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Tech-enabled associates are high-performing associates

Status-quo support

Tech-forward support

Long, boring onboarding that’s quickly forgotten

Focused digital onboarding that builds confidence fast

Training sessions that pull associates away from the floor

Short bursts of daily reinforcement training delivered via BYOD

Communicate through bulletin boards and team huddles

Communicate instantly in the same place they train every day

axonify.com


Goodbye binders and bulletin boards. Hello mobile-first training and communications.

Associates need the right technology to do their jobs well, and they need to feel engaged and excited to use it. Axonify fits the bill. It delivers important messages and personalized training in just 3-5 minutes a day, on any device— mobile phone, POS, tablet or desktop. And since associates love the fast, fun experience (83% log in to train 2-3 times a week), they build a habit that ultimately drives your best store performance.

“The speed at which we’ve been able to deliver crucial training content to our employees during this challenging time, especially without disrupting their flow of work, has made all the difference.” Claudia Lara Senior Manager, Content Development & Design, Southeastern Grocers

[Your logo here]

Explore more at axonify.com


PROTEIN REPORT: RETAINING POST-PANDEMIC SEAFOOD CUSTOMERS TRIUMPH OF GROCERY TECH A look at the past century’s innovations SPRING BEER REVIEW Brewing up better marketing and merchandising BRIGHT FUTURE How store lighting influences sales

The New Walmart On its 60th birthday, the retailer is just getting started on disrupting grocery March 2022

Volume 101, Number 3 www.progressivegrocer.com


The new look of

M’m! M’m! Good! Redesigned to turn heads in your soup aisle.

®

© 2022 Campbell Soup Company. All rights reserved.



Contents 03. 22

Volume 101 Issue 3

28 Features

20 100 YEARS OF FOOD RETAILING

The Triumph of Technology

COVER STORY

28 The New Walmart On its 60th birthday, the retailer is just getting started on disrupting grocery.

Departments

20

From cash registers to barcode scanning and now AI vision, new inventions have continued to advance the process of grocery shopping.

14 MINTEL GLOBAL NEW PRODUCTS

18 UPWARD

Desserts and Confections

NEW Is Now NextUp

16 ALL’S WELLNESS

88 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS

8 EDITOR’S NOTE

Inflation Nation 10 IN-STORE EVENTS CALENDAR

May 2022

Shopping for Health Across the Store

12 NIELSEN’S SHELF STOPPERS

Prepared Foods 4

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16

90 AHEAD OF WHAT’S NEXT

Fantastic Voyage


TO THE FASTEST-GROWING DESSERT! *

Churros are the fastest-growing dessert option on menus*, and only one brand delivers the trusted authentic taste that your shoppers crave – GOYA®! Our full line of deliciously sweet frozen treats are created in Spain, ready in minutes and made from simple ingredients your shoppers can trust.

Contact your GOYA representative or email salesinfo@goya.com | GoyaTrade.com *DATASSENTIAL, 2020 | ©2022 Goya Foods, Inc


Contents 03.22

Volume 101 Issue 3

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

www.ensembleiq.com

40 PROTEIN REPORT

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

Fishing for Dollars

With pandemic-weary consumers starting to eat out again, grocery retailers and suppliers must up their game to maintain shopper interest.

40

EDITORIAL EDITOR-IN-CHIEF Gina Acosta 813-417-4149 gacosta@ensembleiq.com MANAGING EDITOR Bridget Goldschmidt 347-962-9395 bgoldschmidt@ensembleiq.com SENIOR DIGITAL & TECHNOLOGY EDITOR Marian Zboraj 773-992-4405 mzboraj@ensembleiq.com

45 GROCERY

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

Brewing Up Success

CONTRIBUTING EDITORS Mike Duff, A.J. Gorman, Jenny McTaggart and Barbara Sax

Beer brands and retailers move to a spring mindset — and shelf set.

ADVERTISING SALES & BUSINESS ASSOCIATE PUBLISHER, REGIONAL SALES MANAGER (INTERNATIONAL, SOUTHWEST, MI) Tammy Rokowski 248-514-9500 trokowski@ensembleiq.com

48 TECHNOLOGY

SENIOR SALES MANAGER Bob Baker (NEW ENGLAND, MID-ATLANTIC SOUTHEAST US, EASTERN CANADA) 732-429-2080 rbaker@ensembleiq.com

Keep It Moving

Food retailers need to harness the right fulfillment and supply chain technology to compete effectively with the major grocery players in this space.

45

66 TECHNOLOGY

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

Clarity on Crypto

EVENTS VICE PRESIDENT, EVENTS Michael Cronin mcronin@ensembleiq.com

Experts offer advice to grocers beginning to navigate the world of digital currency.

VICE PRESIDENT, EVENTS & CONFERENCES Megan Judkins 773-837-7595 mjudkins@ensembleiq.com MARKETING BRAND MARKETING MANAGER Rebecca Martin 773-992-4407 rmartin@ensembleiq.com

70 CPG INNOVATION

AUDIENCE LIST RENTAL MeritDirect Marie Briganti 914-309-3378

Drinking It Up

Plus Brand Industries CEO Chad Willis discusses why consumers are clamoring for beverages that are beneficial for the body and the planet.

SENIOR SALES MANAGER Theresa Kossack (MIDWEST, GA, FL) 214-226-6468 tkossack@ensembleiq.com

SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES Toll Free: 1-877-687-7321 Fax: 1-888-520-3608 contact@progressivegrocer.com

66

PROJECT MANAGEMENT/PRODUCTION/ART CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com

72 NONFOODS

Cooking With Gas

ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com

72

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

Retailers can capitalize on increased consumer interest in purchasing housewares.

CORPORATE OFFICERS 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

76 EQUIPMENT & DESIGN

Using Lighting Fixtures to the Greatest Effect

With an LED remodel, grocery retailers can enhance product and the shopping experience. 84 OPERATIONS

More Than Clean

In the wake of the pandemic, retailers need to reassess their sanitation strategies to reassure customers and associates of stores’ safety.

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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.



EDITOR’S NOTE By Gina Acosta

Inflation Nation GROCERS NEED NE W STR ATEGIES TO KEEP SHOPPERS LOYAL. brand-new study from data science firm dunnhumby has far-reaching implications for food retailers navigating the inflationary crisis hitting America. The dunnhumby Consumer Pulse Survey found that U.S. consumers are now more worried about rising food prices, the economy and their own personal finances than they are about the pandemic — possibly a watershed moment since COVID-19 first hit in March 2020. Perhaps most worrisome for grocers is that U.S. consumers said that the food inflation rate now stands at 17.7%, when in actuality it stands at 7.5%, according to the U.S. Bureau of Labor Statistics. The reality of increasing food prices, coupled with the intense publicity around these increases, has led to a distorted perception among consumers. But perception is reality, so grocers will need to adjust their operational strategies to keep shoppers loyal and drive sales during what’s expected to be an extended period of inflation. According to dunnhumby, 51% of U.S. shoppers are concerned that their money doesn’t go as far as it used to due to rising prices, marking a 10-point increase since September 2021 and a 12% increase since May 2020. Eightythree percent said that food prices have gone up somewhat, and half say that they’ve gone up by a lot. A majority of U.S. consumers (58%) believe that the economy is weak, a three-point increase from September 2021 and the same percentage from February 2021. Further, 40% of consumers continue to report that their own fiWith inflation expected nances are weak. to intensify even further Interestingly, online shopping numthis year, grocery retailers bers are essentially flat from where they were in May 2020, dunnhumby should be ramping up notes. Consumers reported that they their differentiation make an average of one shopping tactics when it comes to trip per week using click-and-collect, value — not just on price, making that channel as popular as but also to help shoppers delivery. Only 39% of U.S. consumers surveyed are satisfied with the reimagine how to stretch in-store shopping experience, a 3% their food dollars. drop since September 2021. In the study, Walmart — which reported stellar fourth-quarter sales growth in February — was cited for providing the best value for the money by 54% of respondents, an increase of 25 points from September 2021. Aldi (18%), Kroger (10%), and Amazon (10%) finished in the top three for best value. Progressive Grocer’s cover story on Walmart in this issue does a deep dive into how the company plans to grab more grocery share this year. According to the dunnhumby study, the top value-seeking behaviors among consumers were: I am shopping at stores with the lowest prices 8

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(50%), I use coupons/offers on products I regularly buy (39%), I stock up on products when on sale (36%), I search online for the best sales (33%), I buy own label when available (32%), I make a list and only buy what’s on it (31%), some products I only buy when they’re on sale or I have a coupon (30%), I buy larger pack sizes (27%), and I compare prices to decide where to shop (24%). With inflation expected to intensify even further this year, grocery retailers should be ramping up their differentiation tactics when it comes to value — not just on price, but also to help shoppers reimagine how to stretch their food dollars. Some strategies could include expanding private-brand promotions across categories, leveraging social media to help shoppers re-create restaurant recipes at home for less cash, promoting omnichannel offerings as a way to remind customers that shopping online helps them stick to their shopping lists and save money, expanding larger-pack-size SKUs (many consumers are still pantry loading), or marketing recipes that help shoppers make multiple meals using leftovers. These strategies should help food retailers maintain their value propositions during a(nother) historic crisis. Gina Acosta Editor-In-Chief gacosta@ensemleiq.com



IN-STORE EVENTS

Calendar S

05.22

M

American Cheese Month Celiac Disease Awareness Month National Asparagus Month National Barbecue Month

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National Egg Month National Hamburger Month National Mediterranean Diet Month National Salad Month

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National Lemonade Day. This classic thirstquencher hits the spot on a warm day.

Mother’s Day

International Family Day. Parents and kids shopping together should be eligible for a special giveaway everyone can enjoy, like a frozen pizza or a box of yogurt pops.

World Paloma Day. Provide instructions in your monthly publication for shoppers to prepare this Mexican cocktail.

Indianapolis 500. Create racingthemed snacks to enjoy at watch parties for this iconic annual event.

10

International Harry Potter Day. Encourage fans of “the boy who lived” who work and shop at your store(s) to sport regalia from their chosen Hogwarts houses. Go, Gryffindor!

National Sleepover Day. What treats are best for a slumber party? Place the necessary ingredients on an end cap.

National Do Something Good for Your Neighbor Day, like shopping or preparing a meal for an elderly or housebound person who lives nearby, perhaps?

Lucky Penny Day. If you see one and pick it up, it’s said to be a fortunate occurrence.

Memorial Day. Take a moment to remember all of those who lost their lives defending this country.

progressivegrocer.com

National Teacher Day

National Shrimp Day. Fresh or frozen, these popular crustaceans liven up a host of dishes.

National Idaho Day. The Gem State produces much more than potatoes.

National Asparagus Day. Offer tips on how to steam this somewhat finicky vegetable correctly without having it go limp or lose its vivid green color.

AutonomousVehicle Day. If you employ delivery robots or self-driving cars to drop off grocery orders, now would be a good time to promote that service.

National Orange Juice Day. We prefer it without pulp, but there’s no wrong choice here.

National Twilight Zone Day. The signpost up ahead reads: Shoppers should binge a season of this classic fantasy TV series while indulging in some scarily good snacks.

National No Dirty Dishes Day. Direct shoppers to the (compostable) paper plate aisle.

National Wine Day. Run specials on the best-selling varieties in your beverage alcohol department.

Cinco de Mayo. Make sure you have plenty of beer, nachos and toppings on hand for this observance of Mexico’s victory over the French in the 1862 Battle of Puebla.

International Nurses Day

National Devil’s Food Cake Day. Have shoppers submit their favorite recipes for this chocolatey classic so that associates can assess which version rules.

World Redhead Day. For those who are made, not born, there’s always the hair color section.

International No Diet Day. Tell customers it’s OK to take a cheat day — and provide suggestions for how they can do it in style.

International Hummus Day. Cross-merchandise a range of crackers and flatbreads so customers can dip to their hearts’ content.

National Rescue Dog Day. These furry forever friends especially deserve some pampering, courtesy of the pet care aisle.

National Grape Popsicle Day. Maybe it’s not as popular as its orange counterpart, but we believe it’s time for a reappraisal.

World Fair Trade Day. Highlight all of your items produced in accordance with these principals.

National Brioche Day

Eat More Fruits and Vegetables Day. Inform customers that they can find these important foods not just in the produce section, but also throughout the store.

Hamburger Day. Run a promotion ahead of the holiday weekend on all of the items customers will need to assemble some killer burgers.



FRONT END

Shelf Stoppers

Prepared Foods

Basket Facts

Total Department Performance Prepared Foods

Latest 52 Wks W/E 01/29/22

Latest 52 Wks YA W/E 01/30/21

Latest 52 Wks YA W/E 02/01/20

$56,536,284,029

$53,355,166,037

$47,459,423,682

Top Prepared Food Categories by Dollar Sales Complete Meals

Sandwiches

Salads

Soups

Appetizers

$7,000,000,000

How much is the average American household spending per trip on various prepared food products versus the year-ago period?

6,000,000,000 5,000,000,000 4,000,000,000 3,000,000,000

$9.63

2,000,000,000

on all prepared food items, up 4.3% compared with a year ago

1,000,000,000 0

Latest 52 Wks W/E 01/29/22

Latest 52 Wks YA W/E 01/30/21

Latest 52 Wks YA W/E 02/01/20

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. 29, 2022

Convenience is key to attracting shoppers in today’s highly digital retailing landscape, and prepared foods have seen steady gains over the past three years, capturing an additional $9 billion in sales. While confined to their homes, many shoppers looked for ways to make meal preparation more simple and less time-consuming, fueling 12.4% growth in prepared foods between January 2020 and January 2021. But even as working and living restrictions were lifted across regions, there was still a need for convenience as on-the-go shoppers resumed their pre-COVID routines and habits, driving 6% growth for prepared foods in 2021. When looking at who’s purchasing prepared foods, households with five-plus members, presence of children ages 13-17, and older bustling families are over-indexing for the category, further reinforcing the need for convenience. In the latest 52 weeks, there has been a heavy shift towards prepared complete meals, sandwiches and salads, and away from prepared soups. Consumers are looking for variety and are expanding their choices. As their focus on health and wellness continues to grow, shoppers will be opting for ‘better-for-you’ grab-and-go items that provide both nutrition and convenience. Prepared food manufacturers can attract additional consumers to the segment through on-package claims that clearly promote the benefits a product provides (i.e., low-sodium, keto-friendly, gluten-free, etc.).”

$7.35

on appetizers, up 5.1% compared with a year ago

$8.10

on main courses, up 4.7% compared with a year ago

—Carman Allison, VP Thought Leadership, NielsenIQ

Generational Snapshot Which cohort is spending, on average, the most per trip on mac and cheese?

$3.26

on sides, up 2.2% compared with a year ago Millennials

Gen Xers

Boomers

The Greatest Generation

$4.97

$4.84

$4.51

$4.12

Source: Nielsen Homescan, Total U.S., 52 weeks ending Jan. 1, 2022

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Source: Source: Nielsen Homescan, Total U.S., 52 weeks ending Jan. 1, 2022


ND LA

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­


MINTEL CATEGORY INSIGHTS

Global New Products Database

Desserts and Confections Market Overview

The dessert and confection market performed well during the pandemic, as many consumers leaned into indulgent food and drink as a source of comfort; however, consumers are aspiring to make improvements to their health and diets.

58% of U.S. consumers say that they like chocolate-coated treats, and 34% say that they would be interested in dessert and candy mashups (e.g., cookie-flavored candy or candy-flavored ice cream).

Of consumers say that they consumed chocolate in the three months prior to April. Nearly half of U.S. consumers consumed nonchocolate candy at the time.

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41% of U.S. consumers say that they’d like to see more desserts that are naturally sweetened (e.g., with honey or fruit).

Key Issues

As consumers spent most of their time at home during the pandemic, closer to their freezers, frozen novelties and ice cream varieties had the chance to grow loyalty among consumers, while impulse varieties such as candy and snack bars either stalled or lost consumer interest. More than a third of consumers say that they try to select healthier desserts whenever possible, pointing to a dessert and confection future that’s not so sugary. Stress-driven and comfort-seeking behaviors aren’t projected to sustain pandemic-level sales growth, as 53% of consumers would like to take better care of their physical health due to the COVID-19 pandemic.

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

What Consumers Want, and Why As consumers transition into their post-pandemic lifestyles, many are aspiring to make improvements to their diets. Consumers are interested in seeing more naturally sweetened products featuring ingredients like real fruit and honey in desserts and confections. Interest in desserts with lighter textures, including whipped and fluffy, outweighs interest in those with dense and thick textures, indicating a trend toward fewer overly indulgent treats. Looking forward, Mintel expects consumers to return to foodservice for indulgent treats, and at-home eating routines will take a turn toward healthier options. Foodservice operators have the opportunity, using emerging flavors, premium variations of classic flavors, and unique, novel flavor mashups that rival retail options, to double down on the experience they can offer that can’t be replicated at home.



ALL’S WELLNESS By Karen Buch

Shopping for Health Across the Store NO MAT TER THE DEPARTMENT, BE T TER-FOR-YOU FOOD CHOICES ABOUND. ood and nutrition play roles in sustaining health, preventing disease and managing chronic conditions that respond to dietary change, including heart disease, obesity, diabetes and celiac disease. Retail dietitians regularly dispel the myth that nutritious foods can be found only on the perimeter of the store. Today’s consumers can find healthful and affordable food choices in every aisle.

Healthy Crisper Choices

The latest “State of the Plate” research from the Produce for Better Health Foundation finds that nine out of 10 Americans don’t eat enough fruits and vegetables. Yet eating enough fruits and vegetables is one of the most important steps to better health. Surprisingly, the average consumer eats roughly one fruit and one vegetable a day, compared with the three vegetable and two fruit servings recommended daily. Remind customers of specific ways to meet this important goal. Fresh-cut fruit and vegetables make the perfect “ready snacks” for kids and adults while also helping to trim prep time, making it easier to include produce as ingredients or side dishes at breakfast, lunch and dinner. Increasingly, branded produce is setting expectations for consistent delivery of unique flavors, levels of crunch or other positive attributes customers seek. Retailers can highlight unique produce cultivars, from Wish Farms Pink-A-Boo Pineberries, Japanese white strawberries crossbred with American strawber-

Retail dietitians regularly dispel the myth that nutritious foods can be found only on the perimeter of the store. Today’s consumers can find healthful and affordable food choices in every aisle. 16

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ries, offering pineapple flavor notes; to Envy apples, patented Scilate apples — a natural cross between Bradburn and Royal Gala apples; to Sunset Qukes and Sprinkles, baby snacking cucumbers and tiny tomatoes, respectively. When produce departments deliver fresh, reliable and satisfying eating experiences, customers come back for more.

Healthy Frozen Favorites

Promote simple frozen pairings that make balanced and healthful meals easy to plan and convenient to make. Pair frozen diced mangoes with turkey tacos, frozen blueberries with old-fashioned oats, frozen broccoli with classic mac and cheese, and frozen sweet potato fries with a classic lean whole grain sandwich. Suggest frozen vegetables to add to sheet-pan roasted meals, or steam-in-bag options to serve as sides to slow-cooker or pressure-cooker favorites. Point shoppers to the latest innovations found in the frozen food section, including spa- and restaurant-inspired appetizers, single meals, and meal kits or global specialty dishes featuring bold flavors, trending ingredients and prep methods that appeal to adventurous eaters.

Healthy Pantry Staples

Many healthful pantry staples can be found in center store, from 100% whole grain pastas, crackers, breads, rice, oats and cereals, to beans, peas, lentils, quinoa, chia, dried or canned fruits and vegetables, nuts and nut butters, popcorn, seeds, 100% juices, cooking oils, canned fish, and more. In addition, there are nutritious meal replacement snack bars and protein powders geared toward keto, Whole30, Paleo, intermittent-fasting, gluten-free and low-carb lifestyles. All the while, sustainably packaged foods with limited ingredients and responsible sourcing are garnering favor among certain shopper demographics.


Healthy Dairy Staples

The dairy aisle is home to such nutrition powerhouses as milk, yogurt, cheese and eggs, although not all customers agree. Plant-based versions of these foods are gaining traction with consumers. In addition, whole grain oats typically housed in center store are quickly crossing over to the dairy case in the form of oatmilk and “oat-gurt,” and to the freezer section in the form of oatmilk-based ice cream and frozen novelties.

Healthy Meats, Poultry and Seafood

Lean is the name of the game when it comes to meats and seafood. Educate consumers on the leanest choices and provide cut-specific cooking method guidance that yields tender and juicy results. Plant-based meat alternatives allow meat-loving customers the flexibility to reduce their frequency and quantity of meat intake with a similar eating experience to that of meat. Also, eating sustainable seafood is recommended twice a week. Research shows that nearly 50% of all consumers are trying to increase seafood consumption, with 26% having purchased seafood for the first time during the pandemic. To fuel this sales momentum, educate consumers about seafood’s nutritional benefits, sustainable options and preferred cooking techniques. Be aware, however, that the number of plant-based seafood al-

ternative companies has tripled since 2019. Emerging cell-cultured, plant-based and fermented seafood products, currently aimed at a narrow niche market, are poised for growth over the next decade.

Healthy Advice

Pharmacists and registered-dietitian nutritionists are teaming up in-store to offer programs and activities geared to address nutrition, health concerns and well-being, emphasizing self-care, preventive care and evolving strategies on how to use food as medicine. Pharmacists can use routine patient interactions at the pharmacy counter to refer individuals who would benefit from meeting with the retail dietitian via live or virtual consultations and classes.

Karen Buch, RDN, LDN, is a registered dietitian/nutritionist who specializes in retail dietetics and food and culinary nutrition communications. One of the first supermarket dietitians, she is now founder of and principal consultant at Nutrition Connections LLC, providing consulting services nationwide. You can connect with her on Twitter @karenbuch and at NutritionConnectionsLLC.com.

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UPWARD

By Sarah Alter

NEW Is Now NextUp THE ORGANIZ ATION UNVEILS A NE W NAME TO ENCAPSUL ATE ITS E XPERIENCE AND SOLUTIONS. fter 20 years, Network of Executive Women (NEW) is now NextUp. We are women and allies. We are today’s mentors and tomorrow’s rising stars. We are business leaders driving change. And we know that workplace equity can’t wait. Our members and partners are a collective force for progress, eliminating barriers for women in the workplace, championing diversity, equity, inclusion and belonging initiatives, and transforming our organizations.

NextUp is here for you, for your now and for what comes next in your career.

As the world continues to change, our solutions and benefits have adapted to promote allyship, better support the needs of women of color, and transform corporate cultures. We are committed to diversifying our community across gender identity, ethnicity, age and industry to ensure that everyone feels they belong with NextUp. Our new name encapsulates the experience and solutions that we bring to life for women at all stages of their careers. NextUp is here for you, for your now and for what comes next in your career. Prepare for your next great challenge with leadership development, support from a network of peers, and nonprofit board experience.

Our Time Is Now, and We Are What’s Next

Together, we can knock down the obstacles to equality. Together, we can get to a better future, faster. During this exciting time, our mission remains the same: to advance all women in business. You’ll still be able to enjoy all of the things you loved about NEW. We can all reach our goals when our workplaces are diverse, involved and empowered. We are leaders. We are learners. We are mentors. We are achievers. We are NextUp. Learn more about NextUp at nextupisnow.org

Editor’s Note: In keeping with the organization’s rebranding, Progressive Grocer’s NEW Horizons column will now be known as Upward.

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About Sarah Alter Sarah Alter, president and CEO of NextUp, joined the organization in 2017, and has wide-ranging executive leadership experience in the markets that NextUp represents. Alter has successfully expanded the scope of NextUp’s mission to include Advancing All Women, and has grown NextUp to be the largest nonprofit of its type, with more than 14,000 members representing 900-plus organizations, 21 regions, and more than 300 national and regional corporate partners. More than 50% of NextUp’s national corporate sponsors are on the Fortune or Global 500. Alter has built NextUp into an organization that spans industries from tech to finance to retail to CPG. Additionally, she has focused NextUp on supporting women of color, building male allyship, the new generation coming into our workforce and, more recently, how COVID-19 has affected women in the workplace. Alter hosts the “Advancing ALL Women” internet radio show and podcast on VoiceAmerica, with more than 20,000 global listeners. She is a regular speaker at NRF,

ShopTalk, the National Association of Convenience Stores (NACS), and EnsembleIQ events such as Top Women in Convenience, Top Women in Grocery and Top Women in Hardware. Alter was recognized by Crain’s Chicago Business as a Notable Woman Executive in 2020. She has also served on a number of nonprofit boards and is an accomplished fundraiser. Alter is an organizer of Chicago’s annual Juvenile Diabetes Research Foundation (JDRF) Gala, which has raised millions of dollars for type 1 diabetes. She also serves on the for-profit boards of the Illinois State Advisory Lottery Board and the Maverick Digital Advisory Board. She’s a graduate of Northwestern University and has a Harvard MBA.

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100 YEARS OF FOOD RETAILING

Technological Innovation

THE TRIUMPH OF TECHNOLOGY

From cash registers to barcode scanning and now AI vision, new inventions have continued to advance the process of grocery shopping.

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By Jenny McTaggart t’s hard to imagine the success of the supermarket without considering the impact of technology. Long before computers came along, the retail business made use of the latest scientific inventions to create new efficiencies and make consumers’ lives easier. From the invention of the first cash register, to the development of long-haul trucks and highways that made cross-country trade available, and on to today’s hand-held devices and the latest cameras equipped with artificial intelligence (AI) vision that can teach us more than ever before about consumer behavior, technology has truly triumphed over the past century. And if you think technology has evolved at a rapid clip over the past several decades, hold on to your seat for what’s coming next, according to the experts. “I talk all the time about this exponential growth curve of technology,” observes Gary Hawkins, CEO of Center for Advancing Retail & Technology (CART), based in Walnut, Calif. “It’s really the exponential growth curve of computer processing power and Big Data and so on. It’s accelerating so rapidly because we’re now moving past that inflection point on the growth curve. What that means is that all this change — more and more technology, more and more innovation — is going to be more noticeable, and it’s going to be happening faster and faster. Science fiction is becoming real.” Indeed, with the accelerated pace of today’s retailing environment — where the line between brick-and-mortar stores and the digital world is blurring more than ever — it’s both exciting and perhaps a bit intimidating to think of how the next 100 years in grocery retailing might pan out. Experts share more of their thoughts on the future of grocery retailing in the sidebar on page 24. For the time being, though, as we celebrate Progressive Grocer’s 100th year as a publication, let’s take a look back at some of the major achievements in grocery-related technology over the past century.

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Key Takeaways Technology has evolved at a rapid clip over the past several decades, and is poised to ramp up even more as the line between brick-and-mortar stores and the digital world continues to blur. The new level of consumer data made possible by vision technology will become more important than ever for retailers seeking more “smart data.” Today’s technology is allowing each shopper to have their own experience based on their unique preferences.

“All this change — more and more technology, more and more innovation — is going to be more noticeable, and it’s going to be happening faster and faster. Science fiction is becoming real.” —Gary Hawkins, Center for Advancing Retail & Technology


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100 YEARS OF FOOD RETAILING

Technological Innovation Tech Highlights Over the Past 10 Decades 1920s As radio broadcasting grew in popularity as a new source of affordable entertainment, “The A&P Radio Hour” was launched as America’s first national radio program. Clarence Birdseye designed and patented his Quick Freeze Machine and developed a full line of frozen foods designed for commercial sale.

1930s Refrigerators became widespread in U.S. households, allowing consumers to store perishable products for longer amounts of time. Grocery store owner Sylvan Goldman introduced the first grocery cart, allowing shoppers to purchase more items during their shopping trips.

1940s The first charge card was created as a new form of payment that could be used at a specific store. A decade later, in 1958, the Bank of America created what we now think of as the modern credit card. Automatic sliding doors began showing up in grocery stores, beginning with George Jenkins’ “dream store” (Publix) in Florida.

1950s The round turntable checkout counter debuted at supermarkets, helping to speed up a part of the shopping trip that had become an irritation for customers. NCR introduced the first commercially available computer with a solid-state processor. Plastic film and wrapping machines made pre-packaged fruits and vegetables possible. West Des Moines, Iowabased Hy-Vee opened a dataprocessing department.

1960s Cash registers began to go electronic.

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The Shopping Cart

One of the earlier technological advancements of the 20th century in the supermarket industry took place in 1937, when grocery store owner Sylvan Goldman worked with mechanic Fred Young to design the first shopping cart, in an effort to make transporting groceries easier. Their prototype was a metal frame that held two wire baskets, and it was an ideal tool for self-service shopping, which was gaining in popularity at the time. “When you look at something like the shopping The first shopping cart, and the advent of moving from full service to cart, created in self-serve, and then from basket to cart, you can 1937, helped only buy what you can carry,” observes David Bish- advance selfservice shopping. op, partner and research lead at Brick Meets Click, based in Barrington, Ill. “So the cart was really incredible for encouraging and motivating people to buy more.” Ron Bonacci, VP of marketing, advertising and public relations at regional chain Weis Markets, based in Sunbury, Pa., adds: “It really drove up the overall value for families, but also for the grocery industry. Retailers were able to really add to their overall sales volume in relation to that.”

Checkout Technology and Barcode Scanning

Early issues of Progressive Grocer featured advertisements touting the latest versions of cash registers. In one such ad, the National Cash Register Co. (today known as NCR) rolled out a multiple-drawer cash register that helped one retailer grow sales by 20%. “The separate total and drawer for each clerk not only make him responsible for the cash and charge sales he handles, but have increased our cash sales about 20%, as they inspire each clerk to try and beat the other fellow in cash sales,” asserted I. W. Rosenblatt, owner of a grocery and meat market in Omaha, Neb. “And, as a receipt from the register is given out on every sale, I am sure of getting all my money.” While the earliest cash registers simply allowed the user to enter a total, the next generation included buttons for different departments, providing more category-specific data. In the 1960s, cash registers began to go electronic. Yet it was the development of the UPC (Universal Product Code) scanner in 1974 that was truly a game changer. History was made when a pack of Wrigley’s gum was scanned at a Marsh supermarket in Troy, Ohio. Bonacci recalls the huge impact scanning made on the industry. “By the time I became a bagger at Kroger in the late 1970s, it was going full swing,” he says. “You went from where hundreds of people were coding products with pricing to putting a barcode on each item where it The checkout was changed forever in 1974, could be scanned. That really when UPC scanners began enabling tracking of catapulted the industry into individual products. having major opportunities for a wider variety of selection and sourcing from all over.” Bishop notes that his father, Bill Bishop, a well-known industry consultant, went to Switzerland in the early 1970s to observe barcode scanning being piloted at a supermarket called Migros. At the time, the elder Bishop was VP of research at the Super Market Institute, which



100 YEARS OF FOOD RETAILING

Technological Innovation Tech Highlights Over the Past 10 Decades 1970s The world’s first UPC scanner was installed at a Marsh supermarket in Troy, Ohio. By the end of the decade, microwaves became affordable for households. Food manufacturers jumped on board with the trend and continued to roll out more convenient microwave meals.

was the predecessor to the Food Marketing Institute (today known as FMI — the Food Industry Association). “Prior to scanning, a grocer could tally up and have a general idea of how well they were doing, relative to how much money they had in the till — but they really didn’t have much visibility into what was selling,” explains Bishop. Having data available at the item level “helped transform logistics and the whole supply chain,” says Hawkins. Indeed, once computers came on the scene, retailers could measure the data being scanned, which helped them keep track of sales and profit margins, as well as other factors like customer count. Ryan Redner, president and CEO of Redner’s Markets, based in Reading, Pa., considers scanning technology and its integration into both consumer-facing and front- and back-end systems to be “the most significant advancement” in technology since he’s been involved in the business.

1980s The first barcode printer was introduced by Data Specialties, a company that changed its name to Zebra Technologies. The site selection process was aided as Claritas rebuilt PRIZM, a tool that breaks down the nation’s ZIP codes into homogenous clusters, each with a distinct lifestyle description. Companies were now using hand-held micro computers in the aisles, minis in the office, and electronic ordering and invoicing in the warehouse. These tools provided sophisticated analysis of item movement, assistance on promotional decisions, and help with shelf space allocation. Giant Food began using a new in-store pharmacy system. Mike Wickenbiger, owner of Mike’s Shoprite, in Lansing, Mich., was one of a handful of retailers using scanners to determine prices and project gross profit in meat and produce. Richmond, Va.-based Ukrop’s Super Markets launched the first loyalty card program in the country. Bentonville, Ark.-based Wal-Mart completed a satellite network allowing its corporate office to track inventory and sales, and instantly communicate with stores, while Deep’s IGA, in Danbury, Conn., was testing a computerized deli ordering system, and NCR introduced the world’s first weight-conscious scanner.

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Back to the Future When you’ve been reflecting on the past, it’s only natural to also ponder the future. As Progressive Grocer spoke with industry experts about how technology has evolved over the past century, we also asked them to share their thoughts about the business going forward. Here are some of their ideas: Ron Bonacci, VP of marketing, advertising and public relations at Weis Markets, based in Sunbury, Pa., is betting big on walk-out technology and the power of artificial-intelligence (AI) computer vision. “All grocery stores in America, except for maybe the small mom-and-pop stores, will have 40, 50 or 60 cameras in their stores in the future,” he predicts. “As a customer walks in the store, the technology will recognize them and then scan the items as they select them. The cameras will probably have facial recognition and will be tied to credit systems. It will take care of the customer and their shopping experience.” Another likely tech-related feature in supermarkets of the near future will be kiosks — or more likely holograms — that can provide shoppers with more information about an item, including how to prepare it, notes Bonacci. He’s also enthusiastic about how supermarkets can better serve customers’ health-and-wellness needs. “The grocery industry is going to have to evolve and become more involved in consumers’ health and lifestyles,” he asserts. “For instance, if a person is diabetic, the grocer will help direct them to the items that are better for them. The retailer can work with hospitals in their marketing areas to identify newly diagnosed patients who want this type of assistance. And using algorithms made possible by AI, we’ll be able to help manage their disease state and suggest products that are better for them, which can help sustain their life or build a better quality of life long-term. We may possibly be able to help people get out of some of these disease states.” Lisa Chai, partner at ROBO Global Ventures, a venture fund that’s part of Dallas-based ROBO Global, is excited about the potential of new technology that can help solve real-world problems in logistics and the supply chain. One example is in picking and packing technology. “We’re looking at robots that can move backwards and even replicate the human hand in their gripping abilities,” notes Chai. She also predicts further development in payment systems, even beyond touchless applications. “The average person today wants a more automated and personalized experience,” explains Chai. “You’re starting to see a new generation pushing this change. They don’t want to carry cash around, and


Tech Highlights Over the Past 10 Decades He also points to the technology’s importance in today’s brick-andclick operations. “Being able to tie in all these touchpoints to realize online ordering while maintaining real-time inventory levels, which then affect replenishment, is amazing,” he says. “The efficiencies this creates help us to be able to provide a real-time, instant-gratification shopping experience for our guests.”

Loyalty Programs and the Evolution of Consumer Data

Following the advent of UPC scanning, the power of item-level data eventually progressed to an increased interest in shopper-specific data, and that gave birth to the loyalty programs developed in the early 1990s. “Now we had visibility not only into what we sold, but who we sold it to and when we sold it,” observes Bishop. Hawkins, who helped launch one of the first loyalty programs in the industry back in 1993 at his Syracuse, N.Y.-based independent store, Green Hill Farms,

they don’t want to be tied to one bank.” Lastly, since labor challenges seem likely to continue plaguing the industry, Chai expects to see further development in labor systems and robots that can assist in menial tasks in the store and in warehouses. She also believes that software development will become more important as retailers look for more specific solutions that can be employed regardless of existing hardware in their stores. “Right now, we have a really robust amount of great data, but retailers need better software to analyze that data and customize it by store, by region, and even by online versus in-store sales,” she notes.

Certified Grocers of California began using a PC-based system designed for MIS work. The system could schedule multiple projects, monitor work progress, track staff use, create custom reports and determine project costs. By the end of the decade, a growing number of retailers were using computers for merchandising and buying decisions, to achieve new efficiencies with planograms, and to get a handle on in-store security and theft.

1990s Food retailers began experimenting with self-checkout systems. Peapod started offering online grocery shopping and home-delivery service in the Chicago area. The Kroger Co., based in Cincinnati, became the first supermarket to take grocery orders for home delivery via the internet.

Gary Hawkins, CEO of Center for Advancing Retail & Technology (CART), based in Walnut, Calif., envisions a new world of virtual grocery shopping as part of the metaverse. “You’ll put on your virtual-reality headset and enter this virtual world where you can go grocery shopping, go shopping at a mall and meet your friends for coffee,” he explains. “As you’re shopping, you can choose to have an item shipped right to your door. And the day is coming when 3D printing will allow you to print the product you want in the convenience of your own home.” While it may sound far-fetched, Big Tech companies like Facebook, Google, Apple and Microsoft are already “heavily focused” on the idea of the metaverse, he notes. Like Chai, Hawkins expects our concept of currency to continue to evolve as well. “The dollar bill we have in our pocket is changing to cryptocurrency,” he says, “and the payment networks that have been around for decades, in which you scan your credit card, are giving way to new blockchain-based networks.” One day, retailers will use these blockchain networks to deliver digital coupons to their customers, he adds.

Seattle-based Amazon launched in 1995, initially as an e-commerce site dedicated to selling books.

“You’ll put on your virtualreality headset and enter this virtual world where you can go grocery shopping, go shopping at a mall and meet your friends for coffee.”

EPA extended its Energy Star label to the most energy-efficient grocery stores.

—Gary Hawkins, Center for Advancing Retail & Technology

Kroger began deploying a labor-scheduling tool called SuperSked, which helped the retailer staff its stores with the proper personnel to stock shelves and attend to shoppers. Irradiation of meat was approved by the FDA.

2000s Electronic buying alliances gained in popularity, including Buyproduce.com, Agribuys and Transora on the supplier side, and WorldWide Retail Exchange on the global retailing level.

Retailers tried their hands at digital marketing programs. S&H Greenpoints became a popular digital component of the tried-and-true S&H Green Stamps program, while frequent-shopper programs with rewards grew in popularity.

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Technological Innovation Tech Highlights Over the Past 10 Decades Kroger began working with British marketing consulting firm dunnhumby to develop better data-mining practices. Self-service kiosks began appearing in U.S. airports and eventually showed up in the retail sector to sell specialty items and count loose change. The Uniform Code Council launched UCCnet in hopes that it would become the world’s largest electronic business-tobusiness marketplace.

adds, “It wasn’t until loyalty and frequent-shopper programs that retailers began to have any understanding of their business via that shopper focus.” Bonacci, another early adopter of loyalty cards who helped launch the Kroger Plus card, notes how data gleaned from loyalty cards helped retailers better anticipate out-of-stocks and understand shopper behavior on a deeper level. Then, once computer-assisted ordering (CAO) arrived, retailers were better equipped to have products on the shelves when they needed them, he adds. Bonacci, who went on to become VP of marketing at Delray Beach, Fla.-based S&H Greenpoints, also highlights the huge impact that personalized coupons had once they were introduced as an incentive tied to loyalty programs. “That was the critical turning point, when the adoption rate of consumers using loyalty cards really picked up,” he recounts. “We knew that rewarding consumers for what they buy would make a difference in the industry. Then the whole industry adopted personalized coupons, and we eventually went to the online and digital versions that we have today.”

Pilot tests of scan-based trading showed much promise, while RFID technology brought hope for vast improvements in supply chain efficiency and for upgrades in retail shelf performance. Rochester, N.Y.-based Wegmans Food Markets got involved in these technologies, as well as a pilot project to evaluate the benefits of product synchronization. The first rugged RFID handheld was introduced by Zebra Technologies. Salisbury, N.C.-based Food Lion generated industry excitement by launching a tech-focused format called Bloom in 2004. New York’s FreshDirect, launched in 2002, reached profitability. Apple released the iPod — a portable media player — in 2001, followed by the iPhone in 2007. Social media sites such as My Space, Facebook and Twitter further changed the way Americans communicate with one another, along with how companies reach consumers. Pleasanton, Calif.-based Safeway unveiled its first solarpowered grocery store in its home state. Amazon began offering an online grocery delivery service in select cities under the name Amazon Fresh.

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Self-checkout got its start back in 1992. Today, some retailers such as Walmart are actually expanding the technology to create a quicker experience for shoppers.

Self-Checkout

Another big tech development during the 1990s was the advent of self-checkout systems, which essentially let shoppers do the scanning themselves. Dr. Howard Schneider is credited with developing the first self-checkout, which he called “the service robot.” It was installed in 1992 at a Price Chopper Supermarket in New York. NCR soon followed with prototypes of self-checkout machines. “I’ll never forget the day I was in Kroger and we were asking, ‘Why self-checkout?’” recalls Bonacci. “And we were told it was all about giving shoppers the convenience. Back then, we were looking at how to make shopping more convenient for customers, especially those who were just purchasing one to 10 items. They wanted to get in and out of the store, and many of them saw grocery shopping as a chore.”

Media Usage and the Internet

Bonacci notes that some of today’s younger consumers don’t mind shopping as much, and instead see it as more of a sensory, explorational experience. In his estimation, the evolution of media — specifically cooking shows and channels — has been a big influence on how people experience the supermarket. “People in the younger generations look at grocery shopping more as an opportunity to experience things, to see what’s coming out,” he notes. “We used to have only three TV stations, but that progressed into having multiple channels. And then came shows like ‘Iron Chef’


Tech Highlights Over the Past 10 Decades and dedicated channels like Food Network, and that made cooking at home and trying new ingredients cool. People started aspiring to be chefs in their own homes, and that gave way to the grocery industry becoming more exciting.” Of course, television eventually gave way to the internet in becoming consumers’ major source of entertainment, information and advertising. Bonacci recalls that grocers initially began to develop company websites to provide information back in the 1990s and early 2000s. Then came online shopping. “At first, it was just a certain selection of items available to consumers,” he says. “Then, once technology got even better, it evolved to include all the items in the store. So you went from about 12,000 items to potentially 40,000. That was the main result of what Amazon brought to the table. We recognized that it was a different game that the industry had to evolve to.”

Checkout-Free Technology

In recent years, Amazon has set the bar even higher. Hawkins and others see checkout-free technology like Just Walk Out in Amazon Go stores — snd now Whole Foods Market stores, too — as a change that’s here to stay. The technology relies heavily on cameras and voice recognition to get consumers in and out of the store on their own. “When you put something like a computer vision platform in your store, that provides an exponential benefit,” notes Hawkins. “Not only can you get rid of all your cash registers, but once you have these cameras in place, you have all this other data that you can use to change your operations.” Lisa Chai, partner at ROBO Global Ventures, a venture fund that’s part of ROBO Global, an index, advisory and research company based in Dallas, calls Amazon Go technology a “game changer,” adding: “I remember the first time I did a demo with Amazon. I loved it.” In Chai’s view, the rollout of Amazon Go stores would have been more successful if the timing didn’t coincide with the pandemic, since so many people were wary of going into stores at the time. Like Hawkins, she thinks that the new level of consumer data made possible by vision technology will become more important than ever for retailers that are on the hunt for more “smart data.” Bishop and others caution, however, that new tech like Amazon’s must be supported Amazon recently introduced its Just Walk with the right infrastructure, Out cashier-less technology at a Whole Foods and retailers must be careful Market store in Washington, D.C. not to oversteer in focusing on process over people. In addition, some consumers may not be ready to be tracked so closely in the store. Through his work at Brick Meets Click, Bishop advises retailers to make sure that technology isn’t just replacing a store, but rather is complementing the store. “In-store is aspirational or inspirational, and online is very transactional and functional,” he reasons. “When you look at all these new technologies, it’s about thematically tailoring them. We can choose how we consume content, how we conduct commerce and how we connect with people in the community. It’s also about precision, because the tailoring gives us the choices and information that we want. That is all enabled by the fact that technology is allowing each person to have their own experience based on their unique preferences, and that’s really powerful.”

2010s NCR unveiled the world’s first hybrid laser and imaging bi-optic scanner for retail. Kroger rolled out smart shelving using technology called EDGE, which stands for Enhanced Display for Grocery Environment. The cloudbased signage solution supports full-color digital imagery and video for displaying ads and other content. Robots began showing up in supermarkets to help clean and restock shelves. U.K. e-grocer Ocado Group formed an exclusive partnership with Kroger and an initial commitment to build capacity equivalent to 20 fulfillment centers across the United States. Some food and beverage companies began using blockchain technology in their production processes to increase transparency and help ensure better food safety. Walmart formed a blockchain partnership with IBM and a consortium of other retailers and suppliers to find new applications to increase food traceability. Walmart developed an “intelligent retail lab” at its Neighborhood Market in Levittown, N.Y., to test AI-enabled cameras, interactive displays and a massive data center.

2020s Amazon opened its first full-sized cashier-less Amazon Go grocery store, in Seattle. The tech company also rolled out the Amazon Dash Cart as another way to streamline the grocery experience. A growing number of retailers added micro-fulfillment centers with automated technology to help fulfill online orders faster and more efficiently. Grocery stores began testing autonomous delivery using selfdriving cars and drones. Boise, Idaho-based Albertsons made the country’s first commercial 100% zero-emission grocery delivery, using a class 8 battery-electric truck and reefer. Pittsburgh-based Giant Eagle became the first U.S. grocery and convenience store chain to accept PayPal and Venmo payments at the register.

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COVER STORY

Retailer Deep Dive

The New Walmart On its 60th birthday, the retailer is just getting started on disrupting grocery.

W By Gina Acosta

ith the rate of inflation in the United States at a 40-year high of 7.5%, and geopolitical strife threatening to take prices even higher, there are only a handful of grocery retailers in a unique position to leverage these crises into drivers of business. At the top of that list of food retailers is Walmart. “During periods of inflation like this, middle-income families, lower-middle-income families, even wealthier families become more price sensitive, and that’s to our advantage,” Walmart CEO Doug McMillon said during the company’s fourth-quarter earnings call in February. “So we’ve been through this before, and we run with inflation around the world all the time. But inflation is a different environment in the U.S. right now than it has been in recent times, for sure.” Especially in hard times, Walmart keeps growing. As the Bentonville, Ark.-based retailer prepares to celebrate its 60th birthday this year, it’s just getting started on a whole new business model perfectly suited for these hard times and poised to drive even more growth: one that leverages the company’s multibillion-dollar investments in store experience, product assortment, digital convenience and sustainability. Walmart Chief Merchandising Officer Charles Redfield offers Progressive Grocer an exclusive glimpse what’s next for the company that already sells more groceries in the United States than any other retailer. “We may be the largest, but we also want to be the best and the customer’s first choice,” Redfield says. “We do that by evolving and innovating. We are innovating across our stores, supply chain and customer experience to ensure we exceed their expectations on however and whenever they want to shop. We’ll continue to evolve and innovate for the future. Our continued commitment is to always provide our customers with fresh, high-quality food items at the everyday low prices they expect, no matter how they shop.”

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Key Takeaways Walmart’s redesign of its stores aims to earn primary-destination status from shoppers. Hyper-localization of the retailer’s grocery assortment and expansion of private label continue to drive sales. Investing heavily in convenience, omnichannel, supply chain capacity and automation enables the company to stay ahead of demand.


“We may be the largest, but we also want to be the best and the customer’s first choice. We do that by evolving and innovating. We are innovating across our stores, supply chain and customer experience to ensure we exceed their expectations on however and whenever they want to shop. We’ll continue to evolve and innovate for the future. Our continued commitment is to always provide our customers with fresh, high-quality food items at the everyday low prices they expect, no matter how they shop.” — Charles Redfield, Chief Merchandising Officer, Walmart


COVER STORY

Retailer Deep Dive The first phase of Walmart's store redesign added bold dimensional typeface — e.g., FRESH, BEEF and DAIRY — to departments, directing customers to the exact section that they’re looking for.

Variety Redefined

At first glance, Walmart at the age of 60 might not look all that much different from the shop that founder Sam Moore Walton first opened in the 1940s in Newport, Ark. From 1945 until the 1960s, Walton’s retailing business was devoted entirely to the operation of variety stores. In 1962, he opened the first Walmart store under the original flywheel business model of “Always Low Prices.” In 1974, the company updated that strategy to “Every Day Low Prices.” Today, the Walmart of 2022 is still focused on low prices and variety, albeit on a much grander and more modern scale. Under a new flywheel business model revealed last year, the company is scaling a whole other variety of businesses, from delivering groceries straight to customers’ refrigerators, to new media, to home repair services, to data monetization, to fulfillment services, to white-label solutions for other retailers, even as it continues to grow sales from its massive physical-store footprint. Walmart began selling groceries in 1988, the same year that it opened its first Supercenter and a few years after it opened its first Sam’s Club. In 1998, it opened its first Walmart Neighborhood Market. Walmart now generates about 60% of its revenue from selling food and consumables across a footprint of 5,342 locations; according to a new 2022 report from Chicago-based Numerator, Walmart commands 18% of the grocery market share in the United States. The company with $559 billion in annual revenue now has 3,573 Supercenters (around 178,000 square feet each); 370 discount stores (around 106,000 square feet each); 683 Neighborhood Market stores (around 42,000 square feet each); 116 small-format stores; and 600 Sam’s Clubs, a network of stores that gives the retailer a unique competitive advantage, Redfield notes. “There is strong competition in the grocery industry,” he says. “But with 90% of Americans living within 10 miles of a Walmart, we have a very good understanding of how America shops, which allows us to adjust our offerings to 30

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reflect the needs of most of the country, setting us apart from other retailers.” “Adjusting its offerings” is an understatement of what Walmart has been doing during one of the most challenging periods in retail history. The company has been spending billions of dollars on customer-facing initiatives and technology while leveraging its heft with suppliers to navigate supply chain bottlenecks and soaring costs, and shoppers are responding by packing Walmart stores. During its fourth quarter ended Jan. 28, U.S. same-store sales (excluding fuel) at Walmart were up 5.6%; comps were up 14.2% on a two-year-stack basis. The retailer said that comps reflected strong in-store traffic aided by robust consumer spending and a strong holiday season, despite the Omicron surge. Traffic was up 3.1% during the quarter, and average ticket was up 2.4%. Walmart is grabbing even more grocery share. Its grocery comps increased by the high single digits in its fourth quarter, with sales growth and market share gains aided by slightly wider price gaps than pre-pandemic levels and expanded digital offerings; on a two-year stack, sales increased by a mid-teens percentage. Food categories increased by a highteens percentage on a two-year stack. Meanwhile, grocery led sales growth at Sam’s Club during the quarter. The warehouse club chain’s comps increased 10.4%, and 21.2% on a two-year stack. Walmart looks at the local community of each market and sees each customer as unique. The company says that it aims to create "hyper-localization" by catering to local tastes and preferences, including a targeted selection of grocery items.


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COVER STORY

Retailer Deep Dive The banner’s food categories led growth, with freezer/cooler comp growth in the low teens. Fresh meat, produce, floral and prepared foods also performed well, the company said, with dry grocery and beverage comps also showing strength. Walmart reported net income of $3.56 billion, or $1.28 per share, compared with a loss of $2.09 billion, or 74 cents per share, a year earlier. Total revenue rose slightly to $152.87 billion, from $152.08 billion a year earlier. For the full fiscal 2021, total revenue was $572.8 billion, up 2.4%. During the quarter, Walmart remodeled more than 140 stores; it plans to remodel 600 locations in fiscal 2022. The remodels include a new store layout that Redfield says is designed to make Walmart a primary destination for more shoppers. “Last year, we announced the first phase of our store redesign that was focused on navigation and wayfinding,” he observes. “In January, we unveiled the next phase for our signature experience, which we call ‘Time Well Spent.’ It focuses on making Walmart a destination where customers want to spend their time.”

Time Well Spent

For millions of consumers, Walmart’s ubiquitous stores are the reason that they love the company. They’re also the retailer’s biggest competitive advantage, especially now, when the American consumer is longing to return to in-store shopping after two years of a stressful pandemic, Redfield points out. “Customers are still craving an in-store experience, which we have seen steadily rise back towards pre-pandemic levels,” he says. “We think the rollout of the second phase of our store redesign will continue to entice customers to come into stores, since we are repositioning Walmart as a destination where customers will want to spend their time.” Last year, the retailer launched a store design focused on a digitally enabled shopping experience. Developed through a customer-centric lens, the store aims to create an elevated Walmart's reimagined store design looks to offer a seamless omni shopping experience by adding more self-checkout lanes, contactless payment options and digital touchpoints.

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The retailer now offers its popular Grocery Pickup service in 4,600 locations and same-day grocery delivery from 3,500 stores, an increase in pickup/delivery capacity last year of 20%. Walmart expects to increase that capacity by another 35% this year.

experience that appeals to shoppers through a sleek design aesthetic, a layout that spotlights products, and end-to-end digital navigation that guides customers throughout their journeys. The company updated the exterior and interior signage of stores to reflect the Walmart app icon, hoping to create an instant omni-shopping experience in the customer’s mind. As customers enter the store, they are greeted with a store directory that encourages them to download and use the Walmart app while they shop. Throughout the store, bold dimensional typeface — e.g., FRESH, BEEF and DAIRY — directs customers to the exact section that they’re looking for, while aisles are marked with letter-and-number combinations to guide customers from phone to product. Stores were also outfitted with self-checkout kiosks as well as contactless payment solutions, including Walmart Pay. Select locations will also feature Scan & Go to help customers manage checkout directly. According to Walmart, the feedback that it has received from customers regarding the new layout has been overwhelmingly positive, and it now has close to 1,000 stores with the first phase of the redesign installed. This year, the company is embarking on a second phase of the redesign — the aforementioned Time Well Spent — which is laser-focused on earning primary-destination status from the shopper. Features of the new design, now playing a starring role at the company’s incubator Store No. 4108 in Springdale, Ark., include displays at the corners of departments pulling customers in and helping them touch, feel and become a part of the space; brand shops offering a next-gen “store-within-a-store experience,” and omni touchpoints such as QR codes and digital screens. For example, in the pet department, a customer may scan a QR code to find additional dog bed options, learn about Walmart’s pet insurance service options or have a 20-pound bag of kibble delivered to their door. On the foodservice front, last year the retailer opened more than 400 new restaurants as part of the redesign, including 30-plus new brands introduced to


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COVER STORY

Retailer Deep Dive Walmart, most of them local or regional offerings. “Both in-store and online, we have made it easier to navigate, order, check out, and pick up or deliver the items our customers need most, especially in today’s ever-changing climate,” Redfield says. “The bar for ‘easy’ pushes higher every day, and customers are expecting us to continue to meet it.”

Hyper-Localized

As for the merchandising strategy behind all of these newly redesigned Walmarts, Redfield asserts that “hyper-localization” remains key to the retailer’s strategy going forward. “We don’t view the customers of all our stores as one, singular Walmart customer; we look at the local community and view each customer as unique — across all our categories,” he says. “We create what we call hyper-localization by catering to local tastes and preferences. We are in many communities across the country, but we are able to take a local approach to many items. We have an extremely large and targeted selection of diverse/ethnic grocery items across multiple categories. It’s all about providing great, innovative high-quality items, meeting the customer’s needs and making their store feel like home.” Although the retailer’s merchandising strategy, product assortment and promotions may vary by location, Redfield notes that Walmart knows its customers across the country are always interested in high-quality products at affordable prices. That’s why the company has been also focused on growing its private-brands program. “For grocery, our private brands, including Great Value and Marketside, continue to be a place where we innovate and bring products to market that we know our customers will love,” he says. “Private brand plays a very important role in our grocery portfolio. Great Value and Marketside are an As customers enter newly redesigned Walmart stores, they are greeted with a store directory that encourages them to download and use the Walmart app while they shop. Select locations will also feature Scan & Go to help customers manage checkout directly.

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integral part of our customer’s shopping basket, particularly as they provide great quality and value.” The chief merchant observes that the company is always looking for on-trend flavors and exciting foods. It also listens to customers to develop new products, bring them to market quickly and offer them at a price that shoppers expect from Walmart. According to Redfield, recent growth categories include do-it-yourself cooking items, baking products and fresh food. “We continue to see a big opportunity to continue to capture inspirational moments in our seasonal offerings in snacking, sweets and entertaining, and are consistently growing our assortment of private brand across all categories,” he says. “Our customers love our private brands because they deliver on taste and quality, while still being affordable additions to the weekly grocery trip. Customers are choosing our private brands more often, driving double-digit growth since 2020.” Redfield observes that Walmart is introducing new items across grocery categories, adding a total of nearly 1,000 offerings under the umbrella of its grocery private brands. New items that the retailer plans to launch this spring include Sam’s Choice chocolate bars; Sam’s Choice Easter cookies, grahams and chocolate bark; and Great Value Blueberry Cobbler and Speculoos Cookie flavored coffee creamers. “Our goal is to provide our customers with affordable and great-quality meals, whether they want to make them from scratch, semi-scratch or ready-to-heat,” he notes. In addition to private label initiatives, the retailer has made other assortment tweaks during the pandemic. “Over the past few years, we’ve significantly expanded our offerings of frozen foods that fit specialized health-focused diets, including plant-based, gluten-free, keto and more,” Redfield says. The company has also invested in elevating small and diverse businesses through a robust supplier diversity program. “At Walmart, we believe we are at our best when we promote diversity across our supply chain,” explains Redfield. “In 2021, Walmart sourced more than $13 billion in goods and services from nearly 3,000 diverse suppliers. We continue to offer a wide array of great products to our customers, and we are constantly searching for new, unique partners to help elevate our assortment.” Walmart will host a Supplier Inclusion Summit for diverse-owned food and beverage suppliers in April.



COVER STORY

Retailer Deep Dive “Our merchant teams are looking to add to our existing diverse supplier base with exciting and innovative new products that will wow our customers,” he says. Speaking of supply chain, Walmart saw its inventory rise 28% in the United States in the retailer’s fourth quarter, despite the supply chain crisis. The company has been investing heavily in supply chain capacity and automation to stay ahead of demand, improve the customer experience and increase productivity. “We’re making notable investments in the middle mile and supply chain network with automation in our broader supply chain that enable faster delivery,” Redfield points out. “Understanding the challenges facing the overall supply chain, we’ve taken additional steps to navigate the hurdles and minimize disruption so we can deliver for our customers and support our stores, employees and suppliers.” According to Redfield, Walmart is working with suppliers to source holiday merchandise earlier than the typical timelines, “and we have maintained laser focus on inventory levels since the start of the pandemic. We have taken steps such as chartering more ships, investing in our supply associates through wage investments, hiring over 3,000 drivers and 20,000 permanent supply chain positions, and promoting and training nearly 150,000 supply chain associates this year.”

An Omni Flywheel

Another big competitive advantage for Walmart has been its investments in omnichannel innovation, many of which allowed the retailer to leverage technology, talent and product assortment in stores and on walmart.com during the pandemic. The retailer now offers its popular Grocery Pickup service in 4,600 locations and same-day grocery delivery from 3,500 stores, an increase in pickup/delivery capacity last year of 20%. Walmart expects to increase that capacity by another 35% this year. The company today offers a dizzying array of additional omni-grocery services such as Express Delivery via DoorDash (now available from more than 3,400 of Walmart’s

Walmart plans to scale its InHome grocery delivery service from being available to 6 million U.S. households to 30 million U.S. households by the end of the year. To support the expansion, Walmart plans to hire more than 3,000 associate delivery drivers, as well as build out a fleet of 100% all-electric delivery vans.

4,700 U.S. stores for an additional $10 fee), Instacart delivery, and curbside pharmacy pickup. According to Walmart, the number of customers using grocery delivery has increased six-fold compared with pre-pandemic, although the company’s e-commerce sales growth has slowed recently as shoppers increasingly return to physical stores. “Walmart provides several ways to shop to make getting ... groceries easier than ever, whether it be in person, online or from our app,” Redfield says. “We have leveraged new omnichannel touchpoints, innovative tools and partnerships to connect customers with trusted brands. Last year, we brought our grocery and general merchandise apps together into one. This significant omnichannel transformation brought our store and online back-end systems together and provided customers with a simpler, unified app experience.” Walmart plans to scale its InHome grocery delivery service (which costs $148 a year) from being available to 6 million U.S. households to 30 million U.S. households by the end of 2022. To support the expansion, Walmart plans to hire more than

Walmart Is America’s Favorite Omni Grocer Walmart Amazon Instacart Target Other Kroger Albertsons/Safeway Stop & Shop/Giant Food Shipt 0% Source: Chicory 2022 Online Grocery Survey

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10%

20%

30%

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Merchandising Mayhem Creates

NEED FOR NEW SPACE he retail industry survived many changes over the past two years, yet some essential aspects of retail merchandising and operations remain intact.

T

The pandemic era challenges inspired creativity on the part of fixture suppliers whose products help facilitate the execution of strategies on which many retailers are now reliant. For example, it is one of the fundamental reasons why fixture market leader Uniweb, Inc.’s dynamic corporate value proposition of, “We Create NEW Space,” proves timely in today’s retail environment. Retailers must organize and present merchandise on fixtures that are affordable, durable, attractive, and flexible. That is a lot to ask of a humble fixture, an element of retail that tends to be viewed through a utilitarian lens. Savvy retailers know otherwise, though, and do appreciate fixtures for their ability to enhance brand value, favorably impact store experience, contribute to supply chain efficiency, and bring in profits.

As if those prospects were not lofty enough, fixtures today need to satisfy the latest requirements in an evolving retail world filled with fluid shopper behaviors. Most notably, retailers of all types are focused on reducing store sizes, repurposing space, and taking a more opportunistic approach to expansion, one that is based on real estate availability as opposed to cookie-cutter prototypes. These recent retail realities are in turn creating increased expectations when it comes to merchandising. Store operation teams now must deliver comparable levels of sales productivity from reduced selling space. The basic premise of Uniweb’s philosophy is that retailers can make better use of their existing space by re-imagining their approach to fixturing and employing more profitable high-density fixtures. Another key aspect of Uniweb’s value proposition is the company’s domestic sourcing and operation. Made in America means that in a matter of weeks, as opposed to months, Uniweb designs, builds, ships and installs fixtures that

satisfy retailers’ operational requirements and help merchants achieve sales goals. It is a powerful combination that resonates in a changed retail world where speed matters more than ever and ROI expectations have never been higher. Uniweb has an appreciation for these expectancies and others over the course of 50 plus years it has been working with retailers. During that time, the company and its team of seasoned executives and skilled workers have seen many changes in retail formats, expansion strategies and shopper behaviors. The foundation of versatility Uniweb built over a half-

century served the company well during the pandemic. Bottom line, Uniweb delivers shorter lead times and a superior product. Going forward, Uniweb and its unwavering philosophy of “creating new space,” manufactures a powerful combination that promises to serve the retail industry well, especially as speed and flexibility in merchandising and operations become more essential to success. Strong as Steel Since 1970 For more information, please call 800.486.4932 or visit their website uniwebinc.com

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COVER STORY

Retailer Deep Dive 3,000 associate delivery drivers this year, as well as build out a fleet of 100% all-electric delivery vans. Last year, the company launched a $98-a-year membership program called Walmart+, offering free shipping with no order minimum, unlimited delivery from stores, fuel discounts, and mobile Scan & Go for a streamlined in-store shopping experience. “Convenience continues to be an area of focus where we must set the pace amongst our competition — and we have, with Walmart+,” Redfield asserts. “Walmart+ brings together a comThe retailer's investment in Plenty, a San Francisco-based prehensive set of benefits to make life easier for our customers indoor vertical-farming company, is part of a broader strategic partnership to use Plenty’s indoor vertical-farming technology and bring them solutions at an unprecedented value.” The company is also expanding efforts to generate alterna- platform to deliver fresh produce to Walmart stores. tive revenue streams with initiatives such as Walmart GoLocal, which leverages the retailer’s investments in pickup/ Plenty, a San Francisco-based indoor vertical-farmdelivery into third-party sales opportunities. ing company. Walmart’s equity investment is part “We’re expanding our other revenue streams, including of a broader strategic partnership to use Plenty’s our white-label delivery service, Walmart GoLocal,” Redindoor vertical-farming technology platform to field says. “With clients such as The Home Depot, Chico’s deliver fresh produce to Walmart retail stores. FAS and Cognetry Labs, Walmart is leveraging its capacity “Walmart plans to purchase produce from and capabilities to help businesses of all sizes deliver prodPlenty’s new Los Angeles vertical farm that will ucts to customers across the country at an affordable price.” open in the second half of 2022, starting with And Walmart’s omni flywheel is also accelerating with sourcing leafy greens for all of its California initiatives related to sustainability, workforce, diversity, micro stores,” Redfield says. “Produce grown through fulfillment, contract delivery, autonomous trucks, retail health, vertical farming results in high-quality produce social shopping, digital advertising and many more areas. that comes in higher yields while using less water In its fourth-quarter earnings report, the retailer listed its and land. The produce grown is also pesticide-free global advertising business revenue for the first time: $2.1 and can be grown year-round in controlled envibillion. In the United States, customers using Walmart’s ronments, close to the point of consumption and advertising business, Walmart Connect, increased 136%. That distribution, increasing surety of supply.” business is expected to continue to scale over the next few According to Redfield, the investment is an years and could become a top-10 ad important step as Walmart business soon. continues to reimagine food “Walmart+ brings Walmart has also partnered with solutions that sustain and together a comprehensive Facebook to launch a first-to-market nourish people in ways that set of benefits to make life augmented-reality lens retail experience, are good for the planet, and which allows customers to use interactivi- easier for our customers reinforces Walmart’s broader ty to browse holiday gift ideas. commitment to regeneration and bring them solutions at and environmental, social and “Most importantly for food, we introduced shoppable recipes to amgovernance (ESG) actions. an unprecedented value.” plify mouthwatering food ideas across Walmart’s ESG efforts — Charles Redfield, social platforms,” Redfield notes. “On Chief Merchandising Officer, Walmart also include numerous inPinterest, we co-created innovative vestments in its workforce. shoppable experiences for the first “Our average hourly pay large-scale launch of shoppable recipes with supplier partis now up to $16.40 after making three major ners like General Mills, Kraft and PepsiCo. The initiative wage investments since September 2020,” Redencouraged our customers to try new, delicious cooking field observes. “At the same time, we’ve transiand baking recipes ... while providing them with the ability tioned more associates to full-time status so they to seamlessly add ingredients to their Walmart cart and can count on having consistent paychecks and purchase in just a few clicks.” schedules. We’ll continue to look for new ways to invest in our associates’ financial, physical Regenerative Retailer and emotional well-being.” In 2020, Walmart revealed that it would become a regenerEven with challenges from higher costs, labor ative company by 2040, with a commitment to sustainably shortages, supply chain snarls and whatever crisis source 20 key commodities by 2025. The retailer has been comes next, the company seems to be regeneratbuilding on that work ever since, and most recently unveiled a ing into a food retailer that can thrive even in the regenerative move directly related to grocery: an investment in most difficult retail environments. 38

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PROTEIN REPORT

Seafood Trends A Whole Foods Market fishmonger carefully lays out product. Credit: Marine Stewardship Council

Fishing for Dollars WITH PANDEMIC-WE ARY CONSUMERS STARTING TO E AT OUT AGAIN, GROCERY RE TAILERS AND SUPPLIERS MUST UP THEIR GAME TO MAINTAIN SHOPPER INTEREST. By Bridget Goldschmidt he year 2021 was huge for fresh and frozen seafood sales: They both exceeded the $7 billion mark, besting 2020 sales, with frozen notching a 2.6% increase, although units and volumes dipped a bit, while fresh saw dollar growth of 4.0% and its sales compared with pre-pandemic 2019 increased a whopping 30.8%, according to San Antonio-based 210 Analytics. Even shelf-stable seafood, which generated $2.5 billion in 2021 — down about 11% to 13% across dollars, units and volume from last year — experienced sales well ahead of the pre-pandemic normal of 2019, the market research company found.

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Key Takeaways Buoyed by such factors as pandemic-driven eating patterns and inflation, seafood sales dollars soared from pre-pandemic levels. With continued massive sales growth in seafood unlikely postpandemic, retailers and suppliers can continue to lure shoppers with convenience items, increased variety and enhanced traceability measures. A broader definition of sustainability will also help retailers and suppliers align product with consumers’ values, goals and beliefs.


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PROTEIN REPORT

Seafood Trends The category was subject to inflation, however, with the fresh segment particularly affected: Prices per unit were up an average of 6.8% over 2020, higher than the overall food and beverage average of 5.3%. “Behind the year-to-date view is a roller coaster ride of big increases and decreases in sales gains,” notes 210 Analytics President Anne-Marie Roerink. “Sales during the last few months have alternated between slightly below and slightly above year-ago levels. But compared to 2019, frozen and fresh seafood remained far above typical levels.” “The seafood category is growing increasingly popular among our shoppers,” affirms Scott Patton, VP, national customer interaction services at Batavia, Ill.-based Aldi U.S., which currently operates more than 2,100 stores in 38 states. “At Aldi, our focus has been on expanding the variety of seafood we offer to keep up with the at-home cooking trend. In all of our stores nationwide, we offer seafood favorites like shrimp and scallops and a variety of fresh, never frozen fish. Through our Aldi Finds program, we are bringing shoppers convenient items like our Shrimp Fajita Mix or Bacon Wrapped Shrimp for an easy weeknight dinner, as well as premium seafood like Dungeness crab, lobster tails and crab cakes for a special occasion like a date night in. We even carry some unique items like a Scallop & Champagne Gratin or Shrimp & White Wine Salmon Wellington.”

Changing Tides

What comes next for seafood, however, as the pandemic winds down at long last? Perhaps a look at January 2022 sales provides a clue, although the Omicron variant of the virus was still much on consumers’ minds that month. Frozen seafood dollar sales were significantly higher than fresh, according to 210 Analytics, at $737 million versus $666 million, respectively, due to a 7.3% decrease for fresh when comparing January 2022 dollar sales with year-ago levels — the steepest drop across the three temperature zones. Shelf-stable seafood, meanwhile, reached $250 million in sales, which was down compared to 2021, but still up 6.9% versus pre-pandemic January 2020. “Growth levels were fairly consistent during the third and fourth quarters of 2021, and dropped in January 2022 in comparison to

December 2021,” observes Roerink, who also notes that fresh seafood prices were particularly hard hit by inflation. How far sales will continue to decline for the rest of 2022 remains to be seen, but, in discussing the precipitous 18.6% drop in shellfish sales from January 2021, she points out that “it is important to remember the stellar performance of shellfish in 2020 and the early part of 2021 — creating a very difficult path for continued growth.” “We see people flocking back to dining out as quickly as they can whenever COVID restrictions allow, transmission and risk rates decline, and temperatures go up enough for outdoor dining,” says Arlin Wasserman, founder and managing director of Changing Tastes, a Philadelphia-based food strategy consultancy. “Some restaurants have had to minimize fish and seafood from the menu when traffic became unpredictable and kitchen talent was reduced.” However, when conditions aren’t conducive to dining out — such as when a highly transmissible new variant emerges — consumers will eat at home more. “There’s going to continue to be a challenging ‘ping-pong’ about where we eat on any given day or week, which is really challenging for business, and also for fish and seafood, which can be more perishable than other choices,” Wasserman predicts. “For both grocery retail and restaurants, the sweet spot will be finding ready-to-eat, more unusual choices that can be prepared in just a few hours and offer more variety than what we’ve cooked at home in the past. We see ingredients like octopus and ahi tuna for sushi, poké and grilling continuing to grow in popularity.” Shelf-stable and frozen seafood won’t be sharing in that popularity, though, according to Wasserman, who asserts that “the uptick in the sale of canned tuna and frozen fish that we saw during COVID won’t be repeated, even if there’s another wave. We’ve filled our freezers, shelves and pantries and continue to store a great deal of what we bought during last year’s panic.”

The Future of Fish Sustainability is much on the minds of Justin Kolbeck (left) and Aryé Elfenbein, co-founders of Wildtype, a producer of cell-cultivated salmon.

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Several suppliers also weighed in on what’s to come in terms of seafood trends. “Seafood has a bright future,” asserts Derek Figueroa, CEO of Seattle Fish Co. and past 2021 chair of the National Fisheries Institute. “The annual per capita consumption of seafood in the United States is around 19.2 pounds per person, which is more than half of the consumption


“As people return to work and convenience moves back toward the consumer forefront, our industry will need more innovation to retain many of our gains experienced during the pandemic.” —Michael De Caro, Peter Pan Seafood of beef and chicken, and this number seems to be growing each year. Cooking at home and becoming more adventurous with various species and preparations will continue.” Along with that, Figueroa predicts: “Greater visibility into where your fish comes from will continue to improve. Think of credible traceability that lets you interact with your food, such as approachable tech that lets you search for your favorite seafood, trace its origin, [and] easily pull up recipes and stories on the people behind the product.” That doesn’t necessarily mean that everything will go swimmingly, however. “We anticipate continued shipping and logistics disruptions for at least a few more months,” cautions Michael De Caro, VP of retail sales and product development at Peter Pan Seafood, a Bellevue, Wash.-based Alaska producer and global importer of

Moj to

many popular frozen and canned seafood products. “At Peter Pan Seafood, we are working hand in hand with our customers to weather the storm. Flexibility in terms of assortment and adaptation to logistical challenges will continue to be key.” Continues De Caro: “But also, as people return to work and convenience moves back toward the consumer forefront, our industry will need more innovation to retain many of our gains experienced during the pandemic. For example, Hook’d, our new retail frozen brand, features products that are pre-marinated, making them easier for people to prepare at home. There are all sorts of opportunities to keep consumers interested with convenient product forms to continue the growth trends — meal kit components, ready meals and more.” According to Aryé Elfenbein, co-founder of San Francisco-based Wildtype, a producer of cell-cultivated salmon: “[A]s we deal with the COVID pandemic, we also face global climate change, which simultaneously creates its own difficulties. One common theme we’re seeing is that consumers are more invested in supporting brands whose missions they can align with, with great momentum surrounding the desire for environmentally conscious options. We feel that the push for sustainable food options is not a trend, it is a lasting phenomenon.”

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PROTEIN REPORT

Seafood Trends More Than Sustainable

traditional definition of sustainability Speaking of sustainability, all were in agreement to things like renewable energy, social regarding its ongoing importance. responsibility and community impact. “The latest UN FAO data shows that more than We have a really great story to tell even one-third (34%) of fish stocks are estimated to be beyond the certified sustainability of overfished, which is reason alone to make sustainthe resources we sell.” able fishing critical to keep global fish populations What’s more, he notes: “As great healthy,” notes Erika Feller, regional director, Ameras certified-sustainable fisheries are, icas at the London-based nonprofit Marine Stewthey can be daunting for local artisanal ardship Council (MSC). “But that, combined with groups to initially achieve. Allowing for the global human population set to reach 10 billion a more holistic approach to sustainby 2050 and the demand for blue foods — foods ability provides opportunities and Salmon from such suppliers as Seattle Fish Co. remains a popular choice for from aquatic animals, plants or algae — estimated employment to small communities and seafood shoppers. to double by roughly that same time, are important artisanal fishermen that might not othreasons why sustainable seafood is critical for a erwise be available to them, while also healthy planet and healthy people.” encouraging sustainable fishing efforts.” In fact, according to Feller, “Shoppers want to hear more from “We know consumers are looking for truly suscompanies about what they’re doing on sustainability. But not just any tainable options in the seafood aisle,” says Wildtype claims: Consumers are looking for credible sustainability claims. We’re co-founder and CEO Justin Kolbeck. “To us, susseeing that 64% of U.S. seafood consumers demand third-party valitainability means protecting our oceans and the wild dation of environmental claims. So seeing credible, independent labels fish that keep them healthy. It also means quantifying on pack is important to shoppers and helps to drive demand.” greenhouse gas and other pollutants that are associShe also attests to “the power of simple point-of-choice ated with current fishing practices, so consumers can messaging to help consumers shop their values and navigate make informed decisions about the products on offer. the many marketing messages they’re bombarded with each We recently announced our first distribution agreeday. Simple messaging that highlights the retailer’s sustainabilments with retail and restaurant partners that will help ity commitment, and pointing out what independent verification us to pave the way for a wide variety of consumers to labels to look for, is working.” experience Wildtype salmon. These partners came to On their end, many retailers and suppliers are striving to meet us because their customers are asking for a level of consumer expectations in this area. sustainability and transparency that’s hard to come by “We value sustainability and transparency just as much as our cusin conventional seafood channels.” tomers do, which is why all of our fresh, chilled and frozen stand-alone What it comes down to is that, as pandemic-weaseafood products are responsibly sourced by industry criteria without ry folks finally re-emerge from lockdown and start a higher price tag,” says Aldi’s Patton. “On top of that, over 100 of eating out more frequently, seafood retailers and those products are certified sustainably sourced by a third party, and manufacturers can maintain shopper interest and we also have a partnership with the Ocean Disclosure Project (ODP) to counteract an expected slide in sales at grocery with make wild-caught seafood origin visible to the public.” no-fuss items and an unwavering commitment to “The increase in demand for fish and seafood is growing rapuphold consumers’ most deeply held values. idly, so being able to source seafood in a way that protects both As Figueroa puts it, “Consumers will … continue to the species and its habitat is key for the future of the industry,” demand convenience, like self-serve, easy-to-prepare observes Jennifer Barrett, VP of sales at Downey, Calif.-based dishes, but will not compromise their values on quality Del Pacifico Seafoods, which supplies Fair Trade Certified and sustainability.” wild-caught shrimp: “Differentiators like sustainability, fair-trade certification, and products that make an environmental or social impact are important as consumers look for products that they can feel good about purchasing.” “Consumers shop with their conscience,” notes “For both grocery retail and Seattle Fish Co.’s Figueroa. “Distributors and retailers have an obligation to provide transparent, restaurants, the sweet spot credible information about food so consumers can will be in finding ready-to-eat, make their own personal choices that align with more unusual choices that can their values, goals and beliefs.” be prepared in just a few hours Many companies have even begun rethinking the term “sustainability.” and offer more variety than “If we want our children and grandchildren to what we've cooked at have access to the resource, then our entire indushome in the past.” try needs to get onboard,” urges De Caro. “We also think it’s time to do even more and look beyond the —Arlin Wasserman, Changing Tastes

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GROCERY

Spring Beer Preview

Brewing Up Success BEER BR ANDS AND RE TAILERS MOVE TO A SPRING MINDSE T — AND SHELF SE T. By Lynn Petrak

s spring approaches, the days are growing lighter and so, it appears, are beers. Emerging from another pandemic winter, beer companies and retailers are tapping into shoppers’ interest in gathering, celebrating, and balancing their desire to indulge and imbibe with their pursuit of healthier lifestyles. The arrival of the spring beer market doesn’t just mean shifting out the heavier stouts, porters and other wintry ales that have been featured since fall. Grocers can attract shoppers to the beer section by adding interesting new varieties that reflect a range of consumer preferences for taste, health and occasions, and rolling out different promotional and merchandising elements, among other efforts.

Key Takeaways Grocers can attract beer shoppers by adding interesting new varieties that reflect a range of consumer preferences for taste, health and occasions, and rolling out different promotional and merchandising elements. Several beer companies, including regional brewers and brands, are out with flavors that have a spring-like taste and look, including many with fruit flavors. Consumers are increasingly supporting brands that reflect their values in the areas of sustainability and diversity.

Glass Half Full or Half Empty?

One might say that the effects of the two-year-old pandemic and other market circumstances have come to a head in the beer category. The beer industry in general was hit hard by sharp declines in the bar and restaurant industries, and although dollar sales rebounded in 2021, the new market is different from the preCOVID year of 2019. For one thing, the years-long thirst for beer — especially craft beer — has tapered off somewhat, mostly in foodservice and event venues due to a lack of traffic, but this decline is also evident at retail. According to NielsenIQ data, sales of beer at retail dropped 5.4% in 2021 compared with 2020. Research from the Boulder, Colo.-based Brewers Association showed a 22% slide in retail dollar sales of craft beer. Some of the market for traditional and craft beers has been siphoned off by the redhot category of hard seltzers and ready-to-drink cocktails. The rise of mocktails among alcohol-avoiding consumers has dented the beer category as well. Additionally, supply chain bottlenecks that marked the back half of 2021 and are lingering into this year have affected the beer category as manufacturers ramp up for spring demand. A shortage of aluminum, for example, led some beer makers to scramble for cans; Westminster, Colo.-based aluminum can manufacturer Ball Corp. says that it expects shortages to continue to reverberate

PROGRESSIVE GROCER March 2022

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Spring Beer Preview through 2023. Other issues with supplies of wooden pallets have affected orders and fulfillment, too. The impact of high inflation likewise can be felt in the beer category, thanks to higher logistics and transportation costs, and rising prices for ingredients like malt and barley. A drought last year led to some of the smallest barley harvests in years. Meantime, the move toward e-commerce that accelerated during the pandemic is playing out in the retail sector. According to the “2022 Alcohol E-Commerce Playbook,” from global financial services company Rabobank, online alcohol sales in the United States reached $6.1 billion in 2021, and online beer sales topped $960 million. According to Rabobank, online grocers and marketplaces are nearly four times larger than they were in 2019. As such market forces are catalysts for change, other shifting dynamics are shaping the beer category ahead of a new buying cycle. The consumer market for beer is broader, expanding from mostly white younger men to span a more diverse drinking base. A report by the Brewers Association found that there are now more female drinkers under the age of 25 than male drinkers in that same age bracket.

Keeping Tabs on New Products

In this climate, with some nagging challenges and new opportunities, beer makers of all sizes and types are mixing it up to keep the fizz in their category. Grocers, for their part, are planning ahead for the warmer months, when cold beer is particularly appealing to a wide swath of shoppers. One rite of the spring beer market is the introduction (and reintroduction) of flavors that better reflect the season — or, as the case may be, saison. Several beer companies, including regional brewers and brands, are out with flavors that have a spring-like taste and look, including many with fruit flavors. For instance, in Texas, the venerable Shiner brand recently released a Strawberry Blonde beer made with strawberries and a combination of pale and wheat malts. Atlanta-based New Realm, which produces beers sold in southern states, has created a new Tropic Dream wheat ale made

As beer drinkers seek out variety and seasonal flavors, Dogfish Head Craft Brewery is giving them both with its new spring offering.

Bud Light recently debuted its first low-carb beer, Bud Light Next, to meet demand among health-minded consumers.

with passion fruit, blood orange and guava juices. Given consumers’ interest in experimenting with new flavors and their likely resumption of entertaining at home with beer in the spring and summer, variety packs with spring flavors are also starting to flow into grocery stores. Dogfish Head Craft Brewery recently introduced a spring-themed 12-pack with three cans each of 60 Minute IPA, SeaQuench Ale, Namaste and Festina Pêche, the last of these a sour made with peaches that was so popular that the Milton, Del.-based company brought it back largely based on customer feedback. Akin to variety packs is the trend of line extensions to mainstay beer brands. While family brands have existed since light versions of traditional beers first made their debut decades ago, more brewers are branching out with new takes on signature beers, like Chicago-based Molson Coors Brewing Co.’s Blue Moon brand, which now includes Moon Haze and Mango Wheat varieties. Kalamazoo, Mich.-based craft beer company Bell’s Brewery, which offers a spring-release Oberon variety that has become a perennial seasonal favorite, added Tropical Oberon to the mix last year, and is bringing it back in 2022 for a mid-April release. Some new products have been developed with the growing diversity of beer drinkers in mind. A line of Black is Beautiful stouts and IPAs crafted by 13 regional breweries debuted in at least 300 Walmart locations in February and will be merchandised through March. Portions of the proceeds from sales will be donated to a nonprofit group supporting women and people of color in the brewing industry. Given consumers’ growing penchant for supporting brands that reflect their values, beers with a sustainability edge are also coming to market. One case in point is a new line of beer from Fort Collins, Colo.-based New Belgium Brewing and e-grocer Imperfect Foods, in San Francisco: a Citrus Rescue IPA made with oranges that might otherwise have been wasted due to surface imperfections.

Beyond the Pale

Although spring beers generally tend to be lighter than those brewed for cold-weather drinking occasions, the market for light beers doesn’t seem to be tapped out.

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As new beer varieties stir interest in the adult beverage department, merchandising and promotional efforts from grocers and their beerproducing partners will sustain and amplify that excitement. Of course, light beers have been in demand since the late 1970s, but there’s a new crop of entries designed to appeal to beer drinkers who are minding their health, wellness and waistlines. Earlier this year, for instance, Bell’s Brewery unveiled a low-calorie wheat ale called LoSun that has just 110 calories per serving. With many consumers seeking to cut down on carbs, beer makers are getting on board with options for those lifestyles. St. Louis-based Anheuser-Busch recently launched its first zero-carb beer, Bud Light Next, which was featured in a high-profile television commercial during the Super Bowl broadcast in February. Bud Light Next contains 80 calories and has 4% ABV per 12-ounce serving. On the heels of better-for-you offerings in other beverage categories, some beers are also getting the health-and-wellness treatment. Former professional football player Troy Aikman, for example, helped develop a new light lager called Eight that is low in carbs, contains no sugar, and is brewed with “antioxidant-rich” hops and organic grains. For consumers who seek out clean labels, Molson Coors now offers a USDA Organic beer, Coors Pure. If shoppers are lightening up on carbs and calories as daylight saving time gets underway, they’re also easing up on the actual alcohol content of beer. Grocers can expect this rise in low- and no-alcohol beer to continue, as an estimated 18% of shoppers are buying such products, and about an equal number say that they would be interested in trying them, according to findings from Chicago-based market research firm Mintel. Another report, from Boston-based delivery platform Drizly, showed that sales of nonalcoholic products have spiked 120% on the company’s app since 2020. In addition to nonalcoholic stalwarts like O’Doul’s, many breweries and brands are coming out with their own low- or no-ABV versions. Half Acre Brewery, in Chicago, for example, offers a 3% ABV hoppy beer called Buzzard that offers a fuller flavor, and this month, Bend, Ore.-based Deschutes is releasing a nonalcoholic version of its porter, dubbed Black Butte NA.

promote the launch date and create displays with elements of the season, from lawn chairs to sunglasses to beach buckets. Additionally, while grocers amp up the experiential side of in-store shopping to keep foot traffic at a steady pace, they can also make their beer area a destination. Lowes Foods, a Winston-Salem, N.C.-based grocer with 80 stores in the Southeast, touts its “Beer Den,” where shoppers can find a wide assortment of beers from around the world. There, shoppers can also have growlers filled to take home. Although foodservice at retail shrank back a bit during the pandemic, the return to in-store shopping and socializing can help fuel interest in sampling and, in some cases, raising a glass at an onsite bar. Lowes, for its part, also runs a brewpub called the Cavern at its Five Forks location in North Carolina, where patrons can drink small-batch and limited-release beers. Similarly, near Chicago, Standard Market offers a space called The Cube, featuring wine, charcuterie, appetizers and craft beers. Other retailers that have tested or opened bars within select physical stores include Whole Foods Market, Wegmans Food Markets, The Kroger Co. and Albertsons Cos., which runs a Talon Tap & Spirits bar at a flagship site in Meridian, Ida. Finally, even as retailers add new seasonal beers and promotions, they can be mindful of some notable perennial trends within the category. According to the Brewers Association, IPAs and hazy IPAs are still the most popular types of beer in the United States. At the same time that new beer varieties are rotating in, some beers aren’t necessarily being rooted out. For instance, Waitsfield, Vt.-based Lawson’s Finest Liquids recently unveiled plans to make its pilsner and IPA available year-round, and Buellton, Calif.-based beverage company Firestone Walker has debuted a Hopnosis IPA that it says reflects its “15-year quest to master the West Coast IPA style.”

You can have sustainabiluty and drink it, too, as evidenced by a new beer made from upcycled ingredients and created by New Belgium Brewing with e-grocer Imperfect Foods.

A Smooth Finish

As new beer varieties stir interest in the adult beverage department, merchandising and promotional efforts from grocers and their beer-producing partners will sustain and amplify that excitement. Some grocers leverage the anticipatory factor when it comes to spring releases. Retailers that carry products with a loyal following, like Bell’s Oberon, PROGRESSIVE GROCER March 2022

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ADVERTORIAL

BRING A TASTE OF PARIS TO YOUR IN-STORE BAKERY WITH AMERICA’S #1 BRIOCHE BRAND

SPEAKING WITH... DAVID WAGSTAFF, VP North America, St. Pierre Bakery

In 2016, St. Pierre introduced American consumers to its line of brioche products. Inspired by Parisian bakeries and made to authentic French recipes, St. Pierre enticed American consumers with a new take on American staples — upgrading burgers and hot dog rolls with brioche — and the brand soon carved out a new category in US retail. In 2020, St. Pierre became the #1 brioche brand, brioche burger bun and brioche loaf in America, leading a category that is now worth $469 million to the US retail market. In his first interview as VP North America for St. Pierre Bakery, David Wagstaff shares the story of the brand with Progressive Grocer, explaining how the business is supporting retailers in boosting basket spend, improving the in-store experience and offering unrivalled insight to deliver authentic brioche and a true taste-of-France. Progressive Grocer: St. Pierre launched in the US market in 2016. You joined the business in 2020. What drew you to St. Pierre and what is it about the brand and products you think have made it so successful? David Wagstaff: St. Pierre is an amazing brand doing amazing things! My passion lies in introducing new brands and the US market is exciting because there is so much op-

portunity. There are very few UK brands that are successful in the US and St. Pierre is paving the way with superior, authentic brioche products. Brioche is in its infancy here, so we’ve really created a brand-new category that is capturing customers’ imaginations. We’re educating consumers in a way private label can’t. We’re bringing new meal occasions to the market — and with them, new shoppers. PG: You recently put in place a team dedicated solely to the US market and are positioned for US growth. Why is now the time to expand? DW: One of my first jobs at St. Pierre was to build a platform for growth over the next few years. We have a great partnership with Lipari Foods in Detroit, but we lacked a sales team on the ground and knew we needed one to grow. We opened our first US office in Cincinnati in November 2021 and have built a team that includes 10 full-time colleagues based in America. It means that we can play to our strengths — we can focus on our customers and the brand, while Lipari focuses on logistics. PG: Supply chain challenges are top of mind today. How have you helped stores keep product on-shelf since the

pandemic began? And what does the near future look like from a supply chain perspective? DW: Supply chain is a huge advantage for us. Our fill rates are phenomenal. We have not dropped below 94 percent in more than three years, and we ended 2021 with an average fill rate of 98 percent, despite a volatile market and the industry-wide impact of a disrupted supply chain. We are opening a new warehouse in Michigan, which will allow us to double our capacity and storage in the US. That is a key pillar of our growth plans. It’s a huge investment — more than $10 million dollars — but we believe the size of the opportunity justifies the investment because it allows us to maintain our fill rates at the level our customers have become accustomed to. We’re working towards an in-country stock holding increase from 20 weeks to 34. We also ship the product frozen, so our shelf life helps support retailers in terms of supply chain. We have thousands of truckloads of goods moving per year — it’s quite staggering. We don’t rely on third parties; we’re investing to protect our supply chain so we can help retailers protect theirs. For retailers, that’s unique and one of the key advantages of partnering with St Pierre.


ADVERTORIAL

PG: St. Pierre went through a rebranding last year and introduced a new logo as part of that process. How is the new logo different and what does it convey? DW: The rebrand is about delivering a clear message about our products. The orange is still key to the brand, but our logo and imagery work harder to highlight our French heritage and are doing the job. Product visibility has increased by up to 10 percent and the packaging stands out so much better on store shelves. It is successfully delivering messages of quality and authenticity, which are so important to shoppers and crucially, it’s driving purchase. PG: What do you want retailers to know about brioche? What are some trends specifically related to that category? DW: The category is still relatively small, but it’s growing at 30 percent year on year. During the pandemic, eating habits changed. People were eating at home more and began looking for ways to elevate everyday meals. They started using products in different ways and recognized brioche’s versatility. It works in place of a regular bun in breakfast sandwiches and at lunch or dinner for burgers, for example, so it lends itself well to this trend for premiumization. Brioche is now delivering $470 million to the US bakery sector, up 20 percent year on year1 and we want retailers to know that we’re growing the business aggressively. Our goal is to double the sales

value of the brand in the next two years. PG: Merchandising and marketing are key to building the brand in-store. How do you help retailers from that perspective? DW: We provide merchandising support at no extra cost to retailers. One of the most prominent ways we’re doing that is with our Eiffel Tower Racks that are set up in the In-Store Bakery (ISB) — not in the bread aisle. The brand imagery is incredible. It communicates quality and authenticity, gives stores additional selling space, and tends to command higher shopper spend. We’ve seen sales increase up to 58 percent in one trial when the racks were stocked! We have an entire team dedicated to creating programs tailored to individual retailers’ needs. We can design special promotions, regional billboards, and innovative rack programs, for example, that help drive customers to the display. That is important because once we’ve helped drive the footfall, shoppers go on to spend more in the segment. Our displays provide a trip trigger into ISB and increase average basket spend. That’s why people like Kroger support us so well — we are delivering for our customers so they can deliver for their shoppers. From the point of sale to the last bite, everything about the brand is delivering an elevated experience, which is key to getting customers back in stores in the wake of the pandemic.

SUPPORTING SALES THROUGH INSIGHT Each and every grocer or broker who partners with St. Pierre has access to its unique sales platform, providing tools to maximize sales. From customer insights to branded merchandise and everything in between, it offers a ‘best practice’ toolkit to capitalize on growing shopper appetite and ensure buyers get the most out of the brand’s USPs. Included on the trade hub are useful insights. Savvy retailers will monitor where growth is coming from and use that knowledge to drive impulse purchasing. The latest data shows that brioche grilling items such as burger buns and hot dog rolls are in double digit growth. Meanwhile, elsewhere in the bakery sector, ambient waffles are in growth, up 17 percent year on year. Retailers can maximize impulse purchases by reviewing what’s popular with shoppers and entice them with appropriate merchandising. Again, this helps take stores from a functional visit to an experience and that’s the most effective way to increase basket spend and impulse purchase. https://stpierretrade.com/

PG: Trade shows are an important part of your growth plan. Why are they so important? And what shows are on your calendar this year? DW: We’ve missed trade shows over the last 18 months. Being able to deliver the ‘culture’ of St. Pierre is what got us going, so the return of trade shows is a welcome opportunity to do business in-person again. EXPOWEST is the first show on our calendar — it’s such a

great show and we’re excited to get back out there. We’ll also have a large presence at IDDBA and the Lipari show, and at smaller retailer and broker trade events throughout the year. We’re looking forward to reminding people about the strength of the St. Pierre brand and to demonstrate its success over the past few years in a way that carries more impact than a Teams or Zoom call ever could.

1

Source: Nielsen xAOC week ending 01/01/22

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Want to bring an authentic taste of Paris to your in-store bakery or deli area? Visit www.stpierretrade.com to find out how St Pierre can help you.

[


TECHNOLOGY

Grocery E-Commerce & Supply Chain

Keep It Moving FOOD RE TAILERS NEED TO HARNESS THE RIGHT FULFILLMENT AND SUPPLY CHAIN TECHNOLOGY TO COMPE TE EFFECTIVELY WITH THE MAJOR GROCERY PL AYERS IN THIS SPACE. By Mike Duff

The QuickCollect Go! pickup center allows more efficient fulfillment of customer orders as well as packing lot space use.

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he time has come to take stock of food retailing technology, which has seen rapid advances recently, and in the past two years particularly, with greater consideration of efficiency and effectiveness as applied not just to giant chains, but also right down to the independent neighborhood grocer. Retail technology has advanced so quickly that it may seem too vast a subject to grasp at times, but where advantage may lie going forward is not just on the cutting edge, but also in application of what’s already established, whether refining what’s up and running or finding software or a third party that can help launch or improve a function such as e-commerce, curbside delivery or supply chain preparedness. In other words, the best approach to technology isn’t necessarily defined by adoption of the latest sensation, but by tailoring what’s available to specific business goals.


Since

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White Paper

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Merchandising Solutions:

STORE FixtureS Space Management & Fixture Considerations to Maximize ROI

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Introduction: The Power of Merchandising This white paper will examine space management and fixture management considerations to help retailers realize greater shoppability and ROI. AS E-COMMERCE HAS made significant inroads in retail market share over the past decade, many brick-and-mortar retailers have been left wondering how to recapture and retain shoppers in the store environment. With the lines between physical and digital shopping experiences being increasingly blurred, it’s imperative that companies know how to effectively manage shrinking selling space and how their store environments must evolve. To that end, merchandising remains a powerful tool in the hands of retailers that understand how to optimize display space using the right fixtures which can help attract customers, increase sales, and reduce labor costs. “Visual Merchandising is more important than ever in the retail environment,” says global planning, architecture and design firm CallisonRTKL Vice President Ignaz Gorischek, who has 35 years in the industry and leads the firm’s Visual Merchandising team. “Visual Merchandising offers an opportunity to refresh a store in lieu of a more costly remodel. Evaluating sight lines for scale and height helps to maximize visibility and encourage exploration. Repositioning fixtures creates new traffic patterns. Strategically placing visual presentations provides moments of discovery and surprise and drives a customer through the store.” To be sure, Shop!’s 2016 Industry Size & Composition Study revealed that store fixtures, visual marketing, and shopper marketing experienced significant growth over a four-year period, with sales reaching a total of $18 billion in 2015 alone (see accompanying chart from the Shop! study). Further, as retailers look to wring more sales out of their existing customers, effective merchandising becomes even more important to running profitable operations, according to the North American Retail Hardware Association’s (NRHA) landmark Merchandising for Profit study. Retailers are trying to refresh, remodel, and reinvigorate their stores but are spending less money in terms of visual merchandising and are looking for less expensive solutions, the report concluded.

2

RECENT GROWTH OF STORE FIXTURES/VISUAL MERCHANDISING & SHOPPER MARKETING 12,000

Market Size

US$ 12bn

4.0%

▲ 9,000

3.0%

US$ 6bn

6,000

2.0% 1.0%

3,000

0.0%

-1.0%

0 US$ mn

Shopper Marketing 2013

2015

2017

Store Fixtures/ Visual Merchandising

CAGR

● CAGR 2013-15 ▲ CAGR 2015-17

As such, retailers are looking for customized, flexible, and attractive merchandising solutions to position brands/stores as unique. According to a recent IBIS World report, Retail Store Fixture Dealers in the U.S., dealers are stocking portable pieces that break down easily, making it easier for them to either be moved to a different location or discarded. Additionally, material trends vary widely across channels, retailers, and brands, serving as strong differentiators with metal being more common in grocery, drug, and convenience stores, while wood is commonly used in apparel and department stores, for example, according to Shop!’s Industry Size & Composition study. Selecting the right store fixtures and implementing effective Space Management and Visual Merchandising programs can build the brand/ store image, tell the brand story, and create an experiential environment that will keep shoppers coming back for more, as this white paper will illustrate.

2018 Merchandising Solutions: Space Management & Fixture Considerations to Maximize ROI


Space Management Considerations ONCE CUSTOMERS ENTER the domain of brick-and-mortar stores, it’s crucial for retailers to captivate their customers—especially in the digital age of online shopping in which consumers can easily purchase and ship an item they see in-store from their mobile devices. Even so, in-store shopping accounts for an estimated $2.5 trillion or 87% market share compared to online shopping’s 13%, according to Matthew Wood, president of Off the Wall Co., a store design and décor, and fixture and display manufacturer. As such, retail spaces need to be stimulating and attention-grabbing. However, a major challenge for retailers in this effort is the fact that stores are getting smaller, and the number of outlets is shrinking even as retail value sales are growing. Consumers are cutting back on the number of trips and doing more big-box, one-stop shopping trips or shopping online, according to the Industry Size & Composition study. As a result, retailers and brands are asking how they can shrink footprints within brick and mortar establishments and still focus on a targeted product mix for the consumer. “Ensuring that our footprint is smaller and specific to customer needs establishes brand and retail loyalty,” says Cheryl Lesniak at Frank Mayer and Associates. “This also makes it easier to shift focus from trying to sell customers on an item they already know that they want, to upselling them on upgrades and add-ons.” The implications for retailers and merchandisers planning the physical store environment include: a reduced amount of floor space for displays; more effective displays that do more with less; fixtures that maximize space utilization; and a greater number of portable, movable, and/or adjustable fixtures (see graphic below).

SHRINKING RETAIL FOOTPRINTS

SHOPPER MARKETING • Less room for displays • Displays that are included need to be even more effective, do more with less.

STORE FIXTURES/VISUAL MERCHANDISING • Fixtures needs to maximize space utilization and do more with less • Portable, moveable and/or adjustable fixtures are increasingly important.

Valuable floor space in stores means that displays must adapt to the needs of retailers and possess a smaller footprint as well. Additionally, the process of refreshing, remodeling, and redesigning of stores is happening faster than ever before—and successful retailers are the ones who have the ability to change rapidly. According to the Industry Size & Composition study, the effects of this trend on shopper marketing and fixtures is significant and includes: • Increased demand for turnkey solutions (manufacturer that can offer design, engineering, manufacturing, shipping/logistics, and setup.) • Potential for more/less display adoption depending on retailer choices. • Higher demand for fast, turnkey solutions • Increased pressure to anticipate trends

With the pressure to remain agile and fresh with merchandising, it’s important that organization of the floor and clarity of visual displays isn’t sacrificed for novelty. If the process of finding a product becomes difficult, customers will be turned off and may not return. For example, Eric Chiang, co-founder of Perfect Fit Meals, explains that his brand’s food products are best displayed using vertical fixtures with horizontal push racks that the company sources from fixture manufacturer, Trion Industries Inc., which offer a streamlined appearance, efficient use of space, and ease of restocking. The verticality of the rack provides shoppability, browsing, and tight product spacing, while the horizontal tray provides auto feed, forwarding and facing to support sales. Additionally, the trays lift out to rearrange or restock in a matter of seconds. Without them, Chiang says the product may end up looking like the bargain catch-all DVD bins in big box retail stores, or piles of clothes scattered throughout shelves and racks during Black Friday that have little to no organizational value. “People don’t want to shop through that [mess], unless you happen to be a particular type of person that likes to deal hunt, essentially,” Chiang observes. “Most people want to see a particular product displayed neatly and clearly, and have access to that product quickly. In grocery stores, especially, space management is going to be crucial; you want customers to find what they need and to find it quickly,” he adds. With that in mind, a thoughtful store layout using proper space management techniques can have a tremendous impact, even in smaller retail spaces. According to Wood, customers tend to move counterclockwise through a store, “which means any display just to the right of the door is premium space. Shoppers will pay attention to displays located here, so make sure the displays are stocked with high-profit items.” Additionally, Wood says another effective tactic is to place staple items as far away from the front door as possible. “Make customers travel throughout the space to find basic items—milk and eggs if it’s a food store, or paper and printer ink if it’s an office store. This way shoppers will see many other items to buy before they spot what they came in to purchase.”

2018 Merchandising Solutions: Space Management & Fixture Considerations to Maximize ROI

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Fixture Management Considerations WHEN IT COMES TO MERCHANDISING and displays, selecting the right fixture for the job cannot be understated, especially as the footprints of retail stores are getting smaller and retailers are required to do more with less. Eric Chiang of Perfect Fit Meals says retailers who take a flexible approach to fixtures and displays will help brands that are seeking to develop an effective merchandising plan within the store environment. “If built in—if they’ve already designed these stores to be very modular in nature—it’s that much easier for brands to come in and plug in because it’s like a common frame that we’re all working from. And it’s cost effective for the retailer because they’re not over-investing in sets of fixtures that may change out every six months or a year,” he explains. Chiang adds that modular fixtures can help streamline merchandising programs in terms of restocking, making the process much more easily managed. Perfect Fit Meals utilizes vertical fixtures with horizontal push trays, which aren’t new, per se, but maximize floor space and allow for ease of inventory changeout without adding significant costs. The industry is following suit with the modular fixture trend, according to the Industry Size & Composition study. Sought-after features across many channels include flexible products, as well as those that are easy and inexpensive to update. Mobility allows retailers to avoid sparsely stocked fixtures during inventory fluctuations and gives them the flexibility to focus on and adjust the store layout as they see fit. To help retailers select the right fixture for the job, Brad W. Cox, director of sales and marketing, and Rich Wildrick, director of engineering for Trion Industries, Inc. offer the following considerations for several fixture-type categories: STRAIGHT ENTRY HOOKS—These fixtures are used for a few reasons: one is to be able to easily place display hooks tightly under shelves without needing to remove the shelves to do so. Standard display hooks need to be steeply angled up to place them in a peg board, whereas straight entry hooks (either one- or two-piece) can be placed straight into the board, hence the name. Straight entry also allows the tightest display and maximum product density throughout the display, not just under shelves.The other reason retailers use straight entry hooks is because it gives them an easier way to change a planogram as they can move a fully stocked hook instead of having to remove the product, as with a standard peg hook that needs to be angled up to remove and replace in the board. SHELF MANAGEMENT SYSTEMS—Shelf management systems are used to assist in organization by keeping items in their own lane as they are shopped. Spring feed pushers can be added to keep the merchandise pushed forward to the shelf edge for best visibility. Some items cannot stand on their own due to packaging constraints, but by using shelf management a retailer can stand the item up to billboard the marketing information printed on the packaging

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(bagged frozen vegetables, for example). Shelf management can also be used to limit shelf stock. By using a pusher system shorter than the shelf, a retailer can keep the appearance of the shelves looking full until the last item is sold, which leads to another benefit of shelf management: when a product is sold out it can be easily identified by the retailer to be restocked. Bar merchandisers come in many forms, from thin crossbar to square and rectangular tubing, and often allow tighter vertical spacing with less wasted space than shelves. Simple systems use hooks to merchandise items, while more intricate merchandising trays can be used to offer better product management. SCAN HOOKS—Scan hooks are the primary fixture used to merchandise most hanging or carded items in retail. They consist of a lower merchandising arm and an upper arm that holds the scanning tag (price label) in front of the product for easy identification. The most sophisticated scan hook approaches include flatback backplates to avoid marring the display surface, flip front label holders that swing up for better product access, forward staging areas to billboard visual presentation, and simple, anti-theft profiles to prevent “sweeping” or mass theft of multiple items. These types of fixtures, among others, can result in a number of benefits for retailers, including: increased sales, maximum visibility, enhanced package billboarding, proper product rotation, and increased facings. Additionally, Cox suggests retailers look for several characteristics when making fixture management considerations. “Retailers should be looking to partner with an experienced fixture provider who is well versed in all aspects of merchandising. Fixtures should be consistent in quality, so planograms will look uniform when implemented from store to store,” he explains. It is important to find a manufacturer who has multiple solutions to meet all a retailer’s needs from display hooks, bin systems, dividers, pushers, shelf management systems, and more. Of course, cost is another driving factor, so retailers need to be sure that corners are not being cut to reduce fixture prices that will end up costing them more money down the road. “We have seen reduced diameter wire display hooks not hold up and label holders yellow under UV lighting that was caused by inferior materials being used to reduce costs, when if they would have spent a little more upfront they would have gotten extended use, lower life cycle cost, and better consistency in these types of items,” Wildrick notes.

2018 Merchandising Solutions: Space Management & Fixture Considerations to Maximize ROI


CASE STUDY:

Bar Merchandiser Works Wonders at Supermarket Chain Bashas’, the Arizona-based chain of more than 150 supermarkets, has served customers for more than 70 years, but while tradition is important, so is innovation when it can lead to increased efficiency and better customer service. So Bashas’ has embraced the WonderBar Merchandiser system from Trion Industries, Inc., first for bagged candy sales and then for cough drops, gum and bagged deli products. “This has been a real value to us,” said Ken Kniffen, Bashas’ Director of Merchandising. “It is providing a more customer-friendly system, reducing shrink and labor, and improving the appearance of our stores.” Kniffen said Bashas’ tested WonderBar and its Shelf Works and Expandable Wire Tray (EWT) system in the candy aisle, then installed it in all of its stores. “We tested it in our wall deli and with cough drops, so now we are moving them into every new store and major remodel for both of those categories, too.”

Q. Have you seen gains in sales due to improved presentation? A. The pusher bar system keeps the product available in the front, and it’s easier for the consumer to shop. With the pegged system, it’s difficult for many shoppers, unless they are tall, to see and reach the product after the first couple of units have been sold. But this system moves the product to the front so it is always available, reachable, and looks good. It gives a constant billboard presentation and always looks great. Q. Can the right system reduce shrink and eliminate ripped packaging? A. Yes, and that is significant because we don’t have bags ripped at the prepunched hole, which was common in the pegged bag candy section. We have 800 to 1,000 units and none of them are torn. Previously, those torn bags became shrink (or loss), often resulting in a mess on the floor. Q. What was the effect on labor required to manage the department? A. WonderBar is faster and more efficient. You can rotate the product quickly and properly without things getting ripped. Staff can lift the tray out and rotate every single SKU individually. They just put the tray on the cart, push the spring bar back and drop in the new product at the rear to keep dated merchandise forward. It is far more efficient in terms of labor.

Important benefits, he said, include ease of installation, ability to increase SKUs within the same space, elimination of shrink due to bag tears, and a reduction of restocking labor, all made possible by a flexible system that uses spring-fed pusher trays instead of peg hooks. Here, Kniffen explains more about how the supermarket chain has benefited from using Trion’s WonderBar and EWT system in its stores: Q. By installing the systems, were you able to increase your candy offerings? A. We gained 13 facings. With the trays, we have 68 items; before we had 55. The tray system fits on a square bar and can be tightened left to right, up and down. We think sales increased by an average of 15%, although in some stores, maybe as much as 20%. We increased variety by adding new facings in the same space. Q. Did this success lead to enhancements elsewhere? A. Yes. We asked Trion for a version of the tray in a taller system to accommodate the longer multipacks of gum, which never looked good. Trion created a more vertical unit, and they work great. We have them in all of our Bashas’ stores.

Q. What were the benefits in deli meat and cough drops? A. In cough drops, we added eight new SKUs because of space gained. It is night and day compared to pegged cough drops. It holds them upright and looks perfect all the time. In the wall deli section, we were able to add 10 SKUs, and may expand into the perishable area as well. Q. Does this help with resets? A. Any chain going through remodels or resets can benefit. Just take the tray out, set it on the floor and fill it to reset the section. You save a tremendous amount of pain, headaches, and shrink.

2018 Merchandising Solutions: Space Management & Fixture Considerations to Maximize ROI

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Tying It All Back to ROI GIVEN THE NUMBER OF SKUS that are introduced to the market each year (about 30,000), creating effective POP materials and merchandise displays that attract consumers to the product and provide sales lift is key to maximizing a campaign’s ROI. In fact, NRHA’s Merchandising for Profit study concludes that in-store merchandising is still a key component in retailers’ ability to drive transaction size and additional sales. In the words of Trion, “being seen means being sold.” Case in point: Perfect Fit Meals purchased vertical fixtures with horizontal push trays for its prepackaged meals, which has made a tremendous difference in terms of ROI, according to co-founder Eric Chiang. Because the company’s products feature clear packaging, Chiang says they must be merchandised upright, and Perfect Fit opted to use trays that feature back pressure to keep packages easily visible. “For us it was absolutely crucial to be able to maintain our display standards as much as we could because as soon as we saw that retailers merchandised our product laying completely flat, we knew it would not be successful in the long run—it would not have enough traction and the shrink would just kind of bubble up to a point where it would not be sustainable,” he explains. In those instances when a retailer incorrectly displayed the product, Chiang says Perfect Fit would offer another opportunity to the retailer to merchandise it upright, which “suddenly, it would make a difference. It was a slow process, obviously—it’s not a drastic thing, but if [after merchandizing it correctly] the demand starts picking up and it becomes a sustainable program for them, it’s actually very interesting to see.” What isn’t overtly stated but is implied in the Perfect Fit Meals example is that the company was paying close attention not only to sales, but also the way their products were being merchandised in-store, which is a critical factor in improving ROI. According to Shop!’s 2017 ROI Standards: In-Store Marketing Materials, calculating ROI starts with an

understanding of three baseline sets of data to build the ROI equation: in-store execution data on a store-by-store basis; cost factors; and performance data. “The key to measuring the success of any in-store marketing campaign is to have clearly defined goals. These goals must be openly established and agreed upon in the beginning of each project,” the standards document states. “Choosing the right tool to measure the goal is also critical. Attainable goals and measurable KPIs are essential to the success of a program.” Truth be told, many retailers will invest in new fixtures and displays in the hopes of achieving a healthy ROI, but fail to effectively measure the results. In fact, as Erik McMillan, CEO and founder of Shelfbucks, notes in a blog post, “I am surprised CPG companies spend billions every year on in-store merchandising campaigns with no intrinsic measurement capabilities. There is no comprehensive tracking of a display through the supply chain to the back of store, and eventually to the selling space in the front of store. Nor is it known if the display arrives after the campaign starts or even before it starts. It’s been that way for decades, and the operational and economic fail points are astounding,” he explains. To avoid such pitfalls, retailers must not only invest in new fixtures and displays but also measure how well they perform. Additionally, there are several other factors retailers and brands should be paying attention to when it comes to ROI, according to Brad W. Cox, Director of Sales and Marketing, and Rich Wildrick, Director of Engineering at Trion Industries, Inc. In order to help increase facings, maximize visibility, and reduce shrinkage, Cox and Wildrick suggest retailers ask several key questions when making fixtures and display management considerations:

1 2

Are there time savings associated to a new fixture? Will it take less time and man hours to restock it?

Can you get an updated, fresh appearance by adding a new fixture? (Adding a new shelf edge label strip can give the appearance of a new shelf for a fraction of the cost, for example.)

3

Can the fixture aid in proper product rotation and reduce shrink due to spoilage? (Certain bar-type merchandising and shelf-mount trays can do this for date-sensitive products like prepacked salads.)

4

Can more products be merchandised in the same space with more efficient fixtures? (Again, merchandising trays can do this, as retailers can often add a row of product once shelves are removed and a bar based system is implemented. Bar systems hold more product space by tightening the display vertically—but previously mentioned straight entry hooks also increase display capacity, and shelf management tray systems with nested dividers save horizontal space on shelves.) Clearly, thoughtful merchandising best practices help drive sales results higher in store environments, but it takes planning, execution, and consistent performance and cost monitoring to do so effectively.

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2018 Merchandising Solutions: Space Management & Fixture Considerations to Maximize ROI


Steps for Success AS THIS WHITE PAPER HAS DEMONSTRATED, selecting the right merchandising fixtures can help to increase product sales and thus maximize ROI, if planned, executed, and measured effectively. Nevertheless, retailers must pay close attention to the overall in-store customer experience, which often dictates whether a customer will return to that store. Attractive fixtures and displays can help create a more inviting environment for customers, but many retailers have considered fixtures to be nothing more than a commodity. However, the trend is changing, according to Mike Niemtzow, CFO and founder of WindowsWear. “People have thought about fixtures as literally just tools to hold merchandise, but not necessarily represent or reflect on the brand,” he explains. “There has been demand from certain smaller retailers and brands to have more artistic types of fixtures—fixtures that reflect who they feel that they are. They are literally looking for artists that they feel are a good fit in terms of creating fixtures that are still within their budgets but offer something more than just a commodified fixture that can be purchased in bulk or low price,” he notes. To stay competitive, retailers need to incorporate more creative and unique features in store fixtures and displays in order that customers can experience the excitement and appeal that they are looking for in retail settings. While retailers can (and should) engage shoppers with creative design, the overall marketing goal is to persuade them to buy. To that end, following are several strategies to consider that can be used to accomplish merchandising goals whether used alone or in tandem (see chart at right).

1

ATTRACT SHOPPERS TO PRODUCT

• Attract shoppers by creating stopping power and standing out at the shelf. When it comes to fixtures and displays, this includes considering color, shape, messaging hierarchy, imagery, and shoppability.

2

CREATE IMPULSE PURCHASE OPPORTUNITIES

• These displays are designed to persuade shoppers to buy something—typically something not on their list already. Placement within the store may come into play more than design considerations. Just about anything placed within the cash wrap area at the checkout is used to suggestive sell, thus generate impulse buys.

3

Remember, while store footprints may be getting smaller and budgets remaining tight, retailers can still make a big impact on sales and ROI by employing some thoughtful merchandising strategies presented here.

CREATE CROSS-SELL OPPORTUNITIES

• Cross-selling displays create a convenient shopping experience that typically connects the center aisle with the perimeter such as placing the Oreos next to the milk, for example. Cross-selling displays make it easy for shoppers to pick up items that go together. This is similar to how online shopping works (e.g., “You might also like...” or “Shoppers who like this also bought...”)..

4

ENCHANCE CO-BRANDING

• Retailers can use endcap displays to cross sell products and preview what shoppers will find down the aisle. This type of co-branded display creates a win-win for the products to co-exist.

SOURCES: CallisonRTKL Launches Visual Merchandising Services For Retail Clients Worldwide, CallisonRTKL.com (2016) IBIS World, Retail Store Fixture Dealers in the U.S. Interviews: Erican Chiang, co-founder, Perfect Fit Meals; Brad Cox, director of sales & marketing, Trion; Ken Kniffen, director of merchandising, Bashas’ supermarkets; Mike Niemtzow, CFO & founder, WindowsWear; Rich Wildrick, director of engineering, Trion Lesniak, Cheryl. Year in review: in-store merchandising. Retail Environments.

McMillan, Erik. If you can’t measure in-store merchandising you can’t make it better. Shelfbucks.com North American Retail Hardware Association’s (NRHA), Merchandising for Profit Shop! 2016 Industry Size & Composition Study Shop! 2017 ROI Standards: In-Store Marketing Materials Wood, Matthew. Can store design deliver increased sales and customer loyalty? Off the Wall Co.

2018 Merchandising Solutions: Space Management & Fixture Considerations to Maximize ROI

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About Trion For over 50 years, Trion Industries Inc. (www.triononline.com) has been manufacturing products that provide targeted merchandising solutions for retail businesses. The earliest concepts ranged from simple one-piece to sophisticated, articulated, straight-entry pegboard hooks. Today Trion fields full lines of auto-feed shelf management systems, cooler and freezer merchandising systems, storewide labeling systems, anti-theft and security fixtures, bar merchandisers, display and scanning hooks, and point-of-purchase display components and hardware. These are just a few of the tens of thousands of different products the company has created since it was founded in 1965 earning more than 120 patents. Trion has been a member of Shop! since 1972. About Shop! Shop! (www.shopassociation.org) is the global nonprofit trade association dedicated to enhancing retail environments and experiences. Shop! Represents more than 2,000 member companies worldwide and provides value to the global retail market-place through its leadership in: Research (consumer behavior, trends, and futures); Design (customer experience design, store design, display design, fixture design); Build (manufacturing, construction, materials, methods, logistics, and installation); Marketing (in-store communications, in-store marketing, technology, visual merchandising); and Evaluation (ROI, analytics, recognition/awards).

For additional questions about the information contained in this white paper, please contact us at: mbaumgartner@shopassociation.org or call us at 312-863-2917.

4651 Sheridan Street, Suite 470, Hollywood, FL 33021 Phone 954.893.7300 shopassociation.org @shopassociation

@shopassociation

Shop! Enhancing Retail Environments and Experiences

© 2018 by Shop! All Rights Reserved No part of this report may be reproduced for distribution without the express written permission of the publisher.

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2018 Merchandising Solutions: Space Management & Fixture Considerations to Maximize ROI


Key Takeaways Technology and shopping have become increasingly entwined as circumstances such as the COVID-19 pandemic and its resulting supply chain issues have combined with rapidly advancing systems to create new ways to satisfy increasingly diverse consumer needs. While the biggest retailers with the deepest pockets have done much with e-commerce and supply chain technology, solutions are also available to grocers of more modest means. An evaluation of circumstances can lead grocers to apply smart technology that can straighten out supply chain disruption by helping to focus efforts where they can be most effective.

Technology and shopping have become increasingly entwined as circumstances such as the COVID-19 pandemic and its resulting supply chain issues have combined with rapidly advancing systems to create new ways to satisfy increasingly diverse consumer needs. COVID-19 has encouraged retail investment in a wide range of services, in some cases expanding on existing initiatives, in some cases launching new ones. The Kroger Co. is conspicuous by its addition of Ocado robotic fulfillment centers, which are also up and running at Canadian grocer Sobeys, and both Walmart and Amazon have been talking up their own use of automation in distribution/fulfillment. Amazon has been expanding the scope of its Just Walk Out technology in its own stores and in Hudson News outlets at more than 1,000 North American airports, commuter hubs, landmarks and tourist destinations — all convenient places to enable consumers to have a go at the technology — as well as Sainsbury’s grocery stores in the United Kingdom.

Size Matters

What the biggest retailers with the deepest pockets have done with technology can be dispiriting for smaller operators. After all, not too many independent grocery chains can afford a robotic warehouse, and even big chains may find the costs associated with them prohibitive. However, more technology, often developed by companies that are adapting systems for retailers of less

Editor’s Note: Grocers can also better compete against larger supermarket companies by making wise investments in contactless payment and price optimization solutions, as discussed in the following sidebars. PROGRESSIVE GROCER March 2022

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Grocery E-Commerce & Supply Chain

Automated warehouseing solutions including robotic fulfillment centers have become more common in the marketplace, but grocers have to weigh which systems they can afford.

gigantic proportions, is available to grocers of more modest means. For example, Rouses Markets, based in Thibodaux, La., has partnered with Bloomfield Hills, Mich.-based eGrowcery to set up the supermarket operator’s curbside pickup operation. The grocer has added an eGrowcery platform to its Rouses Market Shopping App, which customers can download to shop, place an order and choose a curbside pickup time. They can do so through the app or on the Rouses Markets website. At the time that the program rolled out, Donny Rouse, the supermarket operator’s CEO, said: “We continue to invest in new partnerships and technologies like eGrowcery to give our customers the very best shopping experience, both in-store or online. With eGrowcery, our own team members, the people who know our stores and selection better than anyone else, hand-select every product ordered for curbside pickup. It’s like having your favorite Rouses team member as your own personal shopper.” In working with eGrocery, Rouses was able to tap expertise that would have taken time and money to develop. In addition, Rouses could launch a customer service function with some understanding, because of its partner’s experience, of how to make the rollout smoother and more satisfying for customers than might have otherwise been the case. Provo, Utah-based ShopHero is among those technology companies that are bringing smaller grocers the ability to compete online. Rather than working with Instacart and other companies that have their own specific formats for small grocers to follow, ShopHero customizes a website on its platform in a way developed to promote the character of operation, particularly in the case of small independents, while it works the technology end from behind the scenes. “We’re the man behind the curtain,” says ShopHero Chief Commercial Officer Josh Ray. “We’re more customized. We’re not getting between the store and its customer. We’re bringing in tools.” As such, a grocer can operate its business as has always been the case, talking with customers, ensuring that standards are

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maintained, training, and solving everyday problems, rather than spending an inordinate amount of time online. At the same time, ShopHero supports websites that reflect the stores they supplement while optimizing data and providing stores with actionable information. “We can give them all the data in the world,” explains Ray, “but a person who is a third-generation grocer rather than a data engineer isn’t going to be doing well with it.” Still, that doesn’t mean that ShopHero isn’t responding to the rising tide of technology. The company is launching a marketing tool that ties together operating platform and loyalty program data to provide grocers with information they can use to send customers email and other electronic offers based on the store assortment. In 2021, ShopHero was acquired by Mount Sterling, Ill.-based Dot Foods, the largest food industry redistributor in North America, carrying 133,000 products from 1,000 food industry sources. With Dot, according to Ray, ShopHero can expand the online offering that independent grocers carry beyond what’s in the store, but in a curated way that makes sense and builds on the market position of each of its grocery store customers. Beyond that, ShopHero is tapping technology from another Dot division that analyzes what shoppers buy, and then pares it down to the individual ingredients and assembles shopper purchasing suggestions based on specific taste profiles. Armed with this information, ShopHero retail customers can make personalized suggestions that can be backed up by deals that customers are more likely to find enticing. ShopHero has even added a support function so that questions, comments and complaints generated by e-commerce shoppers come to its own trained staffers, who can handle them without troubling store personnel. “What we build is a retail success platform,” Ray asserts. “We simplify it so a grocer can use it, because we provide the people in the background. What makes them unique should carry over online.”

ShopHero enables independent grocers to create e-commerce sites that reflect their store operations.



Sponsored Content

SHUT THE FRIDGE DOOR ON WASTED TIME, MONEY AND STAGING SPACE When exploring sustainable cooling strategies for e-grocery it’s good to know your options. Active cooling requires energy-hungry, temperature-controlled storage solutions such as refrigerated trucks, walk-in refrigerators and freezers. The alternative is to maintain the quality of perishable goods with either ice or standalone coolant. This is known as passive cooling — a more cost-effective, environmentally preferable option that doesn’t require electricity or high impact, fuel-generated refrigeration systems. Passive cooling totes and containers, with the right amount of coolant and proper ice management, keep chilled food at the Food and Drug Administration-specified temperature range for 10 to 15 hours — even in extremely warm conditions. Additionally, passive cooling shipping provides e-grocers more flexible staging options to get their goods out, by not requiring dedicated space for active cooling. With optimizing operations and improving environmental impact top of mind, Liviri partners with leading national grocers to pave the way for a more efficient, cost-effective, sustainable cold chain. Learn more about the next generation of insulated, reusable totes designed for flexible thermal performance at liviri.com.

©2022 Otter Products, LLC. All rights reserved. The Liviri name and Liviri trademarks are the property of Otter Products, LLC, registered in the U.S. and other countries. All other trademarks are the property of their respective owners.


7 BEST PRACTICES FOR PASSIVE COOLING It’s easy to integrate passive cooling into perishable food and grocery pickup and delivery strategies. Here’s how:

1. MEASURE COLD-CHAIN SUCCESS

Chilled Food

40°F MUST STAY BELOW

4.4°C

dairy, protiens and meat

LIVIRI CONTAINERS KEEP GROCERIES UNDER 40°F IN SUMMER HEAT FOR UP TO 10 HOURS WITH 3 LIVIRI ICE PACKS.

100°

38°

75°

24°

50°

10°

25°

TEMP C°

3 SPRINT ICE PACKS USED 7.5 LB (3.4 KG) OF COOLANT

TEMP F°

based on when food crosses critical temperature thresholds, not by concrete rises in temperatures. For example, requiring that ice cream removed from a -10°F freezer increases no more than 5°F is unnecessary because ice cream doesn’t begin to melt until 10°F.

-4° MILK

EXTERNAL TEMP

0° 0

2

4

6

8

10

12

-18° 14

TIME (HOURS)

Frozen Food

20°F

STARTS TO SOFTEN AT

fruits, veggies and frozen meals

Ice Cream

-6.6°C

BEGINS TO MELT

10°F -12.2°C

2. OPTIMIZE COOLANT LOAD. Liviri tests hundreds of different use cases to determine the right amount of coolant needed to achieve optimal food quality protection. The following factors impact how much coolant is needed: • • • •

External temperature profile Cold-chain duration requirements Coolant type Desired state of food when it arrives to the consumer

5. ENSURE THAT ICE PACKS ARE COMPLETELY FROZEN. Use racks to separate ice packs to ensure good air flow for faster freezing. Do not freeze ice packs in insulated totes since insulation keeps cold air out. And implement first in, first out rotating ice systems to ensure that the most frozen packs are used.

6. REDUCE EMPTY SPACE IN SUSTAINABLE PACKAGING. Use thermal dividers to combine frozen and chilled items in the same box. Or combine multiple orders in the same box to eliminate dead air.

3. MAXIMIZE DIRECT CONTACT WITH COOLANT. To get the best results with the least amount of coolant, sandwich food between ice packs to maximize direct coolant contact. When shipping in extreme heat, enclose goods within a box of coolant using horizontal ice packs on the bottom of the container, plus vertical ice packs on the sides.

4. USE THE RIGHT COOLANT FOR THE JOB. • 32°F (0°C) ice packs are best for keeping chilled and most frozen foods cooler longer — since they melt slower. • 5°F (-15°C) ice packs are best for keeping ice cream below 10° F (-12°C) and frozen food below 20° F (-6.6°C) for up to 12 hours.

7. EXTEND COLD-CHAIN PERFORMANCE BY PRECONDITIONING INSULATED TOTES. Store empty insulated totes in walk-in refrigerators or freezers to avoid having to cool down warm totes. This allows you to maintain cooler temps longer with less ice.

©2022 Otter Products, LLC. All rights reserved. The Liviri name and Liviri trademarks are the property of Otter Products, LLC, registered in the U.S. and other countries. All other trademarks are the property of their respective owners.


TECHNOLOGY

Grocery E-Commerce & Supply Chain Pod Logic

The talk about technology is often about scaling it up, but what about scaling it down so that it can suit more budgets and occasions? Durham, N.C.-based Bell & Howell has developed a technological resource for retailers that incorporates robotic automation with other available technologies for a particular purpose, and at a price that a lot of grocers can afford. In January, ShopRite, the supermarket banner associated with the Keasbey, N.J.-based Wakefern Food Corp. cooperative, revealed that a store in New Rochelle, N.Y. would become the first grocery operation on the East Coast to unveil Bell & Howell’s QuickCollect Go! Pods. Located outside the store building, the pods are where shoppers pick up their online ShopRite grocery orders from a zone temperature-controlled structure designed for fast, easy and contactless

Tap Talk The rapid advance of technology has afforded small businesses the kind of automation and operational advantages that big companies once enjoyed. The process is ongoing and, today, smartphones are replacing expensive mobile and even stationary devices that represented serious investments for grocers. Apple made a big splash in February, detailing plans to offer Tap to Pay on iPhone, a new capability that will let small and large companies use iPhones to seamlessly and securely accept Apple Pay, contactless credit and debit cards, and other digital wallets. A payment requires only a simple tap on an iPhone, with no additional and expensive hardware or payment terminal needed. Apple will make Tap to Pay available for payment platforms and app developers. They can integrate with iOS apps and offer Tap to Pay as an option to their own business customers. This spring, Stripe will become the first payment platform to offer its customers Tap to Pay on iPhone, including via the Shopify Point of Sale app, and more payment platforms and apps will follow later this year, according to Apple. As Tap to Pay on iPhone becomes more widely available, merchants will be able to unlock contactless payment acceptance through a supporting iOS app on an iPhone XS or later device. Apple isn’t alone in developing smartphone payment tools, however. NMI, along with Global Payments, introduced a cloud pointof-sale pilot with Mastercard in January 2021, according to Nick Starai, chief strategy officer at Schaumburg, Ill.-based NMI.

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The QuickCollect Go! Pods that Bell & Howell developed for ShopRite are an East Coast first as the pickup concept continues rolling out nationally.

“The pilot is still live, and this tap-to-mobile technology turns an Android smartphone or tablet into a payments acceptance device, allowing merchants to accept contactless payments directly to their Android device, without the need for additional hardware,” notes Starai. The pilot continues in 16 global markets across Europe, Asia, the Pacific, Latin America, the Middle East and Africa. Although spread broadly, the test locations aren’t necessarily obscure. “Specifically, the pilot is currently being used on the Los Angeles World Airports Flyaway bus service to Los Angeles Airport,” says Starai. “The fares used to be cash only, but now riders can simply tap their Mastercard on a phone to pay. Additionally, the technology was featured at the 2021 TCS New York City Marathon Expo last November.” Contactless payment is another technology accelerated by the COVID-19 pandemic. Health is a main concern, given the needs of social distancing and avoidance of potentially contaminated surfaces, but other factors have to be taken into consideration. Any payment system has to have consumer confidence in its security, and most people trust the familiar Mastercard system. Consumers also need to have confidence in the basic transaction, however, as many people tend to avoid anything new that leaves them feeling awkward. Tap-to-mobile technology is simple and has been evolving at a time when people haven’t been altogether happy


self-service pickup, notes James Hermanowski, general manager and VP QuickCollect Solutions at Bell & Howell. As much as it has been touted, store pickup has proved problematic, asking consumers to enter a facility they often don’t want to visit, and dependent on a tremendous amount of labor not only in picking product, but also in managing back-room spaces and delivering orders to pickup desks or, even more problematically, curbside cars. It doesn’t end there, either, as pickup can result in swarms of vehicles driving up to stores during specific times of the day, with the evening often producing a nerve-racking rush of harried store associates and waiting curbside cars blocking access to doorways. With the Go! Pod, Bell & Howell has combined advanced smallscale robotic automation with cutting-edge software to power secure acceptance and retrieval of the pickup orders that consumers place online. Orders are readied and placed in the pod by store employees for scheduled pickup. Customers receive a text containing a QR code to scan on a console screen, which brings the order to the customer pickup portal. Once a customer starts the retrieval process, the totes that carry the order begin dispensing, which reduces the sometimes long wait time for customers. Because they can be effectively stocked and scheduled before a customer arrives, the supermarket avoids what can be a scramble to assemble and deliver an order, as well as the associated labor costs.

conducting transactions in the traditional way. “Consumers continue to shy away from using cash, and 83% of consumers said they would likely use tap-to-mobile payments if it were offered by a business,” observes Starai. “By requiring nothing more than a smartphone, this technology can be available to businesses of all sizes.” Technical challenges also require consideration. “In developing this technology, NMI had to determine the best places to ‘tap,’ since this technology uses off-the-shelf Android devices from different manufacturers, with an NFC radio in different spots on the device,” says Starai. “While testing the sweet spot for tapping payment instruments against the tap-to-mobile device, NMI found that each manufacturer had a different area that optimized the tap performance. NMI ended up finding the sweet spot for the different manufacturers and placed stickers on where they should tap to make it easier for users.” The rollout of tap-to-mobile payments will save larger retailers money and, as Walmart’s giveaway of smartphones to its employees a few months ago demonstrates, the big guys understand that the replacement of dedicated devices with smartphones loaded with their own software can save money and even create opportunity. In some cases, tap-to-pay technology could serve major retailers well, given that it could potentially simplify and reduce the expense involved with off-checkout, curbside garden department and pop-up operations payments. How-

The Go! Pod not only reduces labor associated with curbside pickup, it also gives supermarkets a way to make the least-used space on a given property more productive. The proposition has proved attractive enough that, although ShopRite debuted the Go! Pod on the East Coast, the banner did so only after approximately 1,800 other supermarket operations did so in other U.S. regions.

Modular Thinking

As noted above, automation as applied to fulfillment and distribution centers has become a big topic, given the gargantuan efforts of Kroger especially. One size doesn’t fit all, however. “People jumped into automation, [but] now they’re taking a breath and asking, ‘What do I really need?’” says David Lind, director of business development for Lewiston, Maine-based Modula. Warehouse automation can take on various approaches, from the comprehensive to the incremental, and generate all kinds of costs. Modula provides a sense of how technology can enhance warehouse operations without the need for comprehensive, expensive and potentially disruptive reconstitution of an existing system.

ever, technologies such as mobile tap could be something of an equalizer in the bigger scheme of technical things. “Technologies like this will greatly impact small businesses,” says Starai. “Many of the pain points that small businesses have with their current payments systems have to do with system setup and onboarding, not to mention expensive terminals. Tap-to-mobile alleviates these hassles with easy integration and no additional hardware beyond a smartphone. This is a game changer for small businesses, as it is the simplest way for them to implement contactless payments, giving customers what they are looking for and helping SMBs compete with larger businesses.”

“Consumers continue to shy away from using cash, and 83% of consumers said they would likely use tap-to-mobile payments if it were offered by a business. By requiring nothing more than a smartphone, this technology can be available to businesses of all sizes.” —Nick Starai, NMI

PROGRESSIVE GROCER March 2022

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TECHNOLOGY

Grocery E-Commerce & Supply Chain as the solution of storage needs, but more as a complement to what’s already out there,” he says.

Consider the Source

Modula vertical-lift modules (VLMS) can fill a warehouse, but their design is especially effective when it comes to supplementing existing operations with space- and labor-efficient automation.

Modula vertical-lift modules (VLMs) can enhance and complement existing systems with automated modules designed for efficiency, according to Lind. As the name hints, the company offers a modular system that it can install as needed in an operation. The company’s modules promote efficiency in several ways. First, they store products vertically on trays loaded in a series of bays accessed by an automated elevator system. The modules use the whole vertical availability in the warehouses, up to 40 feet, whereas traditional racking reaches only a proportion of the available space. Modula also designed its system to maximize vertical space within each compartment, which is usually not the case with conventional racking. Picking product stored within is a matter of scanning a barcode, and the system even uses lights to ensure that the correct product as scanned is picked by the warehouse employee. Although it’s possible to use it for main warehousing, the Modula VLM can supplement specific purposes. So, if a retailer wants to do fulfillment from a facility, pickers can continually gather orders and store them in the VLM until it’s time to present them to a customer in a store or curbside. In another use, retailers that are expanding their product selections can store slow-moving items in spare space near the entrance using a Modula VLM, rather than racking them in the back of the warehouse and having to send a forklift searching out those kinds of items, wasting time in search and retrieval. Customers can select from different systems depending on their needs, the largest being 16 feet wide, Lind notes. Companies can maintain a single module or add over time. VLMs include a chilled option and can also accommodate chilled modules that mount within the VLM so that mixed storage is possible. Frozen options are in the future. Lind concedes that the automation provided by Modula may not save the operational time of a fully robotized warehouse, but the solution can be several times faster than traditional practices, for a fraction of the cost of a full-site conversion. “The message we want to get across is that Modula doesn’t necessarily see this

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In effect, one of the things that’s happening in technology now is that companies are looking at what challenges exist in the market and trying to develop more specific and often simpler methods to address them, which often means doing so at more reasonable cost. Take traceability, for example. The ability to trace product back to the source has been critical for the produce industry as a way of quickly identifying the source of a foodborne illness, both to ensure that an outbreak is minimized and to prevent a general panic from emerging that might hurt trust between the produce sector and its customers. As consumers become more concerned about issues beyond foodborne illness, however, and want answers about how products are sourced, manufactured and shipped through the supply chain, more businesses have to consider how to provide traceability, and that can be costly. Randy Fields, chairman and CEO of Murray, Utahbased ReposiTrak, is among those who have worked on the challenge, and after developing purpose-built software, he’s come up with a low-cost solution Traceability has benefits beyond the health-related. The generally accepted proportion of food that never makes it from farm to plate is in the vicinity of 40%, according to Fields, and consumers are becoming more aware of the problem. Traceability can identify problems in the supply chain that cause waste, and it can allow retailers to address and communicate how they’re dealing with not only waste, but also environmental issues in sourcing everything from food to furniture. Yet cost as a problem in today’s supply chain is global. The food part is particularly tough because of the enormous number of providers from the ground up. Product shipments have an identifying code, but systems such as barcoding are time-consuming and require a great deal of labor, as each lot has to be read at each stage of shipment and consolidation.

“It’s easy to get overwhelmed by technology. It’s supposed to make our lives easier, but you can wind up with analysis paralysis.” —Troy Prothero, Symphony RetailAI


E N D TO E N D E-COMMERCE Yo u r Tr u s t e d E C O M M E R C E Te c h n o l o g y P a r t n e r.

YO U R B R A N D, YO U R C U S TO M E R , Y O U R M O N E Y. CO NTAC T U S TO DAY TO E AR N M O R E WITH O N LI N E O R D E R S .

www.CognetryLabs.ai

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TECHNOLOGY

Grocery E-Commerce & Supply Chain Fields developed his traceability solution by, in effect, expanding out from an existing payment system that he operates. In the course of doing business, ReposiTrak records the shipping code from billing documents. In that way, the company can inexpensively establish the route of any shipment and be able to trace product back to its origin. “We have an interesting advantage,” he says. “We already have a network around the world of suppliers and retailers for compliance management and inventory to go from. We have 2,500 produce companies in the network. In effect, we’re already connected, so you already have sent us a document.” Ultimately, ReposiTrak can use the systems it has in operation to help retailers, wholesalers and suppliers work together to ensure product safety and shelf availability, as well as to reassure shoppers about the safety and sustainability of products.

Dealing With Supply Chain Disruption

Today’s challenges and the technology available to help overcome them are sufficiently vast that it can give anyone pause. Yet it’s important to consider that the business challenge is the measure of the technology. “It’s easy to get overwhelmed by technology,” acknowledges Troy Prothero, VP product management, supply chain solution at Dallas-based Symphony RetailAI. “It’s supposed to make our lives easier, but you can wind up with analysis paralysis.”

Grocers have never had it easy dealing with supply chains that stretch across the United States and even across the globe, but recent developments have created unprecedented disruption, both during the height of the COVID-19 pandemic, when basic merchandise stalled, and then as the coronavirus crisis began to ease and the distribution chain snarled due to a complicated confluence of issues involving everything from port capacity to labor availability to fuel costs. That being the reality, notes Prothero, grocers have an available process that can help them disentangle their supply chain tribulations. An evaluation of circumstances can lead to the application of smart technology that can straighten out disruption by helping to focus efforts where they can be most effective. “The first step is to take those things that are routine and put automation in place to take on the mental bandwidth and allow focus on the really hard problems,” he advises. Supply chain technology as it exists now can help grocers shift from reacting to making decisions based on continually refined data, supported by artificial intel-

On the Edge In some cases, rather than an altogether new approach to a business function, technologies that have been around for a while are becoming increasingly effective doing what they’ve always done, thanks to the application of artificial intelligence (AI), machine learning and related advances that are making them more effective in operation. Grocers may be well served reviewing how, for example, pricing technology has evolved. In a pandemic-related development, the current bout of inflation roiling markets certainly encourages some action on pricing. “Inflation is fundamentally a pricing challenge,” asserts Matt Pavich, senior director of retail innovation at Austin, Texas-based Revionics, an Aptos company. “Pricing is the answer to inflation.” In fact, pricing is a way to solve a host of retail challenges ranging from competition to image, given that other elements of a retail business, from store portfolio to merchandising, can’t be frequently adjusted. Increasingly sophisticated tools offer an even more effective way of addressing multiple business challenges. “Price optimization is a good way to address challenges quickly, efficiently and effectively, if you’re using the right analytics,” counsels Pavich. Yet pricing can be a tough tool to use because of its inherent complexity. What’s inelastic today may be more malleable in a month as seasonal and situational circumstances change. Subsequently, solutions that once were state of the art may be antiquated, and those relying on them may become less competitive

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Effective price optimization requires ongoing evaluation and prioritization to ensure efficient execution at the shelf level.

versus rivals employing more sophisticated solutions. The sophistication today is, in large part, driven by AI. Revionics has been developing capacities including AI, and has been advancing its approach to pricing even through the last period of inflationary creep in relation to the Great Recession. According to Pavich, AI aids in advancing price optimization by continually re-evaluating procedures based on actual developments and making connections across categories in ways that would be hard to do without the technology. Although it might not otherwise be apparent, AI can work when a pricing action that might sell more cheese will lower hot dog sales, for example. When a lot of relationships that might be difficult or impossible for traditional


ligence (AI) and machine learning, that identifies potential problems before they begin having an effect. “AI is making it possible,” adds Prothero. “It’s taking us on that journey. Forecasting with AI is moving us beyond static models and allowing us to take into account enormous amounts of information that describes what is happening to products and what is happening to demand, and ultimately forecast [using] AI technology to get better results.” Leaving behind static models, which require attention to output, and shifting to a focus on input is part of the process. “That’s a game changer,” says Prothero. “With AI, you spend a lot more time identifying clean data and accurate sources at the beginning.” An effective supply chain solution will help the user identify clean data, which is as accurate as possible, before anything is input. The change can take a certain discipline and even trust, as the ultimate output will be forecasting that’s hard to trace back but more accurate than can be otherwise achieved, because today’s AI-backed systems are not only intricate in how they appraise data, they also continually inform and improve their analysis. As they’re not doing the analysis, a lot of companies have some trouble getting onboard with AI-generated results, however. “It’s a black box,” admits Prothero. “They don’t know how it’s coming up with the numbers it’s coming up with, and naturally, they are hesitant to trust.”

systems to reveal get compiled and analyzed, pricing can become a more effective tool. Pavich points out that such sophistication can be critical for grocers, since a food retailer offering 20,000 SKUs can have 1 million individual items in the store at any time. As such, price optimization at its best can drive the investment that’s sitting on store shelves more effectively, in part by helping grocers set priorities about how to handle the investment residing in the store aisle. Yet beyond that, price optimization allows for more effective forecasting, which can have multiple benefits, according to Pavich. Retailers can run scenarios that take into account various pricing structures as applied to different

“Price optimization is a good way to address challenges quickly, efficiently and effectively, if you’re using the right analytics.” —Matt Pavich, Revionics

Symphony RetailAI is working to make the outputs more explainable, but the real test is how those outputs guide actual actions. With accurate data going in, establishing a hierarchy of outputs is important, so that an immediate result is the most pressing consideration, whether it involves local delivery patterns or international shipping. At that point, other considerations can enter the analysis, and more advanced views on a particular subject can emerge. Over time, systems will become more user-friendly, even as the users become more comfortable with the technology. As that happens, based on continual development of systems and their advancement — in effect, due to AI and machine learning — more effective application will follow. “One of the places where we’re putting a lot of thought right now is, how do you enable planning that supports agile response to changing conditions?” says Prothero. “If you go back to AI, one of the great things is that you can assist with a simulation that inputs into various scenarios such as a supply shortage, a weather event, and see what the fallout is. You can assemble a portfolio of plans that can reasonably anticipate what we can simulate. In effect, you’re not going to get wrong-footed.”

expected occasions and circumstances, and even some that might be extraordinary, such as what might occur if a post-pandemic supply chain becomes clogged. Forecasting not only makes the grocery operation more effective, but it can also enhance and improve relationships with vendors that can work with the retailer on pricing adjustments based on a deeper understanding and effective forecasting, which can improve the supplier’s efficiency. “It lets both find a common ground, and you can find it’s a win/win for the retailer and the vendor,” notes Pavich. Sophisticated price optimization also can help retailers deal with another circumstance that challenges them today: labor. Price changes have to be made on the sales floor; however, if a grocer makes a price move but doesn’t have the labor in store to execute it, the entire initiative can go haywire. AI has helped create a level of proficiency that allows grocers to accommodate labor realities, in part by prioritizing price moves so the most important are executed first, and so on down the line, as labor permits. Price optimization can also help brick-and-mortar stores, or those that primarily sell from physical locations, compete with online operators. Pricing in the e-commerce world is based on sophisticated algorithms that continually update what consumers pay for goods, optimizing prices in something like real time with the aid of functionalities like AI. As such, greater sophistication applied in the real world can make physical stores more effective in competing with digital, and can even suggest solutions to strategic considerations in omnichannel operations.

PROGRESSIVE GROCER March 2022

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ADVERTORIAL

DO MORE WITH LESS IN STORAGE AND HANDLING As more than 70% of U.S. households reported buying groceries online in 2021, food retailers are increasingly focusing on and investing in their warehouses, distribution centers and micro-fulfillment centers. If time is money in meeting shoppers’ demands for home delivery and curbside/in-store pickup, it’s also crucial for retailers to have systems in place that allow for rapid, accurate order picking in a way that maximizes space and minimizes labor. To sort out challenges and opportunities in storage solutions and material handling, Progressive Grocer recently spoke with David Lind, business development director for Modula. PG: What are some top things on grocers’ e-commerce priority lists when it comes to storage and handling? David Lind: Whether they are revamping existing facilities or starting from the ground up on a new warehouse, DC or micro-fulfillment center, grocers want to optimize everything — floor space, time, productivity, energy usage, product integrity and availability. On top of that, they are seeking solutions that assure worker safety and less stressful working conditions. PG: How does an infrastructure with vertical lift modules (VLMs) and/or horizontal carousels help food retailers achieve these goals? DL: VLMs are fully automated storage and picking systems that take up a minimum footprint by utilizing the available height of the facility. Items can be stored up to 53 feet high in a safe and secure unit that automatically delivers them to an operator. Horizontal carousels are ideal for low-ceiling environments, as well as those seeking maximum throughput. Thanks to the easy integration of the WMS software with any existing ERP or DMS systems, a retailer can automate the picking and storage process. Workers don’t need to search for products on shelves or lengthy racking systems, they just press a button activating the WMS and let the VLM bring the products to them. This feature ensures that the right part is delivered to the right person. As such, productivity and efficiency are increased while picking errors are drastically reduced. It’s also fast: Modula’s Lift VLM, for example, has a picking speed of 300 lines per hour. The faster products get to the bay, the quicker they get to the store or the shopper’s home. Grocers can also get peace of mind knowing that inventory

stored in these enclosed modules stays secure and clean, and is kept at the proper temperature. PG: How do these systems also help the flow within a facility? DL: As grocers scale up or adjust their warehouses and DCs in light of the evolving e-commerce channel, they are looking to design spaces that can help them do more with less and optimize their processes. Because VLMs can store inventory essentially up to the ceiling for robotic picking, the high-density automated storage and retrieval towers require up to 90% less room than traditional picking systems, opening up floor space and reducing needed footprints. In addition, because items are picked when needed, there’s no accumulation of extra products that would otherwise take up space and cause hazards, delays or waste. PG: What are some benefits when it comes to labor? DL: In addition to optimizing labor through automation — a major consideration at a time of ongoing labor challenges — this system helps enhance workplace safety. Workers don’t have as great a risk of injury when removing inventory from storage, and because trays come out at hip height, employees don’t have to strain or move or reach them. PG: What other advice do you have for retailers to take storage and handling to the next level at a time of increased competition? DL: Evaluate not just your current needs but your potential future needs for order fulfillment. Are you mainly using central distribution warehouses, or would you benefit from adding fully functioning micro-fulfillment centers? Do you need a buffering solution for completed orders? What are your temperature requirements? Consider automated solutions to reduce errors across your fulfillment areas and make the best use of labor and space. You can start small, even with just one module and one robot, and expand your system as you grow. Modula can help you transition in an immediate or gradual way with our series of VLMs or horizontal carousels that can be installed based on your needs. You can also streamline your order fulfillment with other best practices, such as storing popular items near each other, regularly replenishing fast-moving inventory and leveraging technologies like barcode scanners and camera-based imaging for better verification.

Visit https://modula.us/ for more details on custom-made storage and material handling solutions.


TECHNOLOGY

Payments

Clarity on Crypto E XPERTS OFFER ADVICE TO GROCERS BEGINNING TO NAVIGATE THE WORLD OF DIGITAL CURRENCY. By Bridget Goldschmidt

ith Bitcoin and other digital currencies set to take off as everyday payment methods, grocers increasingly need to think about how they’ll incorporate crypto into their existing payment systems — or even whether they’ll need a whole new system. To find out how they should proceed, Progressive Grocer reached out to a couple of experts in the field. First, though, for any retail executives who may think that actual crypto usage among U.S. consumers is vanishingly small, think again: According to a Q4 2021 survey of more than 2,200 U.S. consumers conducted by Brookfield, Wis.based financial technology and services firm Fiserv as part of its Carat Insights research, 16% of Americans report having used crypto at least once to pay for goods or a service; 53% of customers who have paid with crypto are age 18-34, and 25% of crypto users cite lack of merchant acceptance as a limitation to increased usage. Those responses indicate that retailers need to grapple with digital currency sooner rather than later, or risk getting left behind as late adopters.

Obstacles Ahead

According to Brad Goad, VP of Carat and digital commerce at Fiserv, the main roadblocks to grocers’ acceptance of crypto are a lack of crypto point-of-sale and e-commerce integrations, a lack of efficiency, and the need for faster, scalable blockchain payment networks. Goad concludes: “Thus far, crypto adoption has been slow due to the risk involved, the requirements for a merchant to receive and hold crypto or establish a crypto wallet, and a transaction process that is slower than those to which consumers are accustomed.” For his part, David Wilkinson, president and general manager, NCR Retail at Atlanta-based software, managed and professional services, consulting, and technology company NCR, succinctly sums up the problems faced by grocers considering crypto as a payment method: “Cost and headache. Many grocers’ current payments system providers may not support cryptocurrency purchases. Even if they do, it may require an expensive, time-consuming rip-and-replace to get the right technology into the store to facilitate crypto acceptance. Those two things make it difficult for many grocers to process cryptocurrency transactions.”

Finding Solutions

When asked about the best crypto payment solutions for food retailers, Goad advises that “grocers would be wise to employ a graduated deployment strategy …. This means starting with what is most feasible in the near term, which is accepting crypto payments in digital channels, before attempting POS system work. An e-commerce solution is easier to deploy, and there are a growing number of solutions coming to market that will allow a grocer to present their checkout as they normally do, with crypto as an added payment option for the consumer. Settlement will continue to occur for the merchant in

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fiat, same as always, which will remove the complexity and risk associated with the grocer holding crypto at any point or needing to establish a crypto wallet.” “Today’s grocers need a technology partner that can not only make it easy to start accepting crypto today but continue to innovate their software and services to handle the crypto of tomorrow,” counsels Wilkinson. Asked how long this process might take, he replies, “With the right partner and a flexible, software-driven store environment, these updates can be rolled out in a matter of weeks, not years. The hitch is … getting in with the right vendor who can implement easily on top of existing technology to give its retailers access to digital currency payments across digital and physical channels.”

Is Volatility a Dealbreaker?

The recent precipitous nose-dive in value — reported as up to $1 trillion — of cryptocurrencies Bitcoin and Ethereum may have given already wary food retailers pause, but Goad and Wilkinson don’t believe that this volatility will ultimately prevent crypto’s acceptance in the grocery channel. “Crypotcurrency is known to be volatile, and this impacts its usefulness as a payment method, for which stability is preferred,” admits Goad. “However, because

Key Takeaways Cryptocurrencies are rising in popularity, but barriers to acceptance for grocers include a slow transaction process and the cost and difficulty of installing solutions that support cryptocurrency purchases. Grocers should start with accepting crypto payments in digital channels before attempting POS system work, and seek a tech partner that will enable them to accept crypto now but innovate their software and services to handle such payments in the future. Retailers that target younger shoppers will be able to capture more of their spend by facilitating checkout and loyalty in ways that these shoppers care about.


this volatility is expected, it is unlikely to have a large place, most retailers and grocers that “Even if crypto’s impact [on] business’ go-forward strategy.” are dabbling in cryptocurrencies are value continues to “Though Bitcoin and other cryptocurrencies operate accepting Bitcoin, and that is a great fluctuate compared separately from government-managed assets, they place to start,” continues Wilkinson. to cash, digitalaren’t immune to impacts from the marketplace,” notes “Down the line, as consumers are more Wilkinson “The Bitcoin and Ethereum crashes ... have savvy consumers will broadly using them and stores begin to been correlated to the Federal Reserve’s announceaccept them more frequently, there will reward grocers who ment that the Fed will begin raising rates later in Q1 to be a natural expansion to encompass embrace the future.” other top crypto options at checkout.” combat rising inflation. With big changes like this in a less stable market, investors often move to pull back on “It is not a question of Bitcoin versus —David Wilkinson, NCR risker, alternative investments. However, this isn’t to say other digital currencies — the question that digital currencies have lost momentum.” is which distributed ledgers will emerge In fact, according to Wilkinson, “From countries to powerhouse to deliver on the attributes of cryptocurrency,” notes enterprises like Tesla, the movement towards crypto is continuing Goad. “The network that does so cheaply, safely, to gain steam. A recent Pew Research Center study showed that quickly and most reliably at scale is the answer. Bitcoin one in six Americans have invested in, traded or otherwise used certainly is the largest today, and has a lot of advancryptocurrency. It’s clear that adoption of cryptocurrency isn’t going tages, but there are still a number of questions to be away any time soon, and grocers shouldn’t simply look the other answered” regarding these issues. way because of recent headlines.” He adds: “Even if crypto’s value continues to fluctuate compared Future of Cryptocurrency at Grocery to cash, digital-savvy consumers will reward grocers who embrace Since crypto at grocery would seem to be inevitable at the future. Now is the time to secure early adopters’ loyalty. By the this point – “It’s only a matter of time,” asserts Wilkinson time cryptocurrencies become fully institutionalized, it will be too – what will adoption look like, and what effect is it likely late in some instances.” to have on other methods of payment? According to Goad: “We see crypto payments most likely experiencing a gradual adoption. Barring an Bitcoin Versus Other Crytocurrencies Besides Bitcoin, the original and top-ranked cryptocurrency, there inflection-point event, adoption will be driven by instiare now literally “thousands of cryptocurrency options and huntutional investment, but also needs to be supported by dreds of crypto exchanges,” observes Wilkinson, who identifies regulation from the Federal Reserve and existing bankEthereum as ranking second. “To help narrow the ing system to take hold. The speed at which regulation, pool, the CoinDesk 20 list is a great resource for structure and support come from these entities will grocers looking to see which currencies consuminfluence the growth of crypto as a payment type.” ers are interacting with the most,” he suggests. Wilkinson points out that retailers and payments ven“In terms of adoption in the marketdors are already adding in-store and online capabilities allowing consumers to use Bitcoin and other cryptocurrencies to make purchases. “As retailers and consumers start to embrace Bitcoin and other forms of cryptocurrency, it just becomes a form of payment at checkout,” he explains. “While it’s unlikely to entirely replace our more traditional forms of payment in the near term ... I think it has the potential to become a normalized alternative payment option in the next few years as more retailers engage with it. Consumer interest and demand in crypto is already strong across the country, and not just major metropolitan cities: The average bitcoin purchase is $800, with sales happening in 45 states.” While older generations probably aren’t going to jump on the crypto bandwagon right away, retail brands targeting younger generations of shoppers, who are more likely to own Bitcoin than traditional stock, “will be able to capture more of that demographic’s spend by facilitating checkout and loyalty in ways they’re interested in,” predicts Wilkinson. “And as Gen Z and these younger generations enter adulthood and get more of the lion’s share of market spend in grocery, grocers will need to consider ways to create innovative payment and checkout experiences.” PROGRESSIVE GROCER March 2022

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CPG INNOVATION

Functional Beverages

Drinking It Up PLUS BR AND INDUSTRIES CEO CHAD WILLIS DISCUSSES WHY CONSUMERS ARE CL AMORING FOR BE VER AGES THAT ARE BENEFICIAL FOR THE BODY AND THE PL ANE T. By Gina Acosta rocery aisles seem to be bursting with functional beverages. From alkaline waters to mood-boosting drinks to elixirs that promise skin-enhancing benefits, these beverages are booming. In fact, sales of functional drinks increased by almost 16% between November 2020 and November 2021, according to data firm Spins. With consumers taking a more proactive approach toward wellness, functional beverages are one of the fastest-growing categories in grocery. Within that category, alkaline water sales also show no signs of slowing down. According to Beverage Marketing Corp., retail sales in the alkaline water category are expected to balloon to $1.3 billion by 2023, representing 20% of the entire value-added water category. Enter Sheridan, Wyo.-based Plus Brand Industries, which offers an alkaline water designed to appeal to the consumer looking for a functional beverage that heals the body and the planet. Plus Brand CEO Chad Willis talked to Progressive Grocer about the popularity of alkaline water, his All-Scratch Technology and the future of the beverage industry. Progressive Grocer: Chad, how did you come to start a career in beverage innovation? Chad Willis: My entire life, since I was a kid, I’ve been super interested in health, nutrition and food. I owned my first health club by the time I was 19 years old, and I stayed in that business until about my mid-20s. I got a degree in business and was offered a big finance job. I took the job in finance, but I hated it. So I started dabbling in food, beverage and supplements. Nowadays, I wake up every day by 3:30 in the morning excited for the day doing something I really like.

had our flavoring and formula perfected, you have to go through a computer analysis stage where it gives you an exact computer code of elements, so that you can mimic those elements over and over again, especially if you plan on growing and going national and bottling at multiple companies, because it has to pull elements out and add elements in to create the water. So that’s how we created the flavor and the formula for Agua Plus. PG: What is All-Scratch Technology, and how did that come about? CW: Well, the problem of confusion with bottles, whether at a restaurant, a bar or at home, has been going on for a long time. In any type of group setting, people confuse their bottles. It just happens over and over again. One time, I had a family reunion, and in the morning, I was watching people throw out bottles that were full. So me and my brother drove to Office Depot. We bought colored stickers and assigned each person a color, or wrote their initials on the stickers, so people would know which bottle was theirs. Eventually, me and my brother said, “There’s got to be a way that I can put a mark on this bottle so everyone knows which bottle is theirs.” We pulled a lot of patents, looked at a lot of things. We went to different companies, looking for a way to create a new chemical composition so that you could scratch in a name, but it would also be waterproof, can handle the sun, can get cold, not flake off. It’s a combination of about 13 different layers and a lot of different chemicals. We had to make sure the chemicals were biodegradable, not hazardous to humans or children. It was about two and a half years of work.

PG: Tell me about the evolution of Plus Brand Industries. CW: Well, I had created a few sports nutrition supplements. I was doing online sales with them and doing really well, but it was difficult to get the product into stores. So I started looking into developing a product in sports nutrition that would have easier access into stores. My family owns springs in Michigan, California and Alaska, so I had access to my own water points. So me and my brother, we said, “Hey, let’s start a bottled water company.” I already owned the Plus brand, and we wanted to deliver a superior water product. People loved it, and sales were great online. I decided to stop doing the sports nutrition and put all my attention into beverages. PG: And that’s when you came up with Agua Plus? CW: Yeah, I met with a couple of big development companies. One is called Power Brands US. I met with them to create an alkalinity formula that had a really good flavor. So I spent about six weeks with them, and we did test groups. Once we

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PG: And you were almost bankrupt by this point? CW: Almost bankrupt, divorced and homeless. My wife was like, “You’re putting your entire life into this. What are you doing?” But it turned [out] wonderful. PG: How is the supply chain crunch affecting your business? CW: The hardest part right now is really supply chains, logistics and people. I’m late on one of our largest first orders because it took me a long time to get cardboard. It’s very difficult to get these types of materials


doing something good for themselves. They might eat bad here or there, but they really like to know that they’re putting something good in their body, because it’s being reinforced in front of them all the time. It’s in their face every day to take care of themselves. PG: How far do you think Plus Brand can go? CW: The long-term thoughts are, “We’re going to be the biggest.” I mean, anybody can make water. Anybody can make a functional beverage. But we can also deliver a solution to a problem. All of our bottles are made with recycled ocean plastics. So every single thing that we do, we think about the environmental footprint, the sustainability and the person at the end. This is stuff that I want me and my children to be really proud of, and that we would put into our body immediately without even thinking. That’s, I think, what’s going to separate us from a lot of different companies.

All of Plus Brand Industries' water bottles are made with recycled ocean plastics.

right now, and expensive. Every time you think you have the supply chain fixed, something happens, price point goes up, your materials prices are changing daily. Logistics are crazy right now. PG: What kind of response are you getting from consumers about the product? CW: As soon as somebody has it, response is phenomenal. Flavor, packaging and the actual idea, the All-Scratch Technology. People love it. PG: What else is in the pipeline, and when might it be available at retail? CW: We have several different beverages coming out using the same alkaline water formula. One is going to be an immune booster. The others are mood-enhancing. We will also have different pack sizes coming out. PG: What do you think accounts for the rising popularity of alkaline water, and where do you think the trend will go next? CW: I think that simplicity has a lot to do with it, and consumer awareness, knowledge. Over the last five years, people have become really smart to nutrition and what they’re putting into their body. The internet has made it possible to understand what acidity means, what alkalinity means, and people like to know that they’re

PG: Where do you think the beverage industry might be in five to 10 years? CW: Very crowded, and then us. It’s happening right now. These big corporations, because they see all these beverages coming out, it’s affecting their bottom line. That’s why you’ve got the big companies buying up bottled-water and functional-beverage companies. These things are going to continue to happen because of consumer awareness. And now, with the way the world is today and the easy access into the marketplaces between the internet and knowledge, people are making better products. The companies that will really stand out are the ones that really do good and create that difference between them and the others. Because it’s either going to be marketing or a really good product or having that differentiator that separates you.

“Over the last five years, people have become really smart to nutrition and what they’re putting into their body. The internet has made it possible to understand what acidity means, what alkalinity means, and people like to know that they’re doing something good for themselves. They might eat bad here or there, but they really like to know that they’re putting something good in their body, because it’s being reinforced in front of them all the time. It’s in their face every day to take care of themselves.” —Chad Willis, CEO, Plus Brand Industries PROGRESSIVE GROCER March 2022

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Cooking With Gas RE TAILERS CAN CAPITALIZE ON INCRE ASED CONSUMER INTEREST IN PURCHASING HOUSE WARES. By Barbara Sax

s consumers spent more time at home than ever during the past two years, housewares has proved to be a hit category, with double-digit increases across many segments. Even as consumers wade back into normal routines, the category continues to offer upside for retailers, “People are still testing new and inspiring recipes and are looking for tools that make the experience easier,” says Margaret Boyle, associate sales manager for El Paso, Texas-based Helen of Troy’s Oxo brand. The brand’s sales team reports a solid increase in sales of its products. According to Leana Salamah, VP of marketing at the Chicago-based International Housewares Association (IHA), while every housewares category saw growth during the pandemic, cookware and bakeware were standouts. “Not only were consumers cooking more at home out of necessity, but comfort food came back in a big way,” notes Salamah. “Baking became a source of comfort.”

Banana Bread and Beyond

Key Takeaways While every housewares category saw growth during the pandemic, cookware and bakeware were standouts. Retailers are finding ways to add more high-impulse specialty products to their stores. Opportunities in the category exist in time- and money-saving items, particularly in the area of food prep and storage, and in athome entertaining products. recipes and tips — along with tools — that make meal prep easier. Retailers are finding ways to add more high-impulse specialty products to their stores. Acme Markets, an Albertsons banner based in Malvern, Pa., rounds out its in-line section of Goodcook products from Bradshaw Home with a clip-strip program of specialized products from

That was good news for category sales. “Interest in making banana bread skyrocketed, and we saw an upsurge in our Oxo angled measuring cups sets and Oxo Good Grips nonstick baking pans,” observes Boyle. Sales of grilling products also continue to accelerate. “Outdoor living in general is huge right now, and consumers have gotten creative with ways to extend the use of their outdoor space beyond the traditional seasons,” says Salamah. “I’ve seen a lot of new products that make grill cleanup easier and facilitate nighttime grilling — lots of grill lights, and even utensils that light up.” Oxo was one manufacturer that expanded its bakeware and grilling product portfolios based on consumer feedback during the pandemic. The company also launched a Chefs in Residence program to offer

“After 15 months of honing new cooking skills, consumers are ready to put them to use in gathering their families and friends back at their homes after this protracted separation. That represents an enormous opportunity for tableware, barware, textiles and prep-to-table items. In addition, it represents a major opportunity for kitchen electrics that facilitate gatherings — think raclettes and fast-cook pizza ovens.” —Leana Salamah, International Housewares Association

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Blueoxo. The chain recently outposted Blueoxo’s Viovia branded cheese graters and strainers in the pasta set. Viovia hand spiralizers, gripping cutting mats and reusable bowl covers, along with Kolorae reusable storage bags, were also featured in the aisle.

to be a time- and money-saving solution for people,” affirms Eric Stryker, category management manager for OXO. “Our selection of POP containers and our recently introduced Prep And Go sets provide consumers with

Convenience Makes a Comeback

A focus on convenience in the kitchen will become increasingly important as students return to school, adults go back to the office, and activities outside the home resume. “With those three levers being dialed back up, time pressure returns,” notes Joe Derochowski, VP at The NPD Group, based in Port Washington, N.Y., who is also an adviser to the home industry. A return to normal also translates into increased demand for products designed for carrying meals, from bento boxes to insulated lunch bags. According to manufacturers, it’s a great opportunity for supermarket retailers. Portable beverageware is also a key opportunity for retailers. NPD data shows that during Q4 2021, sales of portable beverageware surged 23%, while IRI data shows bottle sales across all outlets up more than 22% for the year. Meal prep and storage products are another growth opportunity. “Meal prepping continues

PROGRESSIVE GROCER March 2022

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NONFOODS

General Merchandise

continue to be a strong growth area for retailers. Derochowski also sees water filtration devices as a product category worth consideration, since consumer interest in these products remains high.

Home Advantage

The pandemic-era baking frenzy has inspired Oxo to expand its bakeware utensils.

everything they need to meal prep and store a few days’ worth of lunches for the week, or packing up food to go.” IHA’s Salamah has noticed more food prep focused on fresh produce. “Beyond the pineapple corers and the apple wedgers, I’m seeing vegetable ricers and shredders and storage solutions that extend the life of fruits and vegetables,” she says. Oxo recently introduced the Good Grips Scoop and Smash Avocado Tool, which features a tapered design that keeps food from sticking. Derochowski says that sales of storage and organization products have also benefited as consumers, stressed from spending more time at home, looked for ways to organize their kitchens. “We’re entertaining more but we are still eating more meals at home, so there’s greater need for storing leftovers,” he adds. IRI data for the week ending Jan. 23 shows sales of household kitchen storage products ahead 9.3% across all outlets, and sales of private label storage products up nearly 19%. Acme recently devoted an end cap to a “buy two, get one free” promotion on its Signature storage containers. Higher food prices and the growth of smaller households are also factors driving the food storage category. “It’s hard to cook for one-person households, and food storage options help,” observes Derochowski. Sales of vacuum sealers spiked 15%, according to NPD. Retailers can expect more interest in appliances that make leftover-oriented meal prep easier, such as slow cookers and one-dish cookware. “Whether it’s prep, cooking, serving or cleanup, there’s an opportunity for products that help consumers save time and make the process more convenient and efficient,” says Derochowski, who thinks retailers should be taking a close look at how they can add more of those products into their stores. As consumers embraced the work-from-home lifestyle, at-home prep of flavored and specialty coffee drinks exploded, fueling a boost in sales of the tools needed to create those gourmet beverages. Last year, consumers spent $2 billion on coffee makers and accessories for in-home brewing, and drove sales of espresso machines, French presses and cold-brew makers to double-digit increases. Accessories, including portable hot-beverage items, will

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For her part, Salamah believes one of the biggest opportunities in the category is the return of at-home entertaining. “After 15 months of honing new cooking skills, consumers are ready to put them to use in gathering their families and friends back at their homes after this protracted separation,” she notes. “That represents an enormous opportunity for tableware, barware, textiles and prep-to-table items. In addition, it represents a major opportunity for kitchen electrics that facilitate gatherings — think raclettes and fast-cook pizza ovens.” With more consumers mixing and serving cocktails at home, barware continues to be a solid housewares segment for retailers, and many are finding ways to add bar accessories to their liquor departments. Acme, for instance, features a floor stand from True Brands, the Seattle-based supplier of beverage lifestyle accessories, stocked with bar tools and wine gift bags in the grocer’s liquor department. Acme Markets capitalized on increased consumer interest in private label food storage products with an end cap display.


Nov. 3-4, 2022 | Orlando, FL Progressive Grocer's Top Women in Grocery award is the most prestigious honor for female leaders in the grocery industry. The Top Women in Grocery award winners represent all levels in the industry within both the retailer and supplier communities. Candidates are nominated by colleagues and peers for one of three categories: Senior-Level Executives, Rising Stars, and Store Managers. Winners are announced in the June issue of Progressive Grocer.

We would like to thank the following sponsors who have already signed on to help us bring this exciting event to life this November:

Want to learn more about available sponsorship opportunities and pricing? Contact your sales representative today! Tammy Rokowski Associate Publisher, Regional Sales Manager Southwest, MI, International 248.514.9500 trokowski@ensembleIQ.com

Theresa Kossack Sales - Midwest, GA, FL 214.226.6468 tkossack@ensembleIQ.com

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

Lou Meszoros Business Development Manager - Grocery Group 203.610.2807 lmeszoros@ensembleiq.com


EQUIPMENT & DESIGN

Lighting

The color-rendering technology available in LED sources can make colors appear more vivid, enticing customers to purchase items such as produce.

Using Lighting Fixtures to the Greatest Effect WITH AN LED REMODEL, GROCERY RE TAILERS CAN ENHANCE PRODUCT AND THE SHOPPING E XPERIENCE. By A.J. Gorman

rocery stores have quickly become the most frequently visited retail destinations during the last two years. The goal was simple: Go in, pick up and get out. Now that COVID-19 restrictions have loosened, however, customers are reverting to their regular shopping routines. Consequently, grocery stores are looking for ways to improve their retail offerings to satisfy shoppers. One of the key ways to enhance the shopping experience is through lighting.

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In Living Color

Most commonly, lighting has been used in grocery stores for guiding customers, helping them feel safe and signaling them to open checkout lines. When used properly, lighting can also help move products off the shelves. Similar to Photoshop or a filter on your phone that “corrects” or enhances the image through vibrancy and oversaturation, LEDs (light-emitting diodes) can do this in real life. The color-rendering technology available in LED sources can make colors appear more vivid, enticing customers to pick up that vibrantly green kale, those bright-red strawberries and that juicy red steak. For years, high Color Rendering Index (CRI) light sources were lauded to render colors effectively. However, high-CRI sources were designed to match the appearance of colors under an incandescent lamp — not an ideal goal for a grocery store — and it was difficult to modify traditional light sources to improve color rendering. Today, the industry has the ability and technology to manipulate


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ADVERTORIAL

TACKLE THE TRIP! Grippy Mat delivers slip- and trip-proof protection for store floors

SPEAKING WITH...Alison Hainsey, Strategic Business Development, New Pig Keeping customers and staff safe is a priority for every grocery store. Preventing slips and falls is an important component of any safety program, especially considering that grocers spend some $450 million annually to defend against insurance claims resulting from slip-and-fall accidents in-store. Progressive Grocer spoke with Alison Hainsey, with the Strategic Business Development team at New Pig, to learn more about how the company’s adhesive-backed Grippy Mat can help grocery stores meet the mission of eliminating slips, trips and falls while keeping floors clean and dry — and do it in an environmentally friendly way. Progressive Grocer: With all of the challenges grocery stores are facing, why should combating slips and falls be one of the most important ones they address? Alison Hainsey: Over 1 million people each year make emergency room visits following slip-and-fall accidents. The grocery industry is well-acquainted with this costly problem. Many lawsuits have been filed as the result of accidents that happen at grocery store entrances and in the aisles — and in extreme cases, those lawsuits can end in multimillion-dollar settlements. Our research shows that 61 percent of businesses do not make fall prevention a top priority. With Grippy Mat, we’re on a mission to change that statistic. PG: How does Grippy Mat differ from other products that grocers might currently be using? AH: Grippy Mat has an exclusive adhesive backing that keeps the mat in place with no shifting or rippling. It also pulls up easily without leaving floor-damaging residue when it’s time to replace the mat. PG: Sustainability is becoming increasingly important for grocers and their customers. How does Grippy Mat address their concerns about environmental impact? AH: Our mat has a 91% lower environmental impact than traditional rubber-backed mats — and we have data to prove that. The Golisano Institute for Sustainability performed a third-party Life-Cycle Assessment** (LCA) on PIG Grippy Floor Mat compared to traditional rubber-backed mats. Stores can clean Grippy Mat in place as part of the regular floor cleaning program, without harsh chemicals, additional water and energy, or transportation needed. That means our environmental footprint is smaller than that of typical rental mats that

are caught in the damaging cycle of pickup, laundering and delivery every one to two weeks. PG: Can you share any success stories from stores that have switched to Grippy Mats? AH: Redner’s Markets, a grocery chain with 43 stores throughout Pennsylvania, Delaware and Maryland, recently launched a safety program that has nearly eliminated slip-and-fall claims. Our Grippy Mat was the foundation of that program. After deploying Grippy Mats in all stores, Redner’s has gone from dealing with 15 to 20 claims for trips over carpets each year to zero. The stores also passed a Pennsylvania safety audit with flying colors, and the auditor even recommended the chain apply for a state award. Over the past several years, we’ve been recognized for our commitment to innovation and safety with industry awards including various Product of the Year and Reader’s Choice Awards— so we’re confident when we say that Grippy Mat eliminates wasted time and labor and minimizes workers’ comp and liability incidents. **Life-cycle assessment (LCA) is a tool used to quantify the environmental impacts of a product, holistically, throughout the entire life cycle; from material extraction, manufacturing and assembly, packaging, transportation, use, and end of life.

TO LEARN MORE ABOUT HOW GRIPPY MAT CAN HELP BUILD SAFE ENTRANCES AND AISLES AT YOUR STORE, CALL 855-474-7791 or visit grippymat.com.


EQUIPMENT & DESIGN

Lighting

LED light sources to an incredible degree. Now LED lights can ensure that colors are saturated and oversaturated. Think of all the different photo filters on our phones: vivid, blush, warm, cool and dramatic, to name just a few. LED light sources are equipped with a detailed brush ability to noticeably change the appearance of colors in a space. Lighting within grocery stores can be multifunctional to provide necessary light and sales-boosting potential. With more vibrant and appetizing features, the in-store shopping experience becomes more captivating. Additionally, improving the customer experience through lighting design makes the in-store shopping experience competitive with the convenience of delivery and pickup.

Project Red Light

White light is a combination of all of the colors in the visible spectrum, and humans see these colors separated as a rainbow by a prism. An object appears to us a certain color because it reflects that color light. For instance, a strawberry appears red because it reflects the red component of a white-light source. If the white light source doesn’t contain a lot of red light, the strawberry appears dull because there’s not enough red light to reflect into our eyes. While early LED adopters received energy

An object appears to us a certain color bevause it reflects that color light.

savings, the red-light content in these early whitelight LEDs was almost nonexistent. Today’s quality LED fixtures don’t have that issue, but why should we settle for an average amount of red light in our light sources? If grocers have more red-light content in their white-light sources, they can make red objects appear oversaturated and enticing. LED technology gives us the opportunity to present that strawberry in the best possible light. LED technology is widely available to adjust the color content of white light, called color rendering. The light sources in screw-in lamps and new LED fixtures make it easier to implement in retrofits and

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EQUIPMENT & DESIGN

Lighting

One of the key ways to enhance the grocery shopping experience is through lighting.

buildouts. The lighting industry has traditionally used CRI to help quantify the rendering ability of light sources. CRI was riddled with issues from the beginning, and manufacturers found it easy to cheat the system, making customers believe that they would get a light source with excellent color-rendering ability. It didn’t make objects appear saturated or attractive, however. With the advent of LED sources and the ability to tune the col-

Lighting within grocery stores can be multifunctional to provide necessary light and sales-boosting potential. With more vibrant and appetizing features, the in-store shopping experience becomes more captivating. Additionally, improving the customer experience through lighting design makes the in-store shopping experience competitive with the convenience of delivery and pickup. 82

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or content of white-light sources so well, the lighting industry developed a new metric called TM-30 to measure and describe how the light source renders colors all along the color space. Specifying a light to improve the appearance of a specific color is a relatively new option in the lighting design industry. It’s recommended that a lighting designer knowledgeable in color rendering and TM-30 be involved in specifying light sources to ensure that the color boosting is optimized for the application. LED fixtures are highly efficient and can dramatically improve energy efficiency, saving energy and maintenance costs compared with fluorescent light fixtures. Between the energy savings, reduced maintenance and improved color rendering, a LED lighting remodel can dramatically change the operation of a grocery store.

A.J. Gorman is a lighting designer at Windward Engineers and Consultants, which has offices in Harrisburg, Pa; Philadelphia; Atlanta; Alpharetta, Ga.; Baltimore; Vienna, Va.; Dallas; and Seattle.


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OPERATIONS

Sanitation

More Than Clean IN THE WAKE OF THE PANDEMIC, RE TAILERS NEED TO RE ASSESS THEIR SANITATION STR ATEGIES TO RE ASSURE CUSTOMERS AND ASSOCIATES OF STORES’ SAFE T Y. By Mike Duff upermarket sanitation is a topic with more relevance today in a marketplace reconditioned by the COVID-19 pandemic to take notice of whatever might be unhealthy in a retail environment. The degree to which the idea of a healthy supermarket environment could change almost overnight is exemplified by Lidl, which not only rethought how it would address usual and some unusual health-related questions — going so far as to put some bulk produce into paper bags for consumers worried about being close to other shoppers and picking up items handled by others — but also married technology to shopper concerns. Clean floors remain important, but Lidl has reconsidered the whole store atmosphere. “The health, safety and cleanliness of our stores is always a priority for Lidl, for our team and customers,” affirms William Harwood, spokesman for Arlington, Va.-based Lidl US. “Specific to the pandemic, the hospital-grade MERV-13 air filtration is the strongest example. We are the only national retailer to have implemented that to combat airborne transmission after that became a recommendation of the CDC.” Wellness, in a broadening sense, already was a growing consumer consideration before the pandemic, and more folks looked to avoid disease states by improving their approaches to diet and exercise and even social engagement. The long, dreary pandemic made wellness an even deeper and broader concern as more people took the idea seriously. Ashley Eisenbeiser, senior director, food and product safety programs at Arlingon, Va.-based FMI – The Food Industry Association, points out: “Food retailers have made a significant investment and have spent more than $1 billion on materials to keep their workers and customers safe. Many food retailers have adopted a more frequent cleaning schedule, as cleaning and sanitation is a best-practice measure for prevention of COVID-19 and other viral respiratory illnesses.”

Doing so provides clarity and accountability for management and retail employees alike for proper execution of the cleaning and sanitation tasks and programs, while also demonstrating to consumers that they take their responsibility to provide a safe shopping environment seriously.”

Heightened Awareness

According to Darren Lewis, key account director at Hamilton, Ohio-based Kaivac, supermarket operators today may be even more conscious of their store cleanliness than consumers. He’s received more inquiries about devices that can clean under cases well beyond where consumers are likely to see, not just for cleaning that’s required under sanitary plans, but also to ensure that their stores are paragons of cleanliness. Although such concerns may seem exaggerated, Lewis observes that cleanliness is now a competitive issue: Convenience stores and chain restaurants that

Looking Beyond the Pandemic

After the scramble to respond to the pandemic, now is probably a good time for supermarket operators to review their entire scope of sanitation practices, if they haven’t done so already. “Regardless of the pandemic, cleaning and sanitation have always played vital roles in the prevention of contamination and remain foundations for establishing an effective food safety management system,” Eisenbeiser says. “Developing and implementing a well-documented and executable cleaning and sanitation program is the first step to achieving a safe food retail environment and building a strong food safety culture.” She adds that a solid systematic program is the foundation for satisfying consumers who, at least in some cases, are thinking more about their health when they’re shopping and otherwise out in public. “Food retailers should have a master sanitation approach in place to manage and organize a cleaning and sanitation program across the store, including both perimeter and center aisle areas,” Eisenbeiser notes. “This approach involves developing a master sanitation schedule, which identifies the ‘who, what, where and when’ for cleaning equipment, utensils, surfaces and environmental areas.

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Key Takeaways Now is probably a good time for supermarket operators to review their entire scope of sanitation practices, if they haven’t done so already. The past two years have made supermarket operators more aware of sanitation, and they’re looking at ways to improve practices. Standards, whether internal or regulatory, are likely to become more stringent in the future as technology enhances sanitation practices.


Infection Still a Concern for Shoppers do a particularly good job in this area use that fact in their marketing. Lewis says that although Kaivac sells devices that automate the cleaning process, and is well known for its contactless cleaning products, the technology can only go as far as the commitment a business has made. The past two years have made supermarket operators more aware of sanitation, and they’re looking at ways to improve practices. Supermarket operators are very much aware that customers notice when things aren’t right. “We’re having heightened conversations today,” he notes. “We’re hearing, ‘We have to do more now.’ They want to talk about everything. They want to talk to you about the restrooms. They want to do things with the refrigerator cases. They are open to the scale of cleaning needed and tasked to handle it, given a budget and are asking, ‘What do I do now, and six months down the road?’ Before, that wouldn’t have been so high on the priority list.” Once, supermarket, convenience store operators and chain restaurants tried to ensure that their restrooms were as clean as the rest of their facilities. Lewis suggests that to deal with today’s sanitation environment, an opposite tack should be taken. Given that the impression a restroom makes has always had an impact on what consumers think of any business, consideration of sanitation starts there. A restroom that projects cleanliness not only reassures customers, but is also a place where supermarket operators can focus attention and use as an example of how they want the entire store cleaned and sanitized. Other parts of the operation get busy, and sanitation may not always receive the priority it deserves. Supermarket operators should emphasize whatever boosts consideration of cleanliness, in the cause of making sanitation not only a priority, but also a statement about the store. This mindset can also help supermarket operators prepare for the future. Standards, whether internal or regulatory, are likely to become more stringent in the future as technology enhances sanitation practices.

The Future of Clean

Although COVID-19 increased awareness of the importance of sanitation, the basic need to keep consumers safe remains the same, according to Dr. Valentina Trinetta, associate professor at the Food Science Institute, Animal Science and Industry Department at Kansas State University, in Manhattan, Kan., but how that’s accomplished won’t stay the same. “In cleaning and sanitation, there is a huge interest towards artificial intelligence (AI) and machine learning (ML),” Trinetta says. “We are looking more towards automatic systems that cut the time of cleaning, new hygiene design that makes equipment and tools easier to clean,

“Developing and implementing a well-documented and executable cleaning and sanitation program is the first step to achieving a safe food retail environment and building a strong food safety culture.” —Ashley Eisenbeiser, FMI

COVID-19 has undermined consumers’ sense of normalcy and forced them to make determinations about how they will ensure their own well-being. In an Ipsos study published in early February, as the Omicron variant was in sharp decline in the United States, only 21% of people polled felt that social settings should open up with no restrictions, while 29% wanted to move in that direction with some precautions, 23% wanted to mostly keep requirements in place, and 21% actually wanted to increase mask mandates and vaccine requirements. Even in a March 1 Ipsos report, 51% of people supported their state or local government requiring masks in public places, which includes supermarkets; this percentage was down significantly but not dramatically from the 63% reported for the previous six months. The numbers suggest that consumers are making decisions about their health in public places and erring on the side of caution. Even as the virus becomes less of an issue, the tacit agreement between shoppers and supermarket operators or anyone selling food remains at a somewhat elevated level of consciousness. “Grocery shoppers deserve and expect a safe shopping experience,” says Ashley Eisenbeiser, senior director, food and product safety programs at Arlington, Va.-based FMI — The Food Industry Association. “Recent consumer research conducted by FMI and published in the ‘FMI U.S. Grocery Shopper Trends 2021’ report shows 72% of customers expect a store to be clean and neat. Additionally, 91% of shoppers trust their grocery store to ensure that the food they purchase is safe.”

systems that measure food residue and microbial debris in pieces of equipment, and then optimize the cleaning process. A lot of food scientists are working with computer science experts and engineers to try achieving these objectives.” So, in the future, she says, supermarket operators may find themselves training employees, from new hires up through retail executives, on proper hygiene protocols and sanitation procedures, using augmented reality or virtual reality to improve overall food safety knowledge. They will use predictive modeling in food preparation areas by mapping out high-risk production environments, informing managers to take corrective action and preventing re-contamination, as well as working with public-health agencies, academic institutions and technology firms to leverage AI and ML data that assists in the identification of contamination sources during foodborne disease outbreak investigations. It’s a brave new world. PROGRESSIVE GROCER March 2022

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EDITORS’ PICKS

Food, Beverage & Nonfood Products

Gummies for Diabetics

Now available at retail, Teelah Corp.’s YumVs Zero Diabetic Multivitamin features a special formulation of vitamins and minerals typically deficient in people with diabetes. The first-ever daily dietary gummy supplement specially formulated for diabetic adults contains 14 essential vitamins and minerals vital to their optimal health, including vitamins C, A, D3, E and B12, the last of which can improve heart health; chromium, which may improve glucose levels and A1C percentages; thiamine to aid in insulin production; folate; and magnesium to help maintain blood sugar levels, with no sugars or sugar alcohols, no artificial flavors, no gluten, no GMOs and zero net carbs. Suitable for those who are prediabetic or just monitoring their sugar intake, the gluten- and gelatin-free, keto-friendly chewable gummies come in a natural raspberry flavor. A 60-count bottle retails for a suggested $14.99. https://yumvs.com/; http://www.teelah.com/

The Future of Nondairy Milk

For those who like the idea of plant-based beverages but are unwilling to give up the taste and texture of traditional dairy, there’s now another option: Silk, the No. 1 plantbased beverage brand, has now come out with Silk Nextmilk, an offering specially formulated by Danone North America’s research and innovation team to meet dairy lovers’ taste expectations through a blend of plants designed to deliver on key attributes of dairy milk, like taste and texture. An excellent source of six key nutrients found in dairy — calcium; vitamins D, A and B12; riboflavin; and phosphorus — Silk Nextmilk also provides 4 grams (8% daily value) of plant-based protein per serving. Further, the lactose-free, Non-GMO Project Verified beverage contains 30% fewer calories than dairy milk. The product, which can be enjoyed on its own by the glassful, paired with favorite foods or used as an ingredient in popular recipes, is available in Whole Fat and Reduced Fat varieties in multiserve 59-ounce cartons retailing for a suggested $4.99 each. https://silk.com/; https://www.danonenorthamerica.com/

Comfort Food Mashup

A first-of-its-kind offering from Perdue combines two of America’s most popular comfort foods — chicken nuggets and tater tots — in one bite-sized offering: Perdue Chicken Plus Chicken Tots. Featuring premium all-white-meat chicken, seasonings, and a crispy crust of panko breading to add crunch, Chicken Tots are suitable as a side dish, a convenient snack or even as a meal. What’s more, with 9 grams of protein and a quarter-cup of veggies — a blend of cauliflower, chickpeas, cabbage and potato — “hidden” in each serving, they provide a nutritious meal solution for today’s flexitarian families. The suggested retail price is $6.99 per 22-ounce bag. https://www.perdue.com/products/perdue-chicken-plus-chicken-tots/80750/

Sustainable Rice

From global rice seed company RiceTec, Whitaker Grain and Agreeta Farmer Network (AFN) comes SmartRice, a product grown using more sustainable methods to reduce the use of agricultural resources and provide more rice to meet the growing worldwide appetite, as well as answering consumer demand for environmentally friendly foods. Developed after more than six years of research that enables the production of more rice using less land and water and fewer other resources, Smart -Rice is grown and distributed by Whitaker Grain, a family-owned fifth-generation farm in Arkansas. SmartRice has the smallest carbon footprint of all commercially grown rice, because of a higher photosynthetic rate and naturally occurring pest and disease tolerance, which ultimately requires less water and nitrogen, and fewer pesticides. Based on the average farm and state data, SmartRice produces 50% fewer carbon emissions while using 20% less land and 50% less water than traditionally grown rice. A quarter-cup serving size of the long-grain, naturally gluten-free rice contains 160 calories; 0 grams fat, cholesterol and sodium; 35 grams of carbohydrates; and 3 grams of protein. A 32-ounce bag retails for $14.52 on Amazon. https://www.smartrice.com/

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Easier Asian Meal Prep

The first company to introduce all-natural, vegan, sugar-free, ready-to-use Asian cooking sauces, Wok of Life offers six authentic flavors that simplify meal preparation and intensify flavor: Szechuan, Sesame Garlic, Sweet and Sour, Cheng Pi Tangerine, Kung Pao, and Mandarin Teriyaki. The sauces are also carb-careful; gluten-, dairy- and MSG-free; and keto- and diabetes-friendly, as they contain fewer calories and less salt than other brands, with no added preservatives. Wok of Life sauces are sweetened with allulose and Blossom, the latter a proprietary blend of monk fruit extract and erythritol that imparts a flavorful kick without the sugar, calories or carbs that can raise blood sugar. As part of the Halo Healthy Tribes alliance of premium all-natural and zero-added-sugar food and beverage products, Wok of Life is committed to the transparency of ingredients and allergens. The Halo across the top of the bottle is a quick reference to the product’s attributes, while the back calls out all allergens, not just those required by law. A 14-ounce bottle of any of the sauces retails for a suggested $7.99. https://woksauce.com/; https://halohealthytribes.com/

Snacking in Layers

Lay’s, one of the marquee brands of PepsiCo’s Frito-Lay division, has now come out with an innovative snacking experience, Lay’s Layers. The bite-sized multidimensional potato bites come in two familiar flavors: Three Cheese, a tangy blend of cheddar, parmesan and gouda, and Sour Cream & Onion, a savory combination of onion and sour cream. The snack retails for a suggested $4.09 per 4.75-ounce bag, $1.99 per 1.75-ounce bag and $1 for two 0.5-ounce bags. https://www.lays.com/; http://www.fritolay.com/; https://www.pepsico.com/

Produce in a Bar

Field + Farmer has expanded its offerings beyond dressings, dips and juices to also include produce-forward refrigerated snack bars. The clean-label, low-sugar, gluten-free, Non-GMO Project Verified plantbased bars feature fresh fruit or vegetables as the first ingredient in five flavors: Apple Cinnamon, Cocoa Brownie, Carrot Cake, Peanut Butter & Jelly, and Peanut Butter Cookie, each containing 6 grams of plant-based protein, but no preservatives, vegetable powders or chemicals. A 1.76-ounce bar in any variety retails for a suggested $1.99. The launch of this latest product line completes the integration of Phyter Bars, which was acquired late last year by The Fresh Factory B.C. Ltd., parent company of Field + Farmer. https://fieldandfarmer.co/; https://thefreshfactory.co/

Salmon Made From Plants

Gathered Foods, maker of Good Catch plant-based seafood, has now launched the brand’s first-to-market U.S.-made Plant-Based Salmon Burgers. As 30% of seafood consumers purchase salmon monthly, Good Catch aimed to create an innovative alternative to the most consumed fish in the United States. Plant-Based Salmon Burgers re-create the delicate texture and mild-yet-rich flavor of salmon, adding a juicy touch of citrus to round out the product’s flavor profile. With 16 grams of plant protein per serving, the easy-to-prepare item has no unwanted fishy smell once cooked, and can be used in many recipes. The offering will be available through a recent partnership with United Natural Foods Inc. (UNFI), North America’s largest natural and organic grocery wholesale distributor, which will help Good Catch reach a wide range of retailers and consumers. Good Catch currently offers a portfolio of 10 product offerings, including shelf-stable Plant-Based Tuna and frozen lines of appetizers and entrées. All of its protein-rich, dairy-free items are made with the company’s proprietary six-legume blend — consisting of peas, chickpeas, lentils, soy, fava beans and navy beans — which mimics the flakiness of seafood without GMOs, mercury or environmental toxins. The suggested retail price for Good Catch Salmon Burgers is $5.99 per 8-ounce box of two burgers. https://www.gatheredfoods.com/; https://goodcatchfoods.com/ PROGRESSIVE GROCER March 2022

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AHEAD OF WHAT’S NEXT By Bridget Goldschmidt

Fantastic Voyage ONE PL ANT-BASED COMPANY IS WORKING TO ENSURE A HE ALTHIER, MORE SUSTAINABLE FUTURE BY HARNESSING ART, SCIENCE AND A DEEP SENSE OF PURPOSE. e all know that plantbased foods are gaining in popularity for both health and environmental reasons, but how can a company differentiate itself in a sea of competitors citing similar benefits? Oakland, Calif.-based Voyage Foods has done so by using an innovative blend of art and science it’s dubbed “food architecture” — a combination of analytical chemistry, process chemistry, flavor science and data analytics — to transform natural upcycled ingredients such as seeds and grains into nutritionally identical alternatives to various products. The company has developed three patented products — all-natural, allergen- and nut-free peanut butter (launching this month); cocoa-free chocolate; and bean-free coffee — with more to come, as evidenced by Voyage’s $5.8 million in venture capital backing. When it began, the company “was looking at the food tech sector as a whole and being confused as to why the innovation was in taking all animal food products and making them vegan,” CEO Adam Maxwell tells Progressive Grocer. “Those companies are doing a fantastic job, but there are countless other commodities that either have huge environmental, health or long-term sustainability issues. We aim to tackle those problems cross-commodity and make food that is available for everyone forever at a cost affordable today.”

Taking on the World

All of the development and sourcing efforts undertaken by Voyage Foods are in support of a brighter future, not only for the planet and those with peanut allergies, but also for a growing industry.

Among the specific issues that Voyage aims to address are deforestation related to cacao and coffee bean farming; water pollution caused by wet-process coffee manufacturing; the impending extinction of wild coffee beans by 2080 if production isn’t reduced by 50% before 2050; unethical labor practices on cacao farms in West Africa, including, slavery, child labor and inhumane working conditions; and peanut allergies, which are responsible for 62% of allergy-related deaths in the United States. To do so, the clean-label company is literally inventing new technology to re-create any nonfibrous food material and leveraging cost-effective ingredients to ensure that its products are competitively priced against their counterparts. When asked about specific ingredients in Voyage’s products, how90

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Voyage Foods uses an innovative blend of art and science to create nutritionally identical, sustainable alternatives to various products, including peanut butter.

ever, Maxwell responds: “There are multiple angles we look at, and some of that is very much a trade secret. In broad strokes: product performance, availability and sustainability. We look at ingredients which have somewhat similar molecular precursors and could potentially be transformed to have the same organoleptic properties. We are making foods to be available for all forever, so we also have to index on a large enough supply to still be able to source at scale. Thirdly, we look at the environmental footprint of those ingredients.”All of the development and sourcing efforts undertaken by Voyage Foods are in support of a brighter future, not only for the planet and those with peanut allergies, but also for a growing industry. “Plant-based foods will definitely continue to rise in popularity and acceptance,” asserts Maxwell. “There is a clear consumer want for more of these types of foods. Also, as the plant-based industry continues to mature, the prices will keep coming down closer to parity of the products they are emulating, which will only increase their ubiquity.”

Bridget Goldschmidt Managing Editor bgoldschmidt@ensemleiq.com


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