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RETAILER DEEP DIVE: AMAZON DOUBLES DOWN ON GROCERY

PROTEIN SPOTLIGHT Beefing up sales CENTER STORE Water as a functional beverage CPG INNOVATION Skinny Butcher aims to nourish new generation

Elyssa Heller, founder/CEO of Edith’s Eatery & Grocery

INDEPENDENT

VISION PG’s 2022 Outstanding Independents dare to stand apart

February 2022

Volume 101, Number 2 www.progressivegrocer.com


2021 S

AIN CAPT


EX PLO RA TION


Contents 02. 22

Volume 101 Issue 2

40 Features COVER STORY

40 RETAILER DEEP DIVE

20 Independent Vision

Experiment and Conquer

Progressive Grocer celebrates 15 forward-thinking indies that dare to stand apart.

Departments 8 EDITOR’S NOTE

Letter From the Heart

20

2022

How Amazon plans to transform grocery in 2022.

14 NIELSEN’S SHELF STOPPERS

18 ALL’S WELLNESS

Condiments and Dressings

New Areas of Food Certification

16 MINTEL GLOBAL NEW PRODUCTS

Dark Spirits

72 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS

12 IN-STORE EVENTS CALENDAR

April 2022

74 AHEAD OF WHAT’S NEXT

18 4

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Innovation on Display



Contents 02.22

Volume 101 Issue 2

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

www.ensembleiq.com

46 PROTEIN SPOTLIGHT

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

In Rare Form

EDITORIAL EDITOR-IN-CHIEF Gina Acosta 813-417-4149 gacosta@ensembleiq.com

As a confluence of unusual factors affects the beef market, demand is still strong for this top protein.

MANAGING EDITOR Bridget Goldschmidt 347-962-9395 bgoldschmidt@ensembleiq.com SENIOR DIGITAL & TECHNOLOGY EDITOR Marian Zboraj 773-992-4405 mzboraj@ensembleiq.com

50 CPG Q&A

SENIOR EDITOR Lynn Petrak 708-945-0415 lpetrak@ensembleiq.com

Nourishing the Next Generation

CONTRIBUTING EDITORS Kathleen Hayden and Barbara Sax ADVERTISING SALES & BUSINESS

Skinny Butcher CEO Dave Zilko pushes the boundaries of plant-based innovation. 53 INDUSTRY EVENTS

5 Key Trends Noted at NRF 2022: Retail’s Big Show

SENIOR SALES MANAGER Bob Baker (NEW ENGLAND, MID-ATLANTIC SOUTHEAST US, EASTERN CANADA) 732-429-2080 rbaker@ensembleiq.com SENIOR SALES MANAGER Theresa Kossack (MIDWEST, GA, FL) 214-226-6468 tkossack@ensembleiq.com

46

SENIOR SALES MANAGER Tammy Rokowski (INTERNATIONAL, SOUTHWEST, MI) 248-514-9500 trokowski@ensembleiq.com BUSINESS DEVELOPMENT MANAGER-GROCERY GROUP Lou Meszoros 203-610-2807 lmeszoros@ensembleiq.com ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com

Automation, crypto, frictionless store experiences, e-commerce and safety/ security are top priorities.

CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com EVENTS VICE PRESIDENT, EVENTS Michael Cronin mcronin@ensembleiq.com

56 FRESH FOOD

VICE PRESIDENT, EVENTS & CONFERENCES Megan Judkins 773-837-7595 mjudkins@ensembleiq.com

Prepared to Accelerate

The pandemic sped up innovation and sales in the retail prepared food realm, and industry leaders are making the most of the forward momentum.

MARKETING BRAND MARKETING MANAGER Rebecca Martin 773-992-4407 rmartin@ensembleiq.com AUDIENCE LIST RENTAL MeritDirect Marie Briganti 914-309-3378

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62 CENTER STORE

Water With Benefits

Functional offerings continue to inundate the beverage category.

SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES Toll Free: 1-877-687-7321 Fax: 1-888-520-3608 contact@progressivegrocer.com PROJECT MANAGEMENT/PRODUCTION/ART CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com REPRINTS, PERMISSIONS AND LICENSING Wright’s Media ensembleiq@wrightsmedia.com 877-652-5295 CORPORATE OFFICERS

66 NONFOODS

Paper Products Shift to Sustainability

Retailers must meet increasing consumer demand for CPG brands that prioritize environmental responsibility. 70 TECHNOLOGY

How H-E-B Is Leveraging Livestream Shopping The Texas grocer is building engagement (and sales) with online shoppers.

70 6

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66

CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, CONTENT Joe Territo EXECUTIVE VICE PRESIDENT, OPERATIONS Derek Estey

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 $14, except selected special issues. Foreign single copy price $16, except selected special issues. Subscription: $125 a year; $230 for a two year supscription; Canada/Mexico $150 for a one year supscription; $270 for a two year supscription (Canada Post Publications Mail Agreement No. 40031729. Foreign $170 a one year supscrption; $325 for a two year supscription (call for air mail rates). Digital Subscription: $87 one year supscription; $161 two year supscription. Periodicals postage paid at Chicago, IL 60631 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to brand, 8550 W. Bryn Mawr Ave. Ste. 200. Copyright ©2022 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.


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Contact your GOYA representative or email salesinfo@goya.com | GoyaTrade.com *GOYA® Plantain Chips (Original) 5 oz. Source: Nielsen Answers on Demand, Total US (All Outlets Combined), dollar and unit sales, 52 weeks ending: 11/6/21 ©2022 Goya Foods, Inc


EDITOR’S NOTE By Gina Acosta

Letter From the Heart A NE W ER A OF SUPPORT AND SERVICE BEGINS. ave you ever seen a grocery worker save the life of a butterfly? That’s exactly what happened as I was trying to exit the parking lot of my local Trader Joe’s last month and was startled when an employee ran out into the middle of a long line of cars on a busy street and put her hands up into the air, screaming. I was all the way at the back of the line of cars, so I couldn’t really see whether there was an obstacle in the roadway or why she had stopped traffic. But I did watch her as she bent down to the floor and cupped her hands on the ground. Then she slowly raised her body into a standing position with her hands still cupped. About 10 seconds later, a monarch butterfly emerged from her hands, and flew away toward a nearby tree. The butterfly had been on the ground, in the road, struggling to fly, and the woman had run out to save it. All of a sudden, people who had been frustrated, waiting in their cars and obstructed by the woman with the butterfly, started honking their horns, extending their hands out of their car windows, clapping and cheering “Hoorah!” “Great job!” “Wow!” I have been in a lot of grocery stores in the many years I have been covering the industry, but this was a first for me, and I was truly amazed. And I was again reminded that, even with the latest COVID-19 variant putting tremendous pressure on an industry already worn down by a two-year pandemic, grocery workers continue to perform an extraordinary service for our country each and every single day. Whether it’s stopping endangered pollinators from being run over by cars, or keeping checkout lanes open, or saving customers’ lives, as happened at a Fresno, Calif., Save Mart in January, it cannot be said enough: Grocery workers deserve more thanks for their heroic efforts in carrying out essential roles, for selflessly and tirelessly working to bring all of us closer to a return to normal. I know that the last two years have been a time of great upheaval, loss and uncertainty. I know that in addition to personal challenges, grocery workers today face acute staffing shortages, supply chain problems, angry and sometimes violent customers, and so many other obstacles. But those who are working to keep the grocery industry

Those who are working to keep the grocery industry moving — including retailers, suppliers and solution providers — are the best of the best in America, along with health care workers, teachers and other essential heroes.

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moving — including retailers, suppliers and solution providers — are the best of the best in America, along with health care workers, teachers and other essential heroes. That’s why I am especially honored to have been named the new editor-in-chief of Progressive Grocer during its 100th year of service. I am here to usher in the next century of PG’s support and gratitude for our grocery heroes. So, I want to hear all about the bold and strong actions that all of you are taking to keep America fed. Do you have any butterfly saviors on your staff? Is there a cashier who always manages to give customers a compliment and a smile even through these challenging times? What about the stocker who keeps the aisles and shelves not only full, but also spotless? Do you have an e-commerce picker who is able to pick more orders than everyone else and still offers stellar service? Please contact me with tips, leads or comments about how you are surviving and maybe even thriving during this cascade of crises. In the meantime, I salute you. I am rooting for you. Always. Gina Acosta Editor-In-Chief gacosta@ensemleiq.com





IN-STORE EVENTS

Calendar S

04.22

M

Fresh Florida Tomato Month National Brunch Month National Afternoon Tea Month National Fresh Celery Month

T

W

National Soft Pretzel Month National Soy Foods Month National Pecan Month Pets Are Wonderful Month

T

F

S

1

2

April Fool’s Day. Create a coupon offering one free elephant with the purchase of a carton of milk and have toy versions ready for those who redeem the coupon.

National Peanut Butter and Jelly Day. Now is the time to get creative with meal ideas beyond sandwiches.

3

4

5

6

7

8

9

10

11

12

13

14

15

16

World Party Day. Provide tips along with the necessary supplies for shoppers to host their own installment of this global bash.

Palm Sunday National Siblings Day

17

Easter. Mark down any holidayspecific candy still left.

24

New Kids on the Block Day. Play the hits of Boston’s finest boy band in your store(s) all day.

12

National Vitamin C Day. Direct customers to the VMS and produce aisles for appropriate products.

National Pet Day. Ask customers to share via social media what their animal companions mean to them, for the grand prize of free pet supplies.

18

Tax Day. It’s a bit later this year, due to the observance of Emancipation Day — commemorating when President Lincoln abolished slavery in the District of Columbia in 1862 — on the 16th in the nation’s capital.

25

Kiss and Make Up Day. Promote the greeting card aisle as the place to start burying the hatchet.

progressivegrocer.com

National Raisin and Spice Bar Day. Encourage shoppers to buy them or bake their own.

National Colorado Day. Tout the excellence of foods and beverages from the Centennial State.

19

National North Dakota Day. Educate customers on the best food and drink that the Peace Garden State has to offer.

26

National South Dakota Day. Like its northern neighbor, the Mount Rushmore State has plenty of tasty fare to try.

National Caramel Popcorn Day. Suggest this treat to enliven the weekly movie night.

National Peach Cobbler Day. Remind shoppers how well this goes with vanilla ice cream.

20

National Banana Day National Lookalike Day

27

National Babe Ruth Day. Celebrate the legendary slugger with a feast fit for a ballpark, starting with franks and fries.

National Burrito Day. A family dinner can become more fun when everyone gets to assemble their own version of this beloved wrap.

National Gardening Day. Whether it’s a plant, pot or bag of soil, make sure that customers know they can purchase it at your store(s).

National Empanada Day. Add this savory Spanish fried turnover featuring meat and/or veggies to your prepared food menu.

National Laundry Day

Husband Appreciation Day. Stock an array of goodies for spouses to present to their hubbies.

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28

29

30

National Kindergarten Day. Mark this entry into big kidhood with a free book of fun puzzles for anyone officially enrolled at this grade level.

Stop Food Waste Day National Take Our Daughters and Sons to Work Day

Good Friday

National Winston Churchill Day. Shoppers can consider the legacy of the famed British statesman (with an American mom) over tea and scones sourced from the international food aisle.

Earth Day. Shine the spotlight on your eco-friendly offerings.

National Arbor Day. Plant a tree in a local park, on behalf of your company.

National Talk Like Shakespeare Day. See how often you and your associates can work “forsooth” or “verily” into conversation.

National Sense of Smell Day. Observe this occasion by having your in-store bakery’s delicious aroma draw shoppers to the department.


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GOCHUJANG SPICY MISO

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*Based on U.S. sales data during the 52-week period ending 1/1/22

KIKKOMAN is a registered trademark of KIKKOMAN CORPORATION. ©2022 Kikkoman Sales USA, Inc.


FRONT END

Shelf Stoppers

Condiments and Dressings Total Department Performance Condiments and Dressings

Latest 52 Wks W/E 01/01/22

Latest 52 Wks YA W/E 01/02/21

Latest 52 Wks YA W/E 01/04/20

$7,976,343,006

$8,163,672,355

$6,878,384,647

Top Condiment and Dressing Categories by Dollar Sales Mayonnaise

Ranch

Ketchup

Hot Sauce/Chili Condiments

Mustard

$1,600,000,000

Basket Facts How much is the average American household spending per trip on various condiment and dressing products versus the year-ago period?

1,400,000,000 1,200,000,000 1,000,000,000 800,000,000

$4.23

600,000,000

on all condiment and dressing items, up 2.8% compared with a year ago

400,000,000 200,000,000 0

Latest 52 Wks W/E 01/01/22

Latest 52 Wks YA W/E 01/02/21

Latest 52 Wks YA W/E 01/04/20

Source: Nielsen, Total U.S. (All outlets combined) – includes grocery stores, drug stores, mass merchandisers, select dollar stores, select warehouse clubs and military commissaries (DeCA) for the 52 weeks ending Jan. 1, 2022

The COVID-19 pandemic has dramatically altered the way we have lived our lives over the past two years, and in the process has prompted many to acquire habit-forming purchase behaviors that are poised to have lasting impacts on the sales performance of select categories. In 2020, consumers spent more time at home, and their grocery purchases reflected that. Condiments saw higher-than-average growth in 2020, and sales remained strong through 2022. The need to stay home presented shoppers with the opportunity to experiment with new foods, flavors, ingredients and recipes they have traditionally avoided due to a lack of familiarity, experience and confidence with preparation and cooking techniques, which has driven changes to purchase behaviors, some of which are likely here to stay.”

—Carman Allison, , VP of Sales Development, NielsenIQ

$2.66

on horseradish, up 4.2% compared with a year ago

$2.08

on mustard, up 4.3% compared with a year ago

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

$3.42

on blue cheese, up 1.4% compared with a year ago Millennials

Gen Xers

Boomers

The Greatest Generation

$3.12

$3.23

$3.27

$3.17

Source: Nielsen Homescan, Total U.S., 52 weeks ending Nov. 27, 2021

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Source: Nielsen Homescan, Total U.S., 52 weeks ending Nov. 27, 2021


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Dark Spirits Market Overview

The spirit market declined in 2020 due to the loss of on-premise sales, but the market will recover as consumers return to bars and restaurants, and once again socialize with others. The spirit market is projected to grow at a faster rate than beer or wine, reflecting the general increase in interest among consumers and the popularity of high-end and super-premium spirits. 39% of consumers say that they drink white spirits more often, and 32% say that they drink dark spirits more often. Throughout the COVID-19 pandemic, 34% of consumers say that they consumed spirits more often. A quarter of consumers say that they tried a new brand.

Key Issues

The COVID-19 pandemic and the limited availability of foodservice and entertainment options meant that consumers were required to imbibe at home. Alcohol’s role in relaxation during stressful times led to gains. However, even though consumers stocked up on spirits during the lockdown, the total spirit market declined due to loss of on-premise sales.

Scotch has the strongest consumer engagement of any spirit type (among drinkers of each respective spirit), yet it’s the only spirit type that experienced a decrease in engagement from 2018. Moreover, consumers age 22-34 report a decrease in their scotch purchases, indicating a need for scotch to connect with younger audiences. Spirit brands are largely embracing ready-to-drink (RTD) cocktails, as they allow spirits to compete in new consumption occasions and appeal to those who want to enjoy cocktails at home without the work. RTDs represent a key growth opportunity for dark-spirit brands to introduce new consumers to the dark-spirit market. The closure of indoor drinking and dining establishments resulted in an increase in home cocktail creation; the trend of home-crafted cocktails will remain even as consumers return to bars and restaurants.

Nearly 70% of consumers say that they most often drink dark spirits in a mixed drink.

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What Consumers Want, and Why Dark-spirit consumers are most likely to try a RTD cocktail that contains a brandname spirit, indicating key opportunities for popular darkspirit brands to leverage brand equity and develop new RTD cocktail products. The new drinking behaviors that consumers established during the pandemic will benefit the spirit market for years to come, and the increase in at-home spirit engagement will result in even further growth of higher-end spirit brands. Consumers missed their favorite events and activities during the pandemic, many of which are also occasions when consumers would enjoy a spiritbased beverage: For example, many consumers age 35-54 missed work happy hours during the pandemic, so brands should target them with campaigns celebrating colleagues being able to once again enjoy drinks after work. Premium tequila and premium gin are two of the fastest-growing alcoholic beverage segments as consumers learn to appreciate high-quality tequilas and discover new varieties of gin.



ALL’S WELLNESS By Molly Hembree

New Areas of Food Certification RE TAILERS NEED TO BE AWARE OF HOW THESE DESIGNATIONS CAN INFLUENCE SHOPPER CHOICES. ood certifications may be the first impression your customers have of a product on your retailer’s shelves and could be a deciding factor if the item makes it into their shopping cart. Product attributes, health claims, nutrient content claims, structure/function claims and food certifications evolve with nutrition research, alongside consumer interest. Many of the newest food certifications popularizing food packages include those focused on sustainability. According to recent SPINS data, 70% of shoppers will pay more for a sustainable product, and 88% of shoppers would like brands to help them be more environmentally friendly and ethical. Rainforest Alliance Certified: This seal signifies that the product was made using methods that support social, economic and environmental sustainability. The Rainforest Alliance focuses primarily on protecting forests, climate, human rights and livelihoods, which is evidenced throughout the organization’s Rainforest Alliance Sustainable Agriculture Standard. B Corp Certification: This certification by B Lab goes beyond ingredients and products, instead speaking to a company’s entire social and environmental performance. Businesses complete a BIA (B Impact Assessment), are assessed via a Legal Requirement Tool to determine how stakeholders can affect company governance, and then evaluated by B Lab to determine whether they meet an 80-point bar for certification. Non-GMO Project Verified: This is a third-party verification system for non-GMO (genetically modified organisms) food and products. The Non-GMO Project is a nonprofit seeking to increase transparency, education and resources about BE (bioengineered) products to support informed consumer choice. Fair Trade Certified: Fair Trade is a global movement of responsibly connecting products to their producers. Fair Trade USA works to empower and give a stronger voice to farmers and workers, as demonstrated by its reaching more than 975,000 people in 63 countries over the past year, contributing to the $846 million in financial benefits provided to producers across the globe since 1999. Certified Vegan: The Certified Vegan trademark of Vegan Action indicates a guarantee that an item doesn’t contain any animal product

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or byproduct, as well as involving no animal testing. Vegan Action has certified more than 10,000 products from 1,082 companies. Campaigns such as Veganuary, aimed at generating excitement regarding animal-free fare, are gaining momentum in the food landscape, as seen by the more than half-million participants who pledged to go vegan in January 2021, and the predicted record numbers coming in for 2022.

It’s critical not only to be familiar with these food certifications, but also to gauge the impact that these symbols might have on your customers’ physical or virtual shopping experience. Certified Plant-Based: The PlantBased Foods Association (PBFA) and NSF International put their heads together to launch the Certified Plant Based seal program in 2018, which is the first and most recognized plant-based food certification. This designation allows for up to 10% of the weight of the product formula to be non-plant-based (but still vegan). This certification, as well as Certified Vegan, is not only helpful to those following a plant-centered eating pattern, but also to flexitarians, or even those navigating a milk, egg, fish or shellfish allergy. It’s critical not only to be familiar with these food certifications, but also to gauge the impact that these symbols might mean to your customers’ physical or virtual shopping experience. Invite your regulatory affairs team to the table with marketing and R&D to brainstorm how to obtain these certifications for private label, or encourage your store management teams to showcase trusted products that proudly display one or more of these certifications to draw attention to your retailer’s responsible product offerings.

Molly Hembree, MS, RD, LD, is a registered dietitian for Kroger Health.


Solving Big Problems, Inspiring Bold Ideas EnsembleIQ is a premier business intelligence resource that believes in Solving Big Problems and Inspiring Bold Ideas. Our brands work in harmony to inform, connect, and provide predictive analysis for retailers, consumer goods manufacturers, technology vendors, marketing agencies and service providers. EnsembleIQ’s integrated suite of solutionsbased, total-market resources give you all the tools you need to achieve a strategic market advantage, giving you the insights, positioning, focus, and access, along with a team of dedicated strategic consultants to help you bring it all to life.

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COVER STORY 2022

2022 Outstanding Independents

INDEPENDENT

VISION Progressive Grocer celebrates 15 forward-thinking indies that dare to stand apart.

I

By Bridget Goldschmidt ndependent grocers are often advised that to keep ahead of the competition, they need to develop a unique offering that will attract and retain customers. Accordingly, for this iteration of Progressive Grocer’s Outstanding Independents, we’ve decided to focus on the ways that each of the 15 food retailers profiled in the following pages has differentiated itself from the rest, fellow indies and major grocery players alike. These differences range from creating memorable prepared food menus unlike anything else on the market to completely rethinking the concept of “local.” This isn’t to say that the retailers in question don’t stand apart in ways other than those that PG is recognizing them for, only that we were especially impressed by their creativity in particular spheres. From single-store operators to regional chains, these independent grocers strive every day to inspire and delight their customers, and we at PG were likewise inspired and delighted by their various success stories It’s never an easy task to choose from among the submissions we receive, each telling a highly personal story of how each retailer not only managed to survive, but also to thrive, in its given market, often encountering hardships along the way, but still able to triumph and even pay the fruits of its labor forward by helping the less fortunate in its community. Indeed, independents share the kind of tight bond with neighborhood residents that many larger operators envy, since independent store owners come from the same places as their shoppers and understand the needs of those customers better than anyone else. As the retail industry continues to grapple with a lingering pandemic and its exacerbation of supply chain and staffing issues, the achievements of these indies take on even more meaning. Read on to learn more about how they maintain a standard of excellence that others can only dream of.

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PROGRESSIVE GROCER Februar y 2022

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COVER STORY 2022

2022 Outstanding Independents

BriarPatch Food Co-op Grass Valley, Calif. Number of Stores: 1

Since 1976, BriarPatch Food Co-op has served as a vibrant hub serving shoppers who live, work and play in the Sierra Foothills of California. The cooperative grocer promotes a resilient community and sustainable local economy by supporting businesses, organizations and brands committed to a healthy, equitable world. For many years, BriarPatch’s definition of “local” meant items grown or produced within 20 miles of its flagship location in Grass Valley, Calif. “Local” also included working with farmers who deliver directly to the store, regardless of distance. However, as the grocer prepares to open a second store more than 20 miles away from its original location within the coming year, it has radically rethought the meaning of “local.” After some consideration, BriarPatch decided that rather than rely upon a human-made definition of the term, such as mileage or county lines, it would turn to nature for inspiration. As a California business, it has a keen awareness of the value of water, having endured an increasing number of droughts and shortages in recent years, and so opted to determine “local” based on where the water flows that sustains its community, farmers and suppliers. In his book “The State of Water,” author and artist Obi Kaufmann describes a watershed as “a geographic area defined by how a single system of liquid water moves above and below ground to supply essential habitat for either a single ecosystem or a network of connected ecosystems. … A watershed can include many different climate types and run through many different environments, yet is always connected by common drainage.” BriarPatch realized that a watershed is a complex system of interconnectedness: What happens upstream affects downstream. “In a sense, it is a metaphor for our cooperative community,” the grocer explains. “It’s also a reminder that with our expansion comes responsibility

BriarPatch realized that a watershed is a complex system of interconnectedness: What happens upstream affects downstream. “In a sense, it is a metaphor for our cooperative community.” —BriarPatch Food Co-op

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as we become increasingly linked: to connect our shoppers and producers to a world that becomes increasingly ‘smaller’ through technology as BriarPatch grows larger.” As a result of this thought process, the co-op’s revised definition of “local” coincides with the Sacramento River Hydrologic Region. These boundaries aren’t man-made, but rather are determined by nature, and give the grocer room to grow in the future, beyond its current market area. According to BriarPatch, basing its “local” area on a natural region allows increased opportunities for its shoppers and employees to think about the environment and their contributions, relationship and responsibility to it. The grocer is currently in the midst of preparing activities, events and learning opportunities to make this new “local” tangible, experiential and more meaningful by deepening shoppers’ connection to, and awareness of, the natural world. These actions include an interview with Kaufmann in the Spring 2022 issue of its quarterly magazine, “The Vine”; developing supportive relationships with organizations dedicated to environmental issues, including in areas beyond the counties where it operates, such as Bear Yuba Land Trust, Placer Land Trust, South Yuba River Citizens League, Sierra Harvest and Chambers of Commerce, throughout its newly expanded “local” area; and engaging in-store cross-promotional opportunities with brands that focus on environmental messaging and help increase awareness of where consumers’ food comes from and the economic impacts of their buying choices.


BriarPatch Food Co-op has relationships with such local vendors as Lisa Carle, from Pyramid Farms, a certified-organic farm in Chico, Calif.

PROGRESSIVE GROCER Februar y 2022

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COVER STORY

2022 Outstanding Independents

Edith’s Eatery & Grocery Brooklyn, N.Y. Number of Stores: 1

Beginning life as a pop-up shop in the summer of 2020 with an investment of just $8,000, Edith’s Eatery & Grocery has now grown into a new flagship location, on 312 Leonard Street in the Williamsburg neighborhood of Brooklyn, N.Y., that carries hard-to-find grocery items, a full dining menu featuring innovative versions of classic Jewish dishes, and a robust house-made program, highlighted throughout the menu and the deli case, and featuring such items as smoked fish, breads and pickles. Initially supposed to last just eight weeks, the pop-up immediately went viral, enabling Edith’s to become a permanent jewel-size fast-casual sandwich shop in Williamsburg, attracting diners from near and far. The retailer’s latest iteration, which officially opened Jan. 18, following a soft opening on Jan. 11, promises “an entirely new kind of grocery shopping and dining experience — one that you’re encouraged to both explore in store and take home with you.” Edith’s likens the ambiance to that of legendary New York City deli Zabar’s. Edith’s founder/CEO Elyssa Heller, who once created supply chain solutions for brands such as Milk Bar and Dylan’s Candy Bar, offers food influenced by the Jewish diaspora, exploring the global flavors and cultural experience of Jewish cuisine. “After spending 10 years on the consumer side of the food industry working with different CPG brands, I always wanted to give the restaurant industry a try,” Heller tells Progressive Grocer. “I felt like there was room for my point of view within the Jewish food space and wanted to try it out on a small scale with the popup to see how my concepts around Jewish food would resonate with guests. On the first day of the pop-up, we opened to two-and-a-half-hour lines down the block, and since then, I’ve never looked back.” The store started off with an all-day café menu, with dinner offered later this spring. Dishes include Malawach, laminated Yemenite Jewish flatbread; Kasha Porridge, a buckwheat oatmeal with seasonal fruit and

“Tradition with a twist is what makes Edith’s special, along with the emphasis on food quality and our story.” —Elyssa Heller, founder/CEO, Edith’s

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nuts; Syrniki Pancakes, traditional Russian-style pancakes with a Japanese soufflé, tart currant syrup and smetana (sour cream); Labneh Parfait with Chickpea Granola, consisting of tangy yogurt with seasonal fruit, house-made crunchy chickpea granola and ancient Middle Eastern honey; Chicken consommé containing mini matzo balls, vegetables and bitter herb; and a Smoked Fish Plate featuring a trio of seasonal house-smoked fishes: salmon, Arctic char and whitefish dip. According to Heller, who develops the recipes with Edith’s team of chefs, “The core menu will stay the same, while we will rotate seasonal specials.” Meanwhile, Edith’s grocery offering turns the spotlight on Jewish food staples, including traditional appetizers as well as unique assorted treats, complemented by historical information inspiring guests to try new ingredients and learn about their history. The store will also carry such exclusive products as Emmett’s Frozen Tavern Pies and collaborative items with Pierozek Pierogi, Petee’s Pie (Tahini Chess Pie) and La Boite (Everything Spice). Noting that Edith’s is “showcasing people who may not have the infrastructure to sell to traditional grocery stores, but who make amazing food that is rooted in tradition,” Heller promises more brand partnerships in the works that will roll out seasonally. The flagship store is just the beginning of the story, however. “We are putting a plan in place for what the future of Edith’s could look like now that we have found success in multiple formats — our flagship-style restaurant-retail hybrid, as well as fast casual,” says Heller. “Tradition with a twist is what makes Edith’s special, along with the emphasis on food quality and our story. This time last year, we were a team of three cooking on a folding table at our pop-up in the back of Paulie Gee’s pizzeria; now we have a team of over 20 and two locations. The fact that we have been able to do this during a pandemic has me really excited for what the future holds for Edith’s.”

PHOTO BY TEDDY WOLFF

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COVER STORY 2022

2022 Outstanding Independents

Erewhon Los Angeles Number of Stores: 7

2021 was a year of various achievements for Erewhon — the opening of its seventh Los Angeles-area store, in Studio City, the adoption of exciting tech to support its e-commerce operation — but none was perhaps more meaningful than when, in June of last year, the organic grocer and café earned B Corp Certification, a designation awarded to companies that meet high standards of social and environmental performance, transparency and accountability. B Corps must also undergo verification every three years to maintain certification. “That’s probably one of the biggest milestones in Erewhon’s timeline, at least so far,” agrees Kabir Jain, the company’s chief growth officer. “We feel like we’ve been living the mantra that B Corps live by, for a long time. Using business as a force for good, thinking about the way we can inspire everyone, from the communities to the employees to the vendor relationships, et cetera. But this was a stamp that we’ve known of and wanted to have. There are very few retailers that have it. There are even fewer grocery stores that have it. We’re definitely one of the first in the U.S., [and] we were super excited. It’s a really daunting, long, arduous process, as it should be.” According to Jain, the months-long road to certification took a “lot of work, from top leadership all the way down to front-line employees. What we loved about it was it Hsving achieved B Corp Certification in the past year, Erewhon is focused on opening new stores, but at its own pace.

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“We feel like we’ve been living the mantra that B Corps live by, for a long time. Using business as a force for good, thinking about the way we can inspire everyone, from the communities to the employees to the vendor relationships.” —Kabir Jain, Chief Growth Officer, Erewhon

forced us to take a really hard look in the mirror at what we do and how we operate, all parts of the business. We learned about where we exceed, we learned about where we have areas of opportunity. … It really helped us recognize the areas where we [can] spend extra time, spend extra effort, spend extra money to do the right thing.” As for the effect of the certification on shoppers and associates, he notes: “The common consumer has heard about B Corps. They see the stamp on the wall. They see it inside the store and in the employee rooms, and [it] just gives a real sense of pride for everyone.” Beyond bragging rights and the deeper confidence it gives customers and employees, the B Corp designation has become “a foundation … of our training now,” says VP Jason Widener. “We have a really, really robust learning management system that we use for everyone that joins the company, from the top down, through [software company] Wisetail. … The core values of B Corps are kind of aligned with our core values as a company, which is really cool, and that’s how we teach our employees. Ultimately, that appreciation for health and wellness and changing people’s lives just becomes infectious. It all kind of goes hand in hand.” As for the company’s further growth, future stores in Beverly Hills and Culver City are in the works, but the company is content to take its time to find the correct locations. “We’re so focused on the community and just making it right that we’ve been tiptoeing into [expansion] very slowly,” explains Jain. “The owners, Tony and Josephine Antoci, [are] so dialed into the details of every little aspect, the look, the feel, the vibe, the subcategories of the selection, and taking into account the community that we’re serving. … One of our mantras is, you’re either in front of it or you’re behind it. And the way that we stay in front of it is by moving at a slow pace.”


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COVER STORY 2022

2022 Outstanding Independents

Balls Food Stores Kansas City, Kan. Number of Stores: 26

Ninety-nine years ago, Sidney and Mollie Ball opened a corner market in Kansas City, and nearly a century later, the Ball family is still serving its neighbors in supermarkets operating under four banners in the Kansas City market. In addition to being a trusted local retailer noted for its extensive philanthropy in support of various causes, Balls Food Stores is an originator of the local food movement in the area. Working with more than 150 local growers, the grocer provides the largest selection of natural and sustainable products in Kansas City, and is a proud supporter of the Buy Fresh Buy Local network. Since 1923, when the company founder would go out in his pickup truck, buy local produce and bring it back to sell at the small corner store, Balls Food Stores has been steadfast in its commitment to local farmers. Further, Balls Food Stores remodeled or replaced four locations in 2021 — a Hen House Market in Olathe, Kan., two Ball’s Price Chopper locations in Kansas City, Mo.; and a Ball’s Price Chopper in Leavenworth, Kan. – to make them more energy-efficient and customer-friendly. For instance, the stores now feature high-efficiency refrigera-

County Market/ Niemann Foods Quincy, Ill. Number of Stores: 39

Over the past year, County Market has revamped its personalized rewards program, MAXvalue, with the goal of combining high-value loyalty rewards and digital mobile games to keep County Market top of mind with consumers and give them new reasons to shop at the retailer’s stores. The Midwestern grocer introduced the program in early 2021 with the Back to the Table campaign, which featured MAXvalue Card loyalty point redemption for KitchenAid cookware. The campaign’s aim was to retain COVID-related sales increases as virus restrictions eased and consumers began to socialize again. County Market then launched the Take It Outside digital mobile game, which motivated customers to visit an in-store seasonal display of grilling and outdoor dining products. Customers played the digital game every day to win 28

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tion and LED lighting, as well as a conscientious recycling program and a zero-waste policy for excess food. “I take great pride in serving our customers, teammates and local farmers, and in being the third generation of this local family-owned company as we continue our 99th year of growth in this community,” says President and CEO David Ball. “The traditions that have guided this honored journey will remain strong.”

prizes and enter a grand-prize drawing for a Weber grill. The daily prizes were redeemable in-store, which drove incremental traffic and enabled the retailer to build a database of digitally engaged customers. Finally, the Company is Coming campaign started in the fall and ran through the holiday season. It featured MAXvalue Card loyalty point redemption for MasterChef ovenware. The all-digital campaign rewarded customers for their patronage as the critical holiday shopping season approached. Supported by customer loyalty solutions provider tcc Global, the year-long effort led to same-store sales rises, increased customer trips and bigger baskets, as well as higher Maxvalue Card penetration, member sales and member transactions. MAXvalue Card member average basket also grew and MAXvalue Card penetration, as a percent of total sales, increased 33%.

County Market has seen success with its revamped personalized rewards program, MAXValue, supported by tcc Global.


Detwiler’s Farm Market Sarasota, Fla. Number of Stores: 5

Wellness is one of the fastest-growing departments at family-owned Detwiler’s Farm Market. As its website explains: “Most stores charge you and arm and a leg for overpriced supplements while offering every brand under the sun — many of which might be of inferior quality! Because of the high price tag and overwhelming selection of competing brands, they sell fewer products and can’t offer their customers the best possible value. That’s not our business model. We would rather carry only the highest-quality national brands and offer you the best possible price.” In fact, Detwiler’s strives for its wellness offerings “to be price competitive with even the biggest internet retailers.” For instance, the company’s wellness flyer for January featured a buy-one-get-one-50%-off deal on 200plus items. Brands included such well-known names as Ancient Nutrition, Jarrow and Dr. Bronner’s, along with

Grand & Essex Market Bergenfield, N.J. Number of Stores: 1

Grand & Essex Market first opened its doors in 2013 as Bergen County, N.J.’s first high-end, kosher market, with a name evoking the “old neighborhood” of New York’s

local purveyors like Jason’s Elderberry Syrup. In addition to the superior quality and value of the wellness products at its University, Clark Road and Palmetto locations, which feature a wide range of vitamins, minerals and supplements in liquid, powder, capsule and other forms, all meticulously organized in spacious departments, the grocer vows “unmatched” customer service. Detwiler’s isn’t just about wellness, though, or even the loads of fresh produce that the “Farm Market” part of its name correctly implies. The grocer also boasts a full-service butcher shop, a seafood shop, an Amish-style deli brimming with meats and cheeses, natural grocery aisles, a farmhouse bakery offering scratch-made treats, and an old-fashioned ice cream shop serving up locally made ice cream.

Lower East Side. Thanks to such offerings as extraordinary customer care, an award-winning butcher department, a devotion to community responsibility, an in-store health coach, a robust e-commerce business and a renowned full-service takeout department, the store has proved so popular that it recently embarked on its second expansion in nine years, which will double the location’s size. “Customer service is our top priority” explains owner Fred (Shia) Schonfeld. “Seeing how crowded the store gets before the weekend and around the holidays, with lines out the door, we knew we had to create the best shopping experience by making Grand & Essex bigger and better. The added space will make G&E a more comfortable, aesthetically pleasing place to shop.” New features include a larger sushi department with a poké bar; a carving station with assorted meats, among them the grocer’s own specialty smoked meats; an extensive produce department; full-service salad and sandwich bars; and a wok station where customers can place orders, shop and then pick up dinner. Additional sit-down bars will be added to several departments, allowing customers to stop for a quick bite, check messages or catch up with friends. The remodeled store will also get a new, larger kitchen to facilitate Grand & Essex’s growing catering business. The two-phase expansion project’s first phase began in December 2021, with the second phase planned to start in February. PROGRESSIVE GROCER Februar y 2022

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2022 Outstanding Independents

Hugo’s Family Marketplace Grand Forks, N.D. Number of Stores: 11

Hugo’s Family Marketplace has been around since 1939, when it was founded by Hugo and Dorothy Magnuson, but the family-owned company came full circle early this year, when it opened its newest location, Hugo’s Pure Market, in downtown Grand Forks. The new store was even built on the exact spot that the Magnusons’ very first store, Pure Foods, was located. Pure Market offers the latest grocery trends and technology, with an urban vibe. The store features a full deli, Hugo’s Kitchen, selling made-to-order lunches and family-style takeout meals, while specialized robots provide custom salads and frozen yogurt in a fun and unique way. The upstairs mezzanine, overlooking downtown, enables customers stay awhile and enjoy a meal, and the in-store 506 Pub serves drinks and appetizers. Both the Pub and the mezzanine have outdoor seating available. The store also includes a Hugo’s Wine and Spirits location. In the area of store design, murals of historic local pictures line the walls, and aisles are named for nearby

Jimbo’s San Diego Number of Stores: 4

Established in 1984, Jimbo’s is a complete organic and natural food grocery store that places strong emphasis on local and 100% organic produce. The retailer also features a full line of groceries, 100% organic bulk foods, wellness products, meats, an in-house deli, a scratch bakery and a 100% organic juice/smoothie bar, all offering products in alignment with 26 strict ingredient standards. Jimbo’s is committed to total transparency in sourcing and consistently supports local organic farms and businesses. This past year, the grocer began to highlight brands that it has identified as practicing one or more factors of Jimbo’s Pledge to S.O.I.L., which consists of four pillars: Security for our future (Thriving soil pro30

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streets like Belmont Road, Chestnut Street, Demers Avenue and Kittson Avenue. With Hugo’s Pure Market, the grocer demonstrates its enduring connection to the area. “Our long history, generous support of our communities, and wonderful and committed team members make Hugo’s one of the pillars that have built stellar communities to live, work and play in,” the retailer says, noting that some associates have been with it for more than 40 years. “Team members know they are appreciated, valued and vital to the success of the company.”

vides a safe and healthy environment for future generations); Organic is the foundation (Carbon sequestration + biodiversity on farms = thriving soil & nutritious food); Influencing positive change today (Educate customers on what they can do to support Mother Earth, people and ecosystems); and Life starts on the farm (Provide farm workers with fair wages, good working conditions, education, tools and resources). “As in the case of organics, it is going to take time, education, and a desire for stores like ours and customer support to move regenerative [agriculture] into the forefront,” the company notes as its motivation for launching the initiative. The introduction of Jimbo’s Pledge to S.O.I.L. is in keeping with the boundary-pushing vision of founder Jim “Jimbo” Someck, an influential pioneer in the natural food industry, as well as a highly respected local figure for his community efforts.



COVER STORY 2022

2022 Outstanding Independents

Kowalski’s Markets Woodbury, Minn. Number of Stores: 11

Already known and loved in the Twin Cities as a one-stop shop offering specialty and conventional products in an accessibly elegant environment, Kowalski’s Markets broke ground in a new way this past year by becoming the first independent grocer in the region to implement scan-and-go technology enabling shoppers to use an Android mobile phone or iPhone to scan product barcodes in aisles and then, with a single tap, complete purchases at a kiosk near the front of the store. The grocer also streamlined its online preorder and prepay programs for holiday meals and products, and increased product availability for curbside pickup and delivery, including sameday services, of items such as heat-and-eat, grab-and-go,

FULL SERVING OF VEGGIES IN EVERY PORTION

family-style and hot meals; bakery; and produce. Beyond its famous food offering, the grocer expanded its gift product selection to include upscale women’s fashions, accessories, spa products, luxury home goods, color cosmetics, jewelry and more. Along with new in-store tech, enhanced e-commerce and the addition of products not commonly found in grocery stores, Kowalski’s devotes substantial resources to training stakeholders to organize, educate and set policy in accordance with democratic principles and standards. This proprietary program teaches associates that they have the capacity to know what’s good, and the responsibility to grow that knowledge and act accordingly to create sustainable solutions that serve the common good among diverse self-interests. Additionally, the company employs clients of Merrick, a nonprofit organization providing enrichment activities and employment support to disabled local adults; for its efforts in this area, Kowalski’s has been recognized by the Minnesota Organization for Habilitation and Rehabilitation. Kris Kowalski-Christiansen (left) and her mother, Mary Anne Kowalski, run 11 Kowalski's Markets stores in the Twin Cities region.

CONTACT YOUR REPRESENTATIVE TODAY! 800.669.3169 / www.veggiecraftfarms.com

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Martindale’s Natural Market Springfield, Pa. Number of Stores: 1

2020 marked the 151st birthday of Martindale’s Natural Market, which is widely regarded as the country’s first health food store. To mark the occasion, the company debuted “a bigger, better and newer store” promising an improved shopping experience. Proud of being able to provide shoppers with hard-tofind items like pine-needle tea in “a judgment-free zone,” Martindale’s observes simply, “Open-minded innovation is part of our DNA.” The store was founded by outdoorsman, author and entrepreneur Thomas Martindale and eventually taken over by his son, Thomas C., who spearheaded its transformation into a health food store and, ahead of his time, worked tirelessly to educate the public about the advantages of a plant-based diet. Today, the suburban Philadelphia business serves shoppers with a wide range of dietary needs, catering to those who follow Paleo, vegan and vegetarian regimens. With all of these customers, the grocer strives to com-

municate on a meaningful level, noting, “Every day, new shoppers come to us with a thousand questions, and they’re eager to talk with a real human.” Martindale’s follows a similar strategy in its sourcing techniques: “We forge personal relationships with farmers, producers and artisans,” the company says. “We handpick each item we carry and keep our prices fair. Our selection of raw milk and local eggs draws shoppers from the tri-state area, as do [our] seasonal heirloom fruits and vegetables. We prioritize ethical products such as Fair Trade coffee, biodynamic olive oil and humanely raised meat. We are special in a world of long-haul supermarket produce and processed food.”

UTOPIHEN IS MORE THAN AN EGG BRAND — IT’S A MOVEMENT PASTURE RAISED EGGS FOR A BETTER WORLD Utopihen Farms invites you, as well as your consumers, to join us on the journey to a brighter future. Our pasture raised organic eggs are USDA Certified Organic, non-gmo and come from hens raised on local Certified Humane small family farms. Conscious consumers love these tasty, nutritious, protein packed eggs. Learn more about our pasture raised eggs, the journey we’re on and the movement we’re creating at UTOPIHENFARMS.COM or call 717-925-0171.


COVER STORY 2022

2022 Outstanding Independents

Nude Foods Market Boulder, Colo. Number of Stores: 1

Nilssen’s Foods Baldwin, Wis. Number of Stores: 6

Beginning as a neighborhood general store founded by Carl Nilssen back in 1903, and evolving into a grocery and hardware store to better serve the community, Nilssen’s Foods currently operates grocery stores in six communities across western Wisconsin and southeastern Minnesota. The retailer carefully trains all employees to ensure every customer is treated with the utmost respect and kindness. By using a “people, product and profit” model, Nilssen’s is not only investing in employees, but also ensuring that all associates understand and implement the basic principles of quality, cleanliness, stock levels, signage, pricing and customer service. Every single customer who departs from one of the grocer’s stores receives an official and heartfelt “thank you,” creating a sense of personal connection. This way of doing business is particularly appreciated by the communities in which the retailer has a presence, because its locations are in towns that have historically been underserved. In partnership with wholesale food distributor SpartanNash, Nilssen’s ensures that shoppers have access to well-stocked shelves featuring a vast selection, giving customers the opportunity to try the latest products. Additionally, shoppers were able to purchase staple foods and supplies even during the height of pandemic. Alongside its core products and services, Nilssen’s provides such standout offerings as Nilssen’s Market Smokehouse Meats, made at the Clear Lake, Wis., location but available at each of its stores. The Nilssen family has received state recognition for its quality homemade sausages, processed meats and hams, with nearly 100 varieties of its “Blue Ribbon” meats and cheeses now sold to the public. 34

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Nude Foods Market is Boulder, Colo.’s first zero-waste grocery store. What exactly does that mean? It means that the store has everything a traditional grocery store has — produce, prepared meals, snacks, bulk items, cleaning products, beauty products, and more — just without all of the plastic packaging. Instead, everything comes in reusable, returnable glass jars and is local, organic or rescued. The store also offers delivery by bike or electric vehicle. Customers pay a small deposit per jar and then receive that deposit back, minus a small cleaning and sanitizing fee, to spend in the store when they return the jar. This promotes a circular economy in which the jars are reused thousands of times. Customer demand has led Nude Foods to offer a few items for customer refill, such as cleaning supplies and peanut butter, but the business expects that this pioneering retail concept will attract those customers who have previously shunned zero-waste refill stores because of a lack of time to refill or concerns about hygiene. Nude Foods is going after traditional grocery store shoppers who want to grab and go and not sacrifice convenience, yet still shop according to their values. The grocer also champions technology in line with its vision. For instance, Nude Foods has deployed MishiPay’s mobile self-checkout solution as the primary payment method at its stores, instead of conventional registers. The environmentally friendly solution allows customers to shop and check out with their own cell phones, eliminating the need to wait in line to pay at a traditional checkout. Nude Foods Market's founding team members, left to right, in their element: Verity Noble, Rachel Irons, Jimmy Uvodich and Matt Arnold.


Zero-waste grocer Nude Foods Market aims to attract shoppers who want to shop according to their values without sacrificing convenience.

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COVER STORY 2022

2022 Outstanding Independents

Since the pandemic hit, each of Oliver's Markets associates has had to carry a heavier load.

Oliver’s Market Santa Rosa, Calif. Number of Stores: 4

To maintain its reputation for superior customer service, Oliver’s Market employs twice the labor force of national stores. “We pride ourselves on having employees throughout the store to assist customers, full staffing coverage in our delis and kitchens, and in solid support in our front end to keep checkstands moving,” Oliver’s explains.

Despite being more heavily staffed than other food retailers in its region, from the onset of the pandemic in March 2020, the grocer has faced labor shortages requiring each associate to carry a greater load. What’s more, finding and retaining workers remained a challenge into 2021, leaving Oliver’s unable to ease the burden placed on its loyal employee-owners. At this juncture, Steve Maass, Oliver’s founder and president, decided to express his gratitude to employees for their commitment throughout this difficult time by awarding a surprise $2 million bonus in December that was strictly based on days worked since March 2020, not on pay grade. The bonuses were divided into four tiers, with the top tier at $3,000 and the bottom tier, for newer employees, at $100. Of 950 active employees, 560 received the top-tier bonus. Arriving by check, the bonus resulted in a happier holiday season for those who deserved it most. In the card accompanying the bonus, Maass wrote: “I want to express my appreciation for all that you do to make Oliver’s what it is. Our success is entirely due to you, each and every one of you.” At Oliver’s, that’s not just hyperbole, but a simple statement of fact. Oliver's Market founder and President Steve Maass expressed his gratitude for employee-owners' hard work during the pandemic with a surprise $2 million bonus during the holiday season.

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most popular seafood Wild Seafood Alaska Seafood Alaska Salmon

AlaskaSeafood.org


COVER STORY 2022

2022 Outstanding Independents

PCC Community Markets Seattle Number of Stores: 16

Cooperative grocer PCC Community Markets has long been involved in environmental efforts in Washington state’s Puget Sound area, going so far as to “view all aspects of [its] business through a sustainable lens,” but Along with its many environmental achievements, PCC Community Markets is known for its world-class food offering.

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it recently achieved new milestones in that area. While three of its stores, in Redmond, Edmonds and Burien, are LEED-certified, in 2020, its Ballard location became the first grocery store in the world to receive Living Building Challenge (LBC) Petal Certification, the world’s most rigorous green building standard, from the International Living Future Institute (ILFI). PCC’s West Seattle and Bellevue stores followed suit in 2021, and the grocer is actively working toward LBC Petal Certification for its new Downtown Seattle and relocated Kirkland locations. To earn LBC certification for its stores, PCC met stringent requirements for the Materials, Place and Beauty Petals. Working with local artists to design meaningful artwork was an important part of meeting the Beauty Petal requirements. This has resulted in unique art installations at PCC’s Petal-Certified stores. In West Seattle, Celeste Cooning’s Cloud Wave installation was assembled from a reclaimed sailcloth to represent the essential life force of water. Shogo Ota’s Murmuration, in Bellevue, showcases a flock of birds that while small individually, become mightier when they fly together, taking the form of a Southern Resident Killer Whale. The Downtown Seattle store features carvings by Andrea M. Wilbur-Sligo, of the Squaxin Island Tribe, and the Kirkland location features Mary Iverson’s hand-glazed ceramic tiles representing “World Tablecloths.” PCC is taking part in ILFI’s Volume Pilot Program, which boosts efficiency when certifying several projects at one time by evaluating store design and materials at a portfolio scale.


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RETAILER DEEP DIVE

Amazon

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t’s been 18 months since Amazon opened its first full-size supermarket, and a question on the mind of everyone in the retail industry is: What’s next for the e-commerce giant’s grocery aspirations? The chief of the company’s Amazon Fresh grocery banner answers that question in an exclusive interview with Progressive Grocer. “Amazon’s cultural bedrock is customer obsession, which drives all of our various businesses to innovate for customers in big and small ways, and to agonize over the things that matter most to them,” says Jeff Helbling, VP of Amazon Fresh. “As we open more Amazon Fresh stores, we will continue to invest in technology — like our Just Walk Out shopping and the Amazon Dash Cart — to make the grocery shopping experience more convenient for customers.” Leveraging the lessons from its $13 billion acquisition of Whole Foods Market in 2017, and continuing to focus on ruthless execution and experimentation, Amazon is on the cusp of transforming grocery with what is expected to be an acceleration of openings for its Amazon Fresh format this year.

Key Takeaways Amazon Fresh store openings are poised to accelerate this year. Cashierless technology is expected to launch in more stores and provide another revenue stream. A veteran from Tesco has joined the team just in time for scaling the grocery business.

EXPERIMENT AND CONQUER By Gina Acosta

How Amazon plans to transform grocery in 2022.

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RETAILER DEEP DIVE

Amazon

“As is true across all of our businesses, if we see an opportunity to deliver something different or better to meet a customer need, we do it. And that’s what we’re doing with our Amazon Fresh business. We’re serving customers in ways they prefer to be served, which includes physical stores and, increasingly, omnichannel shopping.” —Jeff Helbling, VP of Amazon Fresh

Since the company launched its first foray into traditional grocery in Woodland Hills, Calif., in August 2020, Amazon has opened 23 Amazon Fresh stores across six states and the District of Columbia. At this very moment, there are at least two dozen Amazon Fresh stores in various stages of planning or construction across the United States, and Amazon reportedly has plans to open dozens if not more of these stores in major U.S. metros in the next three years. The Amazon Fresh stores, which range in size from 25,000 to 45,000 square feet, join the company’s other U.S. physical locations selling food and consumables: 511 Whole Foods Market stores and 24 Amazon Go stores. “We give ourselves the ability to innovate, test and learn, and adapt to meet the changing needs of our customers,” Helbling says. “That’s why, for example, as our grocery offering has grown, we moved Prime Now to the Amazon app and website so customers can shop all Amazon has to offer from one convenient location, and we opened Amazon Fresh grocery stores to give customers a convenient shopping experience thanks to Just Walk Out technology and the Amazon Dash Cart.” Just Walk Out technology (cashierless checkout) and the Dash Cart (shopping carts with checkout functionality) join other grocery experiments currently scaling up, such as Amazon Key In-Garage (grocery delivery straight to customer garages), Amazon One (palm-payment technology), and private brands. Amazon One is a fast, convenient, contactless way for people to use their palm to make everyday activities like paying at a store, presenting a loyalty card, entering a location like a stadium, or badging into work more effortless.

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According to Helbling, the Amazon Fresh experiment has been a big success so far. “Our efforts to evolve our grocery experience into a seamless omnichannel offering have been well received by customers — and the industry,” he says. Retail analytics firm Placer.ai recently examined the performance of Amazon’s first Amazon Fresh grocery stores in California and Illinois, and found that those stores are gaining market share against traditional grocery operators. “The relative steadiness in visits shows that a core group of customers have added a trip to Amazon Fresh to their regular grocery routine, indicating that Amazon Fresh has successfully integrated into the grocery mix for the neighborhoods it entered,” observes Shira Petrack, a Placer.ai blogger.

A Top 10 Grocer — Twice

Last month, in a second year dominated by the COVID-19 pandemic, Amazon cemented its leadership position in dunnhumby’s Retailer Preference Index (RPI) for U.S. grocery by landing the No. 1 and the No. 5 spots in the ranking. Amazon took first place, and Amazon Fresh took fifth place (the first time a food retailer has nabbed two spots in the top 10). “The pandemic has massively accelerated changes in how customers buy their groceries, and their behaviors are continuing to evolve,” says Grant Steadman, president of North America for dunnhumby. “2021 was the year that grocery retail became truly omnichannel. Retailers who delivered on their customers’ evolving needs in-store and online performed best. This was mostly the larger players, who used their advantages to consolidate their positions. The challenges for most other retailers are significant, but a number of midsize grocers gained momentum by understanding their customers better and differentiating their offering accordingly. The report aims to provide some direction on why and how retailers can best position themselves to win with customers, in this era of the Great Reinvention.” The overall RPI rankings are the result of a statistical model that predicts how retailer execution on various customer needs — preference drivers — affects lasting emotional bonds formed with customers, as well as near- and long-term financial performance. The study includes key findings such as:


Price and quality are no longer head and shoulders above all other customer preference drivers in securing superior, long-term sales growth and emotional connection with shoppers.

With a strong balance sheet, a burgeoning software-as-a-service business and a strengthened physical stores team in place, Amazon’s grocery ambitions are ready for liftoff.

Retailers in the first quartile have long-term sales growth that’s nine times higher than retailers in the fourth quartile, two times higher than retailers in the third quartile, and one and a half times higher than retailers in the second quartile. They also have superior short-term momentum to those in the other three quartiles.

‘New Capabilities in Grocery’

Grocery retail is now truly omnichannel, as digital’s share of total grocery sales more than doubled during the pandemic, from 5% to 10% of sales, yet half of the U.S. grocery shopping population doesn’t buy online and has no plans to. Nearly all online shoppers still buy in brick and mortar, where roughly 90% of all customer dollars are currently spent. Digital is king in driving momentum as Amazon has demonstrated over the past two years by being ranked as the top U.S. grocery retailer.

Amazon Fresh Footprint CALIFORNIA Amazon Fresh Store — Fullerton 1100 S Harbor Blvd Fullerton, CA 92832 Amazon Fresh Store — Irvine 13672 Jamboree Rd Irvine, CA 92602 Amazon Fresh Store — Long Beach 6235 E Spring St Long Beach, CA 90808 Amazon Fresh Store — Ladera Heights 6855 S La Cienega Blvd Los Angeles, CA 90045 Amazon Fresh Store — North Hollywood 5101 Lankershim Blvd North Hollywood, CA 91601 Amazon Fresh Store — Northridge 19340 Rinaldi St Northridge, CA 91326 Amazon Fresh Store — Whittier 15225 Whittier Blvd Whittier, CA 90603 Amazon Fresh Store — Woodland Hills 6245 Topanga Canyon Blvd Woodland Hills, CA 91367

When Amazon reported fourth quarter earnings on Feb. 3, the company was still growing sales by double digits from the pandemic-elevated levels of 2020. Amazon said net sales increased 9% to $137.4 billion. Net income increased to $14.3 billion, a near-doubling of profits. Amazon also reported that its physical store sales (including food retail banners Whole Foods Market, Amazon Fresh, and Amazon Go) were up 16% during the quarter. It was the third straight quarter of double-digit growth for the company's physical stores. Amazon CEO Andy Jassy said the company is seeing "higher costs driven by labor supply shortages and inflationary pressures" and that these issues are persisting into the first quarter due to Omicron. But, he said, despite these short-term challenges, "we continue to feel optimistic and excited about

Amazon Fresh Store — Cerritos 11340 South St Cerritos, CA 90703 Amazon Fresh Store — La Habra 1610 W Imperial Hwy La Habra, CA 90631 ILLINOIS Amazon Fresh Store — Bloomingdale 404 Army Trail Rd Bloomingdale, IL 60108

MARYLAND Amazon Fresh Store – Chevy Chase 5463 Wisconsin Ave Chevy Chase, MD 20815 PENNSYLVANIA Amazon Fresh Store – Warrington 389 Easton Rd Warrington, PA 18976 VIRGINIA

Amazon Fresh Store — Naperville 3116 S Rt 59 Naperville, IL 60564

Amazon Fresh Store — Franconia 7005 Manchester Blvd Franconia, VA 22310

Amazon Fresh Store — Oak Lawn 4031 W 95th St Oak Lawn, IL 60453

WASHINGTON STATE

Amazon Fresh Store — Schaumburg 16 A East Golf Road Schaumburg, IL 60173 Amazon Fresh Store — Westmont 30 W 63rd St Westmont, IL 60559 Amazon Fresh Store — Morton Grove 6931 Dempster St Morton Grove, IL 60053

Amazon Fresh Store — Factoria 3901 Factoria Square Mall SE Bellevue, WA 98006 Amazon Fresh Store — Seattle 2301 S Jackson St Seattle, WA 98144 Amazon Fresh Store — AVA Capitol Hill 610 E Pike St Seattle, WA 98122 WASHINGTON, DC Amazon Fresh Store – Logan Circle 1733 14th St NW Washington, DC 20009

Source: Amazon.com

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RETAILER DEEP DIVE

Amazon

the business as we emerge from the pandemic." Jassy specifically referenced excitement over "new capabilities" the company is building in grocery. Amazon is still following the same “short-term pain in exchange for long-term gain” growth strategy it has championed since the company first went public in 1997, one that occasionally disappoints investors but strikes fear into the hearts of competitors. The company’s forecast for fourth-quarter revenue calls for year-over-year growth between 4% and 12%. The guidance for operating income is between $0 and $3 billion. Of course, part of the reason for decreases in profitability is that costs are exacerbated by the current labor environment. “Across Amazon, we have hired more than 600,000 people globally during the pandemic,” Helbling says. “For Amazon Fresh, every time we open a store, we’re creating hundreds of new job opportunities to help us deliver a shopping experience that customers will love, right in their own communities. These are great jobs with industry-leading pay and benefits.” By the end of 2021, Amazon Fresh stores had created more than 6,000 jobs, according to the company. “Our Amazon Fresh store team is strong and growing,” affirms Stephenie Landry, VP of Amazon Grocery. “I’ve enjoyed getting to know employees and seeing first-hand how they support each other and our customers, while visiting our stores. Because of this amazing team, we’re able to bring customers a new, innovative shopping experience.” At the end of the third quarter, Amazon had 1.5 million employees and its starting hourly wages were at least $15 per hour for all full-time, part-time and seasonal employees and contractors. In addition, employees now have opportunities to own Amazon stock, participate in 401(k) plans with a 50% company match, and enroll in paid life and accident insurance. Last year, Amazon began offering signing bonuses

of up to $3,000 as it aimed to hire 125,000 delivery and warehouse workers across the United States. The company also raised its average starting wage to $18 an hour. “All of our full- and part-time positions offer employees highly competitive wages, along with a variety of benefits packages starting on the employee’s first day on the job,” Helbling notes. “We also provide employees the opportunity to learn new skills and grow with us at Amazon, as well as access to our innovative Career Choice program, which provides education and training for in-demand jobs.” The other short-term hit on Amazon’s profits has been supply chain-related. Helbling admits that the company hasn’t been “immune to the supply chain challenges everyone is facing currently. “To address it, we are continuing to add staff, creating work opportunities for people who want them, innovating across our supply chain, and working to get inventory closer to customers so we can provide products and improve delivery speeds,” he adds. As for how the retailer is replenishing its Amazon Fresh stores, Helbling says that it’s using local and national suppliers, and leveraging the Whole Foods Market supply chain already in place. “We use a variety of suppliers, including both national suppliers and local suppliers, and we do share some suppliers with Whole Foods Market,” he explains. “For example, we source many of our meat products, fresh seafood and produce from some of the same suppliers and farms that supply Whole Foods Market.” In October 2020, Grand Rapids, Mich.-based SpartanNash, which has been working with

Amazon on dunnhumby’s Retailer Preference Index

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Amazon since 2016 and supplies Amazon Fresh stores, filed paperwork to sell as much as 15% of its stock to Amazon by 2027. If Amazon is looking to build an integrated grocery distribution vertical, a minority stake in SpartanNash will provide all of the learnings it needs to do that.

Just Walk Out

It seems longer ago, but it’s only been four years since Amazon debuted technology at an 1,800-square-foot Amazon Go store in Seattle that allowed shoppers to exit a store without stopping at a checkout. Amazon’s Just Walk Out (JWO) technology offers shoppers the ability to enter, shop for the items they want and simply exit the store. Shoppers using Just Walk Out also have the option to use Amazon One, a contactless way for people to enter, identify and pay using their palm. After customers leave the store, those who use the Just Walk Out experience receive a digital receipt. In September, the company revealed that it would be rolling out JWO to full-size supermarkets: select Whole Foods Market and Amazon Fresh stores. Amazon scaling contactless payment options and its JWO innovation in 2022 couldn’t be more ideally timed. The pandemic has prompted consumers to favor the perceived safety and convenience of innovations such as JWO. According to Amazon, it’s hearing from shoppers across its grocery ecosystem that they want to skip the hassle, stress and pandemic-unfriendly crowding associated with checkout lanes. “We’ve heard from customers how much they appreciate the checkout-free shopping experience that Just Walk Out technology offers at both Amazon’s stores and other retailers’ stores,” says Dilip Kumar, VP, physical retail and technology at Amazon. For Amazon, the artificial intelligence-driven technology could dramatically reduce labor spend and improve inventory management and overall in-store operations. In addition, it makes sense for the company to want to showcase the capabilities of JWO technology in as many stores as possible as other retailers mull whether to buy the tech. According to Bloomberg, Amazon has deals to provide its JWO technology to Starbucks Corp., British grocery chain Sainsbury’s and airport c-store operator Hudson Group. Amazon is also selling its Amazon One technology to third parties. Amazon One is now available at more than 70 Amazon physical retail stores and Whole Foods Market stores, along with third-party locations. As for Amazon Fresh, JWO is poised to roll out in more of those stores as well. “To date, we’ve opened 23 Amazon Fresh stores in the U.S. that enable customers to skip the checkout line thanks to our Just Walk Out technology or the Amazon Dash Cart,” Helbling says. “We look forward to bringing this convenient grocery shopping experience to even more customers in California, Illinois, New Jersey, Pennsylvania, Virginia and Washington state, where we’ve confirmed more Amazon Fresh stores will open.” Last month, Amazon showed how serious it is about scaling its grocery business when it welcomed Tony Hoggett to

Amazon reportedly has plans to open dozens if not more Amazon Fresh stores in major U.S. metros in the next three years. Amazon Fresh stores range in size from 25,000 to 45,000 square feet and join the company’s other U.S. physical locations selling food and consumables: 511 Whole Foods stores and 24 Amazon Go stores.

its headquarters in Seattle. Hoggett had been with Tesco, the United Kingdom’s biggest food retailer, for more than 31 years and was chief strategy and innovation director. Hoggett has joined Amazon as SVP of physical stores, reporting to Dave Clark, chief executive of its worldwide consumer business. In a Jan. 7 LinkedIn post, Hoggett wrote: “Well, today is officially my last day at Tesco. It’s time for me to say farewell to a truly amazing set of work colleagues. … I wish you all the very best of luck for the future. Hello to the Amazon team, very excited to be working with you all.” Hoggett had a reputation at Tesco for running exceptional multiformat retail operations, a perfect fit for Amazon’s grocery ambitions. He will need to partner with Helbling and Landry as the company looks to scale its grocery business over the next three to five years. Helbling says that he’s focused on applying learnings as the company continues to open more grocery stores. “All customers want a neighborhood grocery store that offers a broad selection of high-quality foods available at low prices, and a convenient shopping experience,” he continues. “Our Amazon Fresh stores deliver on that. But we also recognize that each community where we open a store is unique and has different needs. We focus on listening to customer feedback and adjust selection based on what we’re hearing to meet the needs of customers shopping that store. For example, at our Amazon Fresh store in Seattle, we kept hearing from customers that they wanted collard greens in our prepared foods hot bar, so we added them to our menu.” PROGRESSIVE GROCER Februar y 2022

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PROTEIN SPOTLIGHT

Beef Outlook

In Rare Form AS A CONFLUENCE OF UNUSUAL FACTORS AFFECTS THE BEEF MARKE T, DEMAND IS STILL STRONG FOR THIS TOP PROTEIN. By Lynn Petrak eef is one of those stalwart foods, a staple of the American diet and a centerpiece of the retail meat case. While there has been some historic predictability about cycles of beef supply and demand, and fairly steady consumption trends over the past several years, the market for the king of animal proteins is bucking tradition lately. Part of the disruption, of course, is linked to concurrent and high-profile challenges of supply chain issues, labor shortages, inflation and the pandemic. COVID-related shutdowns in cattle, feedlot and slaughterhouse operations in 2020 still reverberate in today’s market, given the unique lagging structure of the beef industry. At the same time, the labor crunch and bottlenecks in everything from fertilizer to feed to cattle tags are affecting the amount of available cattle. This confluence of trends, along with other factors, has inevitably affected beef prices. As of November, the consumer price index (CPI) for beef was 20% higher than it was the previous year. For 2022, the

Key Takeaways Challenges such as supply chain issues, labor shortages, inflation and the pandemic have inevitably affected beef prices. Despite mounting price pressures, consumers are still drawn to the meat case, but are turning to value cuts of beef. Even before COVID-19, health, wellness and sustainability were driving consumer perceptions and purchases of beef.

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PROTEIN SPOTLIGHT

Beef Outlook

Despite high retail prices, industry data group CattleFax reports that beef demand is the highest it's been in more than three decades.

Economic Research Services arm of the U.S Department of Agriculture (USDA) projects price inflation for beef to slow somewhat to a rate of 2%-3%. Also in recent months, the beef industry has garnered national attention as the Biden administration castigated the industry’s top beef companies for their hold on the market. In revealing the federal government’s $1 billion support of independent livestock producers and meat processors, the president called out industry consolidation, asserting, “Capitalism without competition isn’t capitalism — it’s exploitation. That’s what we’re seeing in the meat and poultry industries now.” The administration’s public comments and actions received a swift industry response. In a statement released in mid-January, the North American Meat Institute (NAMI) said: “The Biden administration has alleged that meat and poultry industry concentration is to blame for rising consumer prices. The truth is not so convenient.” Washington, D.C.-based NAMI used USDA data to show that although the four-firm concentration of fed cattle beef packaging has remained constant for more than two decades, the beef CPI has been variable over that same period. Meanwhile, a number of independent and smaller beef suppliers and processors applauded the federal support of their efforts to stay afloat and competitive.

It’s What’s for Dinner — Still

In this operating environment, what does the beef market look like for grocers and their shoppers? As 2022 gets underway, consumers are keenly aware of inflation trends. According to data from San Antonio-based market

COVID caused some disruptions in the cattle market that, in turn, affected supply and price. For 2022, experts project stronger cattle prices.

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research firm 210 Analytics, beef, along with pork, produce and poultry, tops the list of categories in which most people notice inflation. The research firm also found that 45% of shoppers are looking for sales specials around the store more often. Despite mounting price pressures, consumers are still drawn to the meat case. Overall meat sales were flat in 2021 compared with 2020 but still 17%-20% above pre-pandemic levels. Fresh beef slid 7.6% in volume sales last year, but remained 4.1% higher than in 2019. On a dollar sales basis, fresh beef was up 6.7% from December 2020 to December 2021, and 26.9% higher than in December 2019. Other research shows that while inflation is real, so is interest in beef. Centennial, Colo.-based industry research group CattleFax reports that beef demand is the highest it’s been in 33 years. A recently released global animal protein outlook from international corporate and investment bank Rabobank predicts that demand for beef should remain solid and cattle prices should be stronger, even as processors grapple with ongoing issues.

With and Against the Grain

In a climate marked by inflation, COVID, regulations, and shifting consumer shopping and eating habits, there have been some accompanying changes in beef shopping. Reacting to higher prices, many consumers are turning to value cuts. According to data from 210

While big-picture issues like health, the environment and price shake up the category, taste and variety remain other key drivers of product innovation in beef.


As inflation continues to affect the retail meat case, many consumers have shifted to value cuts like ground beef.

Analytics, ground beef sales rang up $11.3 billion in 2021, continuing the upswing in ground beef purchases that began in 2020. Beyond price, other factors are influencing beef product development and merchandising. Even before the pandemic, health, wellness and sustainability were driving consumer perceptions and purchases. A recent report on sustainably raised meat from Chicago-based industry insights firm Midan Marketing revealed that more than a third (34%) of meat eaters have become more concerned about the sustainability of meat products they buy. The 2021 “Power of Meat” report from FMI — the Food Industry Association and the Meat Institute Foundation showed that 76% of shoppers feel that meat should be part of a healthy diet, up from 64% in 2020. At the same time, the number of flexitarians has grown and younger consumers are less inclined to say that meat belongs in a healthy, balanced diet than their Baby Boomer, Gen X and older Millennial counterparts. As preferences shift, beef companies are responding. Last year, major processor JBS, based in Greeley, Colo., added a line of Right to Roam natural beef, with free-range, hormone-free and antibiotic-free beef offerings. Also, many traditional beef brands, including the largest processors and smaller regional and niche providers alike, are complementing their portfolios with plant-based products. Other protein companies are starting to invest in cell-cultured meat, including beef. Springdale, Ark.-based Tyson

Shopper interest in sustainably raised beef is climbing, and processors are responding with products like JBS' line of Right to Roam natural beef.

Foods, for example, has backed lab-based meat firm Memphis Meats, while JBS is investing in a cultivated meat firm based in Spain. Even celebrities are getting into the act, like actor Leonardo DiCaprio, who recently invested in Aleph Farms and Mosa Meats as they pursue cultivated meats like cultivated hamburgers and steaks. For its part, Centennial, Colo.-based National Cattlemen’s Beef Association recently submitted comments to the USDA’s Food Safety and Inspection Service, noting that the term “beef” should be applied only to products derived from livestock raised by farmers and ranchers. While big-picture issues like health, the environment and price shake up the category, taste and variety remain other key drivers of product innovation in beef. One example is a new line of Angus beef bacon from Pennsylvania-based Godshall’s, available at Sam’s Club locations. Meeting simultaneous demand for flavor, quality and organic profiles, Organic Prairie, a sister brand of LaFarge Wis.-based Organic Valley, has rolled out a new line of seasoned ground beef made with all-organic spices. In addition, even as many shoppers shift to ground beef due to price concerns, there’s a segment of consumers seeking high-quality beef products as an indulgence. In 2021, Bentonville, Ark.based Walmart debuted a high-quality line of Angus beef under the McClaren Farms label. Salt Lake City-based grill maker Traeger Grills responded to interest in higher-end beef by recently introducing a line of Traeger Provisions meal baskets that include cuts like Wagyu beef brisket, and one of Instacart’s partners is Boston-based ButcherBox, an online grocery platform that offers products like grass-fed, grass-finished beef portions. PROGRESSIVE GROCER Februar y 2022

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CPG Q&A

Plant-Based Foods

Nourishing the Next Generation SKINNY BUTCHER CEO DAVE ZILKO PUSHES THE BOUNDARIES OF PL ANT-BASED INNOVATION. By Gina Acosta ood trends come and go, but the demand for plant-based protein doesn’t seem to show any evidence of fading away. The volatile pricing and shortages of animal proteins, as well as concerns about health, wellness and animal welfare, are driving increasing numbers of consumers toward meat-free alternatives. Now the driving force behind one of America’s most popular fresh salsas has his sights set on leveraging the opportunity in plant-based protein. Dave Zilko, the strategic innovator behind Garden Fresh Gourmet, talks to Progressive Grocer about his entrepreneurial journey, how to build a No. 1 brand and what’s next in the plant-based category. Progressive Grocer: During college, you spent some time in France. How did your time there jump-start your career in food innovation? Dave Zilko: I was going to Michigan State, getting a degree in finance, and I spent a summer in France studying French. I was in a city called Tours in the Loire Valley, and I would take a train to Paris every weekend. I became enamored with the attention to detail, the flower boxes everywhere, the cobblestone streets, the human scale of everything. This was in the early 1980s, and I could not believe how much better the food was there than here, could not believe how great the glasses of Bordeaux were. The beauty of France connected with me immediately, but it was really the food experience. I just love how they appreciate how food brings people together and how important a meal is. That was even more important to me than the food itself. PG: But the United States has come a long way when it comes to food quality since then.

“If 25% of the $290 billion U.S. animal protein market gets converted to plant-based, this will represent the biggest opportunity in food in our lifetime.” —Dave Zilko, CEO, Skinny Butcher

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DZ: Yes, I’m very proud of this country because today I can find baguettes in Detroit every bit as good as what you find in Paris. I think our wine is every bit as good as theirs — a little bit different, but I think we’re on their level. We’ve definitely caught up, maybe not yet on an everyday basis, but our progress has been remarkable and is something to celebrate. PG: So you went back to the U.S., graduated and decided to become a food entrepreneur? DZ: Coupling my fascination with strategy and the creativity of business, my desire to be an entrepreneur, with my experience in France, the food space just seemed to be where I was drawn to. I decided to go to George Washington University to get an MBA in marketing. After that, I came back to Detroit; I’ve got a very strong sense of home — I love the area. I started a little company with a credit card loan from my girlfriend. People always ask: I did marry her. Struggled for 11 years, and then I met


Skinny Butcher's Crazy Crispy sub-brand capitalizes on the popularity in the QSR space of the Southern fried crispy chicken sandwich, but with a plant-based twist.

Jack Aronson at the Fancy Food Show in New York in the summer of 2002; we became partners almost instantly. PG: Starting a successful salsa company isn’t that simple! DZ: Ours is an “Only in America” story. Jack, who passed away in August, started a salsa company in 1997. He was in his late forties, had to declare bankruptcy to hold on to the lease of his 1,200-square-foot restaurant just outside of Detroit, and, out of desperation, pulled out a 5-gallon bucket and in 15 minutes he made what is today Garden Fresh Artichoke Garlic Salsa. He was a food savant: He had no formal training, no formal education. He built a plant, invited me to be a partner, and before we knew it, we were, improbably — fresh salsa from Detroit? What could possibly go wrong? — the No. 1 brand of fresh sauce in the country. When we sold to Campbell Soup Co. in 2015 for $231 million, we were making 85 tons of fresh salsa a day. We were still peeling onions by hand, and making our salsa in 5-gallon buckets, just as Jack did for the very first time in that back of that bankrupt restaurant. We never compromised on our quality, no matter how big we got. PG: How did your success with Garden Fresh Gourmet lead you to start Skinny Butcher? DZ: My approach to building great food concepts is I want to win on branding then I want to win on flavor profile. If you can do that, the world’s going to beat a path to your door. That’s really what we did at Garden Fresh. So, in terms of the brand, we wanted a tension between the progressive nature of this category but still have a retro feel to speak to flavor profile more than we think other plant-based protein brands are doing. We’re no longer appealing to vegans and vegetarians, which are at most 5% of the population. We’re now reaching out to the flexitarian movement, people who are saying, "Yeah, it is better for the environment and better for me if I reduce my animal protein consumption.” If 25% of the $290 billion U.S. animal protein market gets converted to plant-based, this will represent the biggest opportunity in food in our lifetime.

PG: What is the origin of the company’s jovial winking logo? DZ: There’s an old joke that says, “Never trust a skinny butcher or skinny chef — if they’re skinny, they’re not eating their own food.” He’s winking because he’s saying, “Look, this is so good even I’m eating it. You can trust me.” So we’re trying to communicate with the consumer at the point of sale; the butcher is literally winking, embracing him or her in the store. I think a brand should have a distinct voice and personality. I think people buy food with their eyes. You really need to connect there. PG: How were the company’s plant-based offerings — patties, grounds, breasts, sausage, tenders, strips, etc. — developed? DZ: We found a vegetable fiber strain in Europe, from Italy in particular. We’re the first ones in this country to have it. From there, we put a proprietary blend of chicken flavorings together. We really believe we’ve got a superior texture and a superior taste; we’re really thrilled with the flavor profile. With respect to taste, there is no sacrifice between, say, a Skinny Butcher Chick’n Nugget and an animal-based chicken nugget. I personally prefer plant-based just for the bite; real chicken can be muscly – especially a lot of chicken nuggets, which are made with dark meat. So with plant-based, with Skinny Butcher, you get more of a consistent mouthfeel and it’s just an easier process on your body right from the get-go. From there we said, “What’s the hottest thing going in the QSR space right now?” It’s the Southern fried crispy chicken sandwich. So we came up with the “Crazy Crispy” sub-brand, which is an important strategic differentiator. We’ve got Crazy Crispy chicken breast, chicken nuggets, chicken patties, and chicken tenders. And we have handed all of it over to Golden West Food Group, who are not just Skinny Butcher’s PROGRESSIVE GROCER Februar y 2022

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CPG Q&A

Plant-Based Foods contract manufacturers but are significant equity partners in this venture, who can produce at national scale right out of the gate. They’ve got a 350,000-square-foot plant, 1,600 employees, and a national sales and distribution network that we will be tapping into. PG: What’s the most challenging part of what you are doing, creating a new market or creating the product? DZ: I give Beyond Meat and Impossible Foods a lot of credit because, if you think about it, Morningstar Farms have been out for a long time — I think they were founded in 2004. Boca Burgers go back to like 1989. So plant-based protein is already an established category. But I think it was established largely for vegans and vegetarians. What Impossible and Beyond did was they came out and they hit everybody with a two-by-four. They created this craze; they kind of did for plant-based protein what Sabra did for hummus, what Grey Poupon did for specialty mustards, what Robert Mondavi did for American wine. Impossible and Beyond are great brands, world-class brands, but they’re brands of the moment, though. With Skinny Butcher and the approach we’re taking, I think we’re going to have longer legs as a brand because we’re speaking of flavor profile. We’ll see. Nobody has all the answers. But I think there’s wind at the back of this category like nothing we’ve seen in our lifetime. PG: Can you tell us what else is in the pipeline and when it will be available at retail? DZ: Later this year, we’re going to have spicy varieties of our Crazy Crispy nuggets, tenders and breasts. Many retailers have asked us if we could make some pre-packaged sandwiches and sliders too. We’ve developed some fish items, and we’re going to have fish sticks and fish filets probably coming out in the second quarter. One of my biggest surprises is how many buyers and brokers are asking for this, because there’s an increasing concern among moms regarding mercury in fish. We’re going to have some turkey items, with a Mayflower hat on the butcher. On the fish versions, we put a sea cap on the butcher. So the branding has a lot of personality; we don’t want

“The branding has a lot of personality; we don’t want to take this too seriously. These are chicken nuggets, for crying out loud. We just think they should put a smile on people’s faces.” —Dave Zilko, CEO, Skinny Butcher

to take this too seriously. These are chicken nuggets, for crying out loud. We just think they should put a smile on people’s faces. PG: What accounts for the rising popularity of plant-based proteins, and where do you think the trend will go next? Is it likely to become a permanent feature of consumers’ diets? DZ: We’ve got something no other plant-based brand to our knowledge has. We have developed a virtual restaurant program. We are now live on Uber Eats, and we are partnering with one of the premier virtual restaurant development groups in the nation: Wow Bao, originally developed by Lettuce Entertain You, out of Chicago. Wow Bao has deals signed for 650 dark kitchens nationwide right now, I think they’re up to 550 that are open and operating. They’re going to take our Skinny Butcher virtual restaurant concept and they’re going to add it to their existing program. We’ve got our barbecue Crazy Crispy chicken sandwich, a buffalo Crazy Crispy chicken sandwich, chicken parmesan, chicken tenders, chicken nuggets, and salads with our Crazy Crispy chicken and chicken wraps, all now live on Uber Eats. PG: What do you think the food industry will look like in five years? DZ: With the plant-based market already established by Beyond Meat, Impossible Foods, Tyson’s Raised & Rooted, etc., we’re kind of looking beyond that and saying that in three, five, seven, 10 years from now, you’re no longer going to have to hit people over the head with this. Plant-based is going to continue to grow. It just has to because of the better-for-you issues and the environmental sustainability issues and the animal cruelty issues. So I just think it’ll be a long time before there’s a crescendo to this wave, probably a decade, maybe 15 years, but it’s going to be a really nice wave. And then we’ll just see what next wave comes up. There’s always something really cool that comes around, and that’s a testament to the American spirit and how open we are to trying new things.

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INDUSTRY EVENTS

Technology

The exhibits at the recent NRF 2022: Retail's Big Show revealed a breathtaking range of technology solutions to help retailers.

5 Key Trends Noted at NRF 2022: Retail’s Big Show AUTOMATION, CRYPTO, FRICTIONLESS STORE E XPERIENCES, E-COMMERCE AND SAFE T Y/SECURIT Y ARE TOP PRIORITIES. By Bridget Goldschmidt othing could stop NRF 2022: Retail’s Big Show — not icy winter temperatures and inclement weather, not even the latest iteration of a lingering pandemic. According to National Retail Federation President and CEO Matthew Shay, despite these challenges, the event, which ran Jan. 16-18 at New York’s Javits Center, managed to draw about 20,000 attendees and 800 exhibiting companies, along with a range of speakers. Even a cursory trip around the show floor was enough to reveal a breathtaking range of solutions to help retailers, from sourcing of products to the in-store customer experience, and all points in between. Following are five particularly noteworthy trends observed at NRF 2022: Retail’s Big Show:

1

Automation Rules: This one was pretty obvious, from the sheer number of such solutions in evidence at the show, including Locus Robotics’ “co-bots,” designed to work alongside humans in fulfillment warehouses, zipping around the company’s display area; Autostore’s grid-based picking system, also being demoed; Avidbots’ state-of-theart robotic floor cleaner; and Ottonomy, whose proprietary technology enables fully autonomous curbside and last-mile delivery, reducing retail’s carbon footprint, to name just a few. According to BJ Santiago, CEO of Nicholasville, Ky.-based Badger Technologies, a maker of inventory control and hazard mitigation robots that traverse store aisles at such grocers as Woodman’s and Ahold Delhaize USA banners Giant/Martin’s and Stop & Shop, automated in-store tech is becoming much more the norm, with units offering additional capabilities, such as robotic arms for stocking shelves, probably rolling out in the next five to 10 years. Sam Saad, VP of strategy and growth at Gatik, a provider of “middle-mile” solutions through its fleet of autonomous trucks that are currently moving items for Walmart and PROGRESSIVE GROCER Februar y 2022

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INDUSTRY EVENTS

Technology

as something of a hub in this regard, he believes that the main driver for change will be when the U.S. Central Bank comes out with a plan for cryptocurrency, a move that he thinks could happen as soon as this year.

3

AutoStore's grid-based robotic picking system, empowered by Dematic, and Badger Technologies' in-store inventroy control and hazard mitigation robots were two examples of automation at NRF 2022: Retail's Big Show.

largest Canadian retailer Loblaws, noted that the company was “scaling up rapidly” in anticipation of “explosive growth” in terms of new partnerships, expansions of existing partnerships and infusions of new capital. As to when fully automated vehicles shuttling products from warehouses to stores and from store to store on public roads becomes the industry standard, Saad predicted “big shifts in the next five years.”

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Crypto is Coming: With all of the buzz surrounding cryptocurrency, particularly Bitcoin, of late, it’s only natural that retailers would increasingly be looking into crypto as a payment option for consumers, and tech companies are meeting that need. Atlanta-based NCR, for example, recently acquired cryptocurrency software provider LibertyX, which enables customers the ability to buy and sell cryptocurrency, conduct cross-border remittance, and accept digital currency payments across digital and physical channels. NCR will use its Pay360 platform to offer the LibertyX capabilities as part of its solutions for banks, retailers and restaurants. Unsurprisingly, Peter Jensen, CEO of San Francisco-based RocketFuel Blockchain, a global payment-processing company offering one-click checkout solutions using Bitcoin and other cryptocurrencies, is particularly bullish on crypto, explaining that retailers that accept cryptocurrencies as a payment option in-store or online will increase revenue by gaining access to a new wealthy group of customers, many of them younger, and reduce cost, since, unlike credit cards, crypto never gets declined and there are no chargebacks. Additionally, in common with David Wilkinson, president of NCR Retail, Jensen views crypto as particularly beneficial for the unbanked and underbanked populations of the world, as it enables them to take part in the digital economy, in which “your phone becomes your bank,” as Jensen put it. Jensen noted that in stores, grocers could integrate a cryptocurrency payment option into their point-of-sale system, allowing shoppers to pay by phone, as they already do with such options as Apple Pay. Although he acknowledged that on the whole, the United States is lagging behind in the adoption of crypto, despite Miami’s reputation

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Frictionless is Here to Stay: Although Amazon’s much-touted “Just Walk Out” technology predates the pandemic, there’s no doubt that consumers’ enthusiasm for quick, convenient, contactless shopping experiences skyrocketed during the age of COVID-19. Of course, once consumers discover an easier way of doing anything, that becomes the expectation, and retail tech must rise to the occasion. Other retailers to explore such technology include Ahold Delhaize USA, Giant Eagle, and Hy-Vee at its fuel stations and convenience stores. More recently, Wakefern Food Corp. revealed a partnership with computer vision company Trigo on a forthcoming pilot this year of an autonomous supermarket employing Trigo’s artificial intelligence-based frictionless checkout technology, marking the Tel Avivbased vendor’s first foray into the United States, while tech-enabled convenience store chain Choice Market is rolling out cashier-less Mini-Marts in such nontraditional locales as hospitals, airports and college campuses. There were plenty of examples of frictionless tech at the show, including self-checkout options from NCR; Accuvia Software Group, in partnership with Toshiba; and Mashgin, which offers a completely touchless system, as well as solutions from such companies as barcode-scanning technology provider Opticon; retail store fixture manufacturer Lozier Corp., in conjunction with Cornerstone Automation Systems LLC (CASI); and Edgify, developer of a distributed artificial-intelligence training framework solution. From the looks of things, ensuring a frictionless shopping experience for customers that will enable them to get in and out of a store as quickly as possible — and often without any human intervention — will only become more of an imperative for retailers going forward.

4

Evolution of E-Commerce: Speaking of contactless shopping experiences, e-commerce options such as home delivery orders left at front doors and curbside pickup gave consumers rattled by COVID-19 a sense of comfort that they wouldn’t have to encounter possibly infected store associates or delivery people in person. As a result, online ordering surged during the pandemic and is poised to remain a major shopping method, due to its anytime convenience — a feature especially exploited by so-called instant-needs platforms such as Gopuff and Gorillas, which are continually aiming to narrow the delivery window.


Part of this evolution of e-commerce is Santa Monica, Calif.-based Robomart, a service that enables consumers to shop for necessities by “hailing” a mobile store via app, whose average engagement, from hailing a vehicle to the completion of an order, lasts just nine minutes. Robomart has recently been issued a patent for its one-tap store-hailing and seamless checkout-free technology, which should make the service even easier to use as it transitions to a marketplace model. The company’s Retailer Platform, introduced last September, enables retailers to deploy branded mobile stores. (For more about Robomart, read the Ahead of What’s Next column on page 74.) Other providers that offer branded marketplace e-commerce solutions include Rosie, Wynshop and NCR’s Freshop, as food retailers, particularly smaller independents, seek to create their own identities in the realm of digital grocery.

5

Safe and Secure: There are many ways to interpret these terms, but if the pandemic has taught us anything, it’s that people want to know that the places that they shop are looking out for their well-being. One example of this is to ensure that sanitary and hygienic standards are enforced across all stores in a chain, which Qvalon, a cloudbased solution for multiple-location retailers, can help with. The New York-based company assists retailers in creating customized criteria, including cleanliness, and then provides visibility into how each store is performing, so that retailers can see what needs to be improved and where, resulting in a more consistent — and safer — experience across locations. Meanwhile, a major security issue for grocers is loss prevention, which Mountain View, Calif.-based spatial intelligence platform Pathr. ai is able to offer with a solution that tracks the movements of people Opticon was one of the vendors displaying a frictionless shopping solution at NRF 2022: Retail's Big Show.

Autonomous-vehicle company Gatik is scaling up rapidly in anticipation of explosive growth, according to VP of Strategy and Growth Sam Saad.

in a retail location to gauge behavior patterns — anomalous behavior can be flagged and reported to the retailer for further investigation. Germantown, Md.-based Hughes Network Systems, a managed services provider whose offerings include security services, among them protecting retailers from cyberattacks, is ramping up its offerings in the SOC (security operations center)-as-a-service area, which Jeff Bradbury, senior marketing director, North America, likened to “having a cybersecurity SWAT team on standby.” One fascinating byproduct of in-store robots such as those deployed by Badger Technologies is the apparent chilling effect that they have on retail theft. Santiago related an anecdote that one retailer that deployed the robots in its HBC aisle at a peak time for theft observed a 14% decline in such incidents, since would-be perpetrators believed that the robots were monitoring their behavior, although the units are designed for inventory control and hazard mitigation only. In terms of additional trends to look out for, Bradbury noted that in the area of networking services, Hughes is working with satellite communications service OneWeb on a low-earth-orbit connectivity solution akin to SpaceX’s Starlink venture but tailored to B-to-B enterprise businesses. According to Bradbury, the solution will be widely available later this year, although there are already some early adopters in the market. He went on to note that grocers stepped up to the plate and helped people during the pandemic by taking on new tech offerings, so it was up to vendor partners like Hughes to help move food retailers from being reactive to proactive in this realm, thereby “creating a new baseline” for the industry. As for retailers’ ability to meet this present moment and beyond through their adoption of pertinent technology, NRF’s Shay has no doubt that they can and will: “There are a lot of initiatives underway, and we’re confident that retail is going to continue to step up and meet the biggest challenges of today.” PROGRESSIVE GROCER Februar y 2022

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FRESH FOOD

Meal Solutions

Healthful chef-created meal kits are one of many turnkey meal solutions available to grocery retailers.

Prepared to Accelerate THE PANDEMIC SPED UP INNOVATION AND SALES IN THE RE TAIL PREPARED FOOD RE ALM, AND INDUSTRY LE ADERS ARE MAKING THE MOST OF THE FORWARD MOMENTUM. By Kathleen Hayden e are at the point in the pandemic where some silver linings are emerging. The food industry has survived supply issues, staff shortages and ever-changing safety protocols, among other operational problems. With restaurants facing even bigger challenges and longer recoveries, the past two years have reminded consumers just how essential grocery stores are to our daily lives.

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Key Takeaways This time in the history of food retail is the perfect opportunity to reinvigorate and reinvent the industry, thanks to the ability to provide convenience, freshness, better health, and the flavors and styles of chef-created meals. Grocery stores have made great strides in advancing technologies, apps and online interactions so that out-of-store ordering and experiences can compete with those of restaurants. Retailers can play a role in providing better, fresher meal options, particularly those specialties for which they’re known in their local communities, with convenience and speed.


Now the industry is ready to innovate and find even more creative ways to help people get food on the table. Nowhere is this clearer than in the prepared food category. The 2021 “Power of Foodservice at Retail” report from FMI — The Food Industry Association notes, “In 2020, the share of fresh items as a percentage of total store sales declined” because early pandemic patterns meant that shoppers made fewer but larger trips and relied on shelf-stable items from the frozen and center store aisles. Yet good news emerged by the first half of 2021, when the fresh perimeter regained lost share and reached 31.5% of sales. “The deli department, including meat, cheese and prepared foods, reached $41.1 billion in annual sales, reflecting an increase of 4% versus the same period a year ago,” observes Arlington, Va.-based FMI. Even with this encouraging rebound, the fresh perimeter can’t rest on its laurels. We’re already seeing how quickly pandemic fatigue can hit the kitchen, pushing people back into takeout and delivery patterns. FMI finds that the power and opportunity for convenience-driven retail meal solutions lie in “[continuing] to serve as differentiation strategies for their businesses.” “With the right formula that caters to the customer with supportive technology, retailers can increase their significance as a destination for health, well-being and food solutions,” Rick Stein, VP of fresh foods at FMI, notes in the report.

The Time is Now

For Michael Lippold, founder, and CEO of Ventura, Calif.-based FreshRealm, the right formula is about providing solutions to shoppers, some of whom may need a heat-and-eat option, some of whom may want a meal kit that helps them learn how to cook, and others who may need daily convenience options that fall in the middle of that spectrum. With the November 2021 launch of its Kitchen Table brand, FreshRealm is aiming to help retailers offer a turnkey menu of chef-created fresh meal solutions. Lippold sees this time in the

Clear, easy instructions are essential to take-home packaging.

“Meal solutions from the fresh perimeter can compete on convenience, and we excel in health and wellness, which has never been more paramount.” —Rick Stein, FMI history of food retail as the perfect opportunity to reinvigorate and reinvent the industry. “We see fresh meal solutions at the end of an 80-year history of how people have shopped for and cooked food,” he notes, explaining that eight decades ago, shoppers bought from fresh outdoor markets, bakeries, and the neighborhood fishmonger and butcher. From the 1950s to the 1980s, stores got bigger, and food became more processed and shelf-stable for convenience. By the 1990s, however, consumers had realized that processed food loses some of its nutritional value and quality. “Now we have evolved back to where consumers want food that is closer to the original source, and with its nutrition intact,” says Lippold. “They also demand convenience, freshness, better health, and the flavors and styles of chef-created meals they experience in restaurants.” FreshRealm’s in-house expertise supports culinary design, sourcing, implementation, logistics, marketing, promotion, and delivery that brings meals to retailers within 24 hours of assembly. “We have end-to-end solutions,” observes Lippold. “On one end are fully prepared heat-and-serve meals that are chef-created and available with an array of specific diets and tastes in mind. We have solutions for retailers who want to scale up their own brands. Or, if you want to develop a full product line, we can do that, too. We allow grocery stores to stay within their core competencies and we can support them with what we know.” Jewel Hunt, group VP of deli, foodservice, bakery and branded concepts at Boise, Idaho-based Albertsons Cos., has seen how a full array of prepared options was especially important over the past two years. “The pandemic has taught us that many of our consumers are focused on healthy eating and well-being, and we offer a wide variety of meal solutions that meet that demand,” she says, noting that likewise, “[c]ulinary styles and preference vary by customer; therefore, we offer several choices from our Ready to Eat, Ready to Heat and Ready to Cook options, which makes our Ready Meals an easy choice to fulfill and meet their needs.” FMI’s Stein is also enthusiastic about how fresh grocery store options fit into the future of how Americans eat. “Meal solutions from the fresh perimeter can compete on convenience, and we excel in health and wellness, which has never been more paramount,” he notes. “Grocery meal solutions have more options for people who have underlying conditions and need to eat PROGRESSIVE GROCER Februar y 2022

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ADVERTORIAL

LOOKING BEYOND POTATOES:

The Benefits of Marketing “Quick Prep Starch Sides” SPEAKING WITH RYAN ELLIS, Vice President, Retail Marketing & Business Development

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Insights-Driven CENTER STORE GROWTH

After a decade off majority market ma share in the packaged potatoes es category, category we collaborated with IRI to learn more about consumers. This study unveiled consumers reach for Idahoan products for the same occasions they use other time-saving side dishes like dried pastas and quick prep rice. Now, we’ve embraced our role in the “quick prep starch sides” category. This insight is allowing us to better serve our consumers around the country, reach new households and help lead center store growth.


FRESH FOOD

Meal Solutions certain foods, or those who see food as medicine. Our research finds that the most popular diet now is your own diet, which means that people have highly personalized ways of curating what they eat, whether it’s ‘keto light,’ intermittent fasting, cheat days. They need the kind of ingredient transparency they can’t get from the drive-thru, and they can get it from their local grocer.”

Cross-Category Hybrid Meals

Teresa Sabatino, director of customer marketing at Home Chef, the meal kit and food delivery company owned by Cincinnati-based Kroger, notes: “We anticipate at-home meals will continue to dominate in 2022. With people returning to stores to shop, we’re focused on continuing to innovate our in-store meal solutions and offer convenient products that don’t sacrifice quality or flavor. We’re focused on not only making mealtime simple and delicious, but we also want to help make mealtime your way. In stores, you can select from a variety of Heat & Eat single-serve entrées, separate proteins, sides and more to mix and match and create your perfect meal.” Stein sees this mixing and matching as part of an evolution in the way that shoppers experience and use prepared meals. “Fresh prepared foods are part of meal solutions that now involve more parts of the store, from a prepared pasta main dish to bagged salad, bakery bread and frozen vegetables,” he says. “People want ideas about putting these components together. We used to think that shoppers needed cross-merchandising in the deli section, but that’s not necessarily the case anymore. They want suggestions through signs, menu boards, staff, lists and directions. Apps can provide this ideation outside the store, and really drive home the fact that hybrid meals are where groceries shine.” Stein points to great strides in the way that grocery stores have advanced technologies, apps and online interactions so that out-of-store ordering and experiences are up to speed and ready to compete with those of restaurants. Beautiful images and plating ideas help a brand speak to consumers, both in-store and at-home.

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For her part, Hunt believes that technology is vital to category growth. “Now more than ever, consumers are engaging digitally, and we understand that we must be nimble and adaptive to our multigenerational consumer base,” she asserts. “We continue to offer prepared meals that are high quality and fresh, but now consumers can order these meals conveniently online to be either delivered to their home or picked up at our store through our Drive Up & Go program.”

Insta-Ready

Hybrid meals and the need for convenience have also been sweet spots for Instacart, which on Jan. 13 launched its Ready Meals Hub, a focused in-app section featuring prepared meal ordering and delivery from more than 4,100 grocery stores. According to Daniel Danker, VP, head of product at San Francisco-based Instacart, grocers need to step up their prepared meal production and sales as business booms. Danker notes that consumers’ shopping habits and frequency revealed new patterns during the pandemic. “Beyond the weekly shop, we are seeing much more quick, smaller convenience shops for fresh fruit, fresh vegetables and dairy,” he explains. “These are items that grocery stores do best, and our service allows them to do it with speed. We wanted to apply this convenience business model to another category grocers do well, and that’s fresh healthy meals.” Instacart’s Break Up with Takeout campaign recognizes that takeout burnout has peaked in year two of the pandemic. The company’s delivery data shows that retailers could play a role in providing better, fresher options with convenience and speed. Danker notes that the typical prepared meal order is for two meals, plus 19 other items. In addition, shoppers ordering from the hub are shopping twice as frequently as regular Instacart users.


The 4 Ws of Packaging Priorities ASKING WHAT, WHEN, WHO AND WHY WILL KEEP YOUR PACK AGING ON TR ACK.

What:

Focus on the food. It must look and taste good, have ingredient integrity, and keep, cook or retherm well. “Functionality is paramount to packaging,” advises Rick Stein, VP of fresh foods at Arlington, Va.-based FMI – The Food Industry Association. “Consumers tell us that packaging is wasteful only if it doesn’t serve a function. Food safety and integrity are the biggest considerations.”

When:

Apps and store merchandising help shoppers see prepared entrées as centerpieces of hybrid meals that include packaged salads, fresh bread and other extras.

“Our hub creates a dedicated ordering category where shoppers can find options like ‘sushi under $10’ or ‘salads for $6,’ he says. “This approach plays to grocery store strengths. If you’re known for your great soup or your burritos, your shoppers will find them easily.”

Welcome to the Future

The study of shopping patterns is already revealing more ways to personalize both the ordering process and the options that grocery stores make available. For instance, it’s easy to see where special meals for two would be a hit, or how recommendations for add-on items would enhance the ready meal experience. Sabatino says that as Home Chef looks ahead, the development team will “plan to expand our options of family-serving sizes, offer more items focused on convenience, and launch new products in other prepared food categories such as dips.” Likewise, Danker sees other ways that ready meals can grow. “It’s important to capture those ‘in the hunger’ moments we capture with our ‘add, add, add’ ordering function that makes the Instacart experience so easy,” he notes. “I can see where people will want to load up their fridges with some lunch options, a few packaged snacks and salads. Instacart can help meet new behaviors while enabling the local grocery stores to be the beloved neighborhood brands for getting food.”

“Shoppers want to know when pre-packaged grocery and deli-prepared foods were made — more so than where,” Stein stresses. “Provide clear use-by or best-by dates on the package.” According to the 2021 “Power of Foodservice at Retail” report from FMI, 38% of pre-packaged grocery deli-prepared foods are typically purchased for immediate or sameday consumption, and 46% are intended Dedicated prepared meal displays add speed and convenience to the equally for same-day in-store shopping experience. or later-in-the-week consumption.

Who (and How): Consider who your end user is and what they need to know. “Our packaging complements lifestyle needs,” says Jewel Hunt, group VP of deli, foodservice, bakery and branded concepts at Boise, Idaho-based Albertsons Cos. “For example, we offer Ready to Eat and Ready to Cook options in packaging that works in both microwave and ovens.” Hunt notes that package developers need to be sure that customers, no matter their kitchen skills, know their next steps, such as whether the meal is ready for the oven, the microwave or the table. Does the consumer need to pierce the top? Is there any mixing involved? “It’s important to offer easy-to-read labels and ingredients that complement the packaging,” she advises.

Why:

Ask your customers for their opinions on packaging as well as the food. “We are consistently listening to feedback from our customers and implementing packaging that resonates with them,” says Teresa Sabatino, director of customer marketing at Home Chef, which is owned by Cincinnati-based Kroger. “Based on customer feedback, we’re refreshing our retail packaging with new top-down photography [and] a balance of white space and color, among other new packaging elements.” Packaging is an extension of in-store branding and experience. It’s also an opportunity to talk to your consumers as they spend time with it in their homes. Make sure it’s worthy of their attention. PROGRESSIVE GROCER Februar y 2022

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Beverages

Water With Benefits FUNCTIONAL OFFERINGS CONTINUE TO INUNDATE THE BE VER AGE CATEGORY. By Barbara Sax

onsumers are increasingly looking for more benefits from their beverages. Chicago-based market research firm Mintel reports that nearly one-third (31%) of bottled water users are willing to pay a premium for waters with added health benefits. Manufacturers are happy to oblige: Innovative formulations and packaging attributes have become key drivers in the functional water category, and industry experts predict continued growth in the segment over the next few years. “Functionality is the most prevalent trend in the water market as brands enhance water’s inherent healthfulness with other functional benefits,” says Caleb Bryant, associate director, food and drink at Mintel. Sales of flavored still water (which includes many functional water brands) increased 60% from 2016 to 2021, Bryant adds. “We’ve seen the functional water category explode over the past 18 months,” notes Adam Gauer, co-founder of Sheridan, Wyo.-based Plus Brand Industries, maker of Agua Plus, a pH9+ alkaline water enhanced with electrolytes and minerals. “The result is a breeding ground for even more innovation.” The popularity of functional waters is attracting major players to the category. Last year, Purchase, N.Y.-based PepsiCo introduced Soulboost, a functional sparkling water brand, in two varieties: Lift and Ease. The product contains real juice and functional ingredients. The Lift variety contains 200 milligrams of panax ginseng to help support mental stamina, and is available in blueberry pomegranate and black cherry citrus flavors. The Ease variety, formulated to help people relax, contains 200 milligrams of L-theanine, and is available in blackberry passionfruit and strawberry rose varieties. According to Gauer, the category is expanding across age demographics. “Older consumers see the added health benefits of functional waters as an opportunity to be more efficient in their pursuit of all-around better health,” he explains. Younger consumers, meanwhile, are open to options beyond supplements.

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More Than Just Your Average Water

Marketers can alter the makeup of water to increase health benefits, such as adding electrolytes to boost hydration, oxygen to increase energy, or hydrogen to ease inflammation. Increased hydration is popular with consumers: Mintel research indicates that 30% of them are interested in waters that provide superior hydration. “The strong growth of alkaline water opened the door for other waters that claim to provide enhanced hydration using varying elements and pH levels,” says Bryant. “Oxigen water is enhanced with oxygen and electrolytes, and Jove claims its alkaline water provides ‘cellular hydration.’” As an example of this trend, Reno, Nev.-based Takeover Industries expanded distribution of its NXT LVL Hydrogen

Key Takeaways Innovative formulations and packaging attributes have become key drivers in the functional water category. Immune support, gut health and relaxation benefits are growth areas for functional waters. Manufacturers are positioning functional sparkling waters as alternatives to alcohol.


Water this past summer to Hy-Vee stores across the Midwest. Bryant notes that the pandemic has fueled consumer interest in immunity-boosting beverages, paving the way for waters enhanced with ingredients/vitamins with inherent immune support benefits. According to Mintel, 3.2% of waters launched in the United States in 2021 carried an immune support claim. Only 1.9% of waters launched in 2018 featured such a claim. Pure Life + Protect, which contains zinc, is one example. “Expect to see more vitamin D waters,” says Bryant. “In 2021, AnheuserBusch announced it would distribute ShineWater, a functional water brand enhanced with vitamin D.” Rochester, N.Y.-based Wegmans Food Markets recently featured Karma Water, which is based in nearby Pittsford and makes wellness and probiotic varieties, on an immune health display table along with Poppi functional sodas, Olly vitamins and other immune-boosting products. Gut health is another growth area for functional waters. According to Bryant, 24% of consumers are interested in waters that promote gut health, and Mintel research indicates that 1.8% of waters launched in the United States in 2021 carried a probiotic claim, compared with 0.3% of waters launched in 2018. The stress associated with the pandemic has also accelerated consumer demand for beverages boasting relaxation benefits. CBD-infused products have been showing up on more shelves as states allow the products to be marketed. “CBD waters represent a fast-growing segment of the water market,” affirms Bryant.

“The strong growth of alkaline water opened the door for other waters that claim to provide enhanced hydration using varying elements and pH levels.” —Caleb Bryant, Mintel

Consumers are snapping up water with added benefits, such as Aqua Plus, which is enhanced with electrolytes and minerals.

“The amount of positive press CBD has received regarding general wellness, particularly stress relief, has driven the demand in all age groups,” agrees Ricky Wright, president and CEO of the Alkaline Water Co. The Clean Beverage Co., a division of the Scottsdale, Ariz.-based beverage manufacturer, recently launched A88CBD, a line of six natural CBD functional waters In 2020, mainstream brand Ocean Spray, based in Lakeville-Middleboro, Mass., launched CarryOn, a line of CBD sparkling waters, through its Lighthouse Innovation Incubator. The line consists of Elevate, a grapefruit flavor that blends choline for energy and focus with 10 milligrams of CBD, and Descend, a blueberry flavor designed for relaxation and containing L-theanine for calmness and 20 milligrams of CBD. The products are sold in Sprouts Farmers Market locations in Colorado and will likely gain wider distribution. Among the new products introduced this year is Karma Water’s CBD Water, a cannabidiol beverage that the company just added to its portfolio of waters. Karma Culture CEO C.J. Rapp calls CBD “the next evolution of our premium infused waters portfolio.” In addition to health benefits, consumers are using CBD beverages as a base for creating next-generation cocktails. “A lot of our flavor profiles, such as lemon lime, pineapple coconut, citrus, are being developed to meet this need,” says Wright. Manufacturers are also positioning sparkling waters as alternatives to alcohol. “The sober-curious/mindful drinking trend is gaining speed as more consumers PROGRESSIVE GROCER Februar y 2022

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rethink their alcohol consumption behaviors and opt for [betterfor-you] alcohol alternatives,” observes Bryant. “Sparkling waters are already popular with health-conscious consumers and waters featuring unique flavor profiles and enhanced with ingredients that provide relaxation will become alcoholic drink substitutes.” Bryant cites Barbet, a sparkling water positioned as a nonalcoholic option for alcohol consumption occasions, with a lineup of flavors including Love Bite (grapefruit, ginger and juniper) and Wild Card (blood orange, calamansi and jalapeño), as an example of this trend. “Recess launched a margarita flavor to coincide with Dry January, and sparkling water brand Hopwtr claims its flavor profile will remind consumers of their favorite IPA, and that its blend of adaptogens and nootropics provides a feeling of relaxation without alcohol,” says Bryant. As consumers rethink their pandemic alcohol consumption patterns, retailers can expect to see more sophisticated flavor profiles entering the sparkling water category.

The Packaging Point of Difference

Even more category innovation is coming from the packaging side, however. Karma Water products feature a patented protective Karma Cap that helps maintain optimal potency. The Alkaline Water Co.’s new launch features first-to-market patented Freshcap technology that

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Wegmans Food Markets recently featured several functional beverage brands in end cap and table locations at its Montvale, N.J., store.

stores the CBD and other active or functional ingredients in a pressurized chamber in the bottle cap until the consumer twists it open for an instant infusion of flavor and functionality. “Freshcap not only has functional capabilities, it has a wow factor,” asserts Wright. “Unlike a lot of other functional ingredients delivered through powder packs or technology, there are no floaties or shaking required.” The company is currently developing a line of non-CBD functional Alkaline88 waters related to energy, collagen, inflammation, digestion, memory/brain/ cognitive and sports performance/endurance benefits. Agua Plus comes in a bottle featuring All-Scratch Technology, a unique patented feature that allows a user to scratch their name, initial or other identifying marks directly on their bottle to eliminate bottle confusion, a leading cause of unnecessary waste and the transmission of germs, viruses and bacteria. Cans are becoming a more popular packaging choice, and the eye-catching graphics that have dominated cans in the craft beer category to set brands apart are moving into the functional beverage category as well. According to Mintel’s Global New Products Database, 46% of all water product launches last year were canned. PROGRESSIVE GROCER Februar y 2022

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Eco-Friendly Solutions

More manufacturers in the paper product space, including Naturezway, are turning to bamboo to develop more sustainable and renewable products for consumers looking to make less of an impact on the environment.

Paper Products Shift to Sustainability RE TAILERS MUST MEE T INCRE ASING CONSUMER DEMAND FOR CPG BR ANDS THAT PRIORITIZE ENVIRONMENTAL RESPONSIBILIT Y. By Marian Zboraj ousehold paper products like toilet paper and paper towels can have a devastating impact on climate change, due to the amount of these products used by Americans. For example, toilet tissue was the top-selling general merchandise category in the multioutlet sales channel in 2020, according to Hamburg, Germany-based market data company Statista. For the 52 weeks ended Oct. 4, 2020, the toilet tissue category had sales totaling approximately $10.4 billion, while paper towels were approximately $6.5 billion. From an environmental standpoint, while paper towels individually have a small carbon footprint — a single sheet of paper towel contains just 0.06 pounds of carbon dioxide, according to Chicago-based nonprofit organization

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Key Takeaways Rising concerns about the future of the environment are often driving what products today’s consumers purchase. Retailers must place greater emphasis on sustainability to remain competitive and reach the growing number of consumers who support prioritizing these efforts when making purchasing decisions. Some brands are touting the use of bamboo or recycled paper to manufacture their paper goods, while major CPG players are aiming to be more environmentally responsible with their products, and many retailers are developing their own private label products designed to be kind to the earth.


Two Sides North America — collectively, they’re among the tons of paper products used by Americans that clog our landfills and contribute to deforestation and global warming. Luckily, rising concerns about the future of the environment are often driving what products today’s consumers purchase.

Changing Purchasing Habits

Now more than ever, sustainability is becoming increasingly important in consumers’ purchasing decisions. Acosta’s recent “Sustainability Impact on Purchase Behavior” report shows that 59% of shoppers are making it a priority to live a more environmentally conscious lifestyle, and that 85% of those who buy green products will always or most likely buy them in the future. “Consumers are continuing to place an emphasis on sustainability when making purchasing decisions, showing that eco-friendly lifestyles are here to stay,” affirms Colin Stewart, EVP, business intelligence at Jacksonville, Fla.-based Acosta. “Retailers have an opportunity and responsibility to think through their environmental footprint and deliver value in ways that matter increasingly more to their customers.” The report also shows that younger consumers are more actively taking steps toward being sustainable, as they are more likely to modify their buying habits. Seventy-five percent of Millennials say that sustainability is very/somewhat important when buying consumer packaged goods. Furthermore, 75% of Millennials are willing to pay more for an environmentally sustainable product, compared with 63% of Gen Z, 64% of Gen X and 57% of Boomers, according to a recent study from Atlanta-based GreenPrint, an environmental technology company. Retailers must place greater emphasis on sustainability to remain competitive and reach the growing number of consumers who support prioritizing these efforts when making purchasing decisions. Dedicating a planet-friendly section in the paper product aisle is a good start.

No-Guilt Paper

More manufacturers in the paper product space are turning to bamboo to develop more sustainable paper products. Bamboo, which is a grass rather than a tree, is easily renewable because it grows quickly and matures in only three years. It takes up less land, uses less water than trees and requires zero pesticides to grow. In addition, bamboo reduces soil erosion and greenhouse gases while capturing more carbon dioxide from the atmosphere than trees or cotton. A relative newcomer to the U.S. market, The Cheeky Panda, based in the United Kingdom, has secured major distribution deals with such notable companies as Rite Aid and United Natural Foods Inc. for its biodegradable bamboo products, including toilet paper and paper towels. The Cheeky Panda products are carbon-balanced Forest Stewardship Council (FSC) approved. FSC certification ensures that products come from responsibly managed forests that provide environmental, social and economic benefits. Another brand that has opted to go tree-free

“Retailers have an opportunity and responsibility to think through their environmental footprint and deliver value in ways that matter increasingly more to their customers.” —Colin Stewart, Acosta and use bamboo for household items is Los Angeles-based Naturezway. The company uses the renewable sustainable plant-based material for its facial tissue, paper towels, bath issue, napkins, and even in single-use plates and bowls. Naturezway products can be found at retailers such as Walmart.com, Albertsons Cos., Whole Foods Market, Lowes Foods and Costco. Seedling paper products from Grove Collaborative are also made from sustainable bamboo. The San Francisco-based company even claims that its durable paper towels can be reused for up to a week. Grove recently made headlines in December 2021, when it entered into a definitive business combination agreement with Virgin Group Acquisition Corp. II, a publicly traded special-purpose acquisition company, that will result in Grove becoming a public company. Anchored by a strong and loyal customer membership, Grove has a significant opportunity for growth and to pursue omnichannel initiatives. The company recently debuted at physical retail for the first time in Target stores nationwide, with high performance during the first year. Products touting recycled paper are also gaining ground. Household and personal care product company Seventh

Seventh Generation manufactures unbleached household products made from 100% recycled paper.

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Eco-Friendly Solutions Generation helps shoppers reduce their impact on the environment by using 100% recycled paper with a minimum of 50% post-consumer content in its paper towels and facial tissues. The Burlington, Vt.-based company additionally offers unbleached paper towels that don’t use any dyes, inks or fragrances, and are made from 100% recycled paper. By 2025, Seventh Generation is on track to have 100% of its materials and ingredients be sustainable, bio-based or recycled.

green journey, and our goal with Field & Future by H-E-B is to meet them wherever they are on that path,” notes Bonny Akers, director of H-E-B Brand Products. “With these environmentally minded products, along with our growing sustainability efforts, we want to take whatever steps we can, big and small, towards improving the well-being of our planet, our communities and ourselves.”

Other Green Solutions

Major CPG players are also aiming to be more environmentally responsible with their products. While criticized in the past for its less than environmentally friendly sourcing methods, Cincinnati-based Procter & Gamble, the parent company of the Bounty paper towel brand, is now working to ensure that its sourcing practices have the greatest impact on responsible use of the world’s forest resources. P&G is investing a total of $20 million by 2025 to accelerate research into non-wood fiber alternatives and FSC-certified fast-growing fibers. The goal is to develop fibers that are consumer preferred and sustainably sourced, and that can be produced at scale. The company aspires to include greater than 50% of these environmentally preferred fibers in its products. Moreover, P&G claims that for every tree it uses, at least one is regrown. Not to be outdone, many food retailers are also developing their own private label products designed to be kind to the environment. For example, Boise, Idaho-based Albertsons Cos.’ Open Nature brand uses 100% recycled paper for its paper towels to help consumers live green. More recently, in November 2021, San Antonio-based H-E-B launched the Field & Future by H-E-B brand of household and personal care products. Currently, there are more than two dozen products on shelf, including bath tissue and paper towels made with 100% recycled fibers, a portion of which is post-consumer, and baby wipes made with only five ingredients and featuring no fragrance, alcohol, chlorine or parabens. More Field & Future by H-E-B products are set to hit stores this year, including paper and plastic and personal care. “Many of our partners, customers and communities are on a Launched in November 2021, the environmentally minded Field & Future by H-E-B brand of household and personal care products includes bath tissue and paper towels made with 100% recycled fibers, a portion of which is postconsumer, to reach the growing number of consumers placing an emphasis on sustainability when making purchasing decisions at the grocery store.

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Flushing Money Down the Drain The use of disposable wipes has skyrocketed over the past year, thanks to the pandemic. The convenience, efficacy and performance of disposable wipes help consumers meet their need to maintain a healthy home, and the retail shelf space dedicated to them continues to grow. As the Seattle-based nonprofit Responsible Flushing Alliance points out, however, with the growing popularity of sanitization products comes some challenges as a result of improper disposal: sewer clogs and backups. The United States currently spends more than $440 million in taxpayer money repairing wastewater systems and clearing sewer clogs and backups caused by disposable wipes not designed to be flushed down the toilet. On Jan. 1 of this year, a new California law, AB 818, which aims to curb this trend and help promote responsible flushing habits, came into effect. Specifically, in July, the law will require all manufacturers of nonflushable wipes sold in California, including wholesalers, suppliers and retailers, to properly and prominently label a “Do Not Flush” symbol on baby wipes, hard-surface cleaning wipes and other disposable wipes, particularly those that contain plastic and are most often used for household cleaning and personal care. The law also requires the industry to lead consumer education regarding the “Do Not Flush” symbol, and to inform consumers on what can and can’t be flushed down the toilet. The Responsible Flushing Alliance has already kicked off its #FlushSmart consumer education campaign with materials for consumers and stakeholder groups to improve awareness and keep homes and communities healthy through proper flushing practices, ensuring that waterways stay clear and preventing municipal pipes from clogging.


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TECHNOLOGY

Social Media Engagement The beloved Texas grocery retailer has become the first grocer to leverage Facebook’s new shoppable livestream through a variety of events, including the recent “A Very Texas Holiday with H-E-B,” hosted by James Van Der Beek.

The grocery chain is also hosting a weekly cooking show on Facebook that has live shopping capability; H-E-B runs the stream on YouTube as well. “The chefs talk about different ingredients or different accessories; the products that they use are a pop-up and are featured in the bottom corner so that customers as they watch can easily see what they’re talking about, click on them, and actually add them to their curbside order or their cart right away,” Dimperio explains. H-E-B started the live virtual classes in 2020, and then this past year, “Facebook rolled out this capability and asked if we’d like to test it,” Dimperio recounts. “And so we tested it this summer [and] found success. Then the shopping part was added this summer.”

Unique Opportunity

How H-E-B Is Leveraging Livestream Shopping THE TE X AS GROCER IS BUILDING ENGAGEMENT (AND SALES) WITH ONLINE SHOPPERS.

H-E-B is increasing engagement and reaching new audiences on Facebook and YouTube, as well as the retailer’s websites and mobile apps — even TikTok, too. “We are across all the different platforms, and we’ve got a lot of stuff that’s currently a part of our mix,” Dimperio says. “We’re really excited about the future of live shopping and livestreaming with the shopping integration. We’re always looking to test in these spaces, and as customers are spending more time online, we’re shifting some of our platform mix to really meet the customer where they are spending time.

By Gina Acosta -E-B is tapping into authentic content from its relationships with top influencers to embrace a new digital marketing strategy. The company has become the first grocer to leverage Facebook’s new shoppable livestream through a variety of events, including the recent “A Very Texas Holiay with H-E-B,” hosted by James Van Der Beek. “When a customer is viewing the video, if they saw, for example, an ornament they liked, if they click on that, they can actually see all the different products,” says Giovanna Dimperio, senior director of digital marketing at San Antonio-based H-E-B.

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Key Takeaways H-E-B is the first grocer to leverage Facebook’s new shoppable livestream through a variety of events. The grocer is boosting engagement and reaching new audiences on various social media platforms, as well as its websites and mobile apps. The company’s digital marketing plan will also focus on hyperlocal and wellness content.


The focus we have is on that customer-first mindset and really tailoring our digital marketing, just like we tailor our stores to meet the consumers that use them. So we’re creating content that we think is useful to Texans, and then tailoring it to their needs.” According to Dimperio, live events are a unique opportunity for brands to create meaningful and long-lasting relationships with consumers, and to connect them with other members of the community. “One of the things that we really loved seeing was not only that people liked it because they learned something, but also that they started to create a community in the chat, whether it was on Zoom or on Facebook, really talking to each other,” she notes. “And then, because we provided an interactive part of the classes where people can ask questions, that reinforcement really helped fill that void that people had in the past from not being able to ask in-store or do something there. So when we saw that having this interactive participation really made customers feel positive about it, we started testing more interactive content.” Over the summer, H-E-B hosted a 12-hour live event called the Grilling Open that ran from 8 a.m. to 8 p.m. “For 12 full hours, we talked about everything from grilling breakfast and scrambling eggs, to how do you grill pineapple and different types of fruit, to what about seafood and desserts and pound cakes and everything you could think of grilling,” Dimperio says. “We had that shoppable as well and found that was not only something that was kind of fun for customers, but also that interactivity — they really liked where they could ask questions and get answers, like ‘Hey, show us the other side of that steak.’”

H-E-B cooking classes are also an opportunity to make video content shoppable. When it comes to products, the grocer is focused on showcasing whatever is local, plus many of its most popular private brand and wellness-related items.

Ranked Near the Top

Dimperio adds that the company’s digital marketing plan will also focus on hyperlocal and wellness content. “We’ve been focusing on how do we bring some of our friends of H-E-B into the cooking class to share their kind of localization or their tweak on different things,” she says. “When we think about localization, it’s ‘How do we make sure everything is relevant for Texas? How do we bring on friends of H-E-B in the chef community who can talk about different regional tastes?’ and then, when it comes to products, really showcasing some of the things that make some of the great products that we have. Highlighting some of those things as well will be really important in the next year.” For 2022, the company’s digital health-and-wellness content will focus on what makes a “healthy plate” and meal prep.

“One of the most popular classes we did this year was for back-to-school, where we talked about how to meal prep for kids in a way that saves you time and sanity, but also doesn’t have a lot of processed items in it, by doing batch cooking ahead of time,” Dimperio observes. “You will see more things from that digitally, beyond the cooking classes as well … [W]ith a couple of the things that we have coming up this year, you’ll see a lot more in the health-and-wellness space.” In January, H-E-B was ranked second in an annual consumer survey by dunnhumby. The Texas company came in behind Amazon, but beat out such other major grocers as Costco, Walmart, Target and Publix in the survey taken by shoppers. According to dunnhumby, H-E-B maintained its spot at No. 2 in the list this year by “continuing to display its strategic superiority over the competition by holding its ground on its traditionally strong balance of great price perception and great quality perception, driven by its best-in-class private brand, while also making some of its biggest improvements during COVID in digital.”

“The focus we have is on that customer-first mindset and really tailoring our digital marketing, just like we tailor our stores to meet the consumers that use them.” —Giovanna Dimperio, H-E-B

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EDITORS’ PICKS

Food, Beverage & Nonfood Products

Plant-Based Mac and Cheese

Plant-based pioneer Follow Your Heart has reinvented a venerable pantry staple with the introduction of USDA-certified organic SuperMac, which pairs macaroni with creamy sauces made with vegetables, beans and cashews. The dairy-free offering expands the macaroni-and-cheese segment to include a nutritious option made with whole foods. Available in Cheezy Carrot and Creamy Caulifredo varieties, the kid- and allergen-friendly, dairy-, egg-, peanut-, soy-, cholesterol- and preservative-free product line can serve as a quick meal or an easy side dish. The item comes in an 8.1-ounce box with a deluxe sauce pouch and retails for a suggested $5.99 for either variety. SuperMac was dreamed up by moms and vegan chefs Heather Goldberg and Jenny Engel, of Spork Foods, and developed in partnership with Follow Your Heart. The product is available exclusively at all Whole Foods Market locations until March 2022. https://followyourheart.com/

Strong Tea

Tea maker Twinings, which now calls itself a “wellbeing drinks brand,” recently introduced a Superblends collection, which currently consists of four varieties fortified with vitamins and functional additives: Sleep+: Wake Up Wonderful, containing vanilla, cinnamon and melatonin; Immune Support+: A Super Defense, combining mango, ginger, green tea and vitamin C; Energy+: Play All Day, mixing the flavors of apples and oranges with green tea and vitamin B6; and Heartea+: Support a Healthy Heart, a raspberry-flavored hibiscus herbal tea with added vitamin B1. Offering consumers an easy way to achieve overall well-being, the product line features prominently in Twinings’ Drink in Life campaign, which is supported by a multifaceted marketing campaign including connected television, digital promotions and in-store point-of-sale materials. A 16-count box of any of the Superblends teas retails for a suggested $5.49. More flavors are slated to roll out in 2022, and Twinings also offers teas featuring probiotics and adaptogens. https://twiningsusa.com/; https://twiningsusa.com/collections/superblends

Sustainable Salad Kits

Hummus maker Sabra and Fifth Season, a food system pioneer and robotic-farming leader, have collaborated on a fresh idea for the produce aisle: salad kits featuring sustainably farmed greens paired with hummus, guacamole and whole grains. The kits come in two varieties, Mediterranean Hummus Salad (6.7 ounces) and Avocado Ranch Salad (7.2 ounces). Thanks to Fifth Season’s end-to-end automated growing, harvesting and packing system, the salad meal kits will remain crisp for weeks in the fridge. Sabra sources chickpeas from the Pacific Northwest and produces its hummus at a Chesterfield County, Va., facility that has earned both Silver and Gold LEED certification from the U.S. Green Building Council. The chickpea is a nitrogen-fixing legume that leaves the earth nourished after harvest. Fifth Season’s unique growing process requires up to 95% less water and 97% less land than conventional farming, enabling it to conserve resources used to produce food. Either variety of salad kit retails for a suggested $5.99, with some variability. https://www.sabra.com/; https://www.fifthseasonfresh.com/

Love Your Veggies

The most recent innovation from Veggies Made Great, Keto-Friendly Muffins come in Mochaccino Chip, Chocolate Raspberry and Cinnamon Roll flavors, all of which are lower in sugar and carbs and higher in protein than the brand’s other popular frozen muffins. As with all of the other Veggies Made Great products, Keto-Friendly Muffins feature vegetables as the primary ingredient. The suggested retail prices are $5.99 for a 6-count box and $12.59 for a 20-count box. https://www.veggiesmadegreat.com/

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Good-for-You Granola

Alter Eco Foods has now entered the breakfast category with Organic Granola. Sweetened naturally with date powder and monk fruit, the crunchy granola contains no added sugar and comes in three flavors — Dark Chocolate, Cashew Butter and Cinnamon Raisin — all made with clean, USDA Certified Organic ingredients that support regenerative agriculture and contain no soy, corn or artificial ingredients. Additionally, the certified climate-neutral granola is sold in post-consumer recycled plastic packaging. An 8-ounce package of any of the varieties retails for a suggested $7.49.https://www.alterecofoods.com/

Something Spicy

Made Without Grain

Graham crackers have long been a tasty snack for consumers of all ages, but gluten-free brand Pamela’s has now come out with a grain-free version of this family favorite. Suitable for those with grain allergies or intolerances, following a Paleo or other diet plan, or interested in improving their overall gut health, the Gluten Free Certified graham crackers are made from a blend of non-GMO almond flour, organic coconut flour and organic cassava flour, and contain no egg, corn, soy, nuts, high-fructose corn syrup, or artificial additives or flavors. Beyond snacking and dunking, the product can be used for making such items as ice cream sandwiches, s’mores, pie crusts and desserts. The suggested retail price is $6.59 per 6.25-ounce box. https://www.pamelasproducts.com/

Appropriate for meals, snacks or entertaining, Applegate Naturals Spicy Breaded Chicken Breast Bites and Tenders feature 100% natural, humanely raised boneless white meat chicken that’s breaded and seasoned with a zesty blend of peppers, creating products that are crispy on the outside and juicy on the inside. In common with all Applegate products, the fully cooked and frozen spicy breaded chicken is made with nothing artificial and no GMO ingredients. Both lean-meat offerings are low in saturated fat, contain 0 grams of trans fat and provide an excellent source of protein. The suggested retail prices are $12.49 for 10-15 tenders and $11.49 for about 18 bites, with each variety available in convenient 16-ounce resealable bags. https://applegate.com/

The Wonder of Dairy-Free Gelato

Made by family-owned and -operated Wonderlab, Doozy Pots plant-based, dairyfree gelato is now available nationwide. Offering the indulgence of a frozen dessert with the superior nutrition of sustainable hemp hearts, the product line comes in Chocolate Mint Chip, Chocolate Raspberry Swirl, Banana Cinnamon, Date Swirl and Smooth Coffee flavors. The product’s proprietary blend of earth-friendly hemp and oats is combined with other organic, regenerative and Fair/Direct Trade ingredients under the direction of brand co-founder Kirsten Sutaria, a food scientist who spent nine years as Ben & Jerry’s “flavor guru,” leading the creation of its vegan offerings and helping its portfolio become Fair Trade and non-GMO. Doozy Pots (Sutaria’s childhood nickname) also features less saturated fat, a smoother texture and more balanced sweetness than ice cream. A pint of any of the varieties, all in containers made from a minimum of 35% post-consumer recycled fibers, retails for a suggested $6.99. https://www.wonderlabdoozy.com PROGRESSIVE GROCER Februar y 2022

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AHEAD OF WHAT’S NEXT By Bridget Goldschmidt

Innovation on Display A TRIP TO NRF 2022: RE TAIL’S BIG SHOW RE VE ALS THE BEST LE ADING-EDGE SOLUTIONS IN RE TAIL TECH. or my inaugural Ahead of What’s Next column — in case you haven’t heard, its previous writer now has more pressing duties as Progressive Grocer’s editor-in-chief — I decided to write about my recent trip to the National Retail Federation’s NRF 2022: Retail’s Big Show, the annual retail technology trade event that I had somehow never attended before, despite living in its longtime venue of New York City (I know, I know!) So, undaunted by the rapidly spreading Omicron variant of COVID-19 and bone-chilling January temperatures, I ventured forth. One interesting aspect of the show that I hadn’t been aware of before was that in addition to participation from the likes of Target CEO Brian Cornell and Walmart U.S. President and CEO (and now also NRF Board of Directors Chair) John Furner, there’s an Innovation Lab highlighting “carefully curated companies that are solving today’s biggest challenges for retailers,” according to NRF. Among the areas of specialization covered by the Innovation Lab’s 55-plus vendors at this year’s show are e-commerce, sustainability, supply chain, data analytics, customer experience and product discovery.

Learnings From the Lab

It was in the Innovation Lab that I encountered Yawye, a company pioneering zero-question market research, described by co-founder and CEO Danny Socolof as “a brand-new way to measure how people are feeling, using the language of emoji and existing brand content.” When it comes to gleaning actionable insights into a brand, “empathy is the new intelliThe vendors I gence,” Socolof asserted. Another fascinating new solution was encountered CoolR, an artificial intelligence-based at the Innovation platform to monitor refrigerated and Lab represent just ambient shelves, which has already a smattering of sold 11,000 of its Vista units — capable of detecting out-of-stocks, plano- the many gram noncompliance, foreign product original contamination and pricing inaccura- solutions cies, all by SKU — to “the world’s larg- highlighted est ice cream company,” resulting in a by NRF at staggering 65% sales increase at said business, according to CoolR Group its retail tech CEO Roy Mehta. The solution is also spectacular. used by companies such as Target, The Coca-Cola Co. and PepsiCo. I also caught up with Robomart, an e-commerce service that enables consumers to shop for necessities by “hailing” a mobile store via app; when the vehicle pulls up at the curb in front of their house, the consumer opens the vehicle door using the app and then selects 74

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their desired items in a contactless, frictionless manner. The company’s fleets of snack and pharmacy vehicles are currently deployed, with grocery, café (deli) and ice cream versions up next, and a fast-food offering due by the end of the year. CEO and co-founder Ali Ahmed noted how the service is seeing great repeat business in West Hollywood, Calif., where it’s currently available, with consumers hailing the vehicles 2.3 times a week.

Robomart was among the groundbreaking tech vendors featured in the Innovation Lab at NRF 2022: Retail’s Big Show.

The service is also set to expand: Ahmed told me that the vehicles would soon be making their way across Los Angeles, with plans to launch on the East Coast as well. (For more about Robomart, as well as about key trends that I observed at NRF 2022: Retail’s Big Show, turn to the article starting on page 51.) Of course, the vendors I encountered at the Innovation Lab represent just a smattering of the many original solutions highlighted by NRF at its retail tech spectacular, and I was very glad to get a closer look at some of them — better late than never.

Bridget Goldschmidt Managing Editor bgoldschmidt@ensemleiq.com


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BRAND BUILDING & MARKET ENGAGEMENT PLANNING GUIDE

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CONTACT YOUR SALES REP FOR DETAILS AND TO START BUILDING YOUR BRAND SUCCESS TODAY! Theresa Kossack Sales - Midwest, GA, FL 214-226-6468 tkossack@ensembleIQ.com

Tammy Rokowski Sales - Southwest, MI International 248-514-9500 trokowski@ensembleIQ.com

Bob Baker Sales - New England, Mid-Atlantic, Southeast US, Eastern Canada 732.429.2080 rbaker@ensembleiq.com

Natalie Meehan New Business Development 773-992-4410 nmeehan@ensembleiq.com



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