PG - 0220

WILDLY GOOD !

Stop by booth #8005 ACC Level 3 Ballrooms to taste real food that's healthy, delicious, and sustainable.

#AskForAlaska alaskaseafood.org

There's no end to what's good about wild-caught seafood from Alaska Sustainably harvested

Premium quality

Wild-caught

Rich in omega 3s for good mental and physical health

Abundant - Alaska makes up over half the nation’s commercial seafood harvest Unsurpassed flavor

Easy to cook

ALASKASEAFOOD Enjoy our many 30-second How-To-Cook videos

wildalaskaseafood.com alaskaseafood.org

Zip up beverage profits

With The Most Versatile Merchandising Solution on the Market.

ZIP Track is a cost-effective, modern merchandising system that forwards and faces product offerings at all times. Add new facings easily with this quick to install and adjust system.

Custom spring tensions and lane depths are available to fit any and all shelf and product needs. ®

ZIP Track is manufactured from sturdy plastic material for durability and long merchandising life. ®

Adjustable width Change width from 2.00” to 3.75”.

Supports all sizes from mini Red Bull® cans to oversize Gatorade® bottles.

Reset lane width on set-up in less than 30 seconds.

Custom depth Available in any lane depth for custom fit to your retail environment. Match any standard shelf or spec custom depths for special needs.

Adjustable spring tension The only design with dual spring capability.

Fine tune to push the lightest and heaviest products. Change springs and push strength in 10 seconds. Seven spring tensions, with multiple combinations possible.

3 SELL IT

Deploy ZIP Track® for many different size and shape beverages.

1

ZIP IT Use actual product to set lane width. Slide product front-to-back to ‘ZIP’ tracks together in final position.

2 FILL IT Fill it with product. ZIP Track® maintains its width accurately for the entire length of facing without the need for a rear anchoring system.

800-444-4665 TrionOnline.com/ZipTrack

Use in multiple storewide categories

Accommodates many size & shape containers Perfect for all beverages including alcohol

297 Laird Street | Wilkes-Barre, PA 18702-6997 | 800-444-4665 | TrionOnline.com/ZipTrack Š 2020 Trion Industries, Inc. | Beverage Digital Ver 2.0 - 11-19-19

Meat 2020: New growth insights from our exclusive retailer survey CONFUSED BY CANNABIS? Make sense of a hot category ORGANIC PRODUCE Cash in on growing consumer demand EMBRACING BLOCKCHAIN Why food safety is a winner

Amazon and Walmart have nothing on this year’s

Outstanding Independents!

(Check out this year’s winners, page 20)

February 2020

Volume 99, Number 2 www.progressivegrocer.com

SELL

WHAT’S HOT Consumer preferences are varied and ever-changing. The J.M. Smucker Company offers a diverse portfolio of trusted and emerging brands, with products and forms designed to meet today’s demand.

Contact your J.M. Smucker Company rep to stock the right mix for your shoppers — and keep your profits flowing.

Keurig, K-Cup, and the K logo are trademarks of Keurig Green Mountain, Inc., used with permission. © 2019. DD IP Holder LLC (as to Dunkin’, Dunkin’ Donuts and all other trademarks, logos and trade dress of DD IP Holder LLC) used under license. ©/TM/® The J.M. Smucker Company

Contents 02. 20

Volume 99 Issue 2

Oneota Community Food Co-op, Decorah, Iowa

Features

38 SOLUTIONS

A Share of the Pot

20

As CBD products rise in popularity, grocers look to get in on these items’ future growth.

COVER STORY

Small But Mighty A new crop of Outstanding Independents thrives by answering consumers’ calls for a faster, fresher and more localized grocery experience.

Departments 6 EDITOR’S NOTE

Urgency, Creativity, Action 8 IN-STORE EVENTS CALENDAR

12 NIELSEN’S SHELF STOPPERS

16 ALL’S WELLNESS

Condiments and Dressings

Natural vs. Organic: What Shoppers Need to Know

14 MINTEL GLOBAL NEW PRODUCTS

Spirits

18 NEW HORIZONS

April 2020

Banishing Working-Mom Guilt

10 MENU TRENDS

Organic Growth is Still … Natural 4

progressivegrocer.com

14

76 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS

8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 773-992-4450 Fax: 773-992-4455

www.ensembleiq.com

42 SOLUTIONS

Alternative Bites

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

Some meat departments are transforming into the protein department, with plant proteins touting health, wellness, sustainability, and more.

GROCERY GROUP EDITORIAL DIRECTOR Mike Troy 813-857-6512 mtroy@ensembleiq.com EDITORIAL EDITORIAL DIRECTOR James Dudlicek 224-632-8238 jdudlicek@ensembleiq.com

48 FRESH FOOD

42

Raising the Stakes Retailers report robust meat sales, but plant-based products are nipping at their heels.

MANAGING EDITOR Bridget Goldschmidt 201-855-7603 bgoldschmidt@ensembleiq.com SENIOR EDITOR Gina Acosta 813-417-4149 gacosta@ensembleiq.com SENIOR DIGITAL & TECHNOLOGY EDITOR Abby Kleckler 773-992-4405 akleckler@ensembleiq.com CONTRIBUTING EDITORS Princess Jones Curtis, D. Gail Fleenor, Jenny McTaggart, Lynn Petrak and Barbara Sax ADVERTISING SALES & BUSINESS SENIOR MARKETING MANAGER Maggie Kaeppel (NEW ENGLAND, SOUTHEAST) 708-565-5350 mkaeppel@ensembleiq.com

58 FRESH FOOD

Millennials Meet Their Match

SENIOR MARKETING MANAGER Judy Hayes (CA, PACIFIC NORTHWEST) 925-785-9665 jhayes@ensembleiq.com SENIOR MARKETING MANAGER Theresa Kossack (MIDWEST) 214-226-6468 tkossack@ensembleiq.com

The much-touted demographic and organic fruits and veggies are made for each other.

REGIONAL SALES MANAGER Tammy Rokowski (SOUTHWEST) 248-514-9500 trokowski@ensembleiq.com JUNIOR ACCOUNT MANAGER-GROCERY GROUP Natalie Meehan p 773-992-4410 m 619 823-4926 nmeehan@ensembleiq.com

58 63

63 FOOD SAFETY

Case for the Trace Blockchain technology is becoming more widely accepted as a tool for both food safety and product storytelling.

ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com EVENTS VICE PRESIDENT, EVENTS Michael Cronin mcronin@ensembleiq.com AUDIENCE LIST RENTAL MeritDirect Elizabeth Jackson 847-492-1350, ext. 318 ejackson@meritdirect.com SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES 847-564-1468 or email at PG@Omeda.com PROJECT MANAGEMENT/PRODUCTION/ART VICE PRESIDENT OF PRODUCTION Derek Estey destey@ensembleiq.com CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com

66 TECHNOLOGY

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

Demand in a Digital Era

ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com

NRF’s Big Show spotlights solutions to garner real-time, usable data at the store level.

REPRINTS, PERMISSIONS AND LICENSING Wright’s Media ensembleiq@wrightsmedia.com 877-652-5295

69 PG PET

The Well-Groomed Pet

CORPORATE OFFICERS

Grocers can steal share from specialty pet stores by offering the right products to tame Fido and Fluffy’s fur.

CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF INNOVATION OFFICER Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several

72 NONFOODS

Better Days

Preventive measures, social media and novel formulations help enliven the natural OTC segment.

69 PROGRESSIVE GROCER Februar y 2020

5

EDITOR’S NOTE

By Jim Dudlicek

Urgency, Creativity, Action he reason behind our strategy is to delight and serve customers.”

That’s a quote that could be attributed to just about any retailer. But in this case, the speaker was Carletta Ooton, VP of safety, sustainability, security and compliance at Amazon.

And when someone from Amazon says something like that, you can feel the extra oomph behind the statement, because there are few companies better today at removing the friction from the shopping experience.

Ooton made the comment during her keynote address on the first full day of the 2020 FMI Midwinter Executive Conference, held in Phoenix at the end of January. The host organization was debuting its new name — FMI - The Food Industry Association — part of a rebranding that the group’s leaders say is designed to make it more inclusive.

To be sure, FMI President Leslie Sarasin noted that the trade group would be opening its doors to supplier members.

However, as noted by my colleague Mike Troy, editor of Progressive Grocer sister publication Retail Leader, more noticeable is the ongoing absence of significant players like big-box retailers and the dollar and drug sectors, whose shares of the grocery market continue to swell.

Still, it’s a step in the right direction, and since last year, the conference’s tone has become one of greater urgency for retailers to take swift and creative action to innovate and better serve a rapidly evolving consumer base. In short: Disrupt or be disrupted.

One need not have looked further than Ooton’s presentation at Midwinter to see that Amazon continues to be a formidable disruptor: an overview of Amazon’s machine-learning capabilities that allow the e-tailer to, among other things, distinguish between personal preferences and food safety issues in customer feedback, and determine whether boxes or pouches are appropriate shipping media in its effort to reduce packaging waste.

More frequently, we’re hearing that retailers and CPG companies need to become more shopper-centric. At Amazon, Ooton noted, innovation starts with the customer and works backwards. In fact, the seeds of innovation at Amazon lie in what Ooton called a “PR-FAQ,” a forward-looking “press release” for a product or service not yet developed that answers all of the questions about what it’s supposed to do, such as: How does it impact customers? Why should they care? Why this, and why now?

As expected, there was plenty of talk about courting Millennials, but even more about their 6 progressivegrocer.com

The hard part is getting people more comfortable with getting a little messy.”

—Steve Henig, Wakefern Food Corp.

successors, Generation Z, who aren’t shy about sending the pendulum back the other way. On the whole, they’re less liberal, more brand loyal and, while embracing omnichannel, savor the in-store experience.

Both generations use smartphones, computers and voice assistants almost equally for grocery shopping, but their social media preference rankings differ. Gen Zs spend less per month on groceries than Millennials, but spend more in-store versus online.

Beyond age, consumers are more ethnically diverse, with differences in shopping habits both among and within ethnic groups. Multicultural segments make up 40% of the U.S. population, according to the last census, and families are experiencing “retro-acculturation,” with younger generations rediscovering their grandparents’ recipes. Hispanic shoppers’ buying power is expected to be $24 billion by 2025.

With consumers and the world they live in changing ever faster, retailers and their CPG partners must anticipate and adapt accordingly. That means trying things that ultimately might not work, a step that retailers historically are averse to taking.

“Don’t be afraid to fail,” urged Steve Henig, chief customer officer at Wakefern Food Corp, during Midwinter, adding, “Agility is the most important thing any organization can move toward. The hard part is getting people more comfortable with getting a little messy.”

Correction In the packaging article “Pack Mentality,” which ran in the January 2020 issue of Progressive Grocer, we incorrectly reported that Walmart and Target have committed to eliminating single-use shopping bags from their stores. In fact, at this time, these retailers have committed to reducing single-use bags.

Jim Dudlicek Editorial Director jdudlicek@ensembleIQ.com Twitter @jimdudlicek

When others manage, Loomis solves.

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

Turnkey cash automation

Tailored to achieve maximum ROI

Efficient cash reconciliation

Best-in-class support

loomis.us/TitanR © 2019 Loomis Armored US, LLC. All rights reserved.

IN-STORE EVENTS

Calendar

04.20

National Pecan Month National Pet Month National Soft Pretzel Month

National Soy Foods Month Scottish-American Heritage Month

S M T W T F S

1

April Fool’s Day

2

National Burrito Day

3

National Chocolate Mousse Day

4

National Chicken Cordon Bleu Day National Vitamin C Day

National Sourdough Bread Day

National Peanut Butter and Jelly Day

5

6

7

8

9

10

11

12

13

14

15

16

17

18

National Peach Cobbler Day

National Pecan Day. How many recipes can this popular nut be featured in? Ask your customers on social media for their preferred dishes.

20

21

22

23

24

25

National DeepDish Pizza Day. Make sure your prepared food offering includes this Chicago favorite.

Easter. Invite younger consumers to go on an Easter egg hunt that will take them and their parents throughout the store.

19

National Garlic Day. Spotlight the many uses of this pungent herb.

26

National Pretzel Day. Soft or crunchy? Let your customers battle it out on social media.

National Caramel Popcorn Day Throw a gala tasting celebration, complete with countdown to Beer O’Clock, to ring in New Beer’s Eve.

National Make Lunch Count Day

National Cheddar Fries Day National Pineapple Upside-Down Cake Day

27

National Prime Rib Day. Lure shoppers to the meat case with special pricing.

National Beer Day. Keep the party going with specials on a range of brands, both mainstream and niche.

National ChocolateCovered Cashews Day. Give them pride of place among your bulk candy selection.

28

National Blueberry Pie Day. Host an instore competition for the best homebaked one.

National Empanada Day. Offer tips on how shoppers can make great ones at home.

National Glazed Spiral Ham Day

National Jelly Bean Day. Have shoppers guess how many are in a jar, for a prize of — what else? — more jelly beans.

29

National Shrimp Scampi Day

Passover begins.

National Eggs Benedict Day. Encourage shoppers to up their Sunday brunch game with this classic openfaced sandwich.

National Cherry Cheesecake Day National Picnic Day

30

National Bubble Tea Day National Oatmeal Cookie Day National Raisin Day

8

progressivegrocer.com

National Cinnamon Crescent Day. We can smell the heavenly aroma from the in-store bakery already ...

National Cheeseball Day

Ramadan begins.

National Cheese Fondue Day

National Animal Crackers Day. In support of a youth charity, hold a contest in center store to see who can eat the most of these childhood treats in one sitting.

Hold an event to mark National Drug Take Back Day, with bins outside the store to collect unwanted medications.

©2020 Jelly Belly Candy Company

IIntroducing t the Fiery F Fi Five™.

The hot and spicy category continues to grow and grow. Now we’re fanning the flames with new BeanBoozled® Fiery Five™. This new take on everyone’s favorite challenge features five increasingly hot flavors ranging from spicy sriracha to the downright blazing Carolina Reaper. Available in multiple packaging types, it is perfect for everyone who enjoys playing with fire!

Contact us today • 800-323-9380 • JellyBelly.com Kosher Certified d

Download the BeanBoo BeanBoozled l App

MENU TRENDS

Research & Analysis

Organic Growth is Still … Natural The growth of natural and organic products continues to climb, supported by consumers’ ongoing interest in “healthy” eating. There are many similar terms helping differentiate items in this crowded shelf set, however. (Registered dietitian Molly Hembree touches on some of the differences between natural and organic in the All’s Wellness column on page 16.) Datassential’s latest Menu Adoption Cycle (MAC) focuses on a few key terms and offers new opportunities from the restaurant world for product solutions. From the “buzz” around cannabis to the ongoing success of “all natural,” the MAC gives you the tools you need to grow your business.

CBD (Cannabidiol) MAC stage: Inception — Ethnic markets, ethnic independents and fine dining. Trends start here and exemplify originality in flavor, preparation and presentation.

Interest in this cannabis plant compound is exploding in the food and beverage marketplace.

There are so many opportunities — especially in beverages and confections — for retailers to take advantage of consumers’ interest. Keep an eye on this category as it continues to blossom and moves quickly into the Adoption phase.

On 0.2% of U.S. restaurant menus Up 998% on menus over the past four years 50% of consumers know it / 15% have tried it Menu Example Carl’s Jr. Rocky Mountain High Cheese Burger Delight Features two beef patties, pickled jalapeños, pepper jack cheese, waffle fries — and about 5 milligrams of hemp-derived CBD extract in the burger chain’s Santa Fe Sauce.

10

progressivegrocer.com

Vegan MAC stage: Adoption — Ethnic aisle at supermarkets, casual independents, fast casual. Adoption-stage trends grow their base via lower price points and simpler prep methods. Still differentiated, these trends often feature premium and/or generally authentic ingredients.

Popularized by those not wishing to harm animals or consume any type of animal product, “eating vegan” is more a way of life than just a diet. It’s also a rapidly growing category in both retail and restaurants. More and more brands are leaning into the trend — from the Oscars and Golden Globes to United Airlines — and vegan options are here to stay.

Organic MAC stage: Proliferation — Proliferation-stage trends are adjusted for mainstream appeal.

Often combined with popular applications (on a burger, pasta, etc.).

“Organic” is simply a term used to signify an item produced using natural methods. Organic products are regulated by the USDA, include non-GMO products as well and can be found in all areas of the store.

When combined with “healthy” ingredients (as in the 7-Eleven example below), this term can be a powerful marketing tool.

On 23% of U.S. restaurant menus Up 16% over the past four years

On 14.4% of U.S. restaurant menus Up 97% on menus over the past four years 84% of consumers know it / 40% have tried it Menu Example Le Pain Quotidien Roasted Delicata Squash & Cashew Cheese Vegan scallion cashew cheese, spiced pecans, cucumber and arugula.

90% of consumers know it / 73% have tried it

All Natural MAC stage: Ubiquity — Ubiquity-stage trends have reached maturity, and can be found across all sectors of the food industry. Though often diluted by this point, their inception-stage roots are still recognizable.

To say “all natural” is complicated is an understatement. The term is used to attract healthconscious consumers, but unlike organic, there are no government regulations for its use. While most restaurant chains’ menus feature “all natural” chicken or salad entrées, manufacturers tend to use it more liberally on shelf.

Datassential’s Haiku forecast is for continued growth of all-natural menu items, so there should still be ample opportunity remaining for this ubiquitous term.

On 10.1% of U.S. menus

Menu Example 7-Eleven Melon Smart Organic Cold Pressed Juice Melons from Southeast Anatolia contain lots of fiber, vitamin C, folate and beta carotene.

These vitamins and minerals help support your kidneys and heart, and assist in maintaining low blood pressure. And with 1.5 melon slices per bottle, your body is sure to get all of the nutrients it needs, with none of the added sugar.

Up 16% over the past four years 91% of consumers know it / 81% have tried it Menu Example Wendy’s Peach Lemonade All-natural lemonade mixed with real peach purée.

A promise from prairie to plate What the Open Prairie¨ Natural* Meats Openness Promise means To better serve all our partners and customers, we pledge to share our production processes from prairie to plate, including: › Wholesome, Uncomplicated Products: Made from animals raised with no antibiotics ever and no added hormones or growth promotants.** › Complete Traceability: All cattle and hogs are traceable to place of birth through maintained records and unique identification. › Quality Control and Consistency: Dedicated facilities ensure a consistent product you can depend on, crafted by a single workforce.

Start the conversation here:

OurOpennessPromise.com

*

Minimally processed. No artificial ingredients. |

®/© 2019 Tyson Foods, Inc.

**

Federal regulations prohibit the use of added hormones or growth promotants in pork.

FRONT END

Shelf Stoppers

Shelf Stoppers

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

(52 weeks ending April 2, 2016) Condiments and Dressings

Basket Facts

Total Department Performance Condiments and Dressings

Latest 52 Wks W/E 11/23/19

Latest 52 Wks YA W/E 11/24/18

Latest 52 Wks 2 YA W/E 11/25/17

$6,710,750,278

$6,672,864,951

$6,614,000,386

Top 5 Condiment and Dressing Categories by Dollar Sales Mayonnaise

Ranch

Ketchup

Hot Sauce/Chili Condiments

Mustard

$1,600,000,000

How much is the Consumers chose average American frozen broccoli over alternatives for household a variety of reasons: spending per trip on various condiments 12% and because it’s dressings? quick and easy

1,400,000,000

10%

1,200,000,000

because it tastes great

800,000,000

$3.85 9%

600,000,000

Spotlight on Frozen Broccoli

400,000,000

WHEN ARE CONSUMERS EATING FROZEN BROCCOLI? Broccoli as an ingredient is most commonly consumed at dinner, followed by lunch.

200,000,000

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

3%

0 Latest 52 Wks W/E 11/23/19

9%

Latest 52 Wks YA W/E 11/24/18

Latest 52 Wks 2 YA W/E 11/25/17

Source: Nielsen, Total U.S. (All outlets combined) – includes grocery stores, drug stores, OCCASION mass merchandisers, select dollar stores, select warehouse clubs and military commissariesMEAL ITEM 29% CLASS (DeCA) for the 52 weeks ending Nov. 23, 2019 TYPE 62% 35%

because it’s on condiments healthy and nutritious

and dressings

8%

because it’s low in calories, fat and sugar

$3.08 61%

Sales of condiments and dressings in the United States continue to show fairly OTHER— but thereSIDE MAIN ENTRÉE OTHER stagnant growth —DINNER up 0.6% inLUNCH sales this year areDISH distinct opportunities in the category if you’re looking in the right places. While traditional staples like mayonnaise and ketchup are trending in the wrong direction, hot sauce continues to show impressive sales growth (up 6.5% over last year). In popular culture this year, we’ve seen the rise of spicy chicken sandwiches, and hot-wing challenges on talk shows. We’re seeing similar traction on store shelves, with condiments like spicy mayo and hot honey that are trying to tap into crossover opportunities that appeal to consumers who want a little heat.”

on ketchup

$3.84 on mayonnaise

—Eric Brown, manager-global content workstreams, Nielsen

Generational Snapshot Which cohort is spending, on average, the most per trip on mayonnaise?

$3.16 on ranch

Millennials

Gen Xers

Boomers

The Greatest Generation

$3.71

$3.92

$3.89

$3.88

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

12

progressivegrocer.com

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

SERVE GOODNESS It’s simple. We have dressings and dips that will showcase your commitment to quality: • Wholesome, real ingredients • A variety of trending flavors • Packaging for any application All from America’s #1 refrigerated salad dressing brand*.

Order your free sample at LitehouseFoodservice.com/servegoodness

*IRI Total US MULO and Nielsen Homescan

MINTEL CATEGORY INSIGHTS

Global New Products Database

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

Spirits Market Overview

Tequila is one of the fastestgrowing spirits as consumers are gaining a new appreciation for the Mexican spirit.

Meanwhile, more than a quarter of Millennial dark-spirit drinkers report increased consumption compared with a year ago.

Key Issues

Three-tenths of Gen Zers report having taken an extended break from alcohol in the past six months.

Gin is currently a less popular spirit.

The existing consumer base for dark spirits skews male, older, white and more affluent. Almost twice as many men consume dark spirits as do women.

Spirits are growing at a faster rate than beer or wine in both dollar sales and volume consumed.

What Does It Mean?

Despite some challenges, spirit brands may ultimately benefit from Gen Z’s drinking preferences.

Because higherend craft spirits are trending, Gen Zers will likely trade up to more expensive spirits at a faster rate than the Millennials before them.

Gin is set for growth as distillers experiment with new flavors and highlight the craft that goes into production.

White spirits may lack the fervent fan base of dark spirits, but the growth of tequila and super-premium gin indicates that consumers are prioritizing quality when buying white spirits.

While there’s ample opportunity among the existing consumer base, long-term growth will require expanding dark spirits’ appeal to women and younger, more diverse generations.

14

progressivegrocer.com

ALL’S WELLNESS

By Molly Hembree

Natural vs. Organic: What Shoppers Need to Know MAKE SURE YOUR CUSTOMERS UNDERSTAND THE DIFFERENCES BE T WEEN THESE TERMS. f you’ve spent any time comparing labels, you’ll find that there are many marketing terms and label claims spanning the covers of product packages.

Two of those attributes are natural and organic, with organic food sales reeling in $47.9 billion annually and projected to grow. Often confused with one another by shoppers, these two terms aren’t interchangeable and deserve a deeper understanding of their differences.

Natural

The Food and Drug Administration considers the term “natural” to mean nothing artificial or synthetic has been included or added to a product that wouldn’t be normally expected to be there. Natural doesn’t refer to any farming practice or food production method. The FDA is currently reviewing public comments regarding a formal definition of “natural” to reduce ambiguity of the term.

Organic

Organic food regulations are enforced by the U.S. Department of Agriculture and governed by the National Organic Program (NOP). For a product to be 100% USDA Organic, it has to be produced with approved methods and use/not use certain allowed/prohibited substances. USDA Organic foods don’t use genetic engineering, synthetic fertilizers, sewage sludge, irradiation, antibiotics, or artificial preservatives, colors or flavors.

Environment

According to the International Food Information Council (IFIC) Foundation 2019 Food & Health Survey, more than 40% of respondents who said that it’s a priority that their food is produced sustainably associated a food labeled “organic” as a marker of environmental sustainability. Although the NOP specifies that extra attention be given to efforts such as biodiversity, ecological balance, enhancement of water and soil quality, and conservation of wildlife, these rules are interpreted variably within different food systems. This is a perfect opportunity as a retailer to showcase what makes your suppliers special in their devotion to environmental stewardship. Invite farmers, communication experts, or dietitians working with natural and organic labels carried in your store to an event where they can share insights about their practices.

16

progressivegrocer.com

Health

Natural and organic foods appeal to health-conscious consumers. Many natural and organic ingredients are perceived as an upgrade in quality or nutrition. In the same IFIC survey, about half of all participants felt that a food labeled “all-natural” was healthier than an alternative product with an identical nutrition facts panel. However, the NOP doesn’t endorse any claims related to the healthfulness of organic foods. In some instances, healthy compounds like polyphenols and omega-3 fatty acids are higher in organics, but it’s a marginal difference.

Power of Choice

In the FMI - The Food Industry Association’s 2019 “U.S. Grocery Shopper Trends Report,” 44% of respondents said that they look for a “natural” or “organic” product claim when making a purchasing decision.

Recognize as a retailer that many natural and organic products are often most attractive for a higher socioeconomic set of consumers, and for Millennial or Gen Z shoppers. If trying to appeal to a larger audience, opt for flash sales, limited-time offers, BOGOs or digital coupons.

Interestingly enough, many natural and organic manufacturers focus on offering innovative products that could grab the attention of a shopper with certain dietary needs or preferences, such as organic buckwheat soba noodles for someone with gluten intolerance, natural cashew cheese for someone with a dairy allergy, or an organic plant “meat” for someone following a vegan lifestyle. Determine if your store layout would best accommodate a stand-alone natural food department or an integrated natural food experience, and usher folks toward these products. Additionally, show shoppers how to fit these foods into their eating routines with sampling stations, chef demos and recipe cards.

Molly Hembree, MS, RD, LD, is a registered dietitian coordinator for The Little Clinic and Kroger.

Satisfy Your Shoppers’ Hunger For A Different Kind Of Snack

Millennials, whose love of snacking is well known, are increasingly seeking alternative snacking experiences that deliver unique flavors and textures not found in traditional snacks.

Capitalize on this growth opportunity with distinctive snacks from a leader in alternative snacking – GOYA®! As the #1 brand in the plantain chip category in the U.S.*, GOYA® offers a full range of authentic and exciting flavors guaranteed to be a hit with your shoppers. *Source: Nielsen Answers On Demand, Total U.S. (All Outlets Combined), unit sales, 52 weeks ending 12/28/19

Visit goyatrade.com or email us at salesinfo@goya.com

©2020 Goya Foods, Inc.

Offer Them the Full Line of Delicious GOYA® Plantain Chips

NEW HORIZONS

By Sarah Alter

Banishing Working-Mom Guilt IT’S TIME FOR WOMEN TO STOP APOLOGIZING FOR NOT BEING E VERY WHERE AT ONCE.

n a recent Saturday morning, after a busy week crisscrossing the country from Seattle to Dallas to Orlando, Fla., to Charlotte, N.C., I found myself exhausted and cranky. I’d returned the night before on a late-night flight to Chicago. Now I found myself alone, reflecting on the past week. My husband was busy teaching at the University of Chicago Business School, and my two oldest, Emma and Thani, I presumed were still fast asleep at their respective colleges. Upstairs, my youngest son, Eli, a high schooler, was also still snoozing.

The good news was that my busy travel itinerary had racked up some hefty airline miles. Best part: I’d spent my week being inspired by story after story told by members, corporate partners and regional leaders who are driving the success of our mission to create a more collaborative, flexible and diverse workplace for everyone.

But then my mind flashed to a text message from Eli, a text I had neglected to see until late last night. There it was, with a trail of support and responses from his siblings, my husband, friends —

18

progressivegrocer.com

everybody but me. Eli’s school had been placed on lockdown following a report of a suspected school shooter.

Suddenly, I felt overwhelmed with anxiety as my mind flooded with the recent news of violence and mass shootings that have caused parents across the country to worry about sending their children to school.

Thankfully, Eli was now safe inside our home, and his message had turned out to be a false alarm. I was racked with guilt, however. Like most working moms I know, sometimes I feel like I’m forever coming up short when it comes to doing enough, giving enough and being enough for my kids.

I’d been so absorbed in my day that Friday that I hadn’t even checked my personal phone. Eli had texted me earlier in the day when I was speaking at one of our regional events, oblivious to what my youngest son was going through.

When I got home from that trip, my husband, Michael, was out for dinner with Eli and some of his normal tribe of buddies Upon their return from the restaurant, I rushed up to hug my 6’3” son, who is a full foot taller than his 5’2” mom.

The next morning, as I was still trying to deal with my guilt, Eli finally wandered down and asked if I would take him to the car dealer. As we drove there, he shared what it felt like when it dawned on him what might be happening. He said that the first thing he needed to do was to reach out to his family.

I told him how truly sorry I was for not being there. He told me it was OK. I told him it wasn’t. I also told him how sad it was that this is a reality in schools today.

Eli looked at me, smiled and said: “Don’t worry about me. I can handle whatever comes my way.”

At that moment I was able to embrace my shortfalls as a mother — we all have them — and refocus on what truly matters. My son was growing up to be a capable young man who knew that I loved him, even when I wasn’t available at the other end of the phone. Isn’t that what truly matters?

Sarah Alter is president and CEO of the Network of Executive Women, a learning and leadership community representing 12,400 members in 22 regional groups in the United States and Canada. Learn more at newonline.org.

â„¢

FEATURE

Outstanding Independent Awards

A new crop of

Outstanding Independents thrives by answering consumers’ calls for a faster, fresher and more localized grocery experience.

I

By Gina Acosta and Jim Dudlicek

n 1971, Trig and Tula Solberg opened a small grocery store in Land O’Lakes, Wis. Today, in an era in which big-box supermarkets and small-box discounters dominate the landscape, and consumers can order groceries online and have them delivered to their doors by these and other retailers in under 30 minutes, this independent grocer, Trig’s, has grown into a small chain of eight stores.

How? “At Trig’s, we’re obsessed with fresh,” says Kindl Furtak, director of marketing for T.A. Solberg Co. Inc. “In a highly competitive market, our guests expect superior quality, consistency and selection. We work hard to ‘wow’ our guests, especially in our fresh departments.”

Trig’s is one of 18 winners of Progressive Grocer’s 2020 Outstanding Independent Awards. Most U.S. consumers buy their groceries at larger food retailers and grocery chains. Each February, however, PG honors small independents such as Trig’s, which is thriving by offering the “anti-supermarket”experience that many consumers increasingly are looking for today.

This new breed of consumer, especially those of the younger generations, wants stores that are faster in offering things such as hot — and frequently vegan or organic — grab-and-go meals. They want stores with fresher, higher-quality produce, meat and plant-based food offerings. And they want stores that are more “local,” that serve as meeting places in their communities where one can find products and service that are personalized right down to the ZIP code. All of these features

20

progressivegrocer.com

provide these Outstanding Independents with a level of innovative differentiation not found at most supermarkets or online grocers.

In fact, as you’ll see from this year’s Outstanding Independent Award honorees, some of the deepest transformation in the grocery industry is happening at the independent level, in both cities and small towns, where innovative indie food retailers are leveraging the grocery aisle to serve a wider range of consumers, from the socially conscious to those living in underserved economic communities.

Of course, the qualities of being nimble, adaptable and personalized can all be leveraged in any size grocer to generate sales growth. But these Outstanding Independents are hitting the mark by staying ahead of consumer trends, and their momentum shows no sign of stopping.

Congratulations to an inspiring group of Outstanding Independents!

SINGLE STORE

Oneota Community Food Co-op Decorah, Iowa t Oneota Community Food Co-op (OCC), you won’t find robots mopping floors, huge shopping carts blocking aisles or interminably long checkout lines. What you will find is lots of young kids doing their homework in the deli.

“What I enjoy most about my work at the co-op is walking through our deli seating area at around 3:15 p.m. on a weekday and watching all of the kids after school having a snack, doing their homework and talking with each other,” says David Lester, general manager of OCC, in Decorah, Iowa, about 15 miles south of the Minnesota state line.

“We are much more than just a place where people shop for groceries; it’s kind of like we’re an extension of their living room at home. We’re a place where people in our community gather, discuss ideas and spend quality time with each other.”

OCC started out in 1974 as a food-buying club of 12 members. Today, it has more than 5,600 members, $5.2 million in annual sales and a place in the heart of many of the 8,000 residents of this historic town. OCC recently completed a major remodel of its store to offer more prepared food options and what it calls a more convenient shopping experience for customers. New refrigerated cases, produce display bins, LED lighting, a 17-foot long hot bar and salad bar, and other customer-friendly and energy-saving finishes were just a few of the major enhancements.

OCC says that it has a strong commitment to sourcing its products locally, with an emphasis on organic. More than 45% of its products are Certified Organic and 25% of its sales come from producers within a 100-mile radius of the store. Currently, OCC has more than 75 local vendors and suppliers. But

A

most important, OCC values its position as a “third place” for many of Decorah’s residents.

“The store tends to be the place that is not home or work, where residents can relax, have something to eat or drink, exchange ideas, and interact with others,” Lester says. “The word ‘community’ is integral to the mission of OCC and its daily work, and it has strengthened its role as an anchor business in downtown Decorah.”

Judging by shopper surveys indicating that consumers increasingly want more personalized service and higher-quality foods, independents such OCC are well positioned to compete with big chains and online grocery alternatives in today’s competitive retail environment.

PROGRESSIVE GROCER Februar y 2020

21

FEATURE

Outstanding Independent Awards MULTISTORE

Woodlands Market Kentfield, Calif. f you Google “Woodlands Market in Kentfield, California,” here are some of the reviews you would read on social media sites: “The meat is always fresh, delicious and the counter is always kept clean and neat, unlike most other butchers’ departments at other markets. We love, love, love Woodlands Markets meats!!!”

“They sell the world’s best peanut butter cups.”

“I just want to give a shoutout to the wonderful service of their employees during the blackout!! ESPECIALLY the baristas!!

They absolutely ROCK!! Hundreds of people in line for coffee and yet they still smiled and got us through the lines as quickly as possible!! Thank you Woodlands!!”

When you have customers taking the time and effort to go online and write phrases such as “love, love, love”; type exclamation points; and use all caps in relation to your store, you must be doing something right.

In 1986, Don Santa, his parents and three sisters returned to their family’s roots in the grocery business by opening a market in Kentfield, nestled in the beautiful Ross Valley area of Northern California. The Santa family’s mission was to provide customers with high-quality products and top-notch service. Today Woodlands has become a Bay Area institution.

“At Woodlands Market, we feed a sense of community and pride ourselves on the ability to forge deep relationships with our customers and employees,” says owner Don Santa. “We

I

22

progressivegrocer.com

strongly believe that nourishment stems not only from our delicious house-made prepared foods or quality grocery offerings, but also through supporting youth educational programs that focus on healthy eating and caring for the environment.”

Over the years, Woodlands has been recognized locally and nationally for being an industry innovator by focusing on natural and sustainable products, supporting local suppliers, and maintaining a steadfast commitment to its surrounding communities. Since its founding, Woodlands has contributed millions of dollars in cash and in-kind donations to help engage, support and improve the communities where its customers and employees work and live.

Since opening its first store, Woodlands has expanded to include Woodlands Café; Woodlands Foundation (supporting schools and education); an additional Woodlands full-service market, at the Boardwalk shopping center in Tiburon, Calif.; and a San Francisco store in the Lumina Tower, which includes a Woodlands Pet Shop.

As Woodlands continues to grow, all locations continue to embrace the Santa family’s traditions of world-class products and personalized service.

“Woodlands has not been closed one day since we purchased the neighborhood market, and we intend to ‘be there’ for all their customers’ needs, 365 days a year,” Santa vows.

FEATURE

Outstanding Independent Awards CULINARY

Glorioso’s Italian Market Milwaukee decade ago, Progressive Grocer lauded the transformation of Glorioso’s Italian Market from a tiny, historic storefront on Milwaukee’s Brady Street to a food-forward supermarket serving the city’s ancestral East Side Italian neighborhood. In the 10 ensuing years, the 74-year-old family-owned business has continued to raise the bar on service, quality and innovation in grocery and retail foodservice.

Built upon a tradition of family recipes for old-world Italian specialties, Glorioso’s offers a full-service deli counter with made-to-order sandwiches, pasta, pizza and flatbreads; imported cheeses; a meat counter; a bakery department; a beverage department; and a wide range of Italian grocery items.

There's also gelato, espresso, fresh sausage, and Italian wine and beer. Indoor and seasonal outdoor seating invites patrons to linger and savor.

With the success of its new 10,000-square-foot market, Glorioso’s returned to the original 1,500-square-foot storefront across the street and transformed it into Appetito, a culinary center that includes space for hands-on cooking classes and demonstrations, expanded kitchens for increased catering and food production, and event space. Appetito expands the “Italian experience” of the store into an interactive space where people can come together over quality Italian food and beverages. Cooking classes can accommodate up to 28 people, and there’s additional event space for up to 100, including tour groups, private parties and corporate events.

Founded in 1946 by three brothers and still operated by members of the founding family, Glorioso’s has gained national recognition as one of the finest Italian markets in the country.

A

BAKERY

Trig’s Minocqua, Wis. f you want to know how to do online grocery — and bakery — right, just look at what this Outstanding Independent is doing in Minocqua, Wis. The small grocery chain has a list of “Top 5 Reasons to Try Trig’s to Go” (its online grocery service) on its website and across its social media sites:

I

Reason No. 1: Familiar faces: Our delivery drivers and personal shoppers are employees of Trig’s.

Reason No. 2: One delivery price and no added fees.

Trig’s offers a flat rate of $4.99 for pickup or delivery.

Reason No. 3: Obsessed with fresh: Highly trained Trig’s shoppers always pick the freshest items for you.

Reason No. 4: Convenient: Spend less time shopping and [more time] doing the things you enjoy.

Reason No. 5: $5 off your next Trig’s online order.

Who says that smaller operators can’t compete with the big chains and ecommerce giants in online grocery? Then again, the Trig’s mission statement says it all: “We will go out of our way to serve our customers better than any other retailer in the community.” And that means also excelling in the bakery department.

“When our central bakery was devastated by a fire earlier this year, the team turned a potential disaster into an opportunity to move bakery operations into the stores and offer a fresh-from-the-oven experience to guests,” says Kindl Furtak, director of marketing for T.A. Solberg Co. Inc. “Bakery quickly gained momentum and has introduced several new signature items.”

Trig’s also boasts expansive full-service fresh meat and seafood cases, an innovative deli offering such programs as fresh sushi, HIT (High Intensity Taste) Bowls, and Fresh & Fast prepared meals, and a vast liquor department featuring more than 10,000 varietals of wine, craft beer and spirits.

Additionally, Trig’s shoppers are treated to dozens of events each year, including Lobsterfest, Hatch chile roasting, Mistletoe Market and a New Year’s seafood event. An event committee supports each store with playbooks for every occasion.

“Everything we do drives toward the goal of giving back. Every dollar earned is reinvested into our stores, donated to causes in the community or used to support our associates,” Furtak says.

24

progressivegrocer.com

meat shoppers are changing - are you keeping up?

Did you know shoppers choose their preferred grocery store based on meat selection? Plus over the last seven years, the number of shoppers reaching for manufacturer brands for their fresh meat purchases has doubled. Twenty-six percent of consumers today prefer these manufacturer brands.1 Retailers should pay close attention to these trends and push to add branded meat to their meat case.

When capitalizing on this trend, choosing a brand with a focus on quality can provide additional value for the retailer. Products with quality claims often have a strict set of standards each piece of meat must reach. Looking to a brand’s longevity can also have a positive effect on the store’s bottom line. Age speaks to the brand’s success and familiarity, while giving the retailer confidence in the brand’s capabilities and logistics.

Familiarity, perception of quality, value and consistency are just a few of the reasons more shoppers are reaching for branded meat products. Since unbranded and private label meat can come from several different packers, the products may lack consistency. In comparison, national brands coming from a single manufacturer may instill more buyer confidence due to greater quality and consistency.

The confidence you are looking for comes easily from the Chairman’s Reserve® brand. Hand-selected and hand-trimmed beef and pork with exceptional quality make this brand stand apart. And with a history of delivering high-quality meat to happy customers for 20 years, it’s a brand you can feel confident in offering.

ChooseChairmans.com

®

/™/© 2020 Tyson Foods, Inc. Power of Meat, Food Marketing Institute; Foundation for Meat & Poultry Research & Education, 2019

1

FEATURE

Outstanding Independent Awards DELI/PREPARED FOODS

Palmer’s Market Darien, Conn. almer’s Market has always been a trailblazer when it comes to grocery foodservice. This indie grocer, located about 37 miles northeast of New York City, knew well before many small and national food retailers that consumers would increase their consumption of prepared and cooked foods. To wit, household penetration for grocery foodservice grew to 94% in 2019, according to FMI - The Food Industry Association’s latest “Power of Foodservice at Retail” report, with 63% of shoppers turning to semi-prepared and fully prepared foods from retail foodservice for dinner solutions.

“Our one store will do over $19 million in sales in 2019. About $5 million of that is from our prepared food, catering and deli departments, which are projected to exceed grocery sales by the end of 2019,” says Cindy Palmer Dean, owner and creative director.

Also, at a time when many food retailers are paring down center store assortments, cutting SKUs and adding private brands at the expense of national brands, Palmer’s is focused on making center store a place where shoppers can find a curated product experience that can’t be replicated in other stores or online.

“We are one of the few stores whose center store is growing because of the extensive selection of gourmet and local products that our managers source,” Palmer says.

Meanwhile, not even ecommerce is making a dent in the retailer’s success. “Ecommerce has dramatically increased our sales by allowing customers to order prepared foods, flowers and gourmet gift baskets,” Palmer says.

Palmer’s traces its roots back to the early 1900s as a family-owned butcher shop in Stamford, Conn. Now, the fourth and fifth generations of Palmers are running the business, and their vision has transformed a simple market into a one-stop shopping destination that even offers guided food tours to global destinations.

“What also makes us unique are our culinary tours to Italy,” Palmer says. “We joined forces with our Italian importer to offer tours that have been extremely popular with our customers.”

Looking ahead, the Palmers have more plans as the store approaches its centennial in 2020.

“Our shopping center is in the process of a $35 million dollar renovation. We look forward to changing and growing in our next 100 years,” Palmer says.

P

26

progressivegrocer.com

ETHNIC

Compare Foods Charlotte, N.C. volving demographics and increased U.S. consumer interest in exotic foods is driving tremendous growth in the ethnic independent grocery industry, and Compare Foods Supermarkets in Charlotte, N.C., is leveraging that opportunity to the fullest.

According to Arnhem, Netherlands-based Innova Market Insights, sales of foods that highlighted ethnic flavors grew more than 20% in 2018 as U.S. consumers of all stripes ate more tortillas, sriracha and adobo.

“Compare Foods is special because of the connection that it makes with all of its customers,” says Omar G. Jorge Peña, CEO of the company, which has become renowned in the Charlotte region for its assortment of imported products from all over the world, large produce departments, custom butcher counters, quality prepared foods and Mexican-style bakeries.

The first Compare store in Charlotte opened in 2004.

Since then, the chain, a divisional banner of the Port Washington, N.Y.-based Associated Supermarket Group, has grown to six stores not just by appealing to Hispanics, but also by attracting multiethnic foodies searching for unique ingredients for a special recipe, vegans and vegetarians who rely on a wide variety of fresh produce, and North Carolinian barbecue grill-masters who want specific cuts of meat.

“As a family-owned company, our primary value is to treat our customers like members of our family,” Peña says. “We ensure that our stores carry the products from our customers’ native country, the freshest meats and produce available, and a friendly, familiar service that creates a bond with our customers. Everyone ... shares in this mission to make our Compare Foods our customers’ home away from home.”

Compare has also become an important community partner, taking part in a range of corporate responsibility intiatives that benefit the Queen City.

E

FEATURE

Outstanding Independent Awards EXPERIENCE

Barons Market Poway, Calif. n 1993, Joe Shemirani had an idea. A really great idea.

He liked to shop at small but well-stocked markets, and he thought that maybe other Americans would like that, too. Maybe others would want to shop a store with fresher food, a neighborhood feel, and a human-scale size that saves you from the dreary experience of having to brave a huge supermarket just to buy one or two items. Shemirani’s idea not only caught on, it also thrived. Despite the ups and downs of the economy, the rise of ecommerce, and a super-competitive grocery landscape, family-owned Barons Market in the San Diego area has become an integral part of its neighborhoods and plans to open its ninth location in 2020.

Barons has perfected a formula that aims to attract even the most diehard big-box supermarket or online grocery shopper to its stores.

It answers the question “What am I going to have for dinner tonight?” as soon as a customer steps inside the store. In 10 minutes or less, a shopper can choose from a hot-soup bar, salad bar, hot-food bar or antipasto bar, or from a selection of pre-made entrées, salads and sandwiches — all prepared fresh daily. Barons also inspires customers to make their own quick and easy meals at a demo station, where staffers prepare a simple recipe that customers can recreate at home in 15 minutes or less, using just a few store products.

“Through an innovative store design, a product selection that is handpicked during weekly food panel meetings with leadership and managers, and interactive features like an olive oil and balsamic vinegar

I

EXPERIENCE

Eddie’s of Roland Park Baltimore

here are three good reasons why Eddie’s of Roland Park has been thriving in Baltimore for 75 years: exceptional service, extraordinary quality and a diverse selection.

Eddie’s provides a shopping experience that can’t be replicated in supermarkets or online, and it has become a food destination — now with two locations — beloved by Baltimoreans.

So, who is Eddie? In 1954, Victor Cohen joined a buying and advertising cooperative that was formed by Eddie Levy. Some time later, the cooperative dissolved, but the name “Eddie’s” stuck. In the early 1980s, the company distinguished itself as “Eddie’s of Roland Park.”

T

28

progressivegrocer.com

bar and a squeeze-your-own orange juice station, Barons makes grocery shopping quick, easy and, most important, fun,” Shemirani says. And while creating an exciting shopping experience is key for Shemirani, he says that his employees are his No. 1 priority. Barons has a thriving management program that develops and teaches employees to be successful managers. Shemirani believes that spending time and energy in professional development creates happy employees who make for happy customers.

He also believes that customer experience extends outside of its stores and into its tight-knit communities.

With each passing year, Barons makes it a goal to grow its involvement in the community. In 2019, the market donated almost $350,000 to nearly 350 local organizations.

But it also distinguished itself with a signature crab soup and crab cakes, and with turkeys and roast beef from its own kitchen. A prepared food offering at a grocery store was a brand-new concept then, and that was the origin of the grocer’s popular Gourmet to Go department.

In 1992, Victor’s daughter, Nancy Cohen, opened the second and larger Eddie’s of Roland Park location, in Baltimore County. Today, Nancy Cohen and her sons, Michael and Andrew Schaffer, carry on the proud tradition established by Victor so many years ago.

Last year, Eddie’s hosted a year’s worth of contests, events and community partnerships that allowed the grocer to collect customer stories and memories of shopping at the store throughout the years. In September, the retailer handpicked an assortment of the strongest customer stories and invited select customers, vendors and staff to participate in a photo shoot to promote holiday goods and services. The grocer also contacted local celebrities, including novelist Anne Tyler and filmmaker John Waters, both avid Eddie’s shoppers, to participate by submitting a photo or quote of their own.

With these photographs and stories as inspiration, Eddie’s redesigned its holiday catalog.

These seasonal marketing efforts culminated in record-setting Thanksgiving catering sales, bolstered by customer growth and new business-to-business outreach.

Caetlyn Roberts Giant Food

Great companies need great women

E

ntry and mid-level women are leaving our industry at nearly twice the rate of men — senior-level women are leaving at nearly four times the rate of men.* NEW provides solutions that retain and develop great women leaders. Our learning programs, career development, conferences and local events help tens of thousands of women advance each year. Our insights, best practices and advocacy help transform organizations and create a better industry workplace for all. Join our movement today at newonline.org. * Download our report

The Female Leadership Crisis Why women are leaving (and what we can do about it) newonline.org/crisis

Advancing all women. It’s just good business.

FEATURE

Outstanding Independent Awards FOOD SECURITY

Baldwin Market Baldwin, Fla. hat does a town of 1,600 residents do when its last remaining grocery store shuts down?

In Baldwin, Fla., what the town does is open its own grocery store.

“Well, the store came out of pure necessity,” says Sean Lynch, mayor of Baldwin, located about 20 miles west of Jacksonville. “Our senior citizens had to drive 20 or 30 miles roundtrip for fresh produce and meats. And some single parents and one-car families had to wait for rides to go shopping outside town. It’s what our small community needs. I am trying to do the right thing and help the town’s citizens.”

In 2017, the only operating grocery store in Baldwin, an IGA, closed down. The closure essentially turned the area into a “food desert,” making quick trips to buy groceries or supplies difficult. About 13.5 million people live in food deserts across the United States, according to the USDA.

W

FOOD SECURITY

Local Market Chicago

f course, it’s not just small towns that have so-called food deserts. In Chicago’s South Shore area, Dominick’s, the neighborhood’s only grocery store for years, shut down in 2013. That left a big part of the neighborhood — about 14,000 residents — without access to a grocery store for more than six years.

This past December, however, the owners of independent supermarket chain Shop & Save opened a new concept in the South Shore area called Local Market. On its Facebook page, Local Market highlights its organic products and its focus on natural foods.

“Our milk and dairy products, including nurtured eggs, provide the truly unique taste and wholesome benefit only available in foods produced the way they were intended: naturally,” the retailer notes on the social media site.

“From soy-based selections to meat and poultry products produced from livestock patiently fed and bred in holistic, totally natural environments, you’ll find the healthiest variety in organic selections available at Local Market. Watch for our weekly promotions in the organic foods section and take advantage of the savings available to treat yourself to the

O

30

progressivegrocer.com

So, in July of last year, Lynch and the town council decided to become grocers — possibly the only local government in the country to do so — by opening Baldwin Market.

According to The Washington Post, all of the employees of Baldwin Market are on the municipal payroll, from the butcher to the cashiers.

Workers from the town’s maintenance department take breaks from cutting grass to help unload deliveries, and residents flag down the mayor when they want to request a specific type of milk.

“We’re not trying to make a profit,” Lynch told the Post in a recent interview. “We’re trying to cover our expenses and keep the store running. Any money that’s made after that will go into the town in some way.”

natural alternative of healthy eating.”

Eva Jakubowski, a co-owner of the store, told the Chicago Tribune, “Residents will find a full-service grocery experience, complete with a juice bar, a wine and beer bar, and a large seating area with a Starbucks feel.”

South Shore has a median income of just less than $25,000, according to a recent report from the Chicago Metropolitan Agency for Planning, but also has many middle- and high-income residents.

“We have customers that truly want us here, that are willing to support our business,” Jakubowski told the Tribune. “It’s a wonderful relationship where we come in with something the community wants.”

SEE WHAT WE’RE MADE OF.

At Unilever, we’re committed to reducing waste associated with the disposal of our products. By 2025, all of our packaging will be reusable, recyclable or compostable.

Join us.

©2020 Unilever XTM19005

FEATURE

Outstanding Independent Awards LOCAL

Roots Market Clarksville, Md. he root of the success of Roots Market, located north of Washington, D.C., and south of Baltimore, is offering customers clean, healthy and delicious foods. The grocer maintains strict standards such as selling foods free from artificial flavors or colors, artificial preservatives, hydrogenated oils, high-fructose corn syrup, and many other ingredients it deems questionable. What really sets Roots apart, though, is its commitment to local. On its website, the grocer lists its Top 10 Reasons to Buy Local Food:

T

HEALTH & WELLNESS

Pilgrim’s Market Coeur d’Alene, Idaho ay before “wellness,” “natural,” “organic” and “vegan” were trendy buzzwords, Joe and Sarah Hamilton opened a store focused on healthy foods as a way to create a new life for their family. They wanted a greater quality of life, which they found in Coeur d’Alene, Idaho, and a way to share with the community their passion for natural foods and socially responsible living.

In 1999, their original store was 1,200 square feet. The following year, the Hamiltons moved across the street and added space. At that point, the store occupied 4,000 square feet. In August 2005, 2,000 square feet were added, and another 2,000 in 2007. In 2008, a large adjacent space that would triple the store size became available, and today, Pilgrim’s Market spans 25,000 square feet.

“The Pilgrim’s mission is to serve, empower and delight our health-seeking customers,” says Nicole Henley, human resources director for the grocer. “We believe in going above and beyond to always provide the very best customer service experience. The No. 1 compliment we receive is about the quality of our staff and the family-like experience that is provided.”

Pilgrim’s takes educating customers to a higher level than most grocers.

“We believe knowledge is power. We make constant efforts to empower our customers to pursue wellness from a holistic approach,” Henley says. “Our supplements and health and beauty team members are some of the most knowledgeable around. Our entire team takes pride in being the champions of their departments and having thorough knowledge of all the products found in their aisles. Additionally, our events center hosts a wide array of educational classes covering topics like fermentation, natural medicine, raw food, essential oils, CBD and more.”

Pilgrim’s also focuses on employee retention. The grocer says that it constantly reviews and revises its benefits package to ensure that it’s providing useful and valuable benefits to employees. The store pays for 75% of employee health insurance and 50% of employee dental insurance, offers a 3% match into retirement accounts, and matches up to $40 per month into associates’ health savings accounts. Pilgrim’s also shares store profits with employees through a bonus program paid out each quarter.

“We aim to live out our mission statement at the employee level by truly serving, empowering and delighting our team members every day,” Henley says.

W

32

progressivegrocer.com

1. Eating local means more for the local economy.

2. Locally grown produce is fresher.

3. Local food just plain tastes better.

4. Locally grown fruits and vegetables have longer to ripen.

5. Eating local is better for air quality and pollution than eating organic.

6. Buying local food keeps us in touch with the seasons.

7. Buying locally grown food is fodder for a wonderful story.

8. Eating local protects us from bioterrorism.

9. Local food translates to more variety.

10. Supporting local providers supports responsible land development.

Roots was founded in Clarksville, Md., in 2000 by Jeff Kaufman. In 2004, he and his team launched a vegan restaurant, Great Sage, and an eco-shop called Nest, which sells organic clothing and Fairtrade and artisanal gifts, right next door to the grocery store. Then, in 2007, they added a second Roots Market, in Olney, Md. “Roots was created to serve the health and well-being of local communities,” says Katie Smallwood, marketing manager for the grocer. “We do this by offering the cleanest, healthiest foods and by educating our guests to live a healthier lifestyle.”

Roots’ dedication to all things local extends to community groups and free events, including Roots Cares classes, and an annual Vegan Fest held in the summer and fall.

LOCAL

Walla Walla’s Harvest Foods Walla Walla, Wash. olan and Kathleen Lockwood have been institutions in the Washington state food industry for more than 50 years.

“We have been in the grocery business for over five decades, but it has only been the last 13 years that we have owned our own store, learning a different side of the business. It didn’t take long before we began to realize the importance of learning from others as well as sharing our own experiences,” says Nolan Lockwood.

The Lockwoods have operated Walla Walla’s Harvest Foods since 2006, regularly contributing to more than 26 local events and fundraisers. The store has actively supported more than 30 local farmers and producers, not counting the 60-plua local wineries that have helped make the region world famous in the wine industry.

Nolan Lockwood has spent his career in grocery, beginning as a store director for Albertsons Cos. and later becoming president/ CEO of Thriftway and Red Apple Stores. He was also sales and marketing director for Smith Brothers Farms. Now, however, the Lockwoods are retiring, having sold Walla Walla’s Harvest Foods to a new buyer in December 2019.

“I have gained a wide range of experience and knowledge over the [past] 55 years by working in various segments of the grocery

N

MEAT / SEAFOOD

Grand & Essex Market Bergenfield, N.J. t Grand & Essex Market, the butcher, the baker and even the candlestick maker are alive and well, thriving just across the Hudson River from New York City. OK, maybe not the candlestick maker, but certainly the candlestick purveyor (the store offers an impressive assortment for candle aficionados).

Grand & Essex opened in 2013 as the first high-end kosher market in Bergen County, N.J. Today, however, the retailer excels at providing a wide variety of specialty foods, products and services reminiscent of the corner grocer and butcher who knew everyone in the neighborhood.

“We share in our customers’ life cycles, offering complimentary

A

business,” Nolan Lockwood says. “My goal has always been to help the area’s local producers and manufacturers achieve greater success. The organizations and farmers that I work with are both satisfying and rewarding. I believe, through our partnerships, it has allowed many of those great family businesses a chance to reach their own goals quicker and with less burdens.”

dinners for families of newborns, dessert platters for family celebrations or visits, and meals to houses of mourning,” says Mali Baer, director of marketing and customer care at Grand & Essex. “We look out for our elderly or ill customers by taking their orders over the phone or by email, and driving them home when they bought a little more than they can carry, or delivering small orders to their doorsteps.”

Grand & Essex has also built its reputation on the superior quality of its expansive deli and butcher departments.

“Customers travel from all corners of Bergen County just for our fresh Prime USDA American beef and clean poultry,” Baer says. Impressively, butchers from Grand & Essex are available on WhatsApp so that customers can communicate directly with them about meat orders.

“We hand-peel hundreds of thousands of potatoes yearly for our legendary potato kugel and Chanukah latkes, because using machines affects our famous and genuine homey taste,” Baer says. “Authenticity carries through to our Sephardic fusion cuisine, Little Italy pizza shop, fresh sushi and our ‘hot from the oven’ bakery goods.”

Innovations over the past year include a new smokehouse that offers kosher consumers one-of-a-kind ribs, smoked meats and barbecue.

“And we’re one of the first grocery stores to have a certified health coach in-store twice a week to discuss health and nutrition with customers,” Baer adds.

PROGRESSIVE GROCER Februar y 2020

33

FEATURE

Outstanding Independent Awards SOCIAL PURPOSE

Charley Family Shop’n Save Greensburg, Pa. n May 2019, Ray Charley, the 68-year-old owner of Shop ’n Save stores in Greensburg and Murrysville, Pa., completed a 3,058-mile benefit ride across the southern United States on behalf of Feherty’s Troops First Foundation, a Maryland-based charity that provides assistance and support for veterans wounded in Iraq and Afghanistan.

Each day, Charley would log his miles and report his location. His status update would then be posted on the grocer’s website on a page titled “Where Is Ray Today?”

Shop ’n Save stores also tracked his progress with a large map of the United States on display in each of the grocer’s three stores across Pennsylvania. Charley would thank all of the supporters who followed his ride in daily dispatches on Facebook.

The feat became a common topic discussed among shoppers, employees and even suppliers, generating much good will for an already beloved local food retailer with strong ties to the communities it serves.

“Every day I would check, and every day your well wishes and your thumbs-up and your grace-of-God wishes have given me strength to continue this journey through the difficult days when we were going through deserts and mountains,” Charley told Trib Live, a local newspaper. “I greatly appreciate all our friends back in western Pennsylvania who have supported this ride financially, and those that have bought wings at the Charley Family Shop ’n Save stores in Greensburg and Murrysville to help support this noble cause of helping save veterans from the tragic loss of life through suicide.”

The event and its publicity generated sales growth, an increase in loyalty card memberships, and feedback from customers asking, “When are you going to do this again?” More quietly, the grocer also donates to the United Way of Southwestern Pennsylvania and the Westmoreland County Food Bank.

I

PRODUCE

Uncle Giuseppe’s Marketplace Farmingdale, N.Y. n the Northeast, shoppers like to say that Uncle Giuseppe’s Marketplace isn’t a market, it’s an experience.

Uncle Giuseppe’s opened in 1998 in East Meadow, N.Y., and has expanded to seven stores in New York state and one store in New Jersey, based on the popularity of its experiential stores, a sharp focus on the best fresh produce and meats, and a gourmet assortment of dry goods.

“Customers have come to love our various departments, including a meat department with a selection of the best steaks, poultry, roasts and Italian sausage made daily; a deli counter with dozens of dishes made using traditional Italian recipes; and a produce department with a large variety of domestic, imported, local and organic fruits and vegetables,” says Marketing Manager Jillian Gundy. Each location has a seafood department with live lobsters and freshly caught seafood. The cheese department offers hundreds of varieties from around the world.

Uncle Giuseppe’s aims to replicate the way our grandparents used to shop, visiting trusted neighborhood stores and markets with service that “treats you like family” — complete with Italian music, samples and friendly associates.

“Our mozzarella machines are imported directly from Italy,” Gundy says. “People can come see our pasta rooms and watch fresh ravioli and pasta [being] prepared daily. We even have an Italian bakery where customers can enjoy their favorite baked goods, and a candy counter with sweets and treats all house-made.”

I

34

progressivegrocer.com

LegaL Notice

If you bought butter or cheese directly from a National Milk Producers Federation Cooperatives Working Together Program Member between December 6, 2008 and July 31, 2013, you could receive a payment from a $220 million settlement.

What is the lawsuit about? A $220 million settlement has been reached in a class action lawsuit brought against National Milk Producers Federation, Agri-Mark, Inc., Dairy Farmers of America, Inc., and Land O’Lakes, Inc. (collectively “Defendants”). The lawsuit claimed that an effort known as Cooperatives Working Together (CWT) operated a Herd Retirement Program that was a conspiracy to reduce milk output that violated the law. The Defendants deny doing anything wrong. The Court has not decided who is right.

SOCIAL PURPOSE

Oliver’s Market Santa Rosa, Calif. ong before consumers’ appetites for local foods exploded, Oliver’s Market started believing in “the power of local” back in 1988, when Steve Maass founded the grocer in Sonoma County, Calif. Not only has there been huge growth in the number of farm-to-table restaurants and farmers’ markets since then, but even large grocery chains and big-box retailers have been aggressively expanding and marketing their own locally grown offerings. Exactly how “the power of local” is leveraged by grocers large and small has changed over the years, but the core values upholding Oliver’s Market remain the same:

L

Provide customers with choice Keep the focus local Offer fair prices, great quality and service Support our community Value and support employees The grocer’s mission remains to strive to offer customers the finest selection of natural, conventional and specialty products.

This quest begins with a commitment to support hundreds of local partners, including farmers and producers. Oliver’s carries more than 6,000 locally produced items, which account for 26% of sales annually.

“I didn’t know a lot about the grocery business when I started out, but I wanted to create a store where people enjoyed shopping,” Maass says. “I thought if they enjoyed the store, they would spend more time there.” Oliver’s Market now has four locations and more than 1,100 employees.

In 2019, Oliver’s became a Social Purpose Corporation, a type of for-profit entity in some U.S. states that enables, but does not require, considering social or environmental issues in decision-making. Accordingly, the grocer issued its first Social Purpose Corporation Annual Report this year.

Who is included? The Court decided that the Class includes all persons and entities in the United States that purchased butter and/or cheese directly from one or more Members of Defendant, Cooperatives Working Together and/or their subsidiaries, during the period from December 6, 2008 to July 31, 2013 who did not timely opt-out of the Class. Those that are included are called “Class Members.” To be a Class Member who could be eligible for a payment, you must have purchased butter or cheese made by a CWT Member. If you are a consumer, you must have purchased butter or cheese made by a CWT Member at one of the dairy co-op stores. Go to the website for a list of CWT Members along with their store names and locations.

What does the settlement provide? The settlement provides that payments to Class Members will be allocated: 37% to the Butter Sub-Class, and 63% to the Cheese Sub-Class. Total payments will be $220 million plus interest, minus: attorneys’ fees and expenses; payments to the Named Plaintiffs; notice and administration costs; and taxes.

What are your options? If you are a Class Member who received emailed or mailed Notice, you do not need to do anything at this time to be eligible to receive a payment. Once the Court has approved the Claim Form, a deadline will be set for Class Members to submit claims. If you received a Notice in the mail, you will be mailed a Claim Form automatically.

If you did not receive a Notice in the mail, and you think you are a potential Class Member, please identify yourself or your company to the Settlement Administrator as a potential Class Member by letter to the following address: Butter and Cheese Class Action, PO Box 4290, Portland, OR 97208-4290, email to: info@butterandcheeseclassaction.com, or register on the website, so you can obtain a Claim Form, once it is available. As a Class Member, you will be bound by all orders and judgments of the Court. Unless you want to object to the settlement, YOU DO NOT HAVE TO DO ANYTHING NOW. Instructions for objecting can be found at the website or by calling the toll-free number below. You must mail your objection postmarked by March 17, 2020. The Court will hold a Fairness Hearing on April 27, 2020, to decide whether to approve the Settlement and any requests for fees and expenses. If there are objections, the Court will consider them at the hearing. You do not need to attend the hearing. If you wish to appear at the hearing, you must file a “Notice of Intention to Appear” with the Court and you may hire your own attorney to appear in Court for you at your own expense. Detailed information is available at the website and toll-free number listed below.

1-855-804-8574 www.ButterandCheeseClassAction.com

FEATURE

Outstanding Independent Awards SUSTAINABILITY

PCC Community Markets Seattle CC Community Markets has a deep and long history of environmental responsibility. Last year, the Seattle-area grocer and largest community-owned food market in the nation became the first grocery store in the world to pursue Living Building Challenge (LBC) Petal Certification, the most rigorous green-building standard. The retailer also became among the first to launch compostable deli containers, thus removing 8 million pieces of single-use plastic from the waste stream annually.

Yet while PCC is perhaps best known for its environmental work, it’s also a formidable competitor within the grocery industry, consistently raising standards across all aspects of its business.

P

In 2019, that included: Made-From-Scratch Innovation: PCC is among a dying breed of grocers that still insist on making all of their prepared foods from scratch every day. Each of its 13 stores runs a restaurant-quality kitchen producing 300 made-fromscratch items from original PCC recipes in each store daily.

In 2019, the co-op added two new concepts to its already vast array of prepared offerings (i.e., pizza, taqueria, hot bar, soup and full-service deli): self-serve grain bowls and a seafood-forward fast-casual restaurant offering made-to-order dishes from PCC’s sustainably sourced seafood case, paired with local wine, beer and cider. Both have outperformed expectations and provided valuable learnings in operations, customer experience and labor models.

36

progressivegrocer.com

Fresh at the Forefront: Walk into the Ballard, Wash., PCC and you’re immediately enveloped in a 98% organic produce department, with no checkstands in sight. Flanked by an organic Fairtrade coffee bar featuring freshly baked pastries, the produce department leads into what feels like an open-air food market with cheesemongers, butchers, wine experts and chefs practicing their crafts at the highest level. Here, the center store is no longer the central focus.

Instead, fresh is at the forefront.

Private Label Prominence: PCC’s private label program is an expression of the co-op’s values: the highest standards, locally sourced and premium quality. The result is a private label program that continues to see double-digit growth year over year. Not only do PCC’s private label products lead and lift their categories, they also create an outlet and opportunity for the small and midsize producers that are celebrated on each package.

Community Impact: As a community-owned enterprise, PCC strives to continually increase its impact on the communities it serves. While data wasn’t yet available for 2019 at presstime, in 2018, PCC contributed 50% of its after-tax earnings to its members and its surrounding communities. The coop donated 430,000 meals to food banks throughout the city, and gave to more than 600 community organizations and schools.

SOLUTIONS

Cannabis Outlook

A Share of the Pot AS CBD PRODUCTS RISE IN POPUL ARIT Y, GROCERS LOOK TO GE T IN ON THESE ITEMS’ FUTURE GROW TH.

By Bridget Goldschmidt here’s no doubt about it: Cannabis is smoking hot. As grocers and other retailers well know, however, it’s not just for smoking.

Myriad cannabidiol (CBD) creams, balms, oils, tinctures, extracts, capsules, and edibles such as gummies, chocolates, beverages and bars have stormed the retail market, touted to help consumers deal with every condition from pain to insomnia, and supermarket operators are scrambling for their piece of what looks to be a sizable pie.

In fact, such items are already carried by niche and traditional food retailers alike, including Dierbergs, Earth Fare, Fresh Thyme Farmers Market, Kroger, Natural Grocers, and Southeastern Grocers’ Bi-Lo and Winn-Dixie banners.

Before proceeding any further, though, a little clarification may be necessary.

“Cannabis is a broad term, and its full array of products can be classified into two groupings based on which plant they are derived from: those from marijuana and those from hemp,” notes “Brace for Impact: U.S. Cannabis Sales to Rise by the Billions,” a July 2019 report from the CPG, FMCG and retail groups of New York-based Nielsen. “Compounds derived from each of these plants can be further delineated in one of three ways: those that cause a ‘high’ because they contain the psychoactive compound tetrahydrocannabinol (THC); those that contain the nonpsychoactive CBD compound and lastly, cannabis products that don’t contain THC or any noteworthy contents of CBD, such as hemp seed oil or seeds. What might be cause for confusion here is that CBD can be either marijuana- or hemp-derived.”

Just how big is the cannabis opportunity shaping up to be?

“In 2018, we estimate that total sales of all legalized cannabis in the U.S. reached $8 billion,” the authors of "Brace for Impact” write. “This includes sales of hemp-derived CBD. That’s $8 billion in a country where marijuana is now legal for recreational use in just 11 U.S. states and Washington, D.C. With newer recreational markets such as Michigan and Illinois opening up for business in 2020 and more states likely to follow

[T]here is tremendous opportunity for other products and food items, and CBD has the opportunity to be an additive in almost any edible format.”

—Keith Merker, WeedMD

38

progressivegrocer.com

Key Takeaways The burgeoning sales growth of CBD products makes them a prime opportunity for grocers, despite lingering issues regarding regulation, safety and efficacy.

Grocers interested in maximizing their CBD sales must lead with educational efforts, followed by smart merchandising beyond the HBW section, working with responsible suppliers and offering appealing price points.

CBD-infused beverages and other edible products are poised to explode, so grocers should capitalize on consumer demands for these to the extent permitted by law.

Caption Here

suit, we predict that sales of all legalized cannabis in the U.S. will reach $41 billion by 2025.”

Regarding hemp-derived CBD products — which are more likely to be carried in mainstream grocery stores — Rick Maturo, VP of Nielsen’s cannabis practice, writes: “We project that the U.S. hemp-based CBD market could be a $2.25 billion to $2.75 billion industry in 2020. These conservative projections already account for hampered FDA rulings and other possible speed bumps for the hemp-CBD marketplace.”

Although this state of affairs — what Peter Matz, director of food and health policy at the Arlington, Va.-based FMI - The Food Industry Association, described in a May 2019 Food and Drug Administration hearing as “mass confusion in the marketplace for the public, for suppliers and retailers, and also for state regulators and law enforcement” — has emerged as a major obstacle for food retailers hoping to profit from CBD sales, the momentum is still growing for such products at retail, including grocery.

Steven Hoffman, managing partner at Boulder, Colo.-based marketing communications firm Compass Natural LLC and editor of the “Let’s Talk Hemp” newsletter, notes: “Now that hemp is fully legal in all 50 states under the 2018 Farm Bill ... the market for hemp-derived products has taken off, in particular CBD in functional foods and dietary supplements. The confusion lies in the fact that the federal government, the USDA, the FDA, states and sometimes local

governments are interpreting things in different ways.

Nonetheless, as the nutritional supplements market has always driven innovation, often with regulation following, the natural products industry — and consumers of all stripes — have embraced CBD.” However, according to Hoffman, “While a number of companies ... are introducing CBD-infused foods and beverages, the FDA’s current stance on CBD in foods is cause for concern. The advice is to make no health claims marketing these products and to stay compliant within the Dietary Supplements Health and Education Act of 1994 (DSHEA). Remember, hemp food is a superfood — when made from hempseeds, hemp foods are high in omega-3 essential fatty acids and are one of the few plant-based foods delivering complete protein. ... Now, on the other hand, foods and beverages infused with CBD ... must be treated like a functional food/dietary supplement, with all the care mentioned above.”

Still, as Maturo observes, “While the regulatory roadmap remains ambiguous, one thing is clear: The next decade for the hemp-based CBD market has the potential to be a game changer for the traditional CPG and retail industry.”

PROGRESSIVE GROCER Februar y 2020

39

SOLUTIONS

Cannabis Outlook

WeedMD is one of the first licensed Canadian cannabis producers to begin outdoor-grow operations.

‘Nothing But Potential to Grow’

That being the case, what’s behind this surge in popularity, and what does it mean for grocers in particular?

“The industry has become less taboo as the market evolves and the general public becomes more knowledgeable of the benefits,” says Eivan Shahara, partner and president of The Mint Dispensary, a medical cannabis dispensary with two locations in Arizona and expansion plans in Massachusetts and Michigan (medical marijuana is currently legal in 33 states). “When it comes to CBD, it all boils down to accessibility.

CBD has a much wider market because it’s available to the masses.

Greater public awareness and improved perceptions have also helped to increase interest, trial and acceptance. For the grocery industry, this is new ground to explore. It also puts the industry at the forefront of offering some of the most widely sought-after retail products.”

Another incentive for food retailers, adds Shahara, is that “CBD products also tend to be pricier and bring larger margins than most grocery store food or beverage items.”

“A key driver [of] the consumer cannabis trend is a desire for natural alternatives to over-the-counter supplements in treating sleep disorders, anxiety and inflammation,” observes Ari Sherman, president of Boulder-based hemp food and supplement company Evo Hemp. “Grocers carry a variety of products that claim to help consumers with the same conditions that cannabis-derived products help with, but cannabinoids do so in a more natural way.”

The federal government’s recent warning about the potential harm of CBD products complicates matters, however. “The FDA’s stance on CBD definitely has an effect on retailers’ willingness to carry various products,” affirms Sherman. “Until the FDA creates a path to regulating cannabinoids, it will be up to the retailer’s legal department to decide which items they can or cannot carry.”

For her part, Hilary Kelsay, founder and CEO of Richland, Wash.-based Humming Hemp, whose hemp-based protein-energy bar has seen success at national mainstream retailers, notes that “if the general consumer is showing so much interest in the plant, and there is so much contin-

40

progressivegrocer.com

ued discussion and coverage in the media, it’s a great opportunity for grocers to expand their store offerings, maintain relevancy and keep up with current trends.”

“Grocers have the opportunity to leverage this massive interest and increase foot traffic, ultimately attracting and securing new consumers who otherwise would not have visited a grocery store to obtain wellness products,” asserts Angelo Lombardi, president of Portland, Ore.-based Sentia Wellness, maker of Social CBD topicals and traditional ingestibles such as gel caps and oils. “Grocers cannot ignore this market, or they will be overlooked for products they should be selling. Grocers have the coveted position of having wide attraction and access to a diverse set of consumers; there is nothing but potential to grow from the CBD boom.”

Lombardi has an interesting take on the FDA’s warning: “[I]f there is an impact on willingness to shelve CBD products, it will be a positive one. This is an opportunity for supermarkets to position themselves as the newest leaders in the CBD industry. Selling commercial CBD and making it significantly more available puts the pressure on the FDA to establish regulation sooner rather than later.”

While acknowledging that “the immediate opportunities [for grocers] are more in the CBD-based topical space, because it’s safer ground and there’s more clarity with regulations, and the FDA in particular, when it comes to that,” Keith Merker, CEO of Aylmer, Ontario-based WeedMD, a licensed Canadian cannabis producer, believes that “[t]here is tremendous opportunity for other products and food items, and CBD has the opportunity to be an additive in almost any edible format. I think eventually, we will see a real expansion in the CBD space, but in the near term, it’s going to be limited by the ‘grayness’ that still exists with the legality of edible formats with respect to the FDA.”

Learning Curve

When it comes to marketing and merchandising CBD products at grocery, education is key.

Humming Hemp’s Kelsay notes that “the

The more that customers are educated about CBD and its benefits, along with how and when to use CBD products, the more successful the products will be.”

—Eivan Shahara, The Mint Dispensary

interest and the momentum on these products is too strong to make a supermarket not want to carry such items; it just might take a couple extra educative steps to get in the door.”

“The more that customers are educated about CBD and its benefits, along with how and when to use CBD products, the more successful the products will be,” agrees The Mint Dispensary’s Shahara, noting that “suppliers are looking at different ways to engage with customers — from educational POP displays to communication with in-store pharmacists.”

Sentia Wellness’ Lombardi also stresses “customer engagement through education,” calling it “the most effective way for a supermarket to merchandise and promote CBD products. In-store communication can sway a consumer that may be unsure about purchasing a CBD item and make up for the lack of personalized service that a boutique CBD shop offers.” “[G]rocers that can focus on education [should] have a well-merchandised CBD/hemp section in their natural living category, with prominent signage,” advises Compass Natural’s Hoffman. “For those that don’t have educational resources, stick with the top brands. ... For topicals, create a section in [HBW and/or] natural living to highlight these products. Because they are expensive, some retailers keep CBD products behind glass cases, but, again, service and education are important.”

Regarding placement, Shahara is one of several to suggest that grocers with CBD products in the HBW aisle think beyond that section, explaining that “better positioning on the sales floor, along with opportunities to educate customers, [is] important for awareness and sales.”

“At first, it will be beneficial to merchandise these items together near the HBW aisle,” says Evo Hemp’s Sherman. “Then, when consumer awareness grows, the category will get more spread out across the store, similar to how various supplements like turmeric can be found throughout the supermarket.”

Richard Reichmann, CEO of Spring Hill, Fla.-based Healthy Green CBD Oil, observes: “By far the best way to merchandise CBD products would be at the checkout counters as impulse items. Most people would pass them by in an aisle unless they went into the store for that specific item.”

On the subject of promotion, Kelsay urges grocers: “Don’t be afraid of ‘hemp’; it’s not a bad four-letter word. ... Pair it with the words that illustrate its strong nutrient and earth-friendly profile, using known and trusted [terms] like high-protein, nutrient-dense, plant-based, whole food-sourced, sustainable or superfood.”

However, Andrew Amend, founder and co-CEO of San Francisco-based edibles company Manzanita Naturals, warns grocers “to know their source and know their suppliers by working with responsible suppliers who can validate their claims. The instinct might be to load shelves with CBD products, but grocers should seek out reputable companies making products.”

“It is also important to have the right product price points to encourage trial,” notes Lombardi. “A new customer isn’t ready to purchase a month’s supply of CBD. I’d advise any retailer to have the right product, from the right manufacturer, at the right price, to drive trial and sell-through.”

Getting the prices right should become easier, though, as products continue to come on the market. “As more supply becomes available, prices also should come down,” predicts Hoffman.

Manzanita Naturals' edibles portfolio includes cannabis-infused beverages.

Catch the Next Wave

Beverages and other edible products, in particular, are poised to blow up in the cannabis space, and grocers may be able to capitalize on those consumer demands.

According to Shahara, “Emerging technology and trends in water-soluble products hint that the next wave of CBD products will appear in the beverage aisle.” He goes on to note, however, “What items you’ll be able to find in the grocery store with CBD in them next will ultimately be up to lawmakers and the FDA.” “We are seeing a lot of growth in many categories such as water, energy drinks, bars and many more,” notes Lombardi. “Consumer preference and FDA support will ultimately determine the categories that survive.”

Despite the uncertain outlook for some items, Lombardi adds: “These products will continue to grow in variety and type, and grocers will [have] the opportunity to expand their inventory to meet consumer demand and revenue growth. The more variety in CBD product and price points offered, the more margins can expand.”

“We are going to see a huge expansion of topical formats and an explosion on the CBD side in beverages and various ingestible formats,” observes WeedMD’s Merker. “Although it’s hard to predict a timeframe for this, it will ultimately evolve to a place where other cannabinoids become more prevalent, inclusive, in the long term, of products containing THC.” Speaking of other cannabinoids, Evo Hemp’s Sherman points out: “As consumers and retailers become aware of the benefits of CBD, we will start to see the expansion of other cannabinoid offerings such as cannabinol (CBN), cannabigerol (CBG) and cannabichromene (CBC). The different cannabinoids offer various benefits to the consumer and will provide a more functionally targeted experience.”

“I would go as far as to say that I think CBD and other cannabinoids will be the greatest-selling ingredients of our lifetime,” asserts Merker. “Bigger than [essential fatty acids], calcium, vitamin C — you name it. It will be everywhere and change a lot of lives for the better.”

PROGRESSIVE GROCER Februar y 2020

41

SOLUTIONS

Protein

Market Disruptors

Alternative Bites

Those who manufacture plant-based items agree that these products are disrupting the market.

“Plant-based meal solutions and starters not only provide alternatives to animal protein, but create a new category of food products and additional forms of protein that can feed future generations,” asserts Doug Hines, founder and chairman of Nashville, N.C.-based Atlantic Natural Foods, adding that this isn’t just a flash in the pan. “Sustainable protein sources are a requirement — it is not up for debate. With consumers catching on to these demands for change, more and more consumers are adopting the plant-based lifestyle, with the goal of joining in on the movement for sustainability, rather than adopting the latest trend.”

Ryan Jahnke, VP of Bloomfield Township, Mich.-based ARKK Food Co., which produces the new Skinny Butcher plant-based line, underscores the staying power of plant

GROCERS' ME AT DEPARTMENTS ARE DESTINED TO E VOLVE INTO PROTEIN DEPARTMENTS, AS PL ANTBASED ALTERNATIVES PROMISE HE ALTH, WELLNESS AND SUSTAINABILIT Y. By Lynn Petrak Key Takeaways nce upon a time, there was a meat department with butchers clad in red-stained white aprons, and seas of foam trays.

While that scene still exists in many stores today, the grocer's meat department is evolving into a broader-based protein department, in part because of the widening variety of animal proteins and the growth of case-ready meal solutions, but also due to the steady influx of plant-based proteins.

Those proteins, typically designed to mimic animal-based proteins in format and applications, have increasingly found a home in the traditional meat case.

This change stems from shifting consumer eating habits as much as from innovations by plant protein companies seeking to snare sales from a growing number of flexitarian consumers.

“Plant-based protein companies such as Beyond Meat have led the charge in fundamentally repositioning the entire meat grocery department into a protein department,” notes industry analyst Amanda Lai, senior consulting associate for Chicago-based McMillanDoolittle LLP. “As a result, dominant players in the meat industry, such as Tyson and Smithfield, were forced to react and have now moved into the plant-based meat sector, reflecting the transition of meat alternatives from being niche to becoming mainstream. As large suppliers begin requesting their plant-based products be placed adjacent to their existing meat products, it will very quickly set a precedent to develop a new subsection within the meat department for meat alternatives.”

42

progressivegrocer.com

The meat department is evolving into a protein section offering plant-based items as well, due to shifting consumer eating habits, concerns about sustainability, and product innovations created to appeal to the growing number of flexitarian consumers.

Despite the rise of plant-based meat alternatives, consumers likely won’t entirely forsake meat for plant protein, but enjoy either at various times, which means that grocers will need to figure out the right proportion of animal to plant proteins in their respective meat cases.

As the number of meat alternative options available increases, their success will hinge on consumer acceptance of such products on the grounds of whether the items provide a satisfactory cooking experience and taste good.

It’S A FaMiLy ThInG. As any busy family knows, the real star of the show at mealtime is the food, best accompanied by the sound of laughter and the stories of the day or memories of the past.

That’s why today’s meat case and freezer aisles feature more branded options for shoppers looking for something favorite and familiar, yet different.

DiD YoU KnOw....

– PaSs tHe BuRgErS –

55%

The Wahlberg family understands a thing or two or three about making good food, sharing good times and creating strong performances. That’s why the trio of renowned Chef Paul Wahlberg, actor Mark Wahlberg and actor/musician Donnie Wahlberg pooled their collective talents to create Wahlburgers, a thriving group of restaurants and an equally thriving line of retail products developed in partnership with ARKK Food Company.

A majority of consumers – – eat burgers at home or away from home at least once a week. And, growing at 10 times the rate of other meats, premium beef is a driver for retail growth.

– CeRtIfIeD QuAlItY – – NeW PrOdUcTs & CoMiNg AtTrAcTiOnS –

Available at grocery stores around the country, the Wahlburgers line includes angus beef products made with a proprietary blend of brisket, short rib and chuck chosen from the highest quality cuts. Offerings are available in different forms for varietyseeking shoppers to enjoy with their families: Ground Beef, Pre-Formed Patty, PreFormed Beef Sliders and Brick-Pack.

WhAt’s iN a nAmE? NeW CeRtIfIeD AnGuS BeEf WaHlBuRgErS

R

Meet the newest members of the Wahlburger family: Kobe-Style Blend Patties and Prime Blend Patties (both available now) and upcoming additions like Wahl Sauce, which will be available in the Spring.

With today’s shoppers seeking more variety, the Wahlburgers brand also includes three frozen patty blends: Angus Beef Original, Angus Beef Bacon, Cheddar & Jalapeno, and Turkey Burger Patties with Herbs and Stuffing.

Based on consumer and retailer interest in Certified Angus Beef®, the Wahlburger family of products recently expanded to include a line of Certified Angus Beef® products, including fresh Ground Beef, Pre-Formed Patties and Sliders, along with signature Craft Blend and House Blend patties.

Packages feature the Certified Angus Beef seal as well as the stamp of approval from the Wahlberg brothers.

LeArN mOrE aBoUt aDdInG tHeSe tOp pErFoRmErS by visiting https://arkkfood.com/wahlburgers/ or calling 248.484.4050 today.

wahlburgers

SOLUTIONS

Protein

As large suppliers begin requesting their plant-based products be placed adjacent to their existing meat products, it will very quickly set a precedent to develop a new subsection within the meat department for meat alternatives.”

—Amanda Lai, McMillanDoolittle LLC proteins. “The longevity of plant-based meats is real because the factors driving demand are wide-ranging,” notes Jahnke. “You have a mix of consumers that may already be vegetarian, looking to reduce their red meat intake, seeking out cleaner food products and focused on climate change impact. Those consumers do not make up a small batch — this is the majority of the market.”

That’s the million-dollar question: Is this something fundamental with long-lasting effects for grocers? “I classify the world into trends and fads that come and go,” observes Jim Hertel, SVP, analytics client development at Winston-Salem, N.C.-based Inmar. “I think this is a trend. It will be with us for a good while, and maybe forever.”

The Pros of Proteins Based on sales data and consumer research, the case for a balanced protein case remains strong. By Lynn Petrak

A

nimal meat is still big business and a consumer staple. The U.S. Department of Agriculture predicts that red meat and poultry per capita consumption will reach 223.9 pounds in 2020, up from 222.8 pounds in 2019. Meat production in the United States was projected to top 103 billion pounds, up 1.3% from the previous year.

While comparatively much smaller, the growth in plantbased meat alternatives continues at a rapid pace. According to findings from Chicago-based SPINS, sales of meat alternatives jumped 37% from 2017 to 2019, and IRI data, shared

by Arlington, Va.-based FMI - The Food Industry Association in a recent webinar on plant-based shoppers, reveals that plant-based alternatives, chosen for health and diet reasons, have made their way into 53% of U.S. households.

A Crop of New Products

As they weigh what to add to their protein cases, food retailers have more choices than ever.

Plant-based proteins are offered by several plant-based companies as well as by established animal protein companies.

Breakout companies like Redwood City,

44

progressivegrocer.com

Striking a Balance

The proportion of plant and animal proteins in the meat/protein department depends on the proportion of those products in people’s diets. Many experts agree that it isn’t an all-or-nothing proposition — consumers likely won’t eschew meat for plant protein entirely, but instead balance out their consumption.

“There is a massive opportunity to reach an emerging, more mainstream customer who does not necessarily view plant-based products as an abandonment of meat altogether, but perceives it as a broadening of their existing eating habits,” says Lai. “These are customers who would happily shop for meat and plant-based alternatives side by side in the meat department, and represent a larger piece of the pie that retailers could target when it comes to plant-based meats.”

Hertel also emphasizes this having-your-meat-and-eating-it-too behavior. “I think the question — and it’s also my own hypothesis — is that this won’t be as much of a swapout of animal-based protein as it is that extra consumption of plant-based protein,” he predicts.

The same health-and-wellness halo that encircles organic, natural and sustainably produced proteins

Calif.-based Impossible Foods and El Segundo, Calif.-based Beyond Meat Inc., which stirred interest in the foodservice sector, are leaders in this new part of the meat case.

Other plant-based brands are making inroads in the perimeter and beyond, such as Atlantic Natural Foods, Sweet Earth Foods, Happy Little Plants and Good Catch, with products ranging from plant-based bacon to ground-beef-like crumbles to plant-based tuna.

Meanwhile, traditional protein companies that want to maintain their presence in the retail meat case — albeit in a different form — have also sown seeds of growth with meat alternatives.

Tyson Foods, which previously sold its stake in Beyond Meat, went on to invest in Wantagh, N.Y.based New Wave Foods, producer of a plant-based shellfish alternative. Last year, Springdale, Ark.-based Tyson began working on its Raised and Rooted line of plant-based meat alternatives, including a blended burger patty made with beef and pea protein, and an alt-chicken nugget containing pea protein isolate, bamboo fiber, egg white and golden flaxseed.

Virginia-based Smithfield’s Pure Farmland brand includes plant-based burgers, meatballs, breakfast patties and ground beef “protein starters.”

Continued on page 46

SOLUTIONS

Protein

covers plant-based meat alternatives, another catalyst for a continued presence in the traditional meat department. Many packages of plant-based meats also carry symbols for certifications such as non-GMO, organic, gluten-free and vegan.

“It’s on that same vector,” affirms Hertel. “Plant-based is viewed as a healthy alternative and probably a sustainable alternative — at least that’s how people think about it as they’re more thoughtful about what they put in their bodies.”

Adds Lai: “New plant-based brands are attractive to consumers because they are trendy, emerging and often mission-driven, disrupting the market at a time when consumers are increasingly concerned about topics such as health and wellness, climate change, sustainability, and animal welfare.”

More Options

Given these many new and often related drivers, grocers are taking a hard look at the protein case to provide more options to shoppers while maximizing space and sales.

“Even as product offerings and food trends have changed over time — organic, natural, non-GMO, free-from, plant-based — the longtime challenge for retailers remains the same: Space within stores is finite, and grocers must be strategic in how they allocate their space,” points out Lai. “Retailers must carefully consider which products make it into the case based on past product performance, but must also look to the future and select products

The Pros of Proteins Continued from page 44

Reflecting consumers’ parallel interest in sustainability, the items come in trays made with 50% recycled materials.

Dovetailing into another consumer trend, some brands are distinguishing themselves with value-added and convenience-oriented meals featuring plant proteins. Atlantic Natural’s Loma Linda brand, for instance, includes plant-based meal solutions like Spicy Pad Thai, Thai Green Curry and Chipotle Bowls, and plant-based meal starters such as taco filling and sloppy joe, while Bloomfield Township, Mich.-based ARKK Food Co. offers the Skinny Butcher line of fresh ready-to-eat meals.

The Case for Proteins

Even if grocers aren’t yet calling their meat departments protein departments, many of them are dedicating parts of their meat cases to plant-based options.

For example, Chicagoland banner Mariano’s calls out meat alternatives with green signage and a section in its refrigerated meat case. For its part, Mariano’s parent company, the Cincinnati-based Kroger Co., has launched Simple Truth Emerge: Plant Based Fresh Meats, including fresh burger patties and grinds.

However, there have been some efforts to keep plantbased products apart from traditional meats, both to help shoppers find them more easily and to defuse pushback from

46

progressivegrocer.com

This won’t be as much of a swap-out of animal-based protein as it is that extra consumption of plant-based protein.”

—Jim Hertel, Inmar based on where overall industry trends are heading.”

The look of the meat case will be ever-evolving, agrees Hertel. “As this starts to get into more cuts and proteins, it will be interesting to see if it will stay as, ‘Here is all the plant-based products,’ or if retailers will start to weave it in, like, ‘Here’s the chicken and alt-chicken, and here’s the beef and alt-beef,’” he muses. “I suspect for a long period of time, it will be the plant-based protein section, which makes it easier for consumers to navigate.”

Like any retail space, the ultimate success of meat alternatives now transforming the traditional meat case hinges on acceptance. “The actual size, in terms of the share of the ‘old’ meat department that plant protein takes on," Hertel says, "will be a function of how the products taste, how they cook and what the eating experience is like.”

animal protein brands and trade associations that don’t — or won’t — subscribe to an “if-you-can’tbeat-’em-join-’em”philosophy.

It’s no easy task for food retailers to navigate this new normal. As Amanda Lai, senior consulting associate for Chicago-based McMillanDoolittle LLP, observes: “Butchers and meat department leaders must juggle relationships with multiple customer segments as they strategize how to stock and merchandise their stores. Retailers need to maintain their relationships with the country’s largest meat suppliers, who are looking to push their versions of plant-based meats into stores, but are also being squeezed on space by the entry of plant-based newcomers.”

FRESH FOOD

2020 Retail Meat Review

Raising the Stakes RE TAILERS REPORT ROBUST ME AT SALES, BUT PL ANT-BASED PRODUCTS ARE NIPPING AT THEIR HEELS.

By Jim Dudlicek

espite the growth of plant-based alternatives, grocery retailers are still bullish on animal proteins.

And that confidence appears to be growing, according to the results of Progressive Grocer’s exclusive survey of supermarket operators.

Nearly half (48%) of retailers responding to PG’s survey said that their meat sales rose during 2019, up from 42% a year ago. In a sign that the economy has improved for consumers, only 9% of respondents told us that their meat sales declined in the past year, compared with 27% the year prior.

For 2020, 66% of retailers responding to the survey say that they anticipate their meat sales to increase this year, with the rest expecting sales to remain constant and none predicting a decrease.

Kent Horejsi, meat manager and buyer for El Rancho Market, in Pismo Beach, Calif., says that his store’s meat sales are projected to grow by 5% in 2020.

‘We are attracting growth with all-natural, humanely raised, sustainability practices, non-GMO, no antibiotics, no-hormones-ever partners,” Horejsi tells PG. “We’re educating the public on new cuts, cooking methods and maintaining center plate.”

From a topline perspective, meat was fairly stable in 2019, with moderate dollar growth (1.5%) driven by price increases (2%), says Meagan Nelson, associate director at New Yorkbased Nielsen. “But as you dive deeper, there are shifts.”

One of the most notable: the decline in hams overall, with a 4% drop in dollars and nearly 9% in pounds. “What was interesting in 2019 was the growth in more processed meat, with fully cooked up 5.1% and 2.8% in processed meat,” Nelson notes.

“However, fresh meat is still the main driver of the meat department, making up 69% of sales, and had moderate growth.”

Of the four key proteins, beef and chicken held strong, with growth in dollars, and beef seeing growth in pounds (chicken pounds were flat), Nielsen reports. Both pork and turkey saw a slip in pounds from 2018, with turkey down 4.8%.

Beefing Up Sales 48

progressivegrocer.com

EDITOR Progres ’S NOTE: sive Gro cer ’s com Retail S panion eafood Review will app ear in April 20 the 20 issue.

FRESH FOOD

2020 Retail Meat Review Trending health benefits may be contributing to the boost in beef. According to Nielsen’s “How America Will Eat” report, released last December, fresh beef ranks fourth on the list of “top brain foods” considered beneficial to anxiety, depression, brain function and sleep, with 6% growth on sales of $919 million for the year ending Sept. 28, 2019.

To be sure, beef ranks prominently among products that have seen increased demand in the past year. More than half (55%) of PG survey respondents report higher sales of premium-brand beef, 57% report selling more grass-fed beef, and 16% report selling more dry-aged beef.

And despite the growth in plant-based meat alternatives being driven by younger consumers, Millennial eating habits are most influenced by practical needs, including stress (30% versus 23% for Gen X, 15% for Baby Boomers and 9% for the Greatest Generation) and mental health benefits (10% Millennials, 5% Gen X, 3% Boomers, 2% Greatest Gen), according to Nielsen’s Homescan U.S. survey of 19,988 consumers in July 2019.

Manufacturers and retailers also have an opportunity to promote the price efficiency of certain fresh meats as healthy protein options, Nielsen advises. “Where trendy and convenient protein sources like jerky (25 cents per gram), nutrition bars (20 cents per gram) and nuts (13 cents per gram) suit on-the-go consumers, they are sold at six to 12 times the price per gram of chicken, pork and turkey (2 cents per gram, respectively),” the report says. “For the 55% of Americans who prioritize high-protein content when deciding what to buy, this message of protein price accessibility could draw renewed attention to traditional meat-based goods.”

Meanwhile, convenience is also driving sales, as half of survey respondents report a boost in sales of smaller portions or pack sizes, and 68% say that they’ve sold more value-added items like seasoned and marinated meats.

Retailers also report that promotions like mix-and-match bundles and cross merchandising within the store have been effective in driving meat sales.

Planting Their Flag

Plant-based meat alternatives continue to make inroads into the meat department as retailers respond to the growing interest in, and demand for, these products.

50

progressivegrocer.com

Year-Over-Year Meat Department Sales

9%

27%

48

%

CURRENT

YEAR AGO

43% Increase

Stay the same

31%

Decrease

Sales Projected for 2020

34%

42%

66% CURRENT

2%

62%

YEAR AGO

36% Increase

Stay the same

Decrease

Effectiveness of Promotional Activities Rated on a scale of 1-6, where 6 = extremely effective

Product Demos/Sampling Events Temporary Price Reductions BOGOs Mix-and-Match Bundles (i.e., four for $20) Online Marketing Point-of-Purchase Information Cross Promotion Within the Store Flash Sales Social Media Direct Mail

Current

Year Ago

4.7 4.6 4.4 4.3 4.1 4.0 4.0 3.9 3.8 3.4

4.2 4.5 4.6 3.9 4.0 4.1 3.9 4.2 4.2 3.6

Source: Progressive Grocer market research, 2020

METHODOLOGY Progressive Grocer’s Retail Meat Review survey was fielded online by EIQ Research Solutions in November and December 2019 to supermarket retailers involved in the meat/seafood category. A total of 44 responses are included in these results, split between operators of fewer than 10 stores, 10 to 99 stores, and 100 or more stores. By title, 60% are from the c-suite (owner, CEO or executive over fresh departments); 23% are category managers, merchandisers or buyers; and 11% are store managers, with the remainder serving in various capacities, including marketing, consulting and analysis. Among the respondents, meat represents about 20% of their total sales.

There is a Menace on Your Shelf Harmful bacteria is taking over your produce section

Use the new ModoShelf™ – Eradicating 99% of Shelf-Born Bacteria

Stainless Steel Frame

Easy to Clean

Removable Shelf Tiles

Rustproof frame is long lasting and guarantees food safety

Antimicrobial ABS tiles are 100% dishwasher safe

Easy change-out for fast cleaning

Studies show that there is more bacteria growing on your produce shelves than on a your toothbrush, your car steering wheel, and even a dog’s food bowl. This puts your products and your customers at risk.

ModoShelf™ solves this problem with an NSF certified, anti-microbial surface that kills 99% of shelf-born bacteria. It’s modular, easy to setup, and dishwasher safe. Contact siffron to see how ModoShelf can protect and transform your produce section.

NEW ModoShelf™ is NSF Certified and effectively blocks bacterial growth on shelves For more information or to set up a test of fresh area solutions for your business, call 800-422-2547 or visit siffron.com

¨

FRESH FOOD

2020 Retail Meat Review Among survey respondents, 77% carry plant-based meats, up from 46% a year ago, and 67% merchandise them in the meat department alongside traditional animal proteins. Nearly 60% report that they’ve been carrying plant-based meats for less than a year, with a quarter stocking them for the past one to five years. And a whopping majority — 94% — say that sales are trending upward.

Southern California grocery store chain Gelson’s Markets became the first grocer to carry the plant-based Impossible Burger in its fresh and frozen meat cases, as progressivegrocer.com reported last September. Gelson’s plans for the product extend beyond the meat case, however.

“People who shop at Gelson’s know and appreciate great food, and the Impossible Burger is going to become a go-to favorite in home-cooked meals, from dim sum to barbecue,” says Rob McDougall, the Encino, Calif.-based company’s president and CEO. “We’ll also be unveiling delicious new recipes featuring Impossible in Gelson’s Kitchen and offering an Impossible Burger at our Wine & Tapas bars.”

In January, The Kroger Co. started rolling out Simple Truth Emerge: Plant Based Fresh Meats, an expansion of the grocer’s natural and organic private brand. The new line offers fresh, pea protein-based meatless burger patties and grinds, an addition to the grocer’s plant-based options added last September.

And last spring, Bristol Farms’ Yorba Linda, Calif., store rolled out plantbased meats and entrées at the butcher counter, according to San Diego-based Before the Butcher, which supplies the store with plant-based chicken burgers and breakfast sausage, as well as items like no-meat taco mix, vegetarian meatloaf, vegetarian stuffed cabbage, chorizo-stuffed potatoes and a Mediterranean meatless patty made by Bristol Farms chefs using Before the Butcher’s ground products.

What percent of your store sales comes from the meat department?

20%

21.9% 20% 17.3%

15

10

5

0

Less than 10

10-100

More than 100

Number of Supermarket Stores

What percent of your meat sales comes from case-ready products?

54.4%

50% 40

42.8% 38.5%

30 20 10 0

Less than 10

10-100

More than 100

Number of Supermarket Stores

What percent of your meat sales comes from full-service products?

60%

Meat with European quality

61.5%

57.3%

50 45.6%

40 30 20 10 0

Less than 10

10-100

More than 100

Number of Supermarket Stores

52

progressivegrocer.com

Source: Progressive Grocer market research, 2020

Do your stores have butchers/ meat cutters on site?

11%

How well do you make shoppers aware that you have an in-store butcher as a point of differentiation?

5%

15%

No

33%

89% Yes

Extremely well

46

%

Very well Moderately well Not very well

Source: Progressive Grocer market research, 2020

PROGRESSIVE GROCER Februar y 2020

53

FRESH FOOD

2020 Retail Meat Review Do you carry plant-based meat substitutes?

18%

5

%

Which of the following best describes where you merchandise plant-based meat substitutes (e.g., Beyond Meat, Impossible Burger) in your store(s)?

No, and we have no interest in carrying them

7

26%

Not currently, but we would consider it

%

Elsewhere in the store, but would prefer them in the meat department

Elsewhere in the store

67%

77% Yes, we currently carry them

Are your sales of plant-based meats ‌

In the meat department alongside traditional animal proteins

94%

Increasing

6%

Source: Progressive Grocer market research, 2020

Meat Department Category Performance

Decreasing

Total U.S., 52 Weeks Ending Dec. 28, 2019

Pounds Average Percent on Retail

Dollar Pounds Pounds Promotion Average Percent

Dollars per Percent Percent Percent on Change vs.

Retail Change vs.

Supercategory Store/Week Change Pounds Change Promotion Year Ago Price Year Ago

Fresh Meat Beef Chicken Pork Turkey Lamb Other Meat Bison Veal Fowl & Exotics Meat Alternatives Mixed Proteins Remaining Protein

$47,694,943,798

$25,796,209,403 11,473,770,610 6,571,755,409 2,442,365,917 430,297,394 375,344,562 164,071,195 145,407,193 118,798,680 74,585,986 53,630,573 48,706,876

Processed Meat

13,328,170,633

1.6%

1.9 1.6 -0.0 -0.9 2.2 12.5 1.7 -6.6 2.2 166.8 6.1 4.7 2.8

14,059,766,800

5,349,192,669 4,930,548,632 2,360,773,609 1,125,408,344 60,745,152 122,054,222 18,894,984 21,492,827 42,505,211 7,555,188 11,434,207 9,161,756 3,514,248,874

-0.3%

40.0%

0.1

0.3 0.0 -0.7 -4.8 0.5 17.2 0.8 -9.2 -0.5 136.7 5.4 2.5

38.0 37.9 45.8 49.6 26.5 31.2 22.7 20.7 26.8 29.9 26.3 21.0

-0.5 -0.5 2.1 2.0 -0.6 7.0 1.9 0.3 3.6 10.6 4.5 -6.4

1.1

$3.39

4.82 2.33 2.78 2.17 7.08 3.08 8.68 6.77 2.79 9.87 4.69 5.32 3.79

1.8%

1.6 1.5 0.7 4.1 1.7 -4.0 1.0 2.8 2.7 12.7 0.7 2.2

37.2

-2.0

25.5

-2.0 4.55 2.5

1.6

Lunchmeat

5,112,904,827

Ham

1,722,062,144 -4.0 627,709,554 -8.7 51.0

Fully Cooked Meat

1,037,973,488

5.1

218,222,866

3.6

30.3

-0.9

4.76

1.4

Misc. Meat

273,172,466

-1.1

41,241,106

0.5

58.9

-0.1

6.62

-1.6

Total Meat

$69,169,227,356

Source: Nielsen Perishables Group

54

progressivegrocer.com

-0.5 1,123,788,467 -2.9

1.5% 19,584,977,666

-0.4%

38.9%

0.5 2.74 5.1

-0.4

$3.53

2.0%

beefexperts &pork

the

TM

The from A-to-B experts Strategically located coast-to-coast to provide outstanding service coverage.

TheBeefAndPorkExperts.com Chairman’s Reserve® Meats | Open Prairie® Natural* Meats | Star Ranch Angus® Beef | ibp Trusted Excellence® Brand Reuben® Corned Beef | Supreme Tender® Pork | Case Ready Variety Meats *

Minimally processed. No artificial ingredients. ® ™

/ /© 2020 Tyson Foods, Inc.

FRESH FOOD

2020 Retail Meat Review The NPD Group’s “Future of Plant-Based Snapshot” study, reported last November, found that Millennials, born between 1981 and 1996, are the top consumers of plant-based meat alternatives.

Gen Xers, born 1965 to 1980, are also a core consumer group of plant-based meat alternatives, and because many in this group are parents of Gen Zs, born 1997 to present, they’ve raised their Zoomer kids on plant-based beverages and foods. Boomers are decelerating their consumption of plant-based meat alternatives, but are the top consumers of plant-based dairy alternatives.

NPD’s research shows that 90% of plant-based users are neither vegetarian nor vegan, further solidifying the growth of flexitarianism.

And a Michigan State University (MSU) “Food Literacy and Engagement” study, released last October, delivered these key findings: 35% of Americans have consumed plant-based meat in the past year; 90% say they would do so again.

42% haven’t consumed plant-based meat, but are willing to try it.

How long have you been carrying plant-based meat alternatives?

60% 59% 50

40

30

20

30% are unwilling to try it.

Of consumers already eating plant-based meat, 48% are under 40 years old and 27% are over 40.

Looking ahead to the next frontier, cell-cultured meats, the MSU study revealed that 35% of American consumers say they’re likely to buy cell-cultured meats; 49% of these consumers are under 40 years old, and 25% are 40 and older.

16%

14%

10

11%

0 Less than a year

1-2 years

3-5 years

More than 5 years

Source: Progressive Grocer market research, 2020

Register today! www.meatconference.com Meat 2020 8x5.125 Ad.indd 1

12/13/19 7:21 AM

FRESH FOOD

Produce

Millennials Meet Their Match THE MUCH-TOUTED DEMOGR APHIC AND ORGANIC FRUITS AND VEGGIES ARE MADE FOR E ACH OTHER.

By D. Gail Fleenor

rganic produce may be a small part of produce sales, but it’s important to Millennials, the largest group of consumers and organic shoppers.

Ask customers about organic produce, and most young shoppers will say they think it’s healthier, cleaner and safer than traditional produce, while many older shoppers may say it’s more expensive.

Both groups of customers are correct. Younger shoppers are the ones with bigger households, including children to feed, and these shoppers want to give their offspring healthy, clean produce. These consumers mostly fall within the Millennial group, the largest sector of consumers with growing families.

So when a produce department is searching for space for that new organic item, it helps to remember that organic produce shoppers are valuable because they rack up above-average weekly spending and grocery trips. To put it more succinctly, they’re the spenders.

Key Takeaways Millennials, the largest group of consumers with growing families, are also the biggest cohort of organic shoppers, racking up above-average weekly spending and grocery trips.

Organic remains a growth driver for produce, according to FMI’s 2019 “Power of Produce” report.

Messaging that appeals to families, cross marketing of organic produce with locally grown and valueadded items, providing recipes and detailed nutrition information, and presenting the “story” of where the produce comes from are all ways to encourage Millennials to purchase even more organic produce.

58

progressivegrocer.com

3-tier, Two-Truckload, 42-Pallet Capacity TarpLess®SX

TarpLess SX ®

Take your ripening operation to new heights with TarpLess®SX, the next generation TarpLess® ripening room with Fruit-Centric™ ripening – exclusive technology that uses direct feedback from the fruit to deliver all new levels of efficiency, flexibility and control.

Give your customers superior, high quality fruit that looks better, lasts longer and weighs more, backed by the proven reliability, guaranteed uniformity and unbeatable profit of the world's number one ripening room system.

Available Exclusively From:

The Global Leader in Produce Ripening Room Design and Construction www.GoTarpLess.com

FRESH FOOD

Produce

How Popular is Organic Produce?

Organic continues to be a growth driver for produce, according to the 2019 “Power of Produce” report from Arlington, Va.-based FMI - The Food Industry Association. Organic produce is a small part of the entire produce category, at 6.9%, according to the report, but sales gains are driven by increased household penetration, growing availability and increased purchases among buyers.

The FMI survey found that while 61% of shoppers expect to buy about the same amount of organic produce in 2020, 30% expect to expand their organic produce purchases. Organic produce is driving new dollars in categories around the store based on increased availability in terms of SKUs and channels offering organic variety, increased purchasing among current users, and growing household penetration, the FMI report notes.

“Organics are a tricky one,” admits Terry Esteve, produce and floral director for New Orleans- and Baton Rouge, La.-based Robért Fresh Markets and Lakeview Grocery. “We have three stores that do really well with organics, and three that don’t do much. One store is a younger, hipster crowd, with a big mix of gay couples. Both these groups have good jobs and disposable income. They really do not look at price. A second store has Millennial growing-family-group shoppers, and the third store is close to Tulane and Loyola universities.” Esteve notes that the three other

Most of our organic shoppers are families at this point. I think we need to continue to create demand through messaging on packaged organics. Characters [for children] always seem to create demand.”

—Jeff Cady, Tops Markets LLC stores have older customer bases that are more “ad shoppers.” He explains, “On any given day, this group probably frequents us and two of our competitors, looking to save a dollar.”

Esteve is in the company’s stores often. “Our customers are pretty vocal and always let us know what they want — sometimes more than we want to know — but we go out of our way to get what they want,” he observes. “One of my managers had a customer request for organic gold beets, because the customer juices them. It turned into us scratching our heads

Organic Shopper Profile Young kids living at home ages 0-12

More likely to purchase organic produce Core locally grown produce shoppers

Live in urban areas

Online produce shoppers

$75,000$125,000 household income

Farmers’ market shoppers

Kids living at home

$125,000plus/year household income

3-4 persons living in household

3-plus grocery trips per week

60

Millennials

progressivegrocer.com

Spend more than $150/ week on food

Source: FMI’s 2019 “Power of Produce” report

one day to selling four to five cases a week. Always try to take care of requests, because you never know.”

Robért Fresh Markets’ best organic sellers are apples, tomatoes, romaine hearts, broccoli and celery hearts. According to Esteve, Organic Girl salads are a “huge” seller as well.

Meanwhile, according to Jeff Cady, director of produce and floral for Williamsville, N.Y.-based Tops Markets LLC, which comprises 169 supermarkets, along with an additional five supermarkets operated by franchisees under the Tops banner, the chain’s top organics are berries, bananas and packaged salads.

Melissa's organic peeled/steamed red beets and organic steamed lentils are tops with Millennials.

Who Are Millennial Organic Shoppers?

Just as it took a while to learn who Baby Boomers are, Millennials are still a mystery to many. This group is generally pegged as ages 18 to 35, or 22 to 37, depending on the source you read. We hear about this demographic so often because it’s not only the largest group of organic consumers and organic produce consumers, but it also has the largest number of parents of young children.

Because of that, Millennials are most likely to consider their kids’ health when shopping. Currently, they’re the group most interested in cooking, planning meals and even reading labels to make sure they’re purchasing food with the least additives. This is also the group most likely to do grocery shopping online.

PIG GRIPPY MAT ®

Millennials don’t settle for just any food in their shopping carts, according to a Whole Foods Market national survey conducted independently by YouGov in 2019. The survey found that this group is serious about what foods they buy. In fact, 70% spend more on food than they do on travel. Most consider themselves to be “adventurous” eaters, and 60% make an effort to cook new dishes. This group wants to know the story behind how their food is produced or grown.

In the Whole Foods survey, the biggest trend found

®

ELIMINATE RISKS WITH THE MAT THAT STICKS.

Get a FREE Grippy Mat Sample Kit today at grippymat.com or call 1-855-474-7791.

One Pork Avenue • Tipton, PA 16684

PROGRESSIVE GROCER Februar y 2020

61

FRESH FOOD

Produce

was that Millennials want to make “informed purchasing decisions.” Food quality is a priority for this group, with 80% saying that they’re willing to pay more for quality. Additionally, transparency in food sourcing is important to more than 65% of those surveyed. In fresh organic food such as produce, almost 70% of Millennials read labels more closely than they did five years ago, and half of those surveyed buy more organic food than five years ago. Eating healthfully is a normal part of each day for Millennials.

Merchandising Organic Fruits and Vegetables

When marketing organic produce, Robért’s Esteve notes: “I’ll throw an organic produce item in the ad every now and then, but don’t see any real sales lift on that item. I think what works best for us is to merchandise conventional and organic items right next to each other or on the shelf above, with shelf strips to draw attention to it.”

He adds that he always works on a lower margin for organics.

“Costs are better now on organics than they’ve been in the past, but there’s still a big difference,” Esteve observes. “Retails can scare people away and cause more shrink. I try to stay within 75 cents to $1 more on an organic item then a conventionally grown item, just to keep it moving, and maybe convince a shopper to go organic when they see the price isn’t that much higher.”

“Most of our organic shoppers are families at this point,” notes Tops’ Cady. “I think we need to continue to create demand through messaging on packaged organics. Characters [for children] always seem to create demand.” The adults understand the better-for-you message associated with the product, so it’s a win-win, according to Cady. Organic produce marketing at the grocer includes a Tops Natural and Organic Market section on its website, and a magazine “featuring the newest and most popular natural, organic and specialty

items” each month with coupons, he notes. The magazine is also online, and both the publication and the website feature organic items besides produce.

Merchandising organic produce is valuable time spent. Cross marketing within the department of organic produce with locally grown and value-added items can bring additional sales, since there's a high crossover in interest among organic produce shoppers. Value-added produce, which is convenient and saves time by being pre-cut, pre-washed or microwave-ready, appeals to core organic shoppers, who make up 36% of value-added customers according to FMI’s survey.

Other ways retailers can better merchandise their organic produce, according to Rockville, Md.- based Packaged Facts, include: Providing recipes for how to cook or prepare fresh produce items Providing more detailed nutrition information such as calorie and vitamin content for each fruit and vegetable Presenting the “story” of where the produce comes from, including the name of the farm, a photo of the farm and information about the farm’s history Offering unique varieties of produce, and information about what makes these products different Using farmers’ market displays where possible; for organic produce, these markets are competition These moves are likely to attract more Millennials, who, as Packaged Facts illustrates, often “love buying vegetables that are still dirty.”

Marketing Organic Produce to Millennial Shoppers Since Millennials have purchasing power of $1.4 trillion in 2020, according to Forbes magazine, tailoring advertising and marketing to their interests is essential. Millennial shoppers are attracted by different things compared with Baby Boomers — after all, they’ve had contact with the internet and mobile phones all of their lives. Digital media is a given for marketing to this group. Social media, such as Facebook and Instagram, is a strong option, and merchandising by mobile phone is now expected by this group.

Online reviews matter to this group of younger consumers, since most do research before shopping. This doesn’t mean that “old” Baby Boomers don’t research products, but there are more Boomers who won’t touch a mobile phone or go on Instagram than there are Millennials with such habits. According to Cambridge, Mass.based software developer and marketer HubSpot, 84% of customers, and Millennials in particular, don’t trust traditional advertising: They prefer to read the package or Google the item on their phones while standing in the store.

Further, websites are still important for this huge group of younger shoppers.

Companies need to publish quality content on the homepage to attract Millennials, however, rather than just creating a page where customers can land.

62

progressivegrocer.com

FOOD SAFETY

Blockchain

Case for the Trace

Food City will soon be rolling out Mastercard's Provenance Solution in its stores, allowing customers to learn the origins of the seafood they're buying.

BLOCKCHAIN TECHNOLOGY IS BECOMING MORE WIDELY ACCEPTED AS A TOOL FOR BOTH FOOD SAFE T Y AND PRODUCT STORY TELLING.

By Jenny McTaggart

lockchain is moving past its initial hype into a period of broader adoption in the U.S. food retailing industry. A growing number of successful case studies involving both retailers and manufacturers suggest that the distributed-ledger technology has staying power, especially when it comes to the areas of traceability and food safety.

In 2020 and in the next several years, look for more companies to sign on to blockchain projects, while an effort to better evaluate the technology’s impact gets underway.

Walmart’s Early Case for Traceability

In the food safety arena, blockchain first came onto the scene in 2017, when it became known that Armonk, N.Y.-based IBM was developing and testing its IBM Food Trust solution with Bentonville, Ark.-based Walmart to try and achieve faster, more efficient product traceability. (Walmart’s initial pilot with an imported mango was so successful that by last fall, it had mandated all of its leafy green suppliers to join IBM Food Trust.)

Since that time, an impressive list of suppliers and other retailers have signed on to the IBM network – most recently Boise, Idaho-based Albertsons Cos., which began testing the solution last spring by tracing bulk romaine lettuce from one of its distribution centers.

Further, in recent months, blockchain has gained more attention at the federal level: The U.S. Food and Drug Administration has mentioned the technology as just one of the end-to-end digital traceability solutions that it’s studying for its New Era of Food Safety initiative. While the FDA has said that adopting such technology will be voluntary, blockchain will no doubt be a key tool to help the industry usher in a quicker, more effective recall process that could save companies millions of dollars.

“I think blockchain for recalls is really going to cross the chasm,” confirms Ralph Rio, VP of enterprise software for ARC Advisory Group, based in Dedham, Mass. “It has enough traction behind it to become a more routinely used application that has wide adoption.”

Key Takeaways This year and beyond, expect more companies to take part in blockchain projects as an effort to better evaluate the technology’s impact begins.

In addition to perishable products like seafood, shelf-stable products are showing promise in blockchain pilots.

Besides providing traceability in the supply chain, blockchain reduces long delays in shipment and can also be used to track trade promotions, facilitate the payment of invoices and verify that goods were transported as specified, among other applications.

PROGRESSIVE GROCER Februar y 2020

63

FOOD SAFETY

Blockchain

The Beginning of KPMG Origins

KPMG, a global accounting and professional services firm based in Amstelveen, Netherlands, has been piloting a blockchain solution for the past six months, and executives at the company say that they’re starting to see quantifiable results.

“The most suitable use cases in our observations are the ones that we can demonstrate measurable results for,” says Laszlo Peter, head of blockchain services Asia Pacific at KPMG Australia. He shares a few examples without giving actual figures or participants’ names: “Reduce waste by x percent by optimizing the value chain. Extend shelf life by x days with traceable temperature and humidity measurements for a high-margin SKU. Trace a product recall to a specific location and avoid having to dump the whole stock.”

KPMG Origins is the company’s fully managed blockchain platform that includes governance and integration infrastructure for third-party solutions like enterprise resource planning or Internet of Things solutions.

“Specific for supermarkets, we have completed a prototype using a rock melon recalled for a listeria outbreak,” says Peter. “We are also working on a cold-chain automation for product shelf-life extension and waste reduction, and we have a fully integrated ‘smart crate’ solution for fresh food that can track and trace fresh food assets from farm to packing sheds/ripening facilities and distribution centers, all the way to retail shelves.”

Peter notes that some specific challenges have surfaced during the pilots. For one, there are “always information gaps with multiparty participation,” he explains, so KPMG had to design alternatives in some cases. In addition, the company had to spend a lot of time setting up a governance structure and designing rules of engagement for multiparty collaboration.

Topco’s Seafood Tracker

Elk Grove Village, Ill.-based food cooperative Topco Associates began testing a new blockchain solution from Purchase, N.Y.-based Mastercard last fall, following its decision a year earlier to join IBM Food Trust.

Food City, one of Topco’s members, is initially using Mastercard’s blockchain-based Provenance Solution in tandem with Envisible’s Wholechain traceability system to provide better visibility into the ethical sourcing and environmental compliance of the seafood selection at its stores, including salmon, cod and shrimp to start.

Dan Glei, EVP of merchandising and marketing at Food City, which is owned and operated by Abingdon, Va.-based K-VA-T,

More and more, consumers are demanding an understanding of the origins of the food they eat to make more informed purchasing decisions.”

—Deborah Barta, Mastercard

64

progressivegrocer.com

Farmer Connect's Thank My Farmer app lets consumers financially support sustainability projects in the regions where their coffee was produced.

noted in a press release that the solution will help the grocer “pinpoint issues in the food chain during any unfortunate events such as recalls.”

But the technology has an added bonus, as some of the same farm-to-fork information being captured for business needs can be shared on the consumer end. Deborah Barta, Mastercard’s SVP of innovation and startup engagement, says that her company collaborated with Envisible, a Bloomfield Hills, Mich.-based company that enables supply chain visibility in food systems, to address consumer demand for more transparency. “More and more, consumers are demanding an understanding of the origins of the food they eat to make more informed purchasing decisions,” she explains.

According to Barta, the solution is now live in Food City’s supply chain for seafood, and is on track to roll out to grocery stores during the first quarter of 2020.

Consumers will be able to scan the QR code of the product at the counter with a mobile phone’s camera, which will then prompt a browser link that allows them to explore the journey of the items they’re purchasing, all the way back to the fisherman.

From Crop to Cup

While seafood seems like an obvious choice for blockchain, due to concerns over country of origin and counterfeit products, nonperishable products are also showing promise in pilots. Farmer Connect SA, based in Vernier, Switzerland, recently launched a mobile app powered by IBM Blockchain specifically with the coffee market in mind.

“There are fascinating, human stories behind how coffee is being produced, and this information is getting lost,” explains D.J. Bodden, COO of Farmer Connect.

“We’d like it to become normal that when you walk in a store and buy a bag of coffee or tea or chocolate, that you be able to have a connection with the producer and the reality behind the supply chain.”

Farmer Connect developed the app with an impressive number of coffee players, including Beyers Koffie, the Colombian Coffee Growers Federation, J.M. Smucker Co. and RGC Coffee, just to name a few.

Bodden notes that today’s tech-savvy consumers, often with smartphones in hand, are more curious than ever about where their coffee comes from. Providing such information to customers can help create differentiation between brands and even between different

New Kid on the Blockchain

roasting batches, he notes.

Additionally, the Thank My Farmer app lets consumers make a donation to support sustainability projects in the regions where their coffee was produced. “It doesn’t have to be a lot of money,” notes Bodden. “In some of these countries, $1 is considered quite a bit.

And then, once the consumer has helped a specific community, it’s now something they’re tied to, as opposed to being just a generic product on a shelf.”

The app is expected to launch to the general market this spring, he says. At that time, users in the United States and Canada will be able to scan QR codes on 1850 brand premium single-origin coffee.

Other Potential Uses

Produce has been tracked by blockchain from the very beginning, and Newton Square, Pa.-based SAP Industries continues to make progress with one of its initial partners, Chilean berry producer Naturipe Farms, using the SAP Cloud Platform Blockchain solution. Naturipe now regularly employs the solution from the time of harvest, when harvesters stick QR codes on the crates of berries being picked, all the way through the supply chain to retail stores.

“Once at the store, customers can scan these QR codes on their smartphones to see exactly where the berries were grown and learn about sustainability practices from the farm,” explains Lori Mitchell-Keller, co-president of SAP Industries. She notes another advantage for companies using the traceability tool: “Because of border patrol and other supply chain bottlenecks, reporting from blockchain frees up lengthy delays in shipment.”

As blockchain becomes more widely adopted in the industry, companies will likely continue to discover even more uses for the technology. FMI - The Food Industry Association noted in a recent blog that blockchain could also be used to track trade promotions, facilitate the payment of invoices and verify that goods were transported as specified.

Tegan Keele, U.S. blockchain program lead at KPMG U.S., says that her company is seeing interest from supermarkets that want to explore the idea of creating new loyalty programs, or update existing ones, that leverage blockchain-based tokenization to bring additional value to their customers, particularly younger Millennials and Gen Zers.

And Walmart Canada will reportedly soon begin using blockchain technology to track deliveries, verify transactions, and automate payments and reconciliation between the company and its third-party trucking companies.

Meanwhile, the tech industry will continue to hash out the challenges of blockchain interoperability, with the hope that different systems working together could one day have a dramatic impact on food safety.

Ewing, N.J.-based GS1 US, the information standards organization, recently named a VP of blockchain to continue its efforts in educating retailers and other industries about the importance of data quality when setting up and collaborating on blockchain networks.

Kraig Adams comes to the organization after spending more than 25 years at Atlanta-based Coca-Cola North America, where he was most recently the beverage company’s VP of national foodservice distribution. In 2018 and 2019, he was on the executive leadership committee for the Foodservice GS1 Standards Initiative.

In his new role at GS1 US, Adams says that he’ll start by focusing on “three Es” with the group’s members. “We’re going to continue to Educate [the first E] so that our members can better understand how distributed-ledger technology might be a possible solution to help solve a problem they’re running up against with data visibility, whether it’s within their own organization or across trading partners,” he explains.

“To better educate, we want to Explore [the second E] what some of our members are already doing with blockchain technology,” Adams continues. “Is it to support the new era of food safety at FDA? Is it to achieve full traceability around food safety? Is it within the pharma community to make sure prescription drugs or medical devices can be traced? Or it may just be understanding the provenance, or the where, of a product and how it has taken a journey throughout its lifecycle from farm to table.”

The last part of GS1’s work, or the third “E” is Evaluation, notes Adams. “I think there have been some good examples of how members have explored the use of blockchain, but I don’t think we as an industry have been able to truly evaluate the business value,” he says. “We want to ask, did blockchain give the community a better value than what they’re using today? To take it to the next level, we want to really understand the value that comes when different blockchain solution providers begin exchanging data, to really be able to do full traceability across trading partners.”

To achieve blockchain-to-blockchain interoperability, the common language that GS1 provides becomes particularly important, maintains Adams: “When we talk about interoperability, it really is that common language, that identification of the what — or the Global Trade Item Number — as well as the where, or Global Location Number.”

At the end of January 2020, GS1 US was planning at presstime to release a “getting started” guide about blockchain for its members, as part of its educational initiatives. “This will discuss the use of GS1 standards across blockchain, as well as things that companies might want to be aware of and consider before they really start outlining blockchain to support a particular business process,” explains Adams.

PROGRESSIVE GROCER Februar y 2020

65

TECHNOLOGY

Industry Events

Demand in a Digital Era NRF’S BIG SHOW SPOTLIGHTS SOLUTIONS TO GARNER RE AL-TIME, USABLE DATA AT THE STORE LE VEL. By Abby Kleckler

n the floor of the National Retail Federation’s (NRF) annual Big Show, last month at New York City’s Javits Center, technology company after technology company promised to solve the age-old problem of out-of-stocks.

Retailers know as well as anyone, however, that one solution can’t wipe out the average 8% of unavailable items in grocery that has remained consistent year after year. There’s a rigid dichotomy between the promise of technology and execution.

With the expansion of online grocery, the importance of inventory management skyrockets. Jeff Kennedy, president and CEO of Des Moines, Iowa-based Itasca Retail, shares the story of a woman who placed an online order for laundry detergent from her local supermarket and instead received cat litter. This unacceptable substitution greatly alters the shopper’s experience with grocery ecommerce and the brick-and-mortar store.

Technology can help grocers with real-time data, seeing what’s currently in stock, forecasting demand, generating orders and ultimately improving the shopper experience.

Robots in All Forms

Robots are no doubt some of the most buzzworthy advancements in technology, although narrow aisles, deep shelves, refrigerator and freezer doors, fresh displays, and more can all be potential challenges for these automated systems.

Key Takeaways Technology can help grocers with real-time data, seeing what’s currently in stock, forecasting demand, generating orders and ultimately improving the shopper experience.

Exhibitors provide new robot models to overcome such challenges as narrow aisles, deep shelves, refrigerator and freezer doors, and fresh displays.

Time-saving computer-generated ordering is enabling grocers to keep pace with rival online entities.

66

progressivegrocer.com

Companies such as San Francisco-based Bossa Nova Robotics, however, have started to improve their robots’ capabilities. Bossa Nova 2020 exhibits a slimmer profile than the previous version, has 16 cameras and offers what the company calls “complete store coverage,” from fresh to freezer, and everything in between.

At NRF, Bossa Nova — fresh off a deal with Bentonville, Ark.-based Walmart to enter 650 more of its stores, for 1,000 total locations — demonstrates its real-time scanning capabilities and integration of the data into its dashboard. Atlanta-based NCR is handling all of the deployment.

“We’re closing the gap between the dream and the store,” says Tim Rowland, CEO of Nicholasville, Ky.-based Badger Technologies. “Our mission is to deliver real-time data to the retailer to take action.”

According to Rowland, the top three pain points that Badger Technologies first aimed to solve were out-of-stocks, planogram intelligence and pricing. Now, some clients, including Ahold Delhaize USA, have requested additional functions such as making sure that stores are clean by alerting associates to spills.

Rowland says that very conservatively, Badger Technologies’ system can save $150,000 in lost sales from out-of-stocks alone each

We’re closing the gap between the dream and the store.”

—Tim Rowland, Badger Technologies year, which is three and a half to four times what the robot costs for that time period.

Instead of roaming the aisles, Addison, Texas-based Deming Robotics

by Spacee has a solution that uses a modular rail system at the shelf’s edge to scan both sides of the aisle — or using a bird’s-eye view in produce — for out-of-stocks and planogram compliance. This system scans every 15 minutes and is essentially invisible to the customer.

Austin, Texas-based Pensa’s mode of implementation is a small

IT’S NOT A PROMISE IF YOU CAN’T DELIVER Expectations are soaring when it comes to on-shelf (and online) product availability.

Online shoppers hate item substitutions. They expect to receive exactly what they select on your website – just as they do on every other online shopping site they patronize.

That’s a promise you must keep.

Are your grocery stores true to your promises?

With the average supermarket location making 37,000 ordering decisions every day, retailers recognize why timely, accurate replenishment ordering is more important than ever.

Superior on-shelf availability is an imperative for in-store fulfillment. At Itasca Retail, we saw this coming three years ago when we coined “Click. Confirm. Collect.”

Our true CGO system applies refined business process and machine intelligence to automatically create trusted orders that keep your shelves at just the right levels, day in and day out.

So you’re always ready to provide exactly the products your customers order.

Itasca Retail: Simple. Accurate. CGO. To learn more about this, itasca-retail.com/click-and-collect/

Itasca-Retail.com

140 S. 68th St, Suite 1103, West Des Moines, IA 50266 (515) 223-0045 marketing@itasca-retail.com

TECHNOLOGY

Industry Events

generated orders for each store.

“The lettuce comes to the dock at the distribution center and then it goes from the supplier truck to the store truck,” Wirl notes, adding that it no longer sits in the warehouse. “The result of this was five days of extra time on the shelves. Instead of grabbing a bag of salad that says you’ve got three days at home, all of a sudden, you have eight days at home.”

There’s great value in real-time data because it’s needed to generate an accurate order, and although it’s good to know with computer vision when something is out of stock, it’s even better to be proactive so as to never get to that out-of-stock point.

Existing Stores, Existing Employees

Toshiba has a fully frictionless store experience where, in execution, retailers know exactly what’s on their shelves in real time, and customers can shop with no checkout process. Fredrik Carlegren, executive director of global marketing for Durham, N.C.-based Toshiba Global autonomous drone using computer vision and artificial intelliCommerce Solutions, is quick to note, however, that the gence to tackle on-shelf inventory visibility. It visually scans and greatest excitement of these technologies is how they recognizes the products on a shelf, knowing when items are can be implemented into existing stores today. facing in the wrong direction, or in the wrong spot.

“Inventory control and loss prevention are the two big things immediately,” Carlegren says, “and you don’t have to change consumer shopper behavior.”

Quick Replenishment Grocery is largely behind other online entities when it comes to Multilayered shelf sensors, or “smart pads,” can inventory. An up-to-the-minute perpetual inventory is far from standetermine the weight, pressure and shape of items, while dard for most grocers. edge-computing computer vision cameras combine to “Perpetual inventory in grocery has historically been a redheaded create an effective solution for knowing what’s out of stock stepchild, maybe necessary evil, depending how you want to look at or where in the store something is if it’s been misplaced. it, in the sense that grocers want to be able to do it, but Implementing pieces of technology that are there’s reasons that it’s difficult,” says Jason Wirl, director most valuable to the retailer isn’t just about the Robots of solutions consulting at Itasca Retail. “One [reason] is just capabilities of the tech itself. Without managthe human factor of it. Often, there’s lots of turnover, espeers and employees interacting with robots, are quite cially part-time, of course, in grocery. Then there’s also that ignorant. Human computer vision, software and more, inventory in certain areas of the store, it’s easier than others.” optimization is a moot point. beings are much Direct store delivery, perishables and prepared foods are “Robots are quite ignorant,” says Gordon smarter.” no longer off the table when it comes to computer-generatWade, who started Cincinnati-based Combined ed ordering (CGO). If employees do the upfront legwork that Consultants. “Human beings are much smarter.”

—Gordon Wade, Combined Consultants they’re already doing with inventory — and they do it well — Wade speaks of reallocating human capital CGO is the next logical step, which saves employees time by to other areas of the store and higher-value no longer requiring them to review each order line item by line item. activities that improve the overall shopping experience.

Itasca Retail works with Rochester, N.Y.-based Wegmans Food Itasca Retail taps into a similar sentiment — what Markets, where a recent success with real-time inventory has it calls “the human side of CGO.” With highly refined helped the grocer put the freshest lettuce on its shelves.

CGO, employees can greatly cut down on the amount “Wegmans, before we signed them, had tried computer-generof time they spend counting items and stocking shelves ated ordering three times, and it failed,” Wirl recounts, “And, credit and displays throughout the day. to them, they were like, ‘No, this is really necessary, and we need Empowering employees and increasing the bottom to figure this out.’” line are really what inventory optimization boils down to, For Wegmans, it all started with bagged salads, Wirl explains. but don’t forget the most important part: improving the The grocer was seeing more out-of-stocks and lack of freshness in customer experience. the category, so it seemed right to implement a new system.

Technology executed in the right places and at the Instead of sending the manufacturer a forecast and having it right times is the answer to making sure that when a figure out how much lettuce to send back, Wegmans worked with customer orders laundry detergent online, it really is its growers and shippers and submitted individual, computerlaundry detergent that’s delivered to her door.

At the NRF Show, Toshiba demonstrated its fully frictionless store experience, emphasizing various technology components that can be implemented in stores now for inventory control.

68

progressivegrocer.com

""

The Well-Groomed Pet GROCERS CAN STE AL SHARE FROM SPECIALT Y PE T STORES BY OFFERING THE RIGHT PRODUCTS TO TAME FIDO AND FLUFF Y’S FUR.

By Princess Jones Curtis

love Russell, but I don’t love his hair,” says Brittany Larrabee.

The 36-year-old customer service agent from Atlanta is talking about her 10-year-old long-haired cat. “He was a kitten when I got him, and just this cute little ball of fluff,” Larrabee adds.

“Little did I know that fluff was going to mean grooming, grooming, and more grooming!”

From brushes and trimmers to flea and tick shampoo and ribbons, pet grooming is big business. Along with food and health, grooming is one of the major categories of pet care. According to a report from Rockville, Md.-based MarketResearch.com, the pet-grooming products market was valued at almost $4 million in 2017. By the year 2025, it’s expected to hit nearly $5.5 million.

Driving these trends is the increased humanization of pets, as well as the parallel trend of humans becoming more invested in personal beauty care routines. “Having him groomed is pretty expensive. I also use a few products at home between sessions,” says Larrabee. “Sometimes I think it’s too much. But then I look at my own vanity full of beauty products, and I see how happy he acts when he’s got a new ‘do. And I know that it’s worth it.”

“For retail grocers, the target consumer will be one they already know,” notes Mike Franco, a professional merchandiser and retail consultant who has worked with grocery brands big and small, including Food Lion and Farm Fresh. “It’s not very likely that a completely new consumer will visit these locations just for their

Key Takeaways Along with food and health, grooming is one of the major categories of pet care, expected to hit nearly $5.5 million by 2025.

Grocers should consider carrying specialty pet-grooming items, since they can bring more variety to the shelf and also often have better margins than basic products.

When merchandising pet-grooming products, grocers should make sure that shoppers know they’re available, display items outside the pet department, experiment with different ways to group products, and hold in-store events in partnership with manufacturers.

PROGRESSIVE GROCER Februar y 2020

69

I really rely on our manufacturers.

They know their products, and a lot of times, they’re willing to give me tips on selling them. I’ve even had them do events in the store to bring in more awareness that we have certain products.”

—John Riggs, Joe’s Grocery pet’s grooming needs. On the other hand, the ones that are already familiar with your location are a good target. The idea is if they are already shopping you for their food essentials, and they are already buying grooming essentials, they’ll shop you for the grooming products because you’re adding a convenience for them.”

“Our customers are repeat customers. Think about it: Once you find a grocery store you like, you tend to go back over and over again,” explaims John Riggs, a manager at Joe’s Grocery, an independent grocer that has had a presence in Austin, Texas, since 1988, and has expanded its pet offerings. “My job is to make it easier for them to come back by stocking what they want and need. We currently have a small but growing [pet] grooming section. We tweak it periodically to make sure we’re stocking what our customers want to buy.”

Specialty Grooming Category

Within the pet-grooming category, there’s the subcategory of specialty products. While most retail grocers carry at least one type of shampoo or brush, they should also consider specialty items for their shelves, since these products can bring more variety to the shelf and also often have better margins than basic products.

“Let’s say you stock a basic all-purpose dog shampoo with a small profit margin,” explains Franco. “Sure, you can sell a decent amount of it to make a decent profit. But you could also carry specialty shampoo with a higher margin, and you don’t need to sell as much to make the same profit. In the end, it might make the most sense to stock both so that you cover both consumer needs and have a healthy mix of profit.”

Specialty pet grooming products come in many different forms, with each product promising specialized results. For example, both Target and Walmart carry Veterinary Formula Clinical Care Hot Spot & Itch Relief Pet Shampoo, which aims to soothe pets with skin issues. It solves a problem and offers a specific result.

Specialty products are also determined by how they’re made or the ingredients they use. Many consumers place a high value on organic or hypoallergenic ingredients. Innovet’s PurEyes is carried by Austin-based Whole Foods Market and touts an antibiotic- and sulfate-free formula to handle tear stain removal.

The specialty category can also include items that don’t fit into the general category because of their unconventional use in the pet market. For instance, products like dog deodorants, sunscreen and colognes all fall under the specialty category. Stores like San Antonio-based H-E-B carry Four Paws Cologne Red, a spicy scented spray designed to help dog owners keep their pets smelling cleaner longer.

70

progressivegrocer.com

Merchandising and Marketing

Supermarkets and big-box stores are some of the main distribution points for pet-grooming products, but that doesn’t mean there’s no competition out there.

Specialty pet stores are also main distribution points.

“The uphill battle is that consumers expect those pet stores to have these types of products, but that’s not always the case with grocers,” notes Franco. “So, I’d say the first order of business is to make sure that the consumer knows he can get these products where he shops every day anyway.”

Also, think outside of the pet aisle to grab potential customers’ attention. “If the consumer doesn’t expect you to carry a product, they might not even wander down the pet aisle to notice that you do carry it,” suggests Franco. “When you’re stocking new products, consider giving them display space outside of your pet department — Near the door or your customer service desk might get more eyeballs.”

Inside the pet aisle, experiment with different ways to group products. Displaying by manufacturer is effective when a brand name carries a lot of weight. On the other hand, organizing by use can also be successful. “The key is not to lock yourself into one method of display,” warns Franco. “Test out what works, and be flexible about making changes based on the data.”

“I really rely on our manufacturers,” admits Riggs, of Joe’s Grocery. “They know their products, and a lot of times, they’re willing to give me tips on selling them. I’ve even had them do events in the store to bring in more awareness that we have certain products.”

In-store events are a smart way to compete with specialty pet stores. Product demonstrations and free samples can bring in more foot traffic at a store location. Consider partnering with local professional groomers, too. They can provide product demonstrations and tips during in-store events. That may sound counterintuitive, but remember that the target audience for at-home grooming products and professional grooming services can intersect.

One option would be a weekly store drawing where a customer’s dog gets a makeover. The groomer uses grooming products found in the store to perform the makeover. Then, for the rest of the month, the store displays before-and-after photos on-site, along with the products used to achieve the look.

Just by having the contest, you let your current customer base know that you’re carrying more specialized grooming products. The signups yield valuable name and email data. You could even add a field on the form where they tell you what their biggest grooming concern is, which you could then use to inform which products you’re stocking. Just be sure you’re following all applicable laws about the collection of that information and the use of it.

S P O N S O RE D CON T E N T

Dog treatS: varieTy helps build baskeTs year-round Speaking with…

Joe Toscano, Progressive Grocer: What are some trends in dog treats today? Any innovations retailers should know about in the category?

Joe Toscano: Dog treats continue to show strong growth, and the category is expected to grow more than six percent over the next four years. Some of the key trends driving this growth include the human food trend of “better for you,” the belief that treats should provide a health benefit, and dog owners’ desire to create more special moments together. Treats also take many forms including meaty, chew, dental, long-lasting chew and niche offerings.

Currently, meaty is the largest dog treat form, but chew is the fastest growing.

The better for your pet trend will be a priority for Purina as we launch some innovate treats this year, including Prime Bones, which are long-lasting chews dogs will be able to enjoy without the potential hazards associated with treats such as animal bones, antlers or rawhides. Purina will also continue to focus on our Pioneer Woman treats, which are natural, simple ingredient dog treats inspired by recipes from Ree Drummond (host of o The Food Network’s The Pi Pioneer Woman).

PG: W Why is it impo important for grocery retailers to include retai a rob robust, rotating offe offering of dog tre treats both in-store an and online?

JT: Dog treats are an inc incremental purchase for con consumers and our sales data and research indicate the more treats consumers hav have, the more they’ll trea treat. On average, dog treat buy buyers give commercial trea treats to their dogs eight time times per week, and they typi typically have two to five pac packages of treats on hand and more than two varieties on hhand at a given time— whi which means the typical treat purchase isn’t just one! CConsumers also feed their ppets treats for myriad reason reasons including dental health health, indulgent treating, to occupy tthe pet and for training

Vice President, Trade and Industry Development, Purina

purposes. What’s more, more than half of dog treat buyers want to purchase something new and different. The treasure hunt for what’s new continually drives incremental purchases. This makes it imperative that retailers have a robust offering of treats for their shoppers—one that captures the new and innovative items manufacturers bring.

PG: How can retailers merchandise dog treats outside of the regular pet products aisle to help drive sales? And are there ways to do this online, too?

JT: There are multiple ways to capitalize on the growth of dog treats. Below are some simple ways to capture the valuable dog treat buyer.

• Cross-promotion. Retailers can start by bringing in new households with dry dog food cross-promotions focusing on their health benefits and ingredient story.

• Disruption. Treats are more likely to be an unplanned purchase than dog food, which means it is beneficial to disrupt consumers on their shopper journey. Try signage and secondary displays to disrupt the shopper in-store.

Online, banner ads, pop-ups on food pages and an “add to basket” option at checkout are beneficial tactics.

• Multiples pricing. Because dog treat consumers are not as price sensitive, stimulate additional purchases by using multiples pricing. Instead of suggesting a $3.49 retail price either in an ad or as everyday pricing, make it 2/$7 and watch incremental purchases and profits soar.

• EduCation. For dental treats, only 15 percent of users report that they follow the recommended daily feeding routine. Provide education on feeding recommendations at shelf and create loyalty/challenge programs to ensure daily use.

PG: Are there different times of year when dog treats are more popular than others? Or do they hold promise yearround if merchandised and marketed in creative ways?

JT: The weeks before Christmas are the highest sales volume treat weeks of the year. Ensure you’re including your furry family members when planning holiday displays. But consumers want to create those special moments yearround, and an annualized and planned merchandising calendar can stimulate great sales. Every retailer should have some kind of shipper/sidekick/ powerwing on display every month to stimulate additional purchases and reinforce to your consumers that you are in the pet business. Work with your Purina Sales Team to ensure you are annualizing your plan and maximizing your incremental sales and profits.

®

Your Pet, Our Passion.

NONFOODS

Health, Beauty & Wellness

Better Days PRE VENTIVE ME ASURES, SOCIAL MEDIA AND NOVEL FORMUL ATIONS HELP ENLIVEN THE NATUR AL OTC SEGMENT.

By Barbara Sax

riven by consumers’ increased focus on preventive health and fueled by information on social media, the natural over-the-counter (OTC) market is taking a bite out of the traditional OTC category.

While natural OTC products will never replace traditional OTC products, they represent an important growth opportunity — one that supermarket retailers can’t afford to ignore.

Supermarkets have expanded their natural product selections significantly over the past two years. “The proving time these products used to have in specialty stores before entering FDM [food, drug and mass-market retailers] has decreased dramatically. In some cases, FDM stores are going directly to the natural product manufacturers to have custom products made for them, and we have recently designed custom products for large grocery chains,” says Dr. Cameron Moeller, a spokesman for Alpine, Utah-based American Biotech Labs. “These natural product lines are now proven sellers in FDM, and it has simplified the consumer’s shopping experience. The demand for natural products is only going to grow.”

Boomers are seeking products that can proactively treat symptoms associated with aging, but Millennial consumers are the ones significantly driving category growth. “Younger consumers are not interested in treating symptoms — it’s all about prevention — and they are willing to pay a lot for products that help them do that,” notes Laura Mahecha, a health care analyst at Parsippany, N.J.-based Kline Market Research.

Key Takeaways While Baby Boomers seek natural products that can proactively treat conditions associated with aging, Millennial consumers — who wish to avoid such conditions altogether — are the ones significantly driving category growth.

Many natural OTC products now focus on boosting immunity to prevent illness rather than on alleviating specific symptoms, with some manufacturers making use of recently developed combination products to do so.

Along with immune-boosting supplements and cold/flu remedies, sleep aids and children’s products have lifted naturalsegment sales.

72

progressivegrocer.com

The Rise of Black Elderberry

That preventive approach has had a big impact on the cough/cold category, where a significant number of products now focus on boosting immunity to prevent colds and flu rather than on alleviating specific symptoms. “The prevention side of the category, brands like Zicam, Emergen-C and Airborne, [is] growing faster than traditional OTCs that address symptoms,” affirms Lisa Buono, principal in Chicago-based IRI’s health care practice.

“Consumers want quality immune support supplements that can help them stay healthy,” observes Moeller. For example, American Biotech Labs has introduced Silver Biotics Silver Lozenges, which combine a silver supplement with manuka honey for an immune-boosting effect. The Kroger Co.’s Harris Teeter banner, based in Matthews, N.C., recently brought in American Biotech Labs’ Silver Biotics Silver Lozenges and flags them with “new product” shelf tags. The banner also carries Los Angeles-based PPC Group’s EZC Pack, formulated with echinacea, zinc and vitamin C. A Washington, D.C., location of Giant Food, a Landover, Md.-based chain owned by Ahold Delhaize USA,

Elderberry, known for its immuneboosting properties, has become one of the most popular ingredients in the cough/cold aisle.

devotes 2 feet to natural cough/cold products, including the natural Boiron, Ricola, Sambucol and Zicam brands.

Interest in black elderberry, which contains vitamins, minerals and antioxidants believed to stimulate the immune system, has continued to surge. “Immune is a key segment, and there is no product hotter than elderberry,” asserts Kyle Lentz, category analyst for Hamacher Resource Group, a Waukesha, Wis.-based consultancy.

Products containing black elderberry have become a significant part of the natural cold and flu category, and new elderberry products continue to hit retail shelves in a variety of forms, from supplements and syrups to ever-popular gummies. Washington Depot, Conn.-based Momeez Choice recently launched a Mixed Berry with Elderberry Lolleez throat-soothing pop for kids, made with organic elderberry, that’s now available at Kroger, Wegmans Food Markets, and Stop & Shop.

In the cough/cold section, natural segment leaders Sambucol, Nature’s Way Sambucus and Zarbee’s Naturals now share shelf space with products from makers of traditional OTCs. “Major manufacturers like RB [Airborne] and Pfizer [Emergen-C and Dimetapp] have added elderberry products,” Lentz points out.

PROGRESSIVE GROCER Februar y 2020

73

NONFOODS

Health, Beauty & Wellness

Bohemia, N.Y.-based Nature’s Bounty Co. recently introduced Elderberry Gummies as part of a three-product launch targeted to consumers’ key health concerns.

The popularity of black elderberry is a testament to the power of social media and highlights an information shift in the category. “Pharma once controlled the message in OTC, but that’s changing,” says Mahecha. “Sambucol exploded at retail when medical professionals started to recommend the product.

Retailers couldn’t keep it in the store.”

“These products surface online, then generate word of mouth, and once they get to mass retail, sales explode,” says Buono. Buyers with a finger on the pulse of the natural product social media space can get ahead of trends for their consumers.

New Combinations

Meanwhile, the probiotic segment, once a huge growth area, has experienced some stalling. “We’re starting to see scientific data questioning how effective probiotics are,” observes Buono.

New research that indicates probiotics are best absorbed when taken with a prebiotic has sparked the introduction of combination products. “Synbiotic formulations, which combine a prebiotic and probiotic, have become more popular,” notes Mahecha. Last year, Austin, Taxas-based Enviromedica launched Terraflora, a broad-spectrum synbiotic.

A shakeout may be looming for the category. While plenty of consumers take probiotics on a regular basis, retailers are identifying their best-selling products. Probiotics from Los Angeles-based Jarrow, for example, routinely sell out at some locations of MOM’s Organic Market, a 19-unit chain based in Rockville, Md., despite the product’s high retail price tag.

Lentz also sees probiotic ingredients branching out into other categories, including cold and allergy products, as part of a push for a holistic approach to well-being. “We’re seeing secondary facings of probiotic products at retail in the cold and allergy sections,” he says.

While consumers get a lot of their information about natural OTC products online, there’s still plenty of confusion about ingredients. In response, more manufacturers are introducing combination products that address specific health concerns. “That’s a trend we’ve seen forever in health care,” notes Buono. “Consumers don’t know ingredients very well.” Bundling ingredients in one formulation makes selection easier — particularly at locations where sales help is absent.

Nature’s Bounty has taken that approach with three products launched last year. The company’s data and analytics revealed that self-care, sleep and stress relief are among the top issues for consumers, particularly Millennials and Gen Xers. Accordingly,

Younger consumers are not interested in treating symptoms — it’s all about prevention — and they are willing to pay a lot for products that help them do that.”

—Laura Mahecha, Kline Market Research

74

progressivegrocer.com

Natural OTC products targeted to kids continue to grow. Formulations such as gummies and lollipops offer new delivery solutions.

Nature’s Bounty introduced Anxiety & Stress Relief and Sleep3 formulations designed to address these specific wellness concerns. Lentz sees a subsection of “sleep, stress and anxiety” products being created in supplement sections. “Lavender, valerian root and, to a lesser extent, St. John’s wort are key ingredients for this new range of products,” he says.

Seeking a Better Night’s Sleep

Additionally, it’s no surprise that natural sleep aids are growing — The Centers for Disease Control and Prevention (CDC) estimate that 35% of American adults don’t get enough sleep, and that failure to get a solid seven hours of recommended shuteye can contribute to serious health problems such as obesity, diabetes, high blood pressure, heart disease, stroke and mental stress.

“With so much exposure to electronic screens and caffeine consumption, sleep aids are an ever-growing category, and natural sleep aids are growing much faster than monographed OTC products,” says Mahecha.

Combination products containing valerian, chamomile, melatonin and even CBD are showing significant growth as consumers take a prophylactic approach to treating sleeplessness.

“Many natural sleep supplements were showing double-digit increases,” continues Mahecha. Zarbee’s Naturals sleep supplements, for instance, saw sales increases of almost 200%, and sales of Olly Sleep Melatonin Gummy were up 74%, according to IRI all-channel data for the 52-week period ending Dec. 29, 2019. IRI data also shows that Cincinnati-based Procter & Gamble’s drug-free Vicks ZzzQuil PURE Zzzs tablets, in both kid and adult formulations, experienced triple-digit dollar sales increases.

Natural products have established a stronghold in the children’s OTC segment in particular. “Parents feel more comfortable with products that are free of dyes and sweeteners,” explains Buono. “Since traditional respiratory OTCs for kids under 2 years of age have been pulled off the market, these products have become even more popular.” Data from Hamacher shows Zarbee’s Naturals as the No. 2 brand in the pediatric cough/cold market, right behind Mucinex.

EDITORS’ PICKS

Food, Beverage & Nonfood Products

Tickled Pink

More of What Makes Veggies Great

New Classic Cooking LLC brand Veggies Made Great has added three flavors to its popular Superfood Veggie Cakes line. Available in the refrigerated sections of participating Costco locations as of January and set to expand to other retailers, the latest flavors are Quinoa, Butternut Squash and Harvest Root, which, like all Veggies Made Great products, are veggie-packed, allergy-friendly, low in calories, and versatile enough to serve as a breakfast, snack or side dish. The Quinoa Veggie Cakes are a savory blend of clean, simple, nutrient-dense ingredients, among them kale, quinoa and carrots. The sweet and savory Butternut Squash Veggie Cakes are made with a blend of butternut squash, carrots, and a hint of brown sugar. The Harvest Root Veggie Cakes combine such hearty favorites as carrots, sweet potatoes and beets, making them the first Veggies Made Great product to feature beets, a vegetable brimming with essential nutrients and vitamins, as well as lots of heart-healthy fiber. The suggested retail price is $9.99 for a 27-ounce, 12-count box of any of the three gluten-free varieties. https://www.veggiesmadegreat.com

From Magnum, Unilever’s super-premium ice cream brand, comes Ruby Minis, the inaugural ice cream product launched in the United States featuring ruby chocolate — the first new chocolate variant in 80 years, following white, dark and milk chocolates. The ruby cacao bean, which was only discovered in 2017, offers berry fruitiness, smoothness and a unique pink color, and grows in countries known for cacao: Ecuador, Brazil and Ivory Coast.

Magnum Ruby Minis combine ruby cacao with indulgent, velvety ice cream for the ultimate luxury ice cream experience. An 11.1-fluid-ounce 6-pack of bars has a suggested retail price of $4.99. Last month, the item became available for on-demand delivery through goPuff or via The Ice Cream Shop on Uber Eats, Postmates, DoorDash and Grubhub in New York, Los Angeles, Chicago and Philadelphia, with the rest of the country being able to access on-demand delivery this spring. https://www.magnumicecream.com

A Hipper Tortilla Chip

Organic chickpea snack maker Hippeas has now launched Hippeas Tortilla Chips. Featuring 3 grams of protein and 3 grams of fiber per 1-ounce serving, the USDA Certified Organic, certified gluten-free, vegan chips come in three flavors: Straight Up Sea Salt, Rockin’ Ranch and Jalapeño Vegan Cheddar. The chip line joins the brand’s line of Organic Chickpea Puffs, introduced in 2016 and consisting of five varieties: Vegan White Cheddar, Nacho Vibes, Bohemian Barbecue, Sriracha Sunshine and Himalayan Happiness. Hippeas Tortilla Chips will be available exclusively at Whole Foods Market stores through June 2020. A 5-ounce bag retails for a suggested $3.99. http://hippeas.com

Tea is Served

Known for sourcing premium ingredients from all over the world to craft its unique teas, Tazo has now expanded its product portfolio include ready-to-drink refrigerated iced teas in three of its best-selling flavors: Zen, an invigorating infusion of green tea, spearmint and lemongrass; Awake, a bold, full-bodied blend of smooth black teas; and Passion, a vibrant herbal infusion of hibiscus, orange peel and cinnamon. Containing no artificial colors or sweeteners, the USDA Certified Organic beverages come in a single-serve 12-ounce bottle retailing for a suggested $1.99 and a multiserve 42-ounce bottle for a suggested $3.79. Both bottles are made from 100% recycled plastic. https://www.tazo. com/us/en/products/bottled.html

76

progressivegrocer.com

Way to Go Keto

Offered in Canada since early 2019, GoodTo Go Keto Snack Bars from Riverside Natural Foods are now available in the United States. The soft-baked vegan, gluten-free, peanut-free, kosher and NonGMO Project Verified bars come in Cocoa Coconut, Vanilla Almond, Raspberry Lemon and Cinnamon Pecan varieties made from real, organic ingredients. Each bar contains 160 calories, 3 grams of net carbs, 2 grams of sugar and 13 grams of plantbased fats. According to Riverside, the snack bars are among the first to be keto certified by the Paleo Foundation, making them an appropriate choice for those following the diet, which often presents limited snacking options.

The suggested retail price is $2.99 for a single 1.41-ounce bar, or $24.99 for a box of nine bars. https://riversidenaturalfoods.com; https://good2gosnacks.com

Everyday Health

Stonyfield Organic Daily Probiotics yogurt shots aim to support both immune and digestive health when consumed regularly as part of a healthy diet and lifestyle. The brand’s shots are made with real fruit and organic lowfat milk, contain just 60 calories per serving, and provide billions of live active cultures in a portable drink format. Daily Probiotics is also USDA Certified Organic, Non-GMO Project Verified and gluten-free. Available in Blueberry Pomegranate and Strawberry Acai varieties, the item retails for a suggested $4.49 for a 6-pack of 3.1-ounce bottles. https://www.stonyfield.com

Fresh From the Family

Created by Caroline D’Amore, owner and executive chef of D’Amore’s Pizza, a family restaurant in Los Angeles, Pizza Girl is a line of USDA Certified Organic, locally sourced and ethically bottled Marinara, Puttanesca and Vodka sauces. Channeling D’Amore’s childhood nickname and current persona, the product line seeks to bring the freshest, healthiest pasta sauces to households nationwide.

The family-derived recipes originated in Italy with D’Amore’s great-grandmother, a.k.a. “Big Mumma,” and have been perfected over time in California using only local, USDA Certified Organic ingredients sourced with integrity. The Marinara Sauce contains onion, garlic, olive oil, diced tomato, sea salt, dried basil and dried oregano; the Vodka Sauce features fresh cream, olive oil, garlic, onion, diced tomatoes, vodka flavor, balsamic vinegar, sea salt, a ParmesanRomano cheese blend and dried basil; and the Puttanesca Sauce offers Kalamata olives, capers, onion, garlic, olive oil, diced tomato, red pepper flakes, black pepper, sea salt and dried basil. A 24-ounce glass jar of any variety of Pizza Girl sauce retails for a suggested $11.99, with the socially conscious company donating a portion of its proceeds from every jar sold to Smile Train. https://pizzagirl.com

Green Pest Control

Plant-based pest repellent product manufacturer EarthKind has added Stay Away Rodent to its line of home pest repellents. Federally registered by the EPA for use in all 50 states and the District of Columbia, the product mirrors EarthKind’s award-winning Fresh Cab Botanical Rodent Repellent formula, the first botanical rodent repellent for private and professional use to be federally registered by the federal agency. While Fresh Cab is designed for use in enclosed, nonliving areas such as RVs, sheds, attics, storage areas and stored vehicles, as well as farm vehicles and equipment, Stay Away Rodent brings the power of Fresh Cab into the home, employing a highly effective formula that poses no threat to children and animals when used as directed. Eighty percent of Stay Away Rodent’s fast-acting, plant-powered ingredients come from American regenerative family farms, upholding EarthKind’s commitment to sustaining a transparent ingredient supply chain. The formula, consisting of balsam fir oil, lavender oil, Spanish rosemary oil, cedar oil, orange oil, lemon oil and plant fibers, produces a powerful scent that, while pleasant to people, disturbs mice and rats’ highly sensitive scent receptors, repelling them without causing them, people or the environment any harm. The fifth addition to the Stay Away line, Stay Away Rodent joins the brand’s Stay Away Ants, Spiders, Moths and Mosquitoes products. A 2.5-ounce pouch retails for a suggested $6.99. http://www.earthkind.com PROGRESSIVE GROCER Februar y 2020

77

ADVERTISER INDEX

Alaska Seafood Marketing Institute Alpha Packaging

37

ARKK Foods Company

43

BIRO Manufacturing

53

CANADIAN MARKETS • Convenience • Pharmacy • Foodservice

CleanWell

75

ADVERTISING SALES & BUSINES S STAFF

Conopco Unilever

31

Elkay Plastics

27

CHIEF EXECUTIVE OFFICER Jennifer Litterick jlitterick@ensembleiq.com

EPIQ Systems

35

Fmi/North American Meat Institute

57

Forte Products

73

General Mills Marketing, Inc.

19

GOYA Foods Inc

17

Hugo Specialty Foods

45

Itasca Retail Services

67

Bascom Family Farms

Inside Front Cover

Jelly Belly Candy Company

9

Litehouse Inc.

13

Loomis

7

Mettler Toledo

79

NestléPurina

71

New Pig

61

Save-A-Lot, Ltd.

23

Shenandoah Valley Organic

47

Siffron

51

Simply Protein

49

Skinny Butcher

Back Cover

Spindrift Beverage Co

15

THE J.M. Smucker Company

3

Thermal Technologies Inc.

59

Tosca Ltd.

56

Tyson Brand Solutions

55

Tyson Chairman’s Reserve 20 Anniversary

25

Tyson Open Prairie Meats

11

UPEMI

52

th

78

Cover Tip

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

progressivegrocer.com

CHIEF OPERATING OFFICER Joel Hughes jhughes@ensembleiq.com GROCERY GROUP PUBLISHER John Schrei 248-613-8672 jschrei@ensembleiq.com SENIOR MARKETING MANAGER (NEW ENGLAND, SOUTHEAST) Maggie Kaeppel 708-565-5350 mkaeppel@ensembleiq.com SENIOR MARKETING MANAGER (CA, PACIFIC NORTHWEST) Judy Hayes 925-785-9665 jhayes@ensembleiq.com SENIOR MARKETING MANAGER (MIDWEST) Theresa Kossack 214-226-6468 tkossack@ensembleiq.com REGIONAL SALES MANAGER (SOUTHWEST) Tammy Rokowski 248-514-9500 trokowski@ensembleiq.com JUNIOR ACCOUNT MANAGER-GROCERY GROUP Natalie Meehan p 773-992-4410 m 619-823-4926 nmeehan@ensembleiq.com ADVERTISING MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com

8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 773-992-4450 Fax: 773-992-4455 www.ensembleiq.com PROGRESSIVE GROCER (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Single copy price $20, except selected special issues. Foreign single copy price $85, except selected special issues. Subscription: $125 a year; Canada $190 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Chicago, IL 60631 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to brand, PO Box 3200 Northbrook IL 60065-3200.

Copyright ©2020 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.

Get a Clear, Fresh View Into Your Store’s Backroom Needs The 865 Semi-Automatic Wrapper, our newest backroom line-up addition, provides the efficiency of an automatic weighing and wrapping machine while maintaining flexibility with manual label placement, and integrates seamlessly with all of your other METTLER TOLEDO-networked equipment, offering clear and total visibility throughout your enterprise.

Learn more about the 865 Semi-Automatic Wrapper today by visiting www.mt.com/retail-865, calling 1-800-METTLER, or by stopping by booth #1516 at NGA Show 2020.