales this year, while 67.5 percent said their sales in this sector remained the same. No respondents reported a decrease. As with nonorganic categories, variety is the order of the day with consumers who continue to crave exciting new flavors and eating experiences. “Our sales of organic produce have been on the rise since we’ve added more variety in organics,” observes Scott, of Shaw’s. As one example, the grocer began packaging store-brand organic grapes in bowls six months ago — a program that has met with particular success, he says.

From generation to generation...

Focus on Floral and Seasonal Seasonal items and floral could be under-tapped categories for some grocers. Among the 58 percent of survey respondents who sell floral,

Floral SaleS Change in PaSt Year Increased


Stayed the Same



3.5% net Change (%)

7.9% Source: Progressive Grocer Market Research, 2016




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

2016 Retail Produce & Floral Review Promoting Produce in the Produce/floral dePartment

elsewhere in the store crossPromotion

social/ digital media

97.5% 90.1 88.9 35.8 32.1 27.2

46.9% 16.0 18.5 9.9 3.7 6.2

29.6% 4.9 7.4 0.0 3.7 1.2

signage for weekly sP Pecials country-of-origin signage “local” signage samPPling signage ignage for meal/eating suggestions cooking/new Produce demonstrations

Source: Progressive Grocer Market Research, 2016

34.2 percent report a sales increase over the previous year. Overall floral sales increased 3.5 percent. “Floral is one of the best-growing categories in the company,” says Scott. “There was a company-wide initiative from Shaw’s, and we brought in hibiscus earlier this year, and pre-decorated pumpkins and mums for fall — new items and seasonal items that people really like. As a result, floral is now driving sales growth.” At C&R, customers perceive a return on investment

when they purchase a floral or seasonal pick-me-up. “Our sales of seasonal and floral are up,” notes Turner. “When times are hard, it’s an added value that people can enjoy for longer than something like going out to eat.”

Communicative Culture Grocers are promoting fresh produce like never before. PG’s survey finds that nearly 98 percent of supermarkets use signage for weekly specials, 47 percent cross-promote produce elsewhere in the store, and nearly 30 percent use social and digital media to tout fresh produce offerings. “We use a lot of signage,” affirms Turner. “It’s an attention-grabber. When people walk down an aisle and there’s a flip-out sign, it gets their attention and makes them look.” C&R continually changes and updates its vibrantly colored signs. “It does make a difference,” Turner continues. “Signage often makes customers think that there’s a sale, even when there isn’t.”



Talking with…

Dionysios Christou

Vice President Marketing, Del Monte Fresh Produce N.A., Inc.

Progressive Grocer: Del Monte Fresh offers a variety of fresh produce. What role do bananas play in your overall produce offering? Dionysios Christou: Bananas are an important part of Del Monte Fresh’s volume and business offer. They also represent a high percentage of the produce department sales globally. Bananas allow Del Monte and their customer partners to use economies of scale to promote this important category while cross promoting other Del Monte fresh or fresh cut items on an annual basis. PG: Why is it so important for retailers to offer a variety of bananas in their produce departments? DC: Del Monte Fresh Produce offers a full line of organic and specialty bananas. The organic component of the banana category has continuously seen positive growth. There has also been growth in specialty bananas like plantains, reds, and manzanos. Consumers have developed more sophisticated tastes and as trends in healthy eating and interest in new tropical foods continue to grow, so does the demand for exotic and specialty bananas. In order to ensure that our specialty products appeal to consumers, Del Monte Fresh Produce is always working towards developing new packaging or new banana products to bring to market and service the different channels in the industry. We also offer our Del Monte® single finger bananas packed in our proprietary CRT™ (Controlled Ripening Technology) packaging. The 100% natural, individually packaged CRT™ bananas are designed to satisfy consumer demand for premium quality

Del Monte® bananas in the non-traditional retail channels. These bananas experience less scarring and bruising and retain moisture that gives them a brighter, shinier yellow color for an extra day or two, which made for the perfect product to take on the road, or even the trip back home. PG: Do you have any merchandising and marketing tips for retailers who want to boost sales of bananas during the Fall selling season? DC: There are several merchandising techniques to drive incremental banana sales. One technique is cross merchandising, which allows retailers to increase banana sales and sales of related products. Different ideas for cross merchandising include pairing bananas with other tropical fruit, ice cream, cereal, salads, chocolate dips, and peanut butter. Placing recipe cards or nutritional information by a banana display can encourage banana purchases as well. We also encourage retailers to develop secondary banana displays at check out. Placing bananas in a retailer promotional calendar is another important technique. When a retailer supports and promotes a product, it helps motivate impulse purchases and drives incremental sales.

Woot Over a century of awesome. Since 1886, Del Monte


has been dedicated to bringing the best products from

around the world to your door. As the leading pineapple and banana supplier, as well as a top tomato marketer, go-to fresh cut producer and so much more, there’s no limit to how partnering with us can help you grow your future.

The Nature of the Best Visit us at PMA, Booth #2901 | 1-800-950-3683 |

Š 2016 Del Monte Fresh Produce N.A., Inc.





2016 Retail Produce & Floral Review Investment Plans for Produce/floral

sIgnage Portable bIIns energy-effIIcIent lIIghtIIng mobIIle merchandIIsers donatIIon of unsold Produce energy-effIIcIent chIIll cases comPPostIIng floral dIIsPlays/bIIns total dePPartment renovatIIon “ugly” Produce

recently Invested

Investment wIthIn the next 1-2 years

future Investment

wIsh lIst

no Interest/ no resPonse

55.8% 42.9 35.1 32.5 26.0 15.6 14.3 13.0 10.4 5.2

6.5% 15.6 11.7 15.6 0.0 5.2 1.3 5.2 2.6 2.6

16.9% 16.9 19.5 15.6 2.6 27.3 3.9 10.4 27.3 5.2

5.2% 3.9 10.4 3.9 9.1 19.5 3.9 6.5 27.3 5.2

14.3% 19.5 23.4 29.9 61.0 31.2 76.6 59.7 27.3 81.8

Source: Progressive Grocer Market Research, 2016

“Local,” “Home Grown” and “Missouri Grown” are used whenever appropriate at C&R to appeal to the growing number of consumers for whom “local” is near and dear. “We use signs to call out as much as possible, and we get creative,” says Scott, who adds that Shaw’s regularly changes its produce signage to prevent stagnation.


Avocados and guacamole are among the items frequently promoted through signage at Shaw’s, and the results are phenomenal. Scott’s store uses colorful signs that hang from the ceiling to spotlight its wildly popular house-made guacamole. Whole avocados are also actively featured.

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




2016 Retail Produce & Floral Review Produce dePartment category Performance Total U.S., 52 Weeks Ending July 2, 2016


Vegetables Packaged Salad Tomatoes Potatoes Cooking Vegetables Value-added Vegetables Onions Peppers Lettuce Mushrooms Carrots Cucumbers Squash/Pumpkins Celery Corn Cooking Greens Beans Radishes Specialty Vegetables Sprouts Fruit Berries Citrus Apples Grapes Bananas Value-added Fruit Avocados Melons Stone Fruits Cherries Specialty Fruits Pears Pineapples Other Fresh Fruits Other Produce Beverages Nuts and Seeds Herbs, Spices and Seasonings Dried Fruits and Snack Mixes Produce-Dips Dressings, Glazes, Marinades and Sauces Healthy Alternatives Nonspecific Produce Sales Ornamental Produce Grains

Dollars per Store/Week

Dollars per Store/Week Percent Change vs. Year Ago

Volume Percent Change vs. Year Ago

Volume Percent on Promotion

Volume Percent on Promotion Change vs. Year Ago

Average Retail

Average Retail Percent Change vs. Year Ago

$4,017 2,713 2,566 1,922 1,860 1,597 1,545 1,303 891 878 796 721 505 393 380 140 76 28 20

7.7% 3.2 1.6 6.6 9.3 5.2 8.5 0.3 5.3 -0.9 6.0 7.9 3.0 0.8 1.9 0.3 8.8 9.0 0.4

3.3% 2.1 -1.1 2.7 6.3 2.2 7.3 0.9 2.2 -0.7 3.4 5.2 -3.6 -6.8 1.6 -6.6 0.2 5.9 -3.7

21.3% 19.4 22.5 22.1 11.8 13.7 19.4 10.9 19.4 14.8 13.5 19.3 19.3 34.4 17.1 30.1 7.8 11.8 5.3

-2.8% -0.2 -2.0 -0.6 -0.8 -1.6 -0.1 -0.4 -1.1 -0.6 -0.7 -2.0 -1.5 -1.8 1.6 -1.1 -0.6 1.9 -0.7

$2.87 2.32 0.71 1.75 3.16 1.02 2.25 1.83 2.54 1.70 1.02 1.59 1.85 0.52 2.03 1.61 1.16 1.43 2.04

4.2% 1.1 2.7 3.8 2.8 3.0 1.2 -0.6 3.0 -0.2 2.5 2.5 6.8 8.2 0.3 7.4 8.7 2.9 4.3

$4,352 3,170 3,106 2,898 2,652 2,457 1,375 1,216 930 634 571 396 281 36

5.2% 8.1 3.9 6.5 -1.6 10.8 8.4 0.9 -3.7 -15.0 5.3 -1.2 -1.2 -16.3

0.6% 4.0 -3.3 4.5 -0.9 4.5 12.4 5.1 -1.2 -20.8 6.5 -2.8 -4.7 -14.9

34.5% 15.3 19.0 35.4 3.4 14.4 28.2 27.6 36.6 41.3 19.5 20.8 26.0 12.8

-2.4% -0.2 -2.0 0.4 0.2 -2.5 0.0 -2.1 1.8 -5.7 -2.2 -2.9 -7.0 0.8

$3.11 1.31 1.66 2.25 0.56 3.31 1.02 0.52 1.82 3.25 0.96 1.53 2.64 5.58

4.6% 3.9 7.4 2.0 -0.7 6.0 -3.6 -4.0 -2.5 7.2 -1.1 1.6 3.7 -1.7

$1,440 1,064 1,000 411 409 350 121 72 5 2

10.0% -7.5 9.6 -1.1 14.2 7.4 -1.5 2.3 9.4 -11.6

11.1% -7.9 6.2 -6.6 12.0 4.2 0.8 -0.8 2.6 -10.4

30.4% 12.8 7.8 19.7 20.6 32.0 18.2 9.2 28.0 13.5

1.0% 0.0 0.2 -1.6 -1.4 -1.3 -0.7 -0.7 1.2 0.7

$3.27 6.43 1.34 3.53 3.85 3.42 2.91 1.22 2.06 2.33

-1.0% 0.5 3.2 5.9 2.0 3.1 -2.2 3.2 6.6 -1.3

Source: Nielsen Perishables Group

The creamy green fruit is an excellent example of the power of promotion. Supermarkets report that volume is up for avocados more than for any other category in produce — by a mile. Avocado volume is up 12.4 percent perce weekly/per store. That number surges to 28.2 percent when avocados are on promotion. pro


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

“Avocado vocado sales are definitely up,” confirms Turner. “Part art of it is the national advertising — every TV show, how, every magazine that you grab, you see something with an avocado in it. We also hand out free magazines at our store each month with recipes. I have found that whatever recipes we run un in the free catalog, including those featuring a nice avocado dish, sales of those items go up.” PG

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Fresh Food



s consumers increasingly seek healthier snacking options, more and more are noshing on nuts and dried fruit. Suppliers are reporting double-digit growth, and grocers are appealing to health-minded customers by expanding their offerings in these better-for-you categories. Earlier this year, Batavia, Ill.-based Aldi US revealed plans to roll out healthier checklanes at its nearly 1,500 locations by the end of 2016. Single-serve nuts and trail mixes, as well as dried fruits and granola bars, are replacing candy and chocolates.

Last month, Pleasanton, Calif.-based Safeway introduced self-serve, pay-by-the-pound sections featuring a wide variety of nuts, dried fruit and trail mixes under the Truly Good Foods brand in three of its Miami stores. The sections offer clear nutritional and ingredient labels, as well as instructions on how to shop them, says Chad Hartman, director of marketing for Tropical Foods, producer of the Truly Good Foods brand. “For us, the category has grown double digits for as long as I remember,” notes Hartman of the Charlotte, N.C.based company’s dried fruit and nut offerings. Tropical Foods is set to expand upon those offerings

Driven Nuts Grocers expand nut and dried fruit offerings that appeal to health-minded consumers. By Jennifer Strailey


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



Fresh Food

The 2016 [pistachio] harvest is actually shaping up to be the biggest in history.” —Mark T. Carmel, The Wonderful Co.



with the launch of My Salad Bar, a line of four varieties of salad toppers, each of which includes dried fruit and nuts.

New Flavors, Old Favorites Reinvented When it comes to top trends in dried fruit, the exotic and the everyday are both burgeoning. “We are seeing some unique dried fruits hit the marketplace, such as kiwi, goji berries and star fruit,” observes Hartman. “With that said, we are still seeing the best sales with traditional dried ffruit such as apricots, raisins, figs, prunes and apples.” Brooke Golden, director of marketing for Navitas Naturals, in Novato, Calif., agrees. “The dried-fruit category is led by many of the usual suspects — bananas, raisins and mango — but what we get excited about at Navitas are goji berries,” she enthuses. While just a few years ago, goji berries were little known, they now make up 13 percent of the category, Golden notes.

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

“Consumers are learning what we’ve known for years: They are powerful berries packed with fiber, iron and antioxidants,” she says. “Just 1 ounce of goji berries packs more punch than 1 cup of strawberries.” trawberries.” Sunsweet Growers Inc. is on trend rend with its Sunsweet Pacific Tropicals line, which consists of Philippine Mango, Philippine Green Mango, Philippine Pineapple pple and Thai Coconut Chips. The Yuba City, Calif.-based company mpany is also giving younger consumers mers a reason to take a fresh look at prunes with its Sunsweet Ones Individually Wrapped Prunes, a time-honored dried fruit now available in modern portable packaging. Senior Product Manager Stephanie Harralson notes, “Prunes have been showing strong growth, currently +9 percent versus a year ago (IRI 52 weeks ending Aug. 7, 2016), driven by Sunsweet’s commitment to marketing the category through television advertising and digital media.”

A Fresh Date with Destiny While on-the-go snacking is driving much of the demand for dried fruit, consumers are also using it as an ingredient in everything from salads to baked goods to oatmeal. “Sales of dried fruit continue to grow, especially when merchandised near a complementary item,” affirms Joe Tamble, VP of retail sales execution for Sun-Maid Growers of California. To capture these different types of shoppers, Kingsburg, Calif.-based Sun-Maid offers shipper displays and works with retailers to cross-promote dried fruit with items like nuts, croutons, salads and fresh vegetables.

Yogurt Mania “As part of the whole better-for-you snacking trend, the subcategory of yogurt raisins continues to do really well,” says Tamble. While the traditional California raisin remains the company’s No. 1 seller, Sun-Maid Caramel Sea Salt Yogurt Raisins, available in a 5-ounce pouch and a 6-pack of 1-ounce boxes, are gaining traction. “The latest 52 weeks of data from IRI shows the entire dried fruit category is up over 4 percent, with some subcategories — like yogurt raisins — up even higher to an 11 percent increase from a year ago,” observes Tamble. Cherries on Top Consumer demand for new flavor sensations like sweet-tart is helping to drive sales of Montmorency tart cherries. The Dewitt, Mich.-based Cherry Marketing Institute reports that Montmorency tart cherries have experienced an increase in demand in recent years. Since 2003, gross tart-cherry sales

Bard Valley Date Growers, in Yuma, Ariz., is asking retailers to rethink the date category when it comes to in-store positioning. For starters, according to Director of Marketing Erin HanaganMuths, Medjool dates aren’t a dried fruit. “Natural Delights Medjool Dates are an energy-packed, fresh whole fruit,” she notes. As such, Bard Valley wants to see its Natural Delights Medjool Dates positioned with other on-the-go whole fresh items like bananas and apples. The company offers a guide to merchandising, as well as a shelf display shipper program to help retailers optimize their instore positioning of Natural Delights for maximum profitability. To further drive awareness, last month the company launched a new website featuring consumer-oriented lifestyle video content, new recipes, and imagery designed to forge an emotional connection with a youthful, wellnessoriented consumer. “Health-minded consumers and Millennial shoppers are racing towards healthy, on-the-go snacking options to help them power through their day,” asserts Hanagan-Muths. “Not only are these segments looking for high-quality products to sustain their energy levels, they are seeking foods that have minimal ingredients, are GMO-free, contain no artificial flavors or colors, and are natural.”

have risen nearly 25 percent. “Trend experts say tart flavors are on the rise due to consumers’ changing palate that prefers a lesssweet taste,” asserts Jeff Manning, CMO for the institute. “There’s been a dramatic shift in consumer flavor preferences to more stimulating flavors.” “We’re experiencing double-digit growth on both oth our Montmorency tart cherries [and] our dried ried blueberries,” notes Mila Savella, of Stoneridge Orchards. The orchards’ sales of Cherries Dipped in n Dark Chocolate and Cherries Dipped in Greek Yogurt ogurt are also on the rise. This month, the Royal City, Wash.-based company any launched a brick pack featuring six 0.75-ounce packs acks of Montmorency tart cherries. “Our main focus is providing healthier snack options ptions that are clean and good,” says Savella. Stoneridge toneridge also offers an organic line, and all of its products roducts are Non-GMO Project Verified. Publix has recently expanded its Stoneridge dried ried fruit offerings from 10 to 12 SKUs. The Lakeland, nd, Fla.-based supermarket chain is also increasing ng the exposure of Stoneridge’s dark chocolate-enrobed obed Montmorency cherries and blueberries with additional dditional placement in its dried-fruit sections. The products roducts will also continue to be sold through the chain’s hain’s produce departments. October 2016 | |


Fresh Food

Serve them riGht New self-serve sections at three miami Safeway stores feature a wide variety of nuts and dried fruit.


Nutty Snacking As consumers become more aware of the health benefits of nuts, they’re making more frequent purchases, and they’re also looking for new taste experiences. “Consumers are especially showing interest in unique flavor profiles and the additions of spices,” says Tropical Foods’ Hartman. “Sweet and savory have been coming on strong over the past couple years, along with sweet and spicy.” Navitas Naturals expanded its product portfolio this past year with the launch of a Superfood+ snack line of sweet-and-savory treats. “People seek adventure in their foods,” asserts Golden. “Our Superfood+ line of sweet-andsavory seeds and nuts in flavors like the popular Turmeric Tamari Almonds speak to the variety of flavors consumers crave.”

Potential Pistachio Shortage According to an August 2016 report from the USDA, the global production of pistachios for 2015-16 is estimated to plunge 94,800 tons from the previous year, and U.S. production is down nearly half from 2015. The USDA cited weather and drought as the primary culprits for the decline. Does this spell a shortage of the popular green nut? “While we did experience a significant shortfall during the 2015 harvest, Mother Nature made up for it this year,” says Mark T. Carmel, associate director, corporate communications for The Wonderful Co., the Los Angeles-based supplier of Wonderful Pistachios.

“The 2016 harvest is actually shaping up to be the biggest in history,” he continues. This record-breaking yield in the U.S. can at least in part be attributed to this year’s winter and rainy seasons, giving us just the right number of chilly days, followed by rainy days.” According to the company, Wonderful Pistachios are the top-selling tree nut brand in the country, based on market share. “Our processing plants are operating 24 hours a day to meet the demand,” Carmel assures. PG


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


Guest Perspectives By Joe Watson

Harnessing Connections to

Move Produce

Industry, customers unite businesses to succeed.


s members of the fresh produce industry, we hunger to boost society’s craving for fresh fruits and vegetables. This can be achieved by taking advantage of powerful education opportunities. Education leads to awareness of consumer trends and preferences, which grows businesses. With that awareness, we present strong resources that can help today’s families see that eating fresh produce is not only a healthy choice, but also an easy, happy one. At Produce Marketing Association’s (PMA) Fresh Connections: Retail event in Philadelphia last April, it was great to see all of the industry members who came, from across the supply chain and around the world, to learn and discuss the retail side of the produce industry. It linked us all with new ideas and trends, and it was a great chance to create new business relationships and see what’s affecting the retail sector today.

Consumer Feedback Feeds Sales The consumer panel was an excellent resource to have in addition to the industry speakers. There were Millen-


nial, Gen X and Baby Boomer representatives, and their feedback on personal shopping habits and preferences provided helpful tips on how to reach consumers and achieve our business goals. Among the many topics discussed during the event were popular flavor trends, consumer collaboration and the desired shopper experience. For instance, consumers who discover an appealing dish while eating out will want to make it a part of their own recipe book. Their interest in bold, new flavors; flavor enhancements — such as smoked, tangy and hot — and ethnic cuisines offering vegetable-intense dishes will have an impact on what they pull off the shelves when they enter the supermarket. We also explored the convenience factor, which has a great impact on consumers’ choices. Pre-made meal kits and online shopping, we were told by the panel, are two helpful options for today’s hustle-and-bustle families. To provide consumers with the beneficial products and services they desire, we need to collaborate with them. While consumer panels are the rare hotbed of insights, social media

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



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Guest Perspectives as a tool to engage with consumers to see when, where and how they shop also provides a direct feed into consumer minds.

By seizing opportunities to connect to the right people, information, tools and insights, you’re much better positioned to satisfy shoppers’ needs, build consumer demand, grow and prosper.

Define a Unique Shopping Experience Just as one individual might long for a refreshing bite of watermelon on a hot summer day while another might crave the sweet, juicy taste of a peach, one shopper might prefer to take biweekly trips to the supermarket, stocking up only on what’s running low in the fridge, while another might take more frequent trips to purchase the most recent fruits and vegetables placed on display. Consumers have their own preferences and expectations when it comes to shopping for produce. And for the shoppers out there who are accompanied by young children, even a simple invitation from a friendly face like Elmo or Big Bird on a healthy snack, saying “Pick me,” instead of something from the junk food aisle, can make the shopper experience a bit more satisfying. The Eat Brighter! program allows industry members to use “Sesame Street” characters on their fresh fruit and veg-

etable products, royalty-free, to get children ages 2 to 5 excited about eating fresh produce. When the consumer panel participants who have young children spoke about the program, they had only nice things to say. In addition, two Eat Brighter! participants spoke about their recent experience with the program. We were thus able to witness the promising opportunities provided by the Eat Brighter! program through three perspectives: consumer, retailer and supplier.

Connections to Learn, Grow and Succeed Fresh Connections: Retail introduced us to new ideas, trends and solutions in the retail sector of the produce industry. It was only one of the many education opportunities PMA makes available to help businesses grow, however. By seizing opportunities to connect to the right people, information, tools and insights, you’re much better positioned to satisfy shoppers’ needs, build consumer demand, grow and prosper. PG Joe Watson is VP of domestic business development for the Newark, Del.-based Produce Marketing Association (PMA).

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

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General Merchandise

Best Sellers

To keep sales turning over, grocers must tailor publication assortment and placement.


By Barbara Sax

onsumers are still buying books and magazines, but retailers need to manage that category more tightly than ever to optimize sales in this category. Data from Greenacres, Fla.-based MagNet show that magazine dollar sales declined 6.2 percent in the first half of 2016, a trend that’s consistent with declines in 2015. Despite overall sagging sales, opportunities still exist in the category. MagNet reports that as many as 136 titles grew both their unit and dollar sales, with collective sales up 8.7 percent in units and 11.5 percent in dollars for the quarter. Other bright spots include special publications such as “bookazines,” puzzles and adult coloring books.

Something Special Special-interest publications (SIPS), which include bookazines with price points ranging from $9.99 to $14.99, remain popular with consumers. “Higher-priced, specialty-interest bookazines continue to be a growing trend,” affirms Jennifer Hamilton, director of newsstand sales at Des Moines, Iowa-based Meredith Corp. “As checkout space becomes more competitive, these larger-ring products are gaining a stronghold at checkout. These highquality products with niche content and beautiful imagery are the magazine world’s ‘coffee-table books,’ and they make great gifts or keepsakes.” “Specialty issues with tie-ins to movies or events such as ComicCon, particularly when those publications are merchandised with other licensed products, can do really well in displays,” says Jerry Lynch, president of the New York-based Magazines and Books at Retail Association (MBR). Sales of special-interest titles have been healthy, particularly regional publications such as Washingtonian and its offshoot Washingtonian Bride and Groom in the Washington, D.C., market, and Show Me the Ozarks Magazine, since they offer content not found elsewhere. Englewood Cliffs, N.J.-based Bauer Publishing Group is strong in the specialty market, with the company’s First for Women and Closer titles showing increases in both unit and dollar sales. Meredith reports success in the food segment, particularly with releases focused on soups and seasonal slow-cooker themes. Healthy-lifestyle brands continue to be category leaders. “Popular topics include diabetes, clean eating, detox, walking and men’s health,” says Michelle Tauber, VP of retail sales at Emmaus, Pa.-based Rodale. “Healthand-wellness titles such as Men’s Health and Rodale’s special-interest publications perform well from the inline magazine section.” According to MagNet, titles as varied as Playboy Enterprises’ Playboy, Outdoor Sportsman Group’s Guns & Ammo, Future USA’s Simply Crochet,


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

October 2016 | |



General Merchandise

Hearst Communication’s Country Living, and Annie’s Publishing’s Crochet World all had strong quarters, posting double-digit dollar sale increases.

readiNG rooM a display of rodale titles in the nutritional supplement aisle targets consumers interested in healthy living.

Puzzle solvers see the category as a destination, not as an impulse category, so it’s important to keep the category fresh with new product.” —Bruce Sherbow, Penny Publications


Maximizing Merchandising Mass-appeal segments, such as celebrity titles, haven’t fared as well, however. Celebrity magazines have seen market share shrink as consumers turn to online sources for more up-to-the-minute information. Retailers are adjusting their assortments accordingly. In the 6-foot magazine section at one Safeway store in Bethesda, Md., specialty titles such as Cruz Bay Publishing’s Backpacker and The Enthusiast Network’s Recoil OffGrid are given prime positioning. With more pressure than ever on the checkout area and the proliferation of self-checkout lanes, merchandising is crucial. “A lot of stores have downsized checkouts [in favor of] self-checkouts, so those impulse purchases are being lost,” notes John Cowley, partner at Smyrna. Ga.-based TNG (formerly The News Group). “As an industry, we need to address those lost sales.” Innovative Fixture Solutions has had success with its LED-lit racks. “Giant Eagle was the first chain to test these racks in all stores,” says Frank Bishop Jr., SVP of sales at the Rockford, Ill.-based company. “We now have the fixtures in about 10,000 stores nationwide.” Time Inc. Retail is also experimenting with LED lighting in fixtures. “We’ve seen some good results,” observes Bill Romollino, VP of shopper insights. The New York-based company is also working on visual framing fixtures and color-coded floor graphics to boost sales. “Focusing on assortment is critical, especially at self-check, where there’s only room for a small number of titles, based on available merchandising space and limited visual attention,” adds Romollino. “We’re doing a lot of in-store work to optimize sales, since two-thirds of magazine sales are at checkout.” Innovative Fixture Solutions is developing new lane-blocker fixtures that incorporate magazines. “It’s an interesting area that we are going to start exploring,” notes Bishop. “The great thing about magazines is that they change every week, so there’s something new for customers to look at. There’s a real opportunity, even at self-checkouts, especially since the

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

footprint of magazines is so ideal for these lanes.” According to Tauber, Rodale’s Healthy Active Power wing, an auxiliary fixture with 8-, 12- or 16 magazine pockets, has proved to be a successful display vehicle. Positioning diabetic-themed magazines in corrugated ddisplays in pharmacy sections or near diabetic supplies also increases sales, she notes. Thoughtful merchandising is additionally giving a boost to the popular adult coloring-book category. “Adult coloring books are a phenomenon,” asserts Cowley. “Sidekicks and power wings continue to be viable ways retailers are using to display these products, but we’re merchandising the books on end caps with colored pencil sets or metallic and florescent gel pens, and we’ve had terrific results.” Springdale, Ark.-based retailer Harps is planning an end cap checkout display of these products in each of its 82 stores this November and December. “The display has 12 titles and six different pen-andpencil sets on a three-shelf fixture,” says Cowley. Kroger’s Delta Division stores display adult coloring books on power wings near school supplies, and some Safeway locations are using featured sidewings to display coloring books from Tauton Press and Topix Media Lab.

Puzzling Times Puzzle publications also remain a strong segment of the category. “The puzzle segment is still growing, with best-in-class retailers seeing over 4 percent growth in the segment,” observes Bruce Sherbow, SVP at Norwalk, Conn.-based Penny Publications. “Puzzle solvers see the category as a destination, not as an impulse category, so it’s important to keep the category fresh with new product.” Puzzles have lost space at the checkout, but with 20 new titles introduced weekly from publishers in the segment, retailers are often increasing the space devoted to the segment in the main magazine section. “Retailers have been reducing and changing configurations, and generally our puzzle magazines are being reduced at checkout, but we’ve signed on in some Kroger and Walmart stores for pockets for our coloring-book titles,” notes Sherbow. Further, dotto-dot books are making a comeback, with more intricate designs and hundreds of dots to connect. Publishers are also targeting shoppers with magazine offers based on prior purchasing habits. “Kroger mails customers personalized offers based on their shopping habits, such as a discount offer on Prevention magazine mailed to customers whose prior purchases indicate they would be interested in receiving an offer for the magazine,” says Rodale’s Tauber. In that vein, Safeway recently ran a cross-promotion with Oprah magazine and U.S. Postal stamps at a number of its stores. PG


Equipment & Design

Sending a


Supermarket signage is becoming a versatile merchandising tool. By Bob Ingram


uild it high and watch it fly” is no longer the mantra of the food retailing merchandiser. For today’s successful food merchandising, signage is key. “Creating signage is the combination of art and science,” asserts Bridget Kwok, director of marketing at Andronico’s Community Markets, in Emeryville, Calif. “Each sign must be eye-catching and appealing while still offering the customer important pieces of information. Retailers also need to be mindful of not overwhelming their customers with too many signs.”

According to Kwok, Andronico’s everyday signage is divided into what she calls three “buckets”: price and item, providing basic information; romance/story, shelf tags offering more information, often provided by the producer of an artisanal or local product, or one with a unique angle; and programs/promotions, typically perpendicular shelf tags, floor signs, hanging banners or blades to share new partners with customers, or to publicize program launches, new items and their attributes. “Alongside those staples,” Kwok says, “we sprinkle in seasonal signage and special promotions signage. Signage is also a huge part of our seasonal décor package. We create bespoke signs of all sizes and

BEEr HErE SpartanNash stores, including 11 D&W Fresh Market locations in Michigan, feature informational craft beer signage.

October 2016 | |


Equipment & Design


MarkEtInG MatErIal a storefront by archer Sign for krieger’s Market in Cuyahoga Falls, Ohio, promotes the grocer’s brand.

shapes to fit the theme of a season.” Kwok sees the company’s FitMarket flags as “incredibly impactful. They’re black with bright-green detail and really stand out on the shelves next to the products,” as well as being a mixed bag of information about nutrition and eating “real” food, with some even conveying cheeky, fun fitness messages. They all tie back to the FitMarket department, where the goal is to help customers create balance between how they shop, cook, eat, exercise, and recharge throughout

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their lives and their shopping trips. “Our outdoor vinyl banners are also extremely impactful,” Kwok adds. “They are great at grabbing the attention of passersby on foot or by car. “Those who have been to the new [Whole Foods] 365 store in Los Angeles,” she goes on to note, “have seen the future of signage, which lies in digital.” The digital shelf tags there can be changed and updated remotely, as well as keep inventory, and there are also sleek digital end cap displays that rotate messages every 10 seconds. “The beauty of digital signage is that it’s clean, can rotate through multiple messages about a product and can promote a complementary product,” Kwok observes, “and it can promote any programs in the store. As a marketer, that’s an attractive trait.”

Integration, Personalization Growing Ron Cox, director of marketing at Grand Rapids, Mich.-based SpartanNash, says: “Signage has two primary roles in our stores, the first being directional, whether aisle directory, ‘wayfinders’ in aisles, or other tools that help guide the customer through the store. The second purpose is informational; that can include item description, price, promotional pricing, nutrition information, local attribution, and, at times, recipes, key product attributes, digital coupon availability, or even QR [quick response] codes to link to additional information. Brand messaging would fall into this category as well. We also display signs for sponsorship events, community support and SpartanNash Foundation activities.” Cox adds that the company is currently testing digital point of sale (POS) with displays featuring animation in fresh departments and at freestanding video kiosks by entrance areas in the Omaha, Neb., market. “Information spans from pure product information to nutritional information, community news, offers, promotions, branding and seasonal information,” he notes. Cox sees the most effective signage as right in front of the product, and the integration of digital

signs and digital devices as a growing trend. “The ability to scan a sign offering a digital coupon and have it load direct to a card is one example,” he says. “With the continuing shift to personalization, we see the potential to reduce signage in-store as customers will be shopping with ‘personal’ deals not relevant to all, and these may be called out via their cellphone as they shop, based on what is relevant to their specific account,” Cox continues.

Get to the Point On the supplier side, Tara Strauss, an executive in business development at Canton, Ohio-based Archer Sign, says: “The storefront is becoming a great piece of marketing material. I see supermarkets using a photo of the store in everything from newspaper fliers to online banners.” She adds that supermarkets have been moving toward energy-efficient signs by using LED instead of neon or incandescent light, although Archer’s client Marc’s, a Middleburg Heights, Ohio-based chain with more than 60 stores, “loves to use bright neon signs to direct their customers around the store. At Archer Sign, we have a full in-house neon shop, which most sign companies don’t have.” Strauss believes that electronic message centers are the future of signage. “These digital display boards can get a message to the consumer before they even get in the door,” she points out. “With the numerous options available, there is a digital signage option out there for every budget.” For his part, Didier Blanc, president of Blanc Display Group, in Dover, N.J., says that signage plays a “huge” part in supermarket marketing and merchandising programs. “Whatever message a supermarket wants to convey, it cannot be effective and successful if it is not present at the point of purchase,” Blanc emphasizes. “It can be as simple as indicating sales items to providing product information — selection, nutritional information, storage, recipes, for instance — to reinforce a supermarket’s desire to be perceived as a better place to shop, which is becoming even more critical as brick-and-mortar stores strive to keep customers from purchasing online.” Blanc Display Group’s most recent innovations are Signature Series Headers, which provide buyer’s guide information for many of the most common produce categories, and the World of Produce Buyer’s Guide, including large category headers that highlight produce staples for a variety of cultures and cuisines such as Hispanic, Asian, Mexican, French, Italian and Caribbean, in addition to smaller complementary inserts and toppers that incorporate QR code links to recipes and other product information for specific items. “We have made large investments in informative

Germ-free Plastic bakery price tags from evolis eliminate the risk of contamination.

content and added usu er-friendly QR codes code to our signage that link to this content,” Blanc continues. He notes that signage will continue contin to be a key merchanmerchan dising and marketing marketi tool and that his company co is designing its signage to be the vehicle to provide shoppers with an experience they can’t get online.

Plastic Price Tags Lissette Robledo, marketing manager of the Fort Lauderdale, Fla.-based American subsidiary of Evolis Inc., a French company, says marketers will have to pay special attention to the way they tag their fresh food items, given the new FDA guidelines, which will take effect next May and require that calorie counts and other important details be listed on food price tags. “Our core business is the design and production of plastic card printers,” Robledo explains. “We saw a need for supermarkets to eliminate their current price-tag logistics and time delays. Most importantly for price tags that are printed on plastic cards, there is no need to worry about food contamination.” The company’s solution combines an Evolis Zenius or an Evolis Primacy card printer for single- or double-sided printing, card design software, and all of the accessories to hold the tag. The cards can include barcodes and QR codes that can be easily scanned by any mobile device. A price tag can be issued with NFC (near-field communication) functionality embedded and approach a smartphone to receive recipe and other information. “We would like to see the implementation and expansion of plastic price tags in the United States as they have already been in many European countries,” Robledo says. PG

Whatever message a supermarket wants to convey, it cannot be effective and successful if it is not present at the point of purchase.” —Didier Blanc, Blanc Display Group

October 2016 | |




Lessons Learned,

Challenges Ahead Winners will provide convenience and outstanding service. By John Karolefski


he beat goes on for online grocery shopping. The daily grocery news continues to chronicle the growth of e-commerce:

Kroger’s Atlanta division launches a ClickList service that offers customers the ability to place orders online and get their groceries at a pre-selected pickup location.

Whole Foods Market is expanding its ordering and delivery service via Instacart to new markets this year, adding to the 17 cities where shoppers now use the service to obtain groceries from the natural food retailer.


Buehler’s Fresh Foods, in Ohio, has launched the Click Load & Go online shopping platform, which enables customers to order online or through a mobile app and then pay online or at the store’s curbside pickup location. As more retailers make grocery shopping available to their customers, two key questions emerge: What have been the lessons learned so far from their experience with grocery e-commerce, and what challenges do they face? Most analysts who study this segment of the retailing industry agree with the view of Robert Howard, partner and practice leader at Boston-based Kurt Salmon Digital: “We are currently at the very beginning stages of grocery e-commerce. It is essentially where retail ecommerce was 15 to 20 years ago.”

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

THERE’S A FRESH LABELING LAW COMING. ARE YOU PREPARED? PARED? Stay Compliant with ADUSA Digital Displays y & Menu Boards The FDA will begin enforcing orcing a new Menu Labeling Law (part of the Food Safety Modernization Act) on May 5, 2017. The new law requires restaurants, supermarkets and convenience stores to display calorie counts, counts along with messaging regarding suggested caloric intake, on menus and menu bo boards. Chains with 20 or more locations are required to comply with the new law. la There is not much time left, so contact us today to find out how ow our digital displays and menu boards can help your stores cost-effectively address ess the requirements re mandated by the menu labeling law. ADUSA’s Digital Displays & Menu Boards system is part of ADUSA’s SA’s Omni-Channel B™ Omni-Channel Fresh-Foods® product suite, which also includes the OrderHUB™ Integration Server, Self-Ordering Kiosks, Web & Mobile Self-Ordering, rdering, Order-Taking Tablets for Associates, Queue Management and Basic Queueing g modules.

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Work in Progress That doesn’t mean the service isn’t evolving and carving out a share of the overall grocery business. Tony Kleiner, of Dayton, Ohio-based Teradata, rightly points to improving customer interfaces, e-commerce infrastructures and fulfillment processes. He divides progress and work to be done into two areas: Front end: Customer interfaces using both mobile devices and computers are making it easier for customers to review assortments, create shopping lists, place orders and pay for those orders. Customers can choose how they want to receive their groceries through various home delivery or pickup options. Back end: Many grocers still struggle with execution issues from a logistics, labor and measurement standpoint. The volume of online sales today is a relatively small percentage of overall sales for most grocers. “It is important to develop the processes and resources to make

e-commerce profitable and as efficient as possible now, to ensure that it drives and does not hinder financial performance as the percentage of sales grows,” says Kleiner, senior business consultant for the provider of data analytics and warehousing solutions. Randy Burt, partner in the consumer and retail practice of Chicago-based consultancy A.T. Kearney, expects online grocery ordering and delivery to grow five to six times faster than conventional food retailing. “That is inevitable,” he says emphatically. “It has moved from a question of ‘if’ significant grocery share will shift online to a question of ‘how much, and when.’ That said, we are still in an experimental stage, with lots of models out there — from Amazon Fresh, Peapod and Door to Door Organics, to Instacart, Blue Apron and the click-and-collect offerings of traditional grocers. While each of these models has unique value propositions, they are rapidly evolving. We expect the landscape to continue to shift as existing models are refined and new models are launched.”

Fresh Test Keith Daniels, a partner at New York-based Carl Marks Advisors, offers this statistical look at the state of online grocery: Online grocery sales are now in the high single digits as a percentage of total revenue for grocery. They’re growing at a 10 percent range, per Australia-based global business intelligence firm IBISWorld. Amazon grocery purchases are growing at 25 percent.


Buy 1 • Buy 2 • Buy 3 Get Them All

The percentage of consumers ordering groceries online is 30 percent to 35 percent. “Additionally, ‘basket-bandit sites,’ that is, those that siphon off a portion of grocery purchases, such as Amazon, as opposed to pure online grocery plays such as Peapod, are generating a steady stream of sales leakage,” Daniels explains. “Basket-bandit sites capture 84 percent of all online grocery trips and 50 percent of all online spending. Amazon is remarkably capturing approximately half of all online grocery spending.” In light of these threats, Daniels notes that traditional grocers will need to adapt and evolve to the needs of the consumer to survive. For example, stores need to offer the best pricing while still providing quality goods. They need to focus on fresh food because consumers aren’t necessarily ready to buy perishables online, due to concerns about ensuring freshness. Teradata’s Kleiner agrees. “Customers are typically hesitant to allow someone to select their perishable

products for them, particularly produce and meat,” he points out. “Grocers need to establish programs and communications to prove to customers that they will receive the same-quality products as they would select for themselves. If this is not doable, then the grocer should initially focus only on those categories of products that can be executed at a high level, and expand to other categories as the ability to execute evolves.” Another lesson learned from online grocery, according to Kurt Salmon Digital’s Howard, involves the broad adoption of the curbside pickup model of delivery. One, shoppers are limited to local inventory, and two, it’s not a cost-effective use of a grocer’s resources. “Stores need to hire ‘pickers’ to walk around the store, identifying and grabbing pre-ordered items for customers,” Howard explains. “Not only is it more expensive for grocers to maintain a staff of pickers, but it is no more efficient than if customers were to shop themselves. These pickers have just as hard of a time identifying products as shoppers, thereby cluttering aisles and possibly outnumbering in-store shoppers. So while this model may be a trend, it’s not a sustainable one. Bottom line: Grocers aren’t profiting, and customers aren’t getting the superior experience they want.”

If Not You, Who? Graeme McVie, of Toronto-based Precima, tells the story of a grocer who couldn’t make the economics of home delivery work. As a result, he decided to test the removal of the home delivery service from a

single metropolitan area to see the impact. He anticipated that all online sales would simply migrate back into his physical stores. But the result was that a meaningful portion of the online sales simply disappeared, presumably to the competition. “The lesson the grocer took from this was that if you don’t satisfy customer needs, then one of your competitors will,” says McVie, VP and GM of business development for the data analytics division of LoyaltyOne. “Over time, home delivery with short lead times and defined delivery times is going to become increasingly essential. Any retailer selling groceries will need to develop the operational capability to meet these customer needs, or risk losing sales growth.” Experts are quick to identify what grocers need to do to succeed in grocery e-commerce. For starters, they should measure and analyze e-commerce performance the same way they manage in-store performance; namely, labor (pickers), sales, shrink, and shopper value, plus distribution costs, fulfillment and other key e-commerce performance indicators. “Grocers must gear their programs towards a diverse customer base, with varying degrees of technical savvy and requirements for what an e-commerce program must deliver,” advises Kleiner. “While mobile-savvy Millennials are a common target for e-commerce programs, other less mobile-savvy demographics will become a significant component of sales. Just as grocers have moved towards localized in-store customers and align assortments, schematics and promotions based on analytics, similar approach-

1 in 3 Americans Buy Food Online So far this year, 31 percent of Americans have purchased food online, according to a recent poll. That equates to 45 percent of online shoppers buying edibles on the internet, according to officials at Rochester, N.Y.-based Harris Interactive. This purchase behavior is more common among certain demographic groups: Millennials (36 percent, versus 31 percent of average Americans); college grads (35 percent, versus 26 percent with a high school education or less); parents (37 percent, versus 28 percent of those without kids); and those in cities (38 percent, versus 30 percent suburban and 25 percent rural). “As manufacturers continue to grapple with the challenges facing their industry around e-commerce, they must ask themselves: How does a consumer making a purchase in a grocery store differ from a consumer making a purchase online?” says Kathy Stein-

To gain the loyalty of today’s priceconscious consumers, grocers … must create more targeted offers, deploy smarter strategies, provide localized product assortments, and offer the right price to the right target market at the right time.” —Todd Callen, Stibo Systems

berg, director of The Harris Poll, which conducted a national online survey in late June of 1,995 U.S. adults age 18 and older. “Manufacturers will not only want to know differences in what people buy online versus in-store, but more importantly, how people buy online versus in-store.” The most popular product purchases were snacks (20 percent) and non-alcoholic beverages (17 percent), while the least purchased items were baking products and frozen foods (12 percent each). Consumers said they go online to purchase products that are: Nonperishable or have a long shelf life (49 percent) Difficult to find in stores (48 percent) Easy to ship (39 percent) Needed later on (32 percent) Stock-up items (31 percent) Just one in 10 consumers (29 percent of online food shoppers) said the practice has replaced some or all of their traditional grocery shopping trips. Online food purchasers are most often looking for something special that’s not available at their local rocery store (52 percent).

October 2016 | |



Customers are typically hesitant to allow someone to select their perishable products for them. Grocers need to establish communications to prove to customers that they will receive the same-quality products as they would select for themselves.” —Tony Kleiner, Teradata


es should be taken for e-commerce. For example, product recommendations based on both a customer’s purchase behavior and the behavior of similar customers can improve their experiences, drive additional sales and optimize vendor marketing programs.” On a more practical level, according to Burt, fresh categories call for new processes and well-trained labor to ensure that orders are fulfilled at acceptable-quality levels. In-store picking processes need to be organized and managed so that they don’t interfere with the in-store experience of traditional shoppers, while still being extremely efficient to enable the economics to work. From a delivery standpoint, he adds, striking the right balance between the willingness to pay and the cost to serve is critical. Overall, Burt is bullish on the future because of the opportunity to grow share as more food sales transition online. He expects grocery e-commerce’s share to rise from 3 percent to 4 percent today to 12 percent to 16 percent and more by 2023. Burt further predicts that grocers that are able to integrate

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in-store offerings with online offerings — “and craft a unique value proposition” — will succeed. McVie agrees that “e-commerce is going to continue to be an important component to the overall value proposition offered by grocers,” but adds that “there’s a big difference between online ordering for products like TVs, where consumers perceive the item price as a key component of the value proposition, and the online ordering of grocery products. For the latter, there is a significant convenience component to the online value proposition that retailers should clearly communicate, which is that the customer can order their goods online from the comfort of their home at whatever time of day is convenient. “In addition to the convenience factor,” he continues, “grocers will start to make digital suggestions to customers based on their purchases in order to build basket size as personalized offers become a common asset in the online grocery purchase journey. These digital offerings not only act as a driver to utilize the ecommerce platform, but engage the customer online as the grocer would in stores. The world of physical and digital grocery shopping will converge, and consumers will gravitate to whichever best suits their needs.” But whether it’s in-store or online purchases, experts stress that the fundamentals of retailing must apply for all transactions. That calls for unique product assortments coupled with creative selling strategies, suggests Todd Callen, of Aarhus, Denmark-based Stibo Systems. A concerted effort is required to keep assortments fresh and priced to move. To do this successfully, he adds, grocers must develop better sourcing capabilities while improving stock positions, merchandising and pricing execution. This level of agility requires a higher level of operational intelligence. “To gain the loyalty of today’s price-conscious consumers, grocers must carve out a niche based on creative strategies,” says Callen, EVP for the provider of multidomain master data management solutions. “They must create more targeted offers, deploy smarter strategies, provide localized product assortments, and offer the right price to the right target market at the right time. These factors require greater insight into consumer demand, buying habits, inventory levels and product information. Winning over consumers has never been as challenging as it is today.” PG

Regulatory Issues

Supply Chain

Playing by the

Rules FSMA legislation, while daunting at first, is poised to sharpen the fragmented food supply chain. By Jenny McTaggart


n some circles, regulation is considered a bad word, classed with such anxietyridden phrases as “red tape” and “redundant paperwork.” But in the food retailing industry, the newest regulations tied to food safety are largely being embraced, as they promise to sharpen the supply chain in a way that will make supermarkets — and the industry as a whole — much stronger in the end, especially as the industry shifts to a more proactive approach. To be sure, major changes in any industry often come with a lot of undesirable cost and effort, and the heavy regulatory environment in the United States shouldn’t be downplayed. As the Obama administration comes to an end, the passage of the Food Safety Modernization Act (FSMA), and the implementation of its final foundational rules, has brought its share of stress to retailers, manufacturers and other key areas of the food supply chain. After all, each rule comes with some 1,000 pages of requirements. Yet a decidedly positive outlook shared by one retailer’s CEO highlights the advantages that will come into play once the initial headache of understanding the new rules passes. Kevin Davis, president and CEO of Carson, Calif.-based upscale regional chain Bristol Farms (and current October 2016 | |


Supply Chain

Regulatory Issues

chairman of the Food Marketing Institute’s board of directors), recently noted in an interview with Park City, Utah-based ReposiTrak that FSMA will ultimately result in some major changes that are sorely needed in the supply chain. “I think FSMA’s going to “You’d be totally force us all to be a lot more surprised to go diligent about every step in the process, not only when to the back of we first sign up the product reputable stores and put it in, but continually, and be appalled with a diligence that raises at how food is the level of awareness for all handled.” of us on what compliance —Ron Atapattu, means, both from manufacOverseas Cargo Inc. turing and distribution, and in the stores,” he said. Davis also noted FSMA’s significance to the unique complexities of the food supply chain: “So much change happens in our industry, with 10,000 new products introduced every year, and the churning of products in our stores, and the consolidation of manufacturers, and even the selling of brands from one company to another, that I don’t think we do a great job of following up on those products to make sure in current terms that they’re doing everything right.” While the supermarket industry has Davis and

A Full Agenda While the Food Safety Modernization Act (FSMA) is the legislation that’s received most of the food industry’s attention, there are other key issues impacting retailers and manufacturers. Here are a few of the big ones:

Overtime regulations: As the U.S. Department of

Labor has updated its white-collar regulations, grocers have been scrambling to figure out which employees will now be classified as exempt versus nonexempt, and how their pay scale will be affected. “FMI acknowledged that the salary threshold starting at $20,000 is out of date, but to more than double that within a six-month period is incredibly challenging,” notes FMI Chief Regulatory Officer Stephanie Barnes.

Nutrition labeling: The industry is experiencing a twofor-one punch with an update to the nutrition facts panel and serving size regulations, as well as a new menu-labeling rule. “Part of the challenges we’ve seen with the nutrition facts


other leaders who recognize the importance of food safety and the necessity of spending time and money to commit to the cause, the uncomfortable truth is that many retailers still see food safety as an afterthought, especially when it isn’t directly tied to a line on their profit-and-loss statements. Ron Atapattu, president of Overseas Cargo Inc., a Miami-based third-party logistics and freight trucking company, has seen his share of less-thanideal conditions in the back sections of supermarkets. “I call it the back-store problem: That’s where most of the safety issues are hidden — how the products are handled and maintained, especially in cold-chain applications,” he says. “You’d be totally surprised to go to the back of reputable stores and be appalled at how food is handled.” Atapattu admits to being a fan of regulations, primarily because they help boost business for his company, along with other third-party logistics providers. But he also sees new regulations as “the catalyst for sharpening the supply chain processes that we in third-party logistics are constantly trying to refine and implement.” In his experience, most retailers aren’t motivated to significantly change their business practices if regulations don’t demand it, or if the local competition doesn’t spur it on.

Guidance From FMI Even at Food Marketing Institute (FMI), where new regulations can bring about a lot of blood, sweat and tears as the trade group works on behalf of its many members, FSMA is being viewed in a favorable light. “We’ve supported the passage of FSMA strongly,” says Stephanie Barnes, chief

panel is really unique to the private brands industry,” explains Barnes. “Because private brands don’t invest in marketing, they change their labels much less frequently. They’re really struggling both in terms of digesting what the changes are, and also the two-year compliance date that the Food and Drug Administration has provided.” Meanwhile, if retailers are using the nutrition facts panel to comply with menu labeling, timing is an issue. The date for menu-labeling compliance is May 5, 2017, while the nutrition facts panel date is more than two months later — July 26, 2017.

GMO and beyond: “Consumers are increasingly demanding greater transparency about the food and beverages they consume — extending beyond what can easily fit on package labels,” notes Jim Flannery, senior EVP of operations and industry collaboration for the Washington, D.C.-based Grocery Manufacturers Association (GMA). “Our industry is committed to providing this information. So, in addition to working on regulations for GMO disclosure, GMA’s work includes initiatives such as Facts Up Front and the newly launched SmartLabel.”

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

regulatory officer at Arlington, Va.-based FMI. “Obviously, our top priority is food safety and making sure that food is safe for our customers. It’s in everyone’s best interest to take a preventive approach to food safety and to make sure you’re doing your due diligence in terms of verifying your suppliers, and that you have food safety plans in place. “It’s an opportunity to raise the bar, and I think it goes without saying that a lot of our members will continue to go above and beyond what the law requires,” she continues. “But it is a significant undertaking, and the rules are incredibly detailed. So where we are right now is just making sure that as companies are doing it, they’re doing it right.” Currently Barnes and her colleagues are focusing on seven of FSMA’s final foundational rules that are ready to implement, including preventive controls for human food, the rule of foreign-supplier verification and the sanitary food transportation act. “Some of our largest members will be impacted by all seven of these, whereas we might have a smaller member who is only operating retail stores, so the final rules will have less of an impact,” she notes. “Each rule has 1,000 pages of requirements, and then you have to start thinking about how you want to refine your recordkeeping processes, because a huge part of all the FSMA rules are related to documentation and recordkeeping.” Fortunately for its members, FMI has worked closely with the Food and Drug Administration throughout the rulemaking process, she adds. “We’re certainly going to have to stay engaged, because the agency continues to publish additional guidance documents and resources,” she observes. Meanwhile, Barnes encourages supply chain execs to make sure that all of their company departments are on board as they work on rolling out FSMA compliance and implementation. “You really have to have a cross-functional team involved,” she stresses. “That includes everyone from a quality assurance/ food safety person to someone in the IT department looking at recordkeeping. You also want to have your legal team involved to make sure you understand what your regulatory obligations are and how you want to comply. Another important department to be involved is procurement. For example, under the foreign-supplier verification rule, you have to approve your supplier prior to importing a product, so it’s obviously important to make sure that your buyers understand what goes into that. Training is a huge piece, too, down to the employee level.”

November and Beyond As the Obama presidency comes to a close and Americans prepare to elect a new chief executive, not too much is likely to change recall realIty even “healthy” in the regulatory environment for retailers, at least not initially. foods aren’t exempt from food safety “There’s always a little bit of lag issues: Oregon’s time once you have a new adNew Seasons Market recently ministration, in terms of setting recalled its almond priorities both within FDA and butter, saying all the other regulatory agencies it may contain that our members are impacted peanuts. by,” notes Barnes. “At least with FSMA, we’ll continue to see additional guidance and materials coming from the agency, because it really is a heavy lift. There are a lot of mandates that they’re required to fulfill under the statute.” Looking ahead, Atapattu predicts that the regulatory environment will continue to remain fairly favorable for the supermarket industry regardless of who becomes president, considering that retailers and manufacturers “Where we are both have a “powerful say” in right now is just Washington. making sure that But he also contends that as companies are food recalls and other food safedoing it, they’re ty issues will continue to hold a doing it right.” prominent place in Americans’ minds, especially as “connected” —Stephanie Barnes, consumers keep exchanging inFood Marketing Institute formation more frequently than ever before, on a global basis. In fact, he sees social issues as one of the major drivers of increased regulations in the United States. Atapattu is also convinced that in the coming years, consumers will demand even more information about the food they buy — especially those consumers who can afford to pay more for products that are labeled as organic, or are otherwise considered to have superior quality and safety attributes. In that sense, regulations might be preparing the industry for changes that they’d have to make anyway. “Since I am heavily involved in the technology side of the business,” he predicts, “I think there will come a day when the consumer will be able to pick up a product in the store and know the recent history of the product, the transformations that have gone from inception to the shelf, and be able to make a buying decision based on all that.” PG October 2016 | |


Food, Beverage & Nonfood Products

Burger Time

Higher protein and exotic flavors are in vogue today — and front and center in the latest frozen items from Dr. Praeger’s. Bibimbap burgers are made with spicy Korean gochujang and brown rice; Heirloom Bean burgers showcase six varieties of beans, lentils and delicate herbs; and Mushroom Risotto burgers feature roasted mushrooms and simmered arborio rice with a hint of truffle oil. The burgers are vegan and kosher, with the Mushroom Risotto and Heirloom Bean varieties glutenfree and non-GMO. The SRP is $4.99 per 4-pack of burgers.

Dairy to Be Different

Understanding that consumers today love products with unique flavors — and that plain old butter can be boring at times — Minerva Dairy has created unique alternatives by infusing flavor into its traditional Amish roll butter. Available in such varieties as Maplewood Smoked, Garlic Herb, Pumpkin Spice and Maple Syrup, the handwrapped butters are made with milk from local pasture-raised cows, and contain 84 percent milk fat. All varieties are small-batch, vegetarian and rBST-, antibiotic and gluten-free. The SRP is $6.99 per 8-ounce package.

Boozy Bacon

With the immense popularity of everything bourbon and bacon today, Smithfield Brown Sugar & Bourbon Bacon couldn’t have arrived at a better time. The limitededition thick-cut, naturally applewood-smoked bacon from pork processor Smithfield Foods features a touch of sweetness and a hint of smokiness. It comes in a 16-ounce stack pack with an SRP of $8.49.

Stockpile Some Shares

Investing in stocks can be intimidating, confusing and pricey, which could explain why 80 percent of Millennials don’t even bother. To help simplify and ease access, Stockpile has introduced a program that divides stock share values into dollar amounts as low as $1, and grocers across the country can sell gift cards redeemable for these fractions to shoppers. Currently, grocers may choose from 50 cards — a combination of companies and denominations — to sell in their stores for the price of the share, plus an additional fee ($1.99 per card, with an additional 3 percent for cards above $100). After redeeming them for stock ownership, card owners may hold on to stocks and track their progress, or cash them out whenever they want.


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

Not Your Usual Mixer

The rise of craft cocktails has brought about a shift in interest from sweet, fruity cocktails to tart and even savory ones. Now consumers can craft their own unique libations with Trailblazer Foods’ new line of organic drinking vinegars (aka “shrubs”), which can function as cocktail mixers or soda replacements. Made from fruit, sugar and apple cider vinegar, the vinegars come in such flavors as Honey Ginger, Peach Cherry Blossom, Pineapple Cayenne, Apple Spice, Raspberry Pomegranate and Blood Orange. They have a clean-ingredient deck and come in 16-ounce bottles with an SRP range of $8.99-$10.99 each.

The Copper Fixer-upper

No Thaw Necessary

With consumers’ schedules more packed than ever, any dinner solution that both tastes great and speeds up the cooking process is sure to get a warm welcome. Enter Freezer to Plate from General Mills, an expansion of The Good Table product line that brings easy, gourmet-style meal preparations to frozen chicken, requiring no thawing. Freezer to Plate pairs one of four restaurant-inspired sauce varieties with rice or pasta, and is ready in less than five minutes. Users combine rice or pasta with water; add chicken straight from the freezer, along with one of four sauce varieties — Lemon Garlic Herb, Marsala, Southwestern or Teriyaki — and bake for 45 minutes. The products contain no artificial flavors, high-fructose corn syrup, or colors from artificial sources. The SRP is $2.99 per 10.2-ounce package.

The antioxidant and anti-inflammatory properties of copper have been used for centuries to help relieve pain, ease joint stiffness, and provide increased energy and overall well-being. Now Quest Products Inc. offers CopperFixx, said to be the first copper-based analgesic cream and patch for consumers nationwide. Using copper as its primary active ingredient, CopperFixx assists in reducing aches and pains, rebuilding connective tissue and improving blood circulation, and can help reduce swelling and inflammation. The product is homeopathic, with arnica and a natural heating element to provide warmth and comfort. The SRP is $14.99 per 2-ounce jar.

Two’s a Charm

Bourbon’s popularity has brought myriad products to shelf, making differentiation critical to success. Taking a cue from the often multibarreled Scotch-making process, Beam Suntory Inc.’s Jim Beam twice-barreled Double Oak bourbon offers a richer flavor than standard Jim Beam. The Kentucky straight bourbon is aged four years in freshly charred new American Oak barrels, and is then transferred to a newly charred American Oak barrel and aged to taste. The second barreling allows for an even deeper level of spiced oakiness and caramel flavor, creating a unique bourbon that can balance a cocktail or be sipped over ice. The 86-proof spirit has rich notes of caramel and vanilla, hints of toasted wood, and a golden amber color. The SRP is $22 per 750-milliliter bottle. October 2016 | |


Snee to Succeed Ettinger as Hormel CEO

Driscoll’s Unveils New Global Brand Strategy Watsonville, Calif.-based Driscoll’s has introduced an emotion-driven global strategy that further differentiates the company within the produce industry as a consumer-focused brand. Driscoll’s conducted extensive consumer research to further evolve its brand strategy from a functional fruit to create a stronger emotional connection with happiness. The first phase includes rolling out a cohesive visual brand statement across the world. The new look will include a refreshed logo, and new design elements for packaging, in-store merchandising, and all digital and social media touchpoints. The brand design was inspired by the berries themselves as colorful pop icons of the natural world, retaining the brand promise “Only the Finest Berries.” Soren Bjorn, EVP of Driscoll’s of the Americas, says, “We are excited to elevate the brand opportunity to further capture the hearts of our berry consumers — such an opportunity is rare and a privilege in the produce industry.” Brand research included a survey of 1,000 men and women, which Driscoll’s says demonstrates a direct connection between eating berries and joy; happy memories and summertime are also strong positive emotional links associated with berries, with flavor leading the reasons for consumption. ShareTheBerryJoy


Jeffrey Ettinger will retire as CEO of Austin, Minn.-based Hormel Foods Corp. on Oct. 30, to be succeeded by James Snee, the company’s current president and COO. Ettinger, who will continue as Hormel’s Ettinger Snee chairman of the board, was chairman, president and CEO from November 2006 to October 2015, when Snee was appointed president. Under Ettinger’s leadership, Hormel has grown through strategic acquisitions, organic growth and a continued focus on product innovation. Ettinger joined Hormel in 1989 and has held a variety of roles, including senior attorney, product manager for Hormel chili products, and treasurer. Snee joined Hormel in 1989 in the foodservice division and worked in various positions throughout the company, eventually advancing to group VP of Hormel and president of Hormel International in October 2012.

Mondelez to Acquire Cadbury Biscuits License Deerfield, Ill.-based Mondelez International is purchasing from Burton’s Biscuit Co. the license enabling the company to manufacture, market and sell Cadbury-branded biscuits around the world, including in the United Kingdom, France, Ireland, North America and Saudi Arabia. Hubert Weber, EVP and president of Mondelez Europe, says, “The transaction will help us to unify and expand our global Cadbury biscuits portfolio in key markets and enable us to explore delicious new products by using the best of our chocolate and biscuit innovation platforms.” Cadbury-branded biscuits will continue to be manufactured in Burton’s factories by its employees under a co-manufacturing agreement.

Acosta Appoints Matthesen President/CEO Jacksonville, Fla.-based sales and marketing agency Acosta has named Steve Matthesen its president and CEO. Matthesen, with more than 20 years of experience in consumer data, analytics, business strategy and operations, joins Acosta from The Nielsen Co., where he most recently held the role of president of global retail. He succeeds Robert Hill, who will become vice chair of Acosta’s board of directors and will continue to work with the company’s clients and customers in his new role. Hill has been with the company and industry for more than 30 years, serving in a number of capacities at Acosta since 1994.

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

A BETTER PERIOD EXPERIENCE! Enjoy 12 hour leak-free protection, comfort and convenience with The DivaCup. • • • • •

Delivers higher sales and profits in the category! Delivers higher dollar spend and profit from each consumer! The DivaCup Model 1 ranks #12 and Model 2 ranks #21 in $SPPD! Growing by double digits ($ and units) in same-store sales! Unparalleled advertising support driving consumer demand to retailers.

*Source: IRI, Sanitary Pads and Tampons, Total US - FDMx, Latest 52 weeks ending March 20, 2016. Spins Data, Disposable Pads and Reusable Pads and Tampons, Total US - Natural Channel, 52 weeks ending 04/20/2014.

Index 5 Generation Bakers

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

Canadian MarketS S • Convenience • Pharmacy • Foodservice

advertiSing SaleS & BUSineSS Staff Peter Hoyt President & CEO 773-992-4456



Irving Consumer Products Inc.



Jack Links Beef Jerky



Kelloggs Company

Avocados From Mexico


Beaver Street Fisheries


Bemis Retail Solutions


Insert 115, Back Cover 29, Insert 51

Kwik Lok Corporation


Mann Packing Co., Inc. MasonWays Indestructible Plastics

123 146, 150, 152

Better4U Foods

114 65

MillerCoors LLC

Black Jewell





Nature Sweet


Blackhawk Network Blount Fine Foods

162-Inside Back Cover

Bord Bia


Boston Beer/Samuel Adams Brewery Tour Line



Coca Cola NA


Campbell Soup Company

119 37

Chiquita Brands








DaymonWorldwide Del Monte Fresh Produce NA Inc. Dietz & Watson Inc

86-87 126- 127 64

Janet Blaney Associate Brand Director (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601

Distant Lands Coffee


Diva International Inc.


Dr Pepper Snapple Group


John Huff Midwest Regional Sales Manager 224-632-8174

E&J Gallo


Domino Foods

ECR Software Corporation Emmi Roth USA Farmland Inc

Jackie Batson Advertising Manager 224-632-8183


Biscotti Brothers

CIP International

Mike Shaw Northeast, Marketing Manager 201-855-7631 • Cell 201-281-9100



Korry Stagnito Chief Operations Officer 224-632-8171

Maggie Kaeppel Eastern Marketing Manager 630-364-2150 • Cell 708-565-5350


Agrofresh Inc.

Ned Bardic Chief Customer Officer 224-632-8224

Rick Neigher Western Regional Sales Manager (CA, OR, WA) 818-597-9029

Idaho Potato Commission

Adusa Inc.

Calbee North America

Jeff Friedman Senior Vice President/Brand Director 201-855-7621



FleishmanHillard Forte Product Solutions


7 48 Inside Front Cover 10-11 102

General Mills Inc.


Giorgio Foods, Inc.


Goya Foods, Inc. Grimmway Farms

9 124

Mercatus Technologies

93-96 4

Nestlé USA


New Pig


Ole Mexican Foods


Peri & Sons Farms


Phillips Foods Inc.


Pompeian Olive Oil


Premier Nutrition


Private Label Manufacturers Association


Renaissance Food Group, LLC Robbie Flexibles

60 103

Ruiz Foods Products, Inc.




Schwan Food Company


Sealed Air


Stout Beverages, LLC


Sun Pacific


Symphony EYC


The Holiday Gift Check Program


The Wonderful Company/Pistachios


The Wonderful Company/POM Wonderful Arils


Tillamook Country Smoker Inc.


TNS / Kantar


Tosca Ltd.


Trion Industries Inc.


Truly Good Foods


Turbana Corp


US Alliance Paper


Hass Avocados


USA Pears


Heineken USA Inc.


Well-Pict, Inc.


Highland Baking Co.


Wente Family Estates

House Foods America


Hussmann Corporation



Wholesum Family Farms


Zumex Usa, Inc.


Progressive Grocer (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 570 Lake Cook Rd. Deerfield IL 60015. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Deerfield, IL 60015 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to Progressive Grocer, P.O. Box 1842 Lowell, MA 01853. Copyright ©2016 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.

| Progressive grocer | Ahead of What’s Nextt | October 2016

The Last By Meg Major

Flying in Formation


aving last honored Giant Eagle way back in 2002 with our publication’s most important annual honor, that of Retailer of the Year — bestowed annually to one select retailer that’s doing a series of remarkable things to fortify and further enhance its brand — Progressive Grocer felt the time was irrefutably right to recognize the strides the regional chain has made in the intervening years. To be sure, the industry has seen dramatic change in the past 14 years. The same can be said of the Pittsburgh-based retailer, which has gone on to build one of the most effective and impressive multiformat strategies in the business. As CEO Laura Karet unpretentiously notes: “I’d like to say that we had agreed on a plan and knew that the world was going to change the way that it did. What actually happened was we ‘entrepreneured’ our way into a bunch of different formats,” which took wing with its foray into convenience stores as a redemption system for its Fuelperks loyalty program. Flash forward to the present day, when the company’s 202 GetGo c-stores (72 of which feature made-to-order foods, alongside another nine featuring Café + Market on the marquee) have become an influential cog in the quiet giant’s 420-store fleet (as Editor-in-Chief Jim Dudlicek discusses further on page 8). Aside from its multiformat differentiation, Giant Eagle’s investments in technology, infrastructure, logistics and people are providing powerful fresh winds for its sails, with new courses being charted by Jerry LeClair, EVP of merchandising and marketing; Kimberly Aylward, VP of marketing and e-commerce; and SVP Polly Flinn. And though its core Pittsburgh market is less ethnically diverse than much of the country, Giant Eagle is also taking a leadership role in that area as well. True to its heritage as a homegrown enterprise, its workplace diversity initiatives are an outgrowth of the workplace itself. Evolving organically from its internal business resource groups, which encompass women, military veterans, African Americans, the LBGT community, and people with disabilities, Giant Eagle’s associates have not only become a powerful font of talent, but have also added another vibrant dimension to the company’s foundational canvas, according to Karet. “The reality is, the senior leadership of our industry grew up in a different world,” she tells PG. “Our collective shopper base has changed.

The demographics of our world have changed. We, collectively, need to be in a position where we’re responding to the needs of that new shopper base. It’s not just in how they look, it’s what they think about, it’s how they consume media, it’s how they want their information. The only way that we’re going to be able to do that is by attracting people that think differently than we do.” Referencing the growing populations of Hispanics, Asians and other cultures in the United States, Karet asserts that “the idea that we are going to be able to get the right products in the store to satisfy all those folks without having people who actually have lived in the culture help us do those things — it doesn’t make any sense.” As such, Giant Eagle aims to employ more people who think the way the next generation of shoppers do. “And the only way we were going to figure that out is to hire people who know it first-hand,” she observes. The challenge, for Giant Eagle and all retailers, is to keep up with an accelerating pace of change. To that end, Karet points to the company’s dynamic intern program, which aims to nurture more talent from within, beginning with first-job clerks and baggers. These entry-level associates “have fresh perspectives and also know the company,” Karet says. Insights are enlisted from its interns, who are assigned with a project to tell senior executives what should be done differently. “They tell us, no holds barred and with a lot of candor, what we do well and what we don’t do well. And we want to hear it.” Aside from the business case behind the value of hiring people who are putting themselves through college and who already have experience with Giant Eagle, Karet beams when saying, “It’s really been extremely rewarding.” Congrats to Giant Eagle’ Eagle’s 34,000-member team, which whic is blessed to have one of the in industry’s best and brightest wom women helming the flock. PG

The industry has seen dramatic change in the past 14 years. The same can be said of Giant Eagle, which has built one of the most effective and impressive multiformat strategies in the business.

Meg Major

Chief Content Editor Twitter @Meg_Major/@pgrocer

October 2016 | |


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Love from a

of food

Cereal Secrets: 3 New Ways to Drive Sales N

othing defines breakfast more than cereal. Though the category has faced challenges in recent years, ready-to-eat cereal (RTEC) remains one of the best-loved staples on American tables and one of the most productive shelves in the grocery store. But retailers currently have significant opportunities to further grow the category, as sales have slipped in the past few years. Doing so requires digging more deeply into the state of RTEC today, consumer wants and needs, and creative promotional opportunities in the box, in the aisle and throughout the store. Here’s why retailers that invest in the RTEC category stand to see serious sales growth.

Sponsored content


C E R E A L S E C R E T S : 3 N E W WA Y S T O D R I V E S A L E S

Breakfast share continues to expand Breakfast is big business. Breakfast food sales reached $56 billion in the past year, representing a 12.5 percent increase since 2012.1 Moreover, sales of breakfast foods are now outpacing overall edible sales,2 growth that reflects a greater commitment to morning mealtime: In 2015 the average American consumer ate breakfast virtually every single day of the year. (By comparison, consumers skipped their morning meal at least a couple times a month in 2000).3 Clearly, consumers are taking that most-important-meal-of-the-day mantra to heart. And they’re sticking with the classics too. RTEC remains the most popular breakfast food in America, outpacing other a.m. stalwarts such as fruit, toast and eggs.4 For millions of consumers, the day doesn’t start until cereal hits the bowl. While RTEC consumption cuts across consumer demographics—the category currently enjoys 89 percent

Top 10 foods/beverages consumed at breakfast

Share of in-home breakfast occasions Coffee


Cold cereal

26.8% 17.0%


Fruit/vegetable juice










Hot cereal




Source: The NPD Group/National Eating Trends®, year ending 2/15


C E R E A L S E C R E T S : 3 N E W WA Y S T O D R I V E S A L E S

household penetration5—certain segments are especially keen on it. Cereal consumption is particularly high among households with kids under 6, where household penetration for cold cereal is 97.6 percent.6 Simply put: The cereal eating habit starts early in life.

find a lot to love too. So which matters more, health or taste? The correct answer is both. Yet different consumers may focus more on one attribute over another, and more importantly, different consumers define each term in different ways.

How consumers eat cereal, however, can evolve during their lifetime. Though most take a tried-and-true approach—a bowl of cereal with milk is still the most popular way7—consumers increasingly are finding new ways to enjoy their RTEC and new occasions to open up the box. They’re also bringing different expectations to the cereal aisle, especially when it comes to health and taste, and different expectations to the cereal shopping experience in general. It all translates to new opportunities for retailers to engage, excite and delight their customers in store.

Take “healthy,” a word that encompasses a wide range of values and benefits. Some cereal consumers, namely Hispanics and those under age 45, equate health with energy and seek out offerings that deliver sustenance and satiety.8 Others look for specific claims or cues, like “whole grain” or “high in protein” (these straightforward shortcuts are especially appealing to consumers older than 55).9 Still others define healthy by what isn’t in the box, i.e., no artificial ingredients or added sweeteners. This keep-it-clean group skews older and more affluent.10

The taste/health connection

While each consumer may define the concept on his or her own terms, the vast majority take health into consideration (after all, breakfast is usually the healthiest meal of the day).11 But they aren’t willing to sacrifice

The cereal aisle offers plenty in the way of delicious indulgences, yet nutrition-oriented cereal shoppers can


C E R E A L S E C R E T S : 3 N E W WA Y S T O D R I V E S A L E S

taste to get it. Great taste remains a non-negotiable, even for the healthiest cereal eaters. Like health, “great taste” is not a one-size-fits-all claim. For example, some consumers define deliciousness in terms of bold, rich flavors like chocolate or caramel, while others salivate over complex textures coupled with real fruit inclusions. Though demographics do play a role—younger and lower-income consumers are more likely to fall into the former category, while Caucasians and high-income consumers tend toward

the latter12—consumer perceptions of taste, and for that matter health, are deeply nuanced. Their values and priorities run the gamut.

3 ways to boost RTEC sales That makes it all the more important for retailers to offer a broad assortment of taste and nutritional profiles to satisfy these diverse consumer needs for both taste and health, while also making it easy for shoppers to find what they need. Let’s walk through three key


C E R E A L S E C R E T S : 3 N E W WA Y S T O D R I V E S A L E S

opportunities to build a smarter, simpler, more shopper-centric cereal aisle.

1. Leverage shopper segmentation for RTEC products Offering a wide variety of in-demand health and taste attributes is a great start, but growing the cereal segment requires (literally) thinking outside the box. Target age flow (TAF) is an especially effective way to bring shopper segmentation to life in store. This approach organizes the aisle by end-user (i.e., kids, adults, family), leveraging clear, visible signage to guide shoppers toward their desired selection. A mom who hits the store in search of a fun, tasty cereal for her 5-year-old doesn’t need to waste time wandering the bran flakes section, while the cholesterol-minded empty nester can zero right in on the adult-oriented options. The TAF approach not only makes cereal shopping easy for customers, it boosts retail sales too: Compared with their non-TAF counterparts, TAF retailers enjoyed 1.8 percent higher cold cereal base dollar sales and a 2 percent boost in cold cereal base units during a 26-week period in 2016.13 Additionally, shoppers at TAF retailers purchased an average of five more items.14 Dollar sales within the kid cold cereal segment and all-family segment saw an especially big boost at TAF retailers. Kid cereal sales outpaced non-TAF sales by 3.7 percent, all-family sales by 2.4 percent.15

2. Capitalize on RTEC shelf productivity Perimeter categories increasingly are encroaching on

Thinking inside and outside the box Fun is an important element in the cereal aisle for both children and adults. Here’s why: Fun in the box: Readyto-eat cereal (RTEC) brands that offer in-thebox extras help boost sales. Since Kellogg’s began adding toy inserts back into cereal boxes two years ago, for example, sales generated via in-store displays and overall sales lift have grown.22 Parents have shared with the company how much their kids loved finding the toys, and many adult consumers have expressed nostalgia for the cereal box surprises of their own childhoods.23 Fun outside the box: Licensed or rotational cereals can also create excitement among cereal shoppers. Research shows that shoppers not only notice these items, but that licensing can be a powerful driver of purchasing, specifically to participate in a promotional event.24 Sales data back this up: During the 52 weeks ending in June 2016, licensed cold cereal saw its share of the category grow to 0.7 percent with $30.1 million in sales.25 Offering shoppers licensed cereals can be an excellent way to drive category growth and add something special to the cereal aisle experience.


C E R E A L S E C R E T S : 3 N E W WA Y S T O D R I V E S A L E S

RTEC relative ranking for incremental sales dollars for any display ranking against 182 in-store edible categories







RTEC ranking







4 weeks ending: g 7/18/15














Source: Nielsen-total U.S. food, 13 quad weeks ending 5/21/16

center store, which means the need for retailers to optimize center store shelves has never been greater. As one of the most productive edible shelves in grocery,16 RTEC can play a big role in driving center store growth in several ways. First, use your shoppers’ trip types to your advantage. Shoppers are most likely to pick up cereal during stockup or routine trips,17 but with creative promotional strategies retailers can spur cereal sales during other trip types too. This might involve promoting cereal during in/out trips for milk using displays in the dairy

section, for example, a potentially powerful cross-promotion. By increasing cereal basket-adds during milk in/out trips by just 0.7 percent, grocers would see category sales increase approximately $14 million.18 Another tactic focuses on cross-category promotion. Retailers can best optimize cereal shelves by concentrating on two key types of cross-promotional opportunities: categories most frequently purchased in the same basket as cereal (e.g., milk, fresh fruit) and categories that over-index in the same basket with cereal (e.g., dried fruit, jams, jellies and spreads).19


C E R E A L S E C R E T S : 3 N E W WA Y S T O D R I V E S A L E S

3. Maximize RTEC displays

Beyond breakfast

Retailers need to invest in displays that deliver ROI, and cereal has proven to be one of grocery’s biggest incremental growth superstars. In fact, RTEC is the third-highest-performing category in grocery.20 A recent incremental comparison study found that more than half (57.8 percent) of the dollar amount that a cereal display generates in sales would not have occurred if there were no display.21 In other words, RTEC display digs up “found money” rather than cannibalizing base sales.

Cereal isn’t just for breakfast anymore: Today, more than one-third of ready-to-eat cereal (RTEC) consumption takes place outside of the morning meal. While by far the majority of this RTEC usage is still a bowl of cereal with milk, consumers are also tossing cereal into yogurt, using it in recipes for treats, or just grabbing a handful as a midday snack.26 More than 1/3 of RTEC category consumption is outside of breakfast


65% Nonbreakfast

35% Source: NPD Diary Panel

Whether eaten as an energy booster or sought after for its vitamins and fiber, served in a bowl with milk or mixed into a smoothie, ready-to-eat cereal still offers something good for everyone. And that includes retailers. Grocers that invest in a wide range of old and new cereal favorites, leverage shopper-friendly aisle design, and launch creative displays and promotions stand to see happier customers and a better bottom line. Now that’s something to start the day with. n


C E R E A L S E C R E T S : 3 N E W WA Y S T O D R I V E S A L E S


Nielsen AOD, xAOC, 52 weeks ending 3/26/16 vs. 4 years ago



Nielsen AOD, 26 weeks ending 5/21/16

Nielsen AOD, xAOC, 52 weeks ending 3/26/16 vs. 4 years ago


The NPD Group /National Eating Trends® and CREST®, years ending February



Nielsen AOD, 26 weeks ending 5/21/16


Nielsen AOD, 26 weeks ending 5/21/16

Nielsen data analysis


The NPD Group/National Eating Trends®, year ending 2/15

5 6 7 8 9


Nielsen Panel, 52 weeks ending 9/19/15

Nielsen Panel, 52 weeks ending 9/5/15


Nielsen Homescan Panel xAOC, 52 weeks ending 9/19/15

Nielsen Homescan-total U.S., 52 weeks ending 12/26/15


Nielsen Homescan Panel, TUS, 52 weeks ending 9/19/15

Kellogg’s Demand Landscape (2015); TCG analysis


Nielsen-total U.S. food, 13 quad weeks ending 5/21/16

Kellogg’s Demand Landscape (2015); TCG analysis Kellogg’s Demand Landscape (2015); TCG analysis


Kellogg’s Demand Landscape (2015); TCG analysis


Nielsen-total U.S. food, 13 quad weeks ending 5/21/16


Nielsen/Kellogg’s VAP Analyses


Kellogg’s Mindset of the Shopper research


The NPD Group/National Eating Trends®, year ending 2/15, excluding SON ’14


The NPD Group/National Eating Trends®, year ending 2/15, excluding SON ’14


Kellogg’s Promotional program tracking

25 26

Nielsen AOD, data ending 6/18/16

NPD Diary Panel

About Kellogg Company At Kellogg Company, we are driven to enrich and delight the world through foods and brands that matter. With 2014 sales of approximately $14.6 billion, Kellogg is the world’s leading cereal company; second-largest producer of cookies and crackers; a leading producer of savory snacks; and a leading North American frozen foods company. Every day, our well-loved brands nourish families so they can flourish and thrive. Contact: Kellogg’s media hotline: 269-961-3799

nearly 198 Million adulTS in The u.S. 76% are open To eaTing MeaT SnackS Source: Adults ages 18-64, U.S. Census Bureau and Jack Link’s Protein Snacks Research, 2015

The evolving Shopper: Drive growth and generate profits by understanding shoppers


everal macro trends are influencing shopper behavior across channels and categories – causing changes at retail to happen faster than ever. Shoppers want excitement and evolution in

their stores, and the retailers best suited to drive change are those that continually collaborate with manufacturers to meet the needs of these valuable shoppers.

caTegory aTT aTTiiTude udeS S Several emerging themes are imperative to connecting with and building a relationship with today’s protein snack shoppers. • Buy local, eat organic: appreciation for grass-fed and hormone-free; avoid processed food

• Foodie: enjoy new restaurants; exploring foods

• love meat: meat and protein are integral parts of diet

• Snack oFten: frequent snacks throughout the day

• eat on the run: minimally cook; portability is important

Source: Jack Link’s Protein Snacks Research, 2015


Meat SnaCk ConSuMerS PurChaSe everywhere C-Store





43% 41%


PerC C ent of S hoPPerS S M akinG G P urC C haS S e at C hannel tyP P e.

while meat snacks can be a planned purchase, consumers are 32% more likely to purchase meat snacks at the checkout lane Source: Jack Link’s Protein Snacks Research, 2015

So how do forward-thinking retailers best connect with shoppers? It takes commitment to identifying trends, quickly responding to them and collaborating with manufacturers in meaningful ways to drive sales. Currently, the biggest trends affecting the marketplace today include shoppers who are: • Seeking a healthy balance in their diets • Desiring products that are simple and real • Wanting a flavor adventure • Consuming food throughout the day – anytime and anywhere. While universal in their influence, these macro trends have created big opportunities within the meat snacks category. Consumer attitudes toward meat snacks show a substantial and positive trend, along with a huge opportunity to capture new category users.

Protein rotein!! 25% of consumers don’t know how much protein they consume. The other 75% estimate protein makes up 55% of their diet. Source: Jack Link’s Protein Snacks Research, 2015

• 76% of adults in the U.S. are open to eating meat snacks. • But ONLY half have actually consumed them in past year. • Cravings drive sales of meat snacks! The #1 reason to purchase meat snacks is a craving, with 45% of shoppers citing this reason. Source: Jack Link’s Protein Snacks Research, 2015

Snacking increaSed 47% from 2010 to 2014. Source: Mintel, Chicago

At Jack Link’s Protein Snacks, there is a commitment to uncovering and understanding emerging trends, through deep dives into consumer behaviors and attitudes. Jack Link’s proprietary research has shown the meat snack category comprises several distinct segments – each of which has unique demographic and behavioral characteristics that can be used to better target, attract and convert specific shoppers. Attributes within each segment are unique and require focused strategies to reach the right shoppers.


Meat SnackS haVe StrenGthS WIthIn BrOader SnackInG needS: SatIate SuBStantIVe craVe enerGIze

“I might eat a couple of pieces of beef jerky when I go out just to keep me full.” “I just prefer something that you can chew for a while.” “It’s a very specific thing that you seriously crave every now and then.” “I feel it’s going to give me more power when I’m running too.”

However, one universal opportunity is that cravings are satisfied in all store formats, but most often at the checkout lane with shoppers 32% more likely to purchase meat snacks there. Another opportunity arises in that Jack Link’s shopper segmentation can be overlayed with a retailer segmentation in order to generate an even more effective target. Collaboration between Jack Link’s and retailers in examining and understanding segmentation will grow the meat snacks market to new levels, driving sales and overall basket size. With an understanding of segmentation, what comes next? An analysis of core consumer segments, along with proprietary research, can uncover some key insights to allow retailers to keenly reach the evolving shopper.

Meat Snack eatInG OccaSIOnS there is no typical occasion for eating meat snacks – respondents cite varied times and places. OccaSIOn PurchaSed (recent Meat Snack PurchaSerS) For a Snack at Work

Watching tV/Surfing V/Surfing the Internet

traveling raveling (on a road trip, airplane, etc.)

For example: • Meat snacks help grow the basket: Highprotein meat snacks appeal to a diverse set of consumer groups, encompassing a broad range of snacking need states and occasions.

running errands rrands

Snack for kids ids While Out and about

• Meat snack shoppers often buy on impulse, so providing incremental displays with trusted brands and offering flavor variety will drive interest as consumers seek new items and new food experiences.

hunting/Fishing/ unting/Fishing/camping/h hiking

Further, according to market research firm Mintel, snacks are obliterating meals!

commuting ommuting to/from Work or School

Consumers eat often, eat on-the-go, and eat with more intention in recent years. And it’s not just millennials or dashboard diners – this movement spans demographics. Growing numbers of Americans snack four or five times daily, which adds up to a lot of snacking and even more opportunity to become the chosen snack.

Post-workout Snack

Source: Jack Link’s Protein Snacks Research, 2015

tO drIVe GrOWth and Generate PrOFItS In the Meat SnackS cateGOry, cOntact yOur rePreSentatIVe at Jack LInk’S tOday!