PG_0323

Benefit from the halo effect of natural and organic products GET READY FOR GRILLING SEASON Ideas, promos and opportunities abound COST-EFFECTIVE RENOVATIONS Experts tell how to navigate rising prices THE BEST WAY TO PAY Which systems are best for your stores?

Digital

Differentiators How e-grocers are setting the pace of change in grocery

March 2023

Volume 102, Number 3 www.progressivegrocer.com

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Contents 03.23

Volume 102 Issue 3

Weee! says that it has the recipe for grocery success in an increasingly multicultural world: a diverse assortment and lots of social media.

Features

21 SPECIAL REPORT

The Halo Effect

16

Even during times of inflation, grocers should think about how they can further implement natural and organic products into their merchandising plans.

COVER STORY

Digital Differentiators

How pure-play online grocers Misfits Market and Weee! are setting the pace of change in grocery.

Departments 8 EDITOR’S NOTE

Don’t Be Afraid to Be Amazing

21 12 NIELSEN’S SHELF STOPPERS

14 ALL’S WELLNESS

Pet Care

Update on Food Allergen Labeling Requirements

13 MINTEL GLOBAL NEW PRODUCTS

Energy Drinks

57 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS

10 IN-STORE EVENTS CALENDAR

May 2023

4 progressivegrocer.com

58 AHEAD OF WHAT’S NEXT

Seafood Rules the Road

Authentic.

Delightful.

Chocolatey.

Authenticity meets chocolate.

Treat your shoppers to GOYA® Chocolate Maria Cookies!

The craveable cookies Hispanics love, now made with real cocoa.

Contact your GOYA representative or email salesinfo@goya.com | GoyaTrade.com

©2023 Goya Foods, Inc.

Learn More!

Contents 03.23

Volume 102 Issue 3

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

26 FRESH FOOD

Grate Expectations

www.ensembleiq.com

26

BRAND MANAGEMENT BRAND DIRECTOR John Schrei 248-613-8672 jschrei@ensembleiq.com

As grilling season rolls out, so do new ideas, promotions and opportunities.

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

UNDERWRITTEN BY

SENIOR DIGITAL & TECHNOLOGY EDITOR Marian Zboraj mzboraj@ensembleiq.com

MANAGING EDITOR Bridget Goldschmidt bgoldschmidt@ensembleiq.com

SENIOR EDITOR Lynn Petrak lpetrak@ensembleiq.com MULTIMEDIA EDITOR Emily Crowe ecrowe@ensembleiq.com CONTRIBUTING EDITORS Debby Garbato, Jenny McTaggart and Barbara Sax ADVERTISING SALES & BUSINESS ASSOCIATE PUBLISHER, REGIONAL SALES MANAGER (INTERNATIONAL, SOUTHWEST, MI) Tammy Rokowski 248-514-9500 trokowski@ensembleiq.com

32 CENTER STORE

What’s Cool in Snacking

REGIONAL SALE MANGER Theresa Kossack (MIDWEST, GA, FL) 214-226-6468 tkossack@ensembleiq.com

The frozen section offers a plethora of noshing options.

BUSINESS DEVELOPMENT MANAGER Lou Meszoros 203-610-2807 lmeszoros@ensembleiq.com ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com

35 CENTER STORE

Some Things Brewing Functionality, traceability and sustainability are infusing current coffee and tea offerings.

32

CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com AUDIENCE LIST RENTAL MeritDirect Marie Briganti 914-309-3378 SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES Toll Free: 1-877-687-7321 Fax: 1-888-520-3608 contact@progressivegrocer.com

40 EQUIPMENT & DESIGN

Spotless Reputation

PROJECT MANAGEMENT/PRODUCTION/ART SENIOR CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com

Keeping stores clean isn’t only an essential hygienic practice, but also key to attracting and retaining customers.

ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com

40

ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com MARKETING MANAGER Rebecca Welsby rwelsby@ensembleiq.com SUBSCRIPTION SERVICES LIST RENTAL mbriganti@anteriad.com SUBSCRIPTION QUESTIONS contact@progressivegrocer.com

45 OPERATIONS

Retailers’ Eco-Friendly Efforts Gain Ground

Some of the biggest players in grocery have upped their waste reduction initiatives.

48

48 EQUIPMENT & DESIGN

The ‘Look’ for Less

Facing soaring labor and materials prices, experts discuss how to reduce store renovation costs.

54 TECHNOLOGY

The Future of Payments

54 6 progressivegrocer.com

With convenient payment options proliferating, which systems should grocers adopt?

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF PEOPLE OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, CONTENT & COMMUNICATIONS Joe Territo EXECUTIVE VICE PRESIDENT, OPERATIONS Derek Estey

PROGRESSIVE GROCER (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Single copy price $14, except selected special issues. Foreign single copy price $16, except selected special issues. Subscription: $125 a year; $230 for a two year supscription; Canada/Mexico $150 for a one year supscription; $270 for a two year supscription (Canada Post Publications Mail Agreement No. 40031729. Foreign $170 a one year supscrption; $325 for a two year supscription (call for air mail rates). Digital Subscription: $87 one year supscription; $161 two year supscription. Periodicals postage paid at Chicago, IL 60631 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to brand, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Copyright ©2023 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.

T H E

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EDITOR’S NOTE

By Gina Acosta

Don’t Be Afraid to Be Amazing GROCERS DESERVE MORE APPRECIATION AND RECOGNITION FOR THEIR WORK. n my desk, I have a little wooden sign with a gold frame around it. The sign says, “Don’t be afraid to be amazing.”

This is my guiding force every day as I do my very best to shine a light on the wonderful industry we call grocery.

One of our favorite things to do at Progressive Grocer is to shine that light on the industry through our awards programs, many of which began accepting nominations this past January. Our Top Women in Grocery, GenNext and Impact Awards are the leading and most prestigious honors in the industry for women, emerging grocery leaders under the age of 40, and those companies leading the way on sustainability topics such as food waste, diversity and recycling. We will celebrate all of these honorees during our special Grocery Industry Week of events in November in Orlando, Fla.

Hometown Heroes

We also have our Editors’ Picks contest, Category Captains and Outstanding Independents, the last of which we just celebrated with a beautiful and emotional reception at The NGA Show in Las Vegas. We honored 25 indie grocers who all have heartwarming stories to tell about how they’re truly making a difference in their communities. Independent operators such as Isom IGA, Redner’s Markets, Rademacher’s and John’s Markets were honored, and it’s a great privilege for us at PG to stand among these heroes, knowing the work they do every day to make their customers’ lives just a little more special.

The owners of Troy, Kan.-based John’s Market were interviewed by their local newspaper, the St. Joseph News-Press, a few days after the reception. “Personally, I was in shock,” John Simpson, co-owner of John’s Market, told the newspaper. “I didn’t dream that our small store would even have a chance in a nationwide contest like this, but we were overjoyed.” I congratulated co-owners John and Laurie Simpson at the reception, but there’s something that I should have told them. I should have said, “Thank you for not being afraid to be amazing.”

John and Laurie’s store is the textbook definition of a hometown, family-run rural grocery store. Troy is located about 70 miles north of Kansas City and has a population of approximately 7,500, with a median household income of $54,792. Without John’s Market, a lot of people in this community wouldn’t have access to quality groceries or quality customer service.

One of our favorite things to do at Progressive Grocer is to shine a light on the industry through our awards programs.

8 progressivegrocer.com

John’s Market is famous for helping neighbors in need. From offering special hours after a game to provide food to athletes, to delivering necessities to a customer whose house burned down on Thanksgiving, the retailer serves its community without hesitation.

Recently, one customer received a breast cancer diagnosis. Her family tradition for Thanksgiving was making oyster salad, but she was too sick to travel, so John’s Market brought the oysters to her. During the pandemic, John’s Market was the community’s “security blanket.” The retailer adjusted its business model and began offering contactless delivery, accepting phone orders and providing special shopping times for the most vulnerable, as well as adding online pizza ordering, pre-made sub sandwiches and much more.

John’s Market is a great reminder that grocery stores and their workers are a lifeline to communities across this great country. They show up every day to serve everyone, no matter the circumstances, whether they’ve spent 40 days or 40 years on the job, whether they’re a large chain or a one-store operator like John’s Market. Grocery workers are, more often than not, never afraid to be amazing, and they deserve a lot more recognition than they receive. So send in those nominations for Top Women in Grocery, GenNext, Impact Awards and our other programs.

After an extraordinarily challenging few years, this industry deserves more recognition for its good deeds.

Gina Acosta Editor-In-Chief gacosta@ensembleiq.com

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IN-STORE EVENTS

Calendar S

05.23

M

Asian American and Pacific Islander Heritage Month Celiac Awareness Month Haitian Heritage Month

T

W

Global Health and Fitness Month International Mediterranean Diet Month Jewish American Heritage Month National Barbecue Month

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Loyalty Day. Use the occasion to tout the perks offered by your loyalty program.

National Packaging Design Day. Turn the spotlight on the most innovative examples of this throughout your store, with the aim of driving trial of the products within.

National Brioche Day

World Baking Day. This is the perfect time to cross-promote the ingredients necessary for shoppers to get in touch with their inner pastry chef.

Indianapolis 500.

Start shoppers’ engines with a sale on automotive supplies.

Iris Day. Place these vivid blooms front and center in your floral department.

National Nylon Stocking Day. They come in far more colors than taupe.

National Craft Distillery Day. Raise a glass to your local brewers with an evening in-store tasting party.

Memorial Day. This solemn occasion enables you and your associates to honor those who died in defense of this country.

10 progressivegrocer.com

Baby Day. Showcase your affordably priced offerings for infants, from formula and food to diapers and lotions.

Hurray for Buttons Day. Also give a cheer for the other sewing supplies in your notions set.

National Barbecue Day. Make sure that your store(s) stock everything shoppers need to fire up the grill.

National Library Workers Day. Recognize those who promote literacy with a generous donation to keep free reading material available.

National Creativity Day. Whether it’s an unconventional approach to a work problem or a drawing done on a break, your team should feel able to exercise their imaginations in positive ways.

National Raspberry Popover Day. Run a special on a box of these classic treats in the bakery department.

National Night Shift Workers Day. Have plenty of grab-and-go options available for these hardworking folks.

National Employee Health and Fitness Day. Enable your associates to opt into a program to help them exercise more and eat better.

National Brothers Day. Those who shop with their male sibling should get a discount, especially if they do it without fighting.

National Smile Day. As they say, it costs nothing.

Anti-Bullying Day. Cinco de Mayo Provide a safe space for customers and Nail Day. associates alike.

Encourage shoppers to keep their talons strong and healthy with products in the HBW section.

Hostess CupCake Day. Build an eyecatching display for this favorite sweet snack of many.

Global Accessibility Awareness Day. Check that your store(s) are optimally able to welcome everyone, regardless of disability.

Chardonnay Day. Suggest some appropriate pairings for a wine-andcheese party.

Shades Day. Those searching for funky yet effective eye protection should head for your sunglasses selection.

Plant Something Day. Your gardening section can help customers do just that.

National Cherry Dessert Day. Ask shoppers online for their most creative use of this beloved tree fruit.

Kentucky Derby.

And they’re off with some of your fun entertainment ideas for a watch party in honor of this iconic race.

National Crouton Day. What’s a salad without them?

International Heritage Breeds Day. Satisfy customers’ desire for traceability by calling out those products sourced from farms raising these unique animals.

National Sunscreen Day. It should be a must in every skin care routine.

FRONT END

Shelf Stoppers

Pet Care

Basket Facts

Total Department Performance Pet Care

Latest 52 Wks W/E 02/11/23

Latest 52 Wks YA W/E 02/12/22

Latest 52 Wks YA W/E 02/13/21

$29,518,384,087

$25,702,162,801

$23,823,022,996

Top Pet Care Categories by Dollar Sales Dog Food

Cat Food

Cat Litter

Bird Food

Pet Toys

$16,000,000,000

How much is the average American household spending per trip on various pet care items versus the year-ago period?

14,000,000,000 12,000,000,000 10,000,000,000

$21.18

8,000,000,000

on all pet care items, up 9.7% compared with a year ago

6,000,000,000 4,000,000,000 2,000,000,000 0

Latest 52 Wks W/E 02/11/23

Latest 52 Wks YA W/E 02/12/22

Latest 52 Wks YA W/E 02/13/21

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 Feb. 11, 2023

$15.72

on bird food, up 18.1% compared with a year ago

Cross-Merch Candidates Beer, Flavored Malt Beverages and Cider

Household Maintenance

GI Care

Vegetables

Packaged Coffee

Nuts and Seeds

Olives, Capers, and Pickled and Marinated Vegetables

Creams and Nondairy Creamers

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

Millennials

Gen Xers

Boomers

The Greatest Generation

$16.52

$16.74

$16.58

$16.22

Source: Nielsen Homescan, Total U.S., 52 weeks ending Jan. 28, 2023

12 progressivegrocer.com

$15.65

on cat food, up 14.5% compared with a year ago

$19.33

on dog food, up 12.3% compared with a year ago Source: Nielsen Homescan, Total U.S., 52 weeks ending Jan. 28, 2023

MINTEL CATEGORY INSIGHTS

Global New Products Database

Energy Drinks Market Overview

Energy drinks are one of the fastestgrowing segments of the total nonalcoholic beverage industry, thanks to a combination of factors: a dedicated base of high-frequency users, retention of high brand engagement among category leaders, better-for-you (BFY) innovation from newer brands, and consumers’ everpresent need for energy.

The pandemic only increased consumers’ energy needs, resulting in strong market growth and spurring changes in consumers’ purchase behaviors.

Consumers shifted their dollar spend from c-stores to conventional food and drink retailers, which in turn resulted in increased multipack purchases, a trend that ultimately benefits the market.

Key Issues

Consumers turn to energy drinks to fulfill key need states such as while working/studying and during long drives; this strong association is a primary driver of the energy drink market’s period of prolonged growth.

A new crop of brands has successfully garnered attention among highfrequency energy drink consumers, fitness enthusiasts and even some noncategory consumers.

Appealing to non-category consumers is a challenging and narrow path; 41% of noncategory consumers say that nothing would motivate them to try an energy drink. However, 26% of consumers say that they would try an energy drink that offers functional benefits in addition to energy.

Total energy drink sales reached an estimated $16 billion in 2021, up 48% from 2016.

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

What Consumers Want, and Why Newer brands that deliver on flavor, provide consumers a noticeable energy boost and feature BFY claims will rise in market prominence.

For emerging brands, a key to success in breaking into the energy drink market is to think beyond energy. Claim differentiation is necessary for newer energy drinks to stand out in the market and a method for potentially bringing new consumers into the energy drink market.

Innovation featuring highly functional BFY energizing drinks that allow consumers to accomplish their healthand-wellness goals should be marketed not as traditional energy drinks, but as holistic health beverages that also provide an energy boost.

PROGRESSIVE GROCER March 2023

13

ALL’S WELLNESS

By Barbara Ruhs

Update on Food Allergen Labeling Requirements RE TAILERS NEED TO STAY ABRE AST OF THE L ATEST DE VELOPMENTS TO KEEP CONSUMERS HE ALTHY. ndeclared allergens on food labels are the leading causes of food recalls in the United States. The recent year-end 2022 updates to the Food Code and federal food-labeling regulations make it a great time for retailers to train employees about the top nine food allergens.

2022 Food Code Adds Sesame as Ninth Allergen

Every four years, the Food and Drug Administration (FDA) updates the Food Code, and the latest 2022 edition last December reflects new legislation that took effect Jan. 1, 2023: The Food Allergy Safety, Treatment, Education and Research Act of 2021 — also referred to as the FASTER act – added sesame to the list of the top major food allergens.

The Food Code is a tool intended to ensure that food sold at retail is safe for consumers. While foodborne illness was the initial focus for many years, newer versions of the code also include food allergies that pose a significant risk to more than 50 million Americans. According to the Food Code, retail foodservice managers must know the nine major food allergens, must understand food allergen ingredient identities on food labels and must be aware of the serious health risks of food allergies.

The Nine Major Food Allergens The FDA identifies “major food allergens” as one of the following foods from one of the following food groups, or an ingredient that contains protein derived from one of the following:

Foods

MILK

WHEAT

EGGS

SOYBEANS

PEANUTS

SESAME (as of Jan. 1, 2023)

Food Groups

FISH (such as bass, flounder, cod)

Food Allergen Labeling for Unpackaged Foods

Informing customers in writing of the nine major food allergens as ingredients in unpackaged food is the biggest change that retailers need to know about when it comes to the latest 2022 Food Code and federal food-labeling requirements. Previous versions of the Food Code and FDA labeling regulations required all packaged foods, including foods packaged at retail, to identify major food allergens on labels. The new requirements extend this requirement to any bulk food available for consumer self-dispensing, such as prepared food sections, in-store bakeries with self-service bins, and food-sampling stations.

The Food Allergen Labeling and Consumer Protection Act of 2004 (FALCPA) requires food allergens to be labeled in plain English in the ingredient list, or in a “contains” statement printed immediately after or adjacent to the ingredient list. In November 2022, the FDA released two guidance documents that answer food industry members’ questions about labeling requirements. They include more in-depth clarification on the labeling of sesame, milk, eggs, tree nuts, fish and shellfish, as well as the labeling of dietary supplements. They also discuss exclusions and exceptions, such as those for soy oil and soy lecithin, as well as for “raw agricultural commodities” such as whole fruits and vegetables that may be sold in the fresh produce department. These documents include helpful images and examples of labeling requirements as well.

14 progressivegrocer.com

CRUSTACEAN SHELLFISH (such as crab, lobster, shrimp)

TREE NUTS (such as almonds, walnuts, pecans) Unlike food-manufacturing facilities that may have separate areas or production timeframes that can eliminate and drastically reduce exposure to food allergens and cross-contamination, the retail food environment does not have many of the same luxuries. Confined space featuring food prep for multiple departments makes the potential for cross-contamination in retail supermarket food prep areas extremely high.

There’s a right way to do pork.

We call it the Prairie Fresh Way. At Prairie Fresh®, we own the entire production process – from farms to processing plants to store distribution.

That’s our connected food system. And that’s the Prairie Fresh Way. It’s our way of delivering outstanding pork to your shelves that will keep your shoppers coming back for more. Isn’t it time to imagine all the possibilities when you partner with us?

Imagine the

Prairie Fresh USA Prime® is the best of our best.

Our industry-leading proprietary technology helps to select premium cuts based on superior marbling, color and tenderness. So you can deliver a higher level of consistency and quality to your shoppers.

Imagine the

Provide your customers with pork that’s already loaded with flavor. Prairie Fresh® Signature cuts are perfectly seasoned and case-ready for your shelves and your customers’ plates.

Your partner in the Prairie Fresh® Way.

With our unmatched industry knowledge, marketing support and data-driven consumer insights, we’ll keep your shelves stocked and your customers happy.

Because at the end of the day, we’re committed to producing the very best we have to offer so you can better serve your shoppers.

Join us on the Prairie Fresh Way and imagine all the porkabilities™.

prairiefreshway.com © Seaboard Foods 2023

Retail Allergen Resources

is now required as part of FALCPA and Although some shoppers To help retailers tackle the complexities of managing helps customers avoid health risks and with food allergies report food allergen labeling and to help establish good retail retailers avoid unnecessary liability. that they avoid entire practices (GRPs), FMI — The Food Industry AssociHelping shoppers with food allergy departments that may ation released a Retail Allergen Resource Document concerns is smart for business. They contain allergens, retailers in July 2022. It’s an invaluable resource to address respend more overall on groceries and have an opportunity to gain cent regulatory updates, providing concrete steps that represent $19 billion in annual sales, loyal customers by helping can get retailers up to speed with regard to managing growing at a rate of 4%, according them find safe products. new requirements. The FMI resource is set up to help to FARE (Food Allergy Resource & retailers in four distinct areas to manage major food Education). They’re savvy shoppers allergens: Customer Notification and Engagement, Training Retail Food who read food labels and take advantage of food Employees, Labeling Guidance to Comply with Regulations, and Retail allergy tools such as apps, online information, and Operations to Minimize Unintended Allergens. in-store dietitian services if they’re available. Posting Another helpful resource is a video, “FASTER Act Overview: FDA’s signage about the potential of major allergens and Perspective.” The 24-minute video, which is publicly available on Yousharing information on safety protocols in place to limit Tube, includes basic information and helps answer frequently asked cross-contamination go a long way in serving happy, questions from the food industry and other stakeholders. healthy long-term customers.

New Areas in Store for Allergen Awareness

Although some shoppers with food allergies report that they avoid entire departments that may contain allergens, retailers have an opportunity to gain loyal customers by helping them find safe products. Clearly identifying allergens and cross-contaminants (of other allergens) for self-serve or unpackaged items sold in the deli/prepared food sections and bakery

Barbara Ruhs, MS, RDN, is the owner of MarketRD.com, a marketing agency that provides nutrition and health strategy to food brands. A former retail dietitian, she launched and directed an annual supermarket RD symposium for eight years.

Connect @BarbRuhsRD on Instagram and LinkedIn.

ACTIONABLE INSIGHTS & CONNECTIONS POWERING BUSINESS GROWTH EnsembleIQ is the premier resource of actionable insights and connections powering business growth throughout the path to purchase. We help retail, technology, consumer goods, healthcare and hospitality professionals make informed decisions and gain a competitive advantage.

EnsembleIQ delivers the most trusted business intelligence from leading industry experts, creative marketing solutions and impactful event experiences that connect best-in-class suppliers and service providers with our vibrant business-building communities.

To learn more about our brands, visit ensembleiq.com

PROGRESSIVE GROCER March 2023

15

COVER STORY

E-Grocer Report

How pure-play online grocers Misfits Market and Weee! are setting the pace of change in grocery.

By Gina Acosta 16 progressivegrocer.com

hat do price-sensitive, sustainability-minded, mobile-first grocery shoppers want?

That’s the quandary on the minds of many North American grocery retailers today, no matter how large or small their footprint.

But it’s pure-play online grocers that are eagerly leveraging the opportunity to answer this question by redefining value, curating their offerings to address more need states, prioritizing sustainability in all of its forms and investing in diverse fulfillment models to win on convenience.

“The pandemic highlighted our broken food system and lack of innovation in grocery,” says Kai Selterman, chief strategy officer of Philadelphia-based Misfits Market, an e-grocer that delivers produce, meat, seafood, plant-based proteins, dairy, bakery, wine and other grocery items to nearly every ZIP code in 48 states.

Founded only four years ago, Misfits Market has been busy luring shoppers and more than $525 million in venture cash to its innovative business model focused on three pillars of “ability”: affordability, accessibility and sustainability.

“While COVID pulled forward the grocery industry, it also highlighted the challenges many incumbents faced. They tried to adapt quickly by partnering on delivery logistics, building apps and more, but the reality is it was analogous to putting lipstick on a pig,” Selterman says.

“These large grocers are not able to adapt quickly to shopping trends that Americans are looking to address, like reducing food waste and being more sustainable.

We are the only grocer that leverages sustainability to create affordability. By virtue of our opportunistic buying strategy, we can deliver high-quality products at a great value while fighting food waste, and we deliver it all in a delightful customer experience that’s becoming increasingly personalized.”

Misfits Market is one of several e-grocers showing everyone what grocery shopping could (should?) look like in the future, and successfully persuading shoppers that buying their groceries online is the way to go in any economic environment.

“While COVID pulled forward the grocery industry, it also highlighted the challenges many incumbents faced. They tried to adapt quickly by partnering on delivery logistics, building apps and more, but the reality is it was analogous to putting lipstick on a pig. These large grocers are not able to adapt quickly to shopping trends that Americans are looking to address, like reducing food waste and being more sustainable. We are the only grocer that leverages sustainability to create affordability.

By virtue of our opportunistic buying strategy, we can deliver highquality products at a great value while fighting food waste, and we deliver it all in a delightful customer experience that’s becoming increasingly personalized.”

—Kai Selterman, Misfits Market

They Want Value

Last month, NielsenIQ gave a presentation at The NGA Show detailing how grocery e-commerce sales have slowed since the peak of the pandemic, but are still continuing to grow. According to James Hunt, SVP of North American retail for Chicago-based NielsenIQ, total grocery e-commerce sales increased 11.2% in 2022, with food accounting for 15% of that increase. Broken down by category, health and beauty care e-comm sales were up 10%, household care was up 20%, pet care was up 19% and baby care was up 16% in 2022. Overall e-grocery sales are expected to increase to a 13.6% share of the market by 2027, according to the 2023 Brick Meets Click/ Mercatus 5-Year Grocery Sales Forecast.

Not only are inflation-battered consumers still attracted to grocery e-commerce, they are also re-defining “value”; instead of seeing online grocery as a luxury service that costs more, they see it as a way to save money by avoiding trips to the store, eliminating impulse buys and sticking to their budgets.

In fact, a February online grocery report from retail media platform Chicory showed that e-commerce is now more important than ever to consumers. According to a survey conducted by New York-based

COVER STORY

E-Grocer Report “Combining forces will exponentially accelerate the ability to address a broken food system and create a formidable online grocer that’s focused on delivering value by fighting food waste,” Selterman observes. “The growth of Misfits Market over the past year proves that customers are looking for this new type of online grocery store, and customers are already changing the way they shop and eat.”

They Want Curation

Weee!, founded in 2015, sells more than 15,000 products, mostly ethnic foods. The company delivers fresh groceries to 18 states and shelf-stable products to 48 states.

Chicory of more than 1,000 U.S. consumers, 56% said that they order groceries online more frequently now than one year ago, and more than 72% had purchased groceries online in the past 90 days. Additionally, online grocery shoppers who spend the most on e-grocery orders — more than $201 — place orders the most frequently.

Misfits Market says that it’s delivering value to shoppers via its unique supply chain focused on reducing food waste.

‘Our North Star is ‘We save consumers money by saving food,’” Selterman notes. “From day one, we knew we needed to build a differentiated supply chain if we were going to be successful. We built Misfits Market because of the inefficiencies in the food supply chain that existed in produce, and we’ve expanded that into all of the inefficiencies that exist in every grocery category. We call it our food value supply chain. Some examples of how we do this is partnering with suppliers to bring upcycled products to market. We also work with vendors to rescue food that would otherwise end up in the landfill.”

According to Misfits Market, it rescued 55 million pounds of food in the past year alone; the company also gobbled up one of its competitors, another e-grocery startup called Imperfect Foods, in 2022.

“The strengths of the Imperfect Foods organization, from its in-house delivery fleet and robust private label program to its sustainability commitments and innovation, add immediate scale and depth to what we’re building at Misfits Market,” Selterman says. “Already, we’ve been able to leverage Imperfect’s delivery network to improve the customer experience across a large portion of our delivery area, with features such as free shipping, lower order minimums and a packaging return program.”

In fact, Misfits Market notes that the combined business is on track to cross $1 billion in sales and reach profitability by early 2024.

18 progressivegrocer.com

Another way that pure-play e-grocers are distinguishing themselves from competitors operating on- and offline is by curating assortments that speak to what shoppers want today: a fun, immersive and multicultural offering at a great price.

San Francisco-based startup Weee!, which has raised more than $800 million in VC funding, says that it has the recipe for grocery success in an increasingly multicultural world: a diverse assortment and lots of social media.

Weee!, founded in 2015, sells more than 15,000 products, mostly ethnic foods. The company delivers fresh groceries to 18 states and shelf-stable products to 48 states. From Korean beauty masks to frozen green onion pancakes to freshly cut stewing beef from Mexico, Weee! caters to U.S. consumers, some multicultural and some not, who got comfortable cooking chicken biryani and pork pozole during the pandemic. Many of these same consumers are also looking to save money "Our focus on meeting the needs of underserved ethnic communities has the potential to encompass many different categories," says Weee! CEO Larry Liu. "We encourage our merchants to be customer- and ethnicity-focused, rather than simply thinking about traditional industry categories."

on meals and still find that cooking at home is cheaper than eating out — despite elevated grocery prices — which is why at-home food spend remains strong, with sales up 8.7% in Q4, according to Chicago-based IRI. “Weee! is the largest Asian and Hispanic e-grocer in North America,” asserts Larry Liu, CEO of the company “However, there is still a huge opportunity for growth. Our focus on meeting the needs of underserved ethnic communities has the potential to encompass many different categories. We encourage our merchants to be customer- and ethnicity-focused, rather than simply thinking about traditional industry categories. We have the capability to handle and deliver all temperature regimes, and our assortment will expand to reflect the specific needs of each customer group.”

Since the pandemic, Weee! has expanded rapidly while staying focused on addressing the needs of underserved ethnic communities in the United States, according to Liu. That segment continues to grow, with the grocery market for ethnic customers expected to surpass $464 billion by 2030.

“That demand has fueled our growth while we’ve continued to expand our offerings to address additional ethnic communities and expand the scope of our offerings to other areas such as health and beauty,” Liu says. In 2021, Weee! acquired RICEPO, an online Asian food delivery company. Liu describes

Misfits Market started out as an "ugly produce" grocer but now delivers groceries across almost every category. According to Misfits Market, it rescued 55 million pounds of food in the past year alone; the company also gobbled up one of its competitors, another e-grocery startup called Imperfect Foods, in 2022.

the acquisition as “a major step forward as we look to solve the larger food-at-home problem.”

Last year, the company hired Jon M. Chu, director of “Crazy Rich Asians” and “In the Heights,” as its chief creative officer. With Chu in charge of creative strategy, the company aims to make shopping on Weee! as fun as watching a movie, with experiential elements such as videos explaining the history of an ingredient, and features allowing customers to post videos of recipes on the retailer’s app. Liu notes that the retailer thinks of itself as a grocery business that’s enabled by technology, rather than as a technology company that happens to sell groceries.

NO RESERVATIONS NEEDED

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COVER STORY

E-Grocer Report “It’s a very important distinction for us, given the highly differentiated nature of our assortment,” he points out. “That said, we continue to develop new ways to improve both the experience for customers and the efficiency of the operations. Product search and discovery, network planning, and warehouse picking are all areas of high focus for us this year.”

They Want Sustainability

Sustainability isn’t just a buzzword at every industry trade show — it’s also a business imperative for every retailer in 2023. More than 90% of shoppers today say that sustainability is important and 50% say that it’s very important, according to NielsenIQ data. But e-grocers are moving the needle on sustainability in more innovative ways by integrating principles related to food waste and DEI across every aspect of the business.

E-grocers such as Misfits Market and Weee! live and breathe sustainability through their business models and work cultures, moves that are deeply attractive to today’s shoppers.

“Weee! is an extremely diverse employer, and our employees come from a wide range of backgrounds and cultures, including many first-generation and second-generation immigrants,” Liu observes. “This is an asset in addressing the needs of our equally diverse customer base, but also means we must be constantly working to develop an inviting culture where all employees feel valued and are excited to be a part of the Weee! story.”

Misfits Market says that it plans to keep building a truly differentiated and unique food value supply chain by investing in building proprietary technology, from inventory management systems to warehouse management systems, as well as in customer experience and new co-branding opportunities and food categories, including upcycled food, as areas of major growth. Last year, the retailer launched a mobile app, customer self-service refunds, and a loyalty program, Misfits Perks.

In 2021, Misfits Market held a pop-up mobile tour throughout the United States to celebrate the summer season. The company traveled to 18 locations throughout the South and the East Coast, as well as Chicago, in an ecofriendly pop-up truck at beachfront and lakefront locations.

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“We make it easy for customers to embrace the future of food through discovering upcycled products and other sustainably sourced foods,” Selterman affirms. “We’ve become a destination for emerging, sustainable brands, and that kind of treasure-hunt experience is valuable for customers and suppliers alike. Our customers are excited to try new items and be introduced to alternative quality products that you can’t find everywhere.”

According to Selterman, as his company matures, it will continue to drive sustainable innovation.

“One key theme we are tackling immediately to begin the year is packaging,” he adds. “With the acquisition of Imperfect, we are the only grocer to take back packaging for reuse, and this is a program we plan to scale in 2023. And by leveraging our own delivery fleet, we can cut down on the number of ice packs and amount of packaging needed to deliver cold items.”

And They Want Convenience

Approximately 74% of respondents in the Chicory report said that convenience is a top driver of their decision to order groceries online, with price being the second most important factor. Chicory also found that food blogs and recipe sites, along with social media platforms, are the top sources of online meal inspiration. Both Misfits Market and Weee! excel at offering these immersive experiences to shoppers.

Among preferred retailers for e-commerce, most respondents’ top choice was Walmart. Amazon Fresh, ALDI, The Kroger Co. and Costco Wholesale rounded out the top five, respectively. Since “smaller players such as ALDI also fared well,” that suggests “a strong digital experience can go a long way with consumers,” the survey noted.

Selterman says that innovators such as Misfits Market company have a unique advantage as consumers get even more comfortable grocery shopping online and the e-commerce market matures.

“Luckily for us, we don’t have 10, 20 or 50 years of technical debt,” he contends.

“From day one, we built a differentiated supply chain with purpose-built custom technology. Our company was built around being a delivery-first organization with a core focus on logistics and operations. We believe we are setting the pace of change while the incumbents are playing catch-up.”

SPECIAL REPORT

Natural and Organic Products Natural Grocers (pictured here) is just one of the smaller, specialized retailers that sells 100% organic produce in its stores.

The Halo Effect E VEN DURING TIMES OF INFL ATION, GROCERS SHOULD THINK ABOUT HOW THE Y CAN FURTHER IMPLEMENT NATUR AL AND ORGANIC PRODUCTS INTO THEIR MERCHANDISING PL ANS.

By Jenny McTaggart hile U.S. grocery shoppers are certainly concerned about inflation, it’s not stopping many of them from seeking out and purchasing organic and natural products.

With a halo effect around better health and a greener environment, these items are being viewed in a more positive light than ever — especially among younger consumers. Even during times of economic uncertainty, retailers can grow their sales and lay claim to a piece of this lucrative business by honing their pricing strategies and offering more information and better transparency to their increasingly discerning shoppers.

Today’s consumers have no shortage of places to shop for organic or natural products, whether they be food, beverages or nonfoods. Mass merchandisers like Walmart and Target feature them in-store and online, Amazon owns one of the premier chains for organic and natural products (Whole Foods Market), traditional grocers carry them, a growing number of regional chains with smaller footprints are dedicated to them, neighborhood natural food stores provide them to their loyal followings, and now new online channels like Thrive Market offer to customize assortments and deliver them to consumers’ homes.

In short, it’s not easy to compete in the world of organic and natural retailing today.

But there’s a broad swath of shoppers with different needs and attitudes who are either already looking for these products or could be easily persuaded to try them. Therefore, retailers would be wise to think about how they can further implement natural and organic products into their merchandising plans while staying true to their brand missions.

Andrew Henkel, EVP of retail for Chicago-based SPINS, points out that natural products continue to be a growth engine for mainstream supermarkets, and that fact has increased the urgency for both health-oriented and mid-market retailers to build a uniquely differentiated assortment. “Loyalty is built on grocers having assortments that align with the unique needs of their shoppers, and the most successful grocers are finding ways to more readily connect their shoppers to their preferences,” notes Henkel.

Organic Sales Stabilize After Pandemic

The total sales of natural and organic products aren’t easy to measure, especially since natural products aren’t as readily defined (while the term “organic” is aligned to a federal standard, the FDA doesn’t have a formal definition for the

Key Takeaways Natural and organic items received a huge lift during the pandemic, when shoppers couldn’t always find conventional products at their regular stores.

Education, nutritional counseling and competitive pricing can encourage consumers to purchase more natural and organic products.

With health and wellness remaining a key priority for shoppers, grocers need to realize premiums on unique natural/ organic products while ensuring that commoditized offerings in this space are affordable.

PROGRESSIVE GROCER March 2023

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SPECIAL REPORT

Natural and Organic Products term “natural,” although it’s generally understood to mean that nothing artificial or synthetic has been added to a food that wouldn’t be expected to be there). There’s no doubt, however, that these items received a huge lift during the pandemic, when shoppers couldn’t always find

Ups and Downs for Organic Produce Sales of organic fresh produce grew by 3% to top $9.4 billion in 2022, but volume declined by 3.7%, according to the “2022 Organic Produce Performance Report” from Monterey, Calif.-based Organic Produce Network and Idaho Falls, Idaho-based consultancy Category Partners. Ups and downs like this are to be expected during an inflationary period, even for conventional produce, explains Category Partners President Tom Barnes.

He notes that the average conventional price per pound grew by 9.2% compared with 2021, while organic produce price per pound rose by 7%. Yet organic fresh produce prices in aggregate remain substantially higher than conventional, with 2022 showing the price gap between conventional and organics as the largest it has been in the past four years ($1.55 per pound).

“With rising prices, we may see more selective organic shopping from consumers as they substitute higher-priced organic items for conventional ones,” observes Barnes.

Organic apples were the biggest example of substitution last year, as their price per pound increased by more than double the amount of conventional, resulting in a volume decline of 10.3%.

The organic fresh berry category fared the best sales-wise in 2022, holding more than 16% of organic fresh produce dollars, followed by organic packaged salads as a close second. Organic grapes had a stellar year, with a 6.9% increase in volume and an 8.3% increase in sales. Overall, organic fresh produce made up 12% of all fresh produce sales and accounted for 7% of all fresh produce volume.

Four-Year Performance Conventional Produce $80B $70B $60B

$56.9B +3.5%

$64.3B +11.1%

$64.9B +2.5%

Organic Produce $70.0B +7.9%

$10B $8B

$7.3B +5.3%

$8.7B +15.2%

$9.1B +6.4%

$9.4B +3.0%

2020

2021

2022

$2.9B +15.1%

$2.9B +1.8%

$2.8B -3.7%

2020

2021

2022

$50B $6B

$40B $30B

$4B

$20B

$2B

$10B $0B

$40B

2019

$37.6B -0.2%

2020

2021

2022

$42.0B -8.1%

$40.0B -3.4%

$39.5B -1.1%

$0B

3,000M 2,500M

$30B

2019

$2.5B +5.3%

2,000M 1,500M

$20B

1,000M $10B $0B

500M 2019

2020

2021

2022

0M

2019

Source: "2022 Organic Produce Performance Report," published by Organic Produce Network and Category Partners

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conventional products at their regular stores, and in some cases opted to purchase things like recycled toilet paper and organic milk, which maybe they hadn’t done before.

In 2021, organic sales experienced steady yet more stable growth, with a $1.4 billion or 2% lift over the previous year. Total sales surpassed $63 billion, according to the Organic Trade Association’s 2022 Organic Industry Survey, the most recent report available. Food sales for 2021, which comprise more than 90% of organic sales, rose to $57.5 billion (roughly 2% growth), while nonfood sales reached $6 billion in sales, accounting for 7% growth.

Katie Macarelli, manager of public relations at Lakewood, Colo.-based Vitamin Cottage Natural Food Markets, which operates 166 Natural Grocers stores in 21 states, says that while the retailer definitely picked up new shoppers during the pandemic, people have continued to come in during a time of high inflation because of the stores’ affordable prices. “We’ve done really well in the past year in maintaining our commitment to affordability in light of inflation and heavily subsidizing things like eggs,” she notes.

In fact, in recent months, when local news stations came by to record footage of Natural Grocers stores with empty egg cases, Macarelli made sure reporters knew that the shortage was due to their low prices, not because of avian flu. The company’s base standard is $3.50 for a dozen free-range eggs.

In addition to offering “always affordable pricing,” Natural Grocers has a free loyalty program called {N} power, which offers members additional discounts and free products.

In Macarelli’s view, younger consumers in particular are demanding more information about where their food comes from and how it’s produced, and this is helping to drive sales of natural and organic products. This demographic cares whether there are chemicals not only in their food, but also in their shampoo and other nonfood products, she observes.

Natural Grocers has taken on the mission of educating shoppers on these issues and spotlighting the high standards it adheres to when selecting vendors. “We proudly share information, but not in a pretentious way,” Macarelli adds, “because none of this matters if people can’t afford it.”

The retailer relies on a monthly magazine, knowledgeable store staff, and creative social media outreach, including TikTok videos to instruct and serve its shoppers. Natural Grocers is also among the few retailers to offer free, on-site nutritional educational coaching. “Anyone who walks in and wants more nutritional guidance — whether it be an athlete preparing for their first Ironman, someone with a recent cancer diagnosis, or a parent whose child has multiple food allergies — can get counseling on the spot or can make an appointment for an hour-long session with a certified nutritional health coach,” explains Macarelli.

Natural Grocers features several special promotional periods throughout the year to create excitement among its shoppers. Earth Day on April 22 is always a big event — in fact, the retailer celebrates the occasion throughout the entire month of April. Then, in September, stores

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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.

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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%

●

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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).

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.

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 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

Breaking Down Organic Categories Here’s a look at how specific organic categories performed in 2021, as highlighted in the Washington, D.C.-based Organic Trade Association’s 2022 Organic Industry Survey: Fruits and veggies: Organic fruits and vegetables accounted for 15% of the total product market and brought in more than $21 billion in revenues. This was a 4.5% increase over 2020. Fresh produce and dried beans, fruits and vegetables drove the category, while frozen and canned foods declined slightly as consumers cut back on pantry loading.

United Natural Foods recently expanded its Wild Harvest private label organic produce line, featuring easily recognizable purple branding and a prominent USDA Organic Certified label to help associates and shoppers more easily identify the products.

focus on Organic Month. Coinciding with these promotional periods, Natural Grocers runs a semiannual campaign with Washington, D.C.based Beyond Pesticides called Ladybug Love, which lets shoppers donate to the cause of pesticide-free parks and open spaces.

Different Strategies for Different Retailers

Like Natural Grocers, MOM’s Organic Market is a regional chain that focuses solely on organic and natural products. Scott Nash, CEO of the 23-store chain, which is based in Rockville, Md., tells Progressive Grocer that shoppers appreciate the chain’s competitive pricing, especially amid the current economic environment. “We have seen inflation impact our shoppers, and while we’ve had to pass along some of the rising costs to them, we still aim to offer very competitive pricing,” maintains Nash, adding that the retailer has been doing a lot more to cut waste and operate as efficiently as possible, as today’s retailing environment requires.

Nash doesn’t see education as being quite as important for MOM’s Organic Market shoppers, because so many of them already buy into the organic/natural lifestyle. “People don’t go from Doritos and Coke to kale and kombucha overnight,” he asserts.

“It’s a journey.” He credits Whole Foods with doing a great job of educating loyal organic and natural shoppers.

According to Nash, he feels very confident about the future of the industry, primarily because organic foods are better for the environment, and also because they’re perceived as being better quality and better for people’s health. He notes that shoppers in his stores are inveterate label readers, so manufacturers will continue to play an important role in making their products as “clean” as possible.

Of course, dedicated natural/organic retailers aren’t the only ones that can serve label-reading shoppers. Take The Kroger Co., for example. While the Cincinnati-based company is much more massive and mainstream in scale, it has served a growing niche by integrating natural and organic products alongside mainstream items, and by developing a private brand dedicated to natural and organic products. The retailer’s Simple Truth brand, which turns 10 this year, is now considered America’s No. 1 natural and organic brand, featuring more than 1,500 items that are free from 101 artificial colors, flavors, preservatives and sweeteners, and contain no artificial ingredients. To mark the anniversary, Kroger offered customers 10 fuel points with all Simple Truth purchases made using a digital coupon during Jan. 18-31.

Last summer, Kroger’s Holly Adrien and Alexandra Trott, of the grocer’s 84.51° division, shared on Progressivegrocer.com that more than 73% of Kroger’s shopping households had purchased an item in the natural/organic category over the past year. Meanwhile, 5 million omni-

Dairy, eggs and meat: After hitting the highest growth rate in more than a decade in 2020, the organic dairy and egg category unsurprisingly leveled off in 2021.

These segments remained relatively flat through 2021, although they still outperformed 2019 sales by nearly 11%. Meanwhile, sales of organic meat, including poultry, livestock and seafood, increased by 2.5%, representing nearly $2 billion in annual sales. Organic poultry was the strongest performer, with 4.7% growth.

Packaged and prepared foods, including snacks: Packaged and prepared organic foods experienced an overall decline of around 5% in 2021, representing a shift away from pantry loading and toward more measured purchasing patterns. Organic baby food, which saw more than 11% growth, was the biggest bright spot. Snacks saw healthy growth of 6%, with nutrition bars reaching nearly 15% growth.

Beverages: Organic beverages experienced strong growth of 8%, thanks in part to manufacturers’ ability to adjust quickly to shifting consumer needs and habits.

Organic coffee topped the beverage performance chart, with more than 5% growth.

Breads and grains: Organic bread and grain sales tapered off slightly in 2021 as the pandemic boom subsided, but sales were still strong, at $6.2 billion overall.

Frozen and fresh breads, the largest subcategory, saw a modest increase of 1.6%.

Nonfoods: Fiber, supplements and personal care products were the dominant performers in nonfoods: Each saw growth rates of between 5.5% and 8.5% in 2021.

channel Kroger shoppers had bought natural and organic items online, and two-thirds of those were brand-new to the category. Among those shoppers, the price-sensitive ones spent more time considering cost while shopping online, from comparing prices to looking for coupons.

To highlight its organic and natural products in stores, Kroger uses signage such as green “plant-based” clings, and also runs special campaigns.

Label Readers on the Rise

Angela Jagiello, director of education and insights at the Washington, D.C.-based Organic Trade AssociaPROGRESSIVE GROCER March 2023

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Natural and Organic Products tion (OTA), points out that two-thirds of organic shoppers are new to the category at any given time, according to OTA research, so education is key.

“That fact, combined with the sheer complexity of the label, means that brands and retailers are constantly in the position of educating about what organic means,” she notes. “At the same time, food inflation is real, and the unbridled spending on grocery that we saw during the worst of the pandemic has come to an end. Shoppers have demonstrated they are willing to pay more for products that align with their values. They look to retailers to help them understand and prioritize.”

To help retailers in their outreach efforts, OTA offers a Good Organic Retail Practices Guide that includes tips on handling, display and marketing organic products, as well as an Organic Opportunity Communications Toolkit, which it describes as a science-backed information resource.

Sarah Christiansen, VP of shopper insights and category leadership at Campbell Snacks, a division of the Camden, N.J.-based Campbell Co., confirms that shoppers seem more eager than ever to learn about ingredients. “Since the pandemic, wellness remains top of mind for consumers, and we’re seeing nearly half of shoppers pay more attention to food labels and ingredients compared to pre-pandemic levels,” observes Christiansen, citing Kantar ShopperScape research.

SPINS’ Henkel stresses that the idea of value isn’t solely related to price for many shoppers. “Throughout the pandemic, we’ve seen shoppers rediscover the joys of better-for-you and small indulgences

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The Organic Trade Association now offers retailers tools like this Organic Sustainability Wheel to help educate about the attributes of organic.

at home,” he notes. “Since health and wellness continues to be a central priority for shoppers, grocers need to address the ‘total basket’ — realizing premiums on truly unique products while ensuring commoditized offerings create an affordable foundation in the basket.”

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FRESH FOOD

Grilling Forecast

Grate Expectations AS GRILLING SE ASON ROLLS OUT, SO DO NE W IDE AS, PROMOTIONS AND OPPORTUNITIES.

By Lynn Petrak

he practice of cooking meat over fire may be about as primal as it gets, but there’s always room for innovation. That’s what suppliers, retailers and consumers discover every year when the temperatures thaw in much of the country and outdoor grills get fired up and used more often.

Certainly, stalwart proteins like burgers, steaks, hot dogs, kebobs and cut-up chicken remain top of mind and top of cart for many shoppers. But as with other eating habits and product categories, the trends reflect the times.

Take, for example, pricing. Stubborn inflation rates are causing many consumers to shift some of their habits as the traditional grilling season arrives.

Steven Raichlen, author of “The Barbecue Bible” cookbook series, highlighted what he calls “budget-que” as his top trend for 2023 in a blog post earlier this year.

In a recent exclusive interview with Progressive Grocer, the barbecue guru says that other cuts can be swapped for pricier portions. “If you smoke top round and bottom round low and slow, they can deliver a similar pleasure to that of brisket,” he explains, adding that beef shanks also come out well in a smoker.

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Key Takeaways Stubborn inflation rates are causing many consumers to shift some of their habits as the traditional grilling season arrives.

Protein providers are emphasizing the variety of their offerings.

Given the rise of plant-based eating, grocers can also tout ideas for flexitarians, vegans and others looking for inventive ways to grill plant-based foods.

Variety and Other Trends

Shifting to other proteins to save money doesn’t mean that consumers are totally eschewing premium cuts, however: They’re often saving them for days they feel like splurging, or simply mixing up their purchases. Protein providers are accordingly emphasizing the variety of their offerings.

One World Beef Alliance, of Solana Beach, Calif., offers a broad selection of beef products under its umbrella of brands that is grill-worthy and also aligns with consumers’

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FRESH FOOD

Grilling Forecast

Brandt Beef partnered with Chef Brandon Rogers to offer recipes such as a charcoal-grilled ribeye with grilled romaine lettuce.

parallel interests in attributes like grain-fed beef, third-party-verified transparency, and sustainability. For instance, Brandt Beef, a brand of One World Beef, has launched a “head to tail” initiative and points out that there are more than 100 types of possible beef cuts.

“Brandt Beef offers award-winning performance in the traditional portion-cut steaks and value-added items that characterize the summer grilling season: ribeyes, baseball cut top sirloin, hot dogs and hamburgers, to mention a few,” says VP of Sales Steve Summers. “These lines are always popular, but we also aim to introduce our customers to new culinary experiences such as the flavorful beef flanken-style short ribs and our brand-new beef demi-glace.”

Burt P. Flickinger III, retail industry consultant and managing director of New Yorkbased Strategic Resource Group, notes that shoppers may be making other adjustments in today’s still-volatile marketplace, like getting ahead of possible price jumps this summer.

“Given the explosion of prices last summer, people who want to cook steak may grill it in March or buy steaks to freeze and cook later, going into Memorial Day,” he observes.

One trend that bodes well for brands and grocers ahead of grilling season is the rise in cooking savviness over the past few years. “I think people got the grill and smoking ‘fire’ during COVID, when grill and smoker sales shot through the roof, as did

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sales of my book,” says Raichlen, who is hosting a new public television show, “Steven Raichlen’s Planet Barbecue,” that premieres Memorial Day weekend.

Because of that, Raichlen believes that this is shaping up to be another robust season for inventive grilling. “People are cooking more at home and a) learned how to grill and smoke better during COVID, and b) realized that restaurant trips have gotten more expensive,” he notes.

Britney Banuelos, senior brand manager at Tyson Foods’ fresh meats marketing group, shares that sentiment. “Consumers have become increasingly comfortable and confident at the grill, and with that comes creativity,” she affirms.

Pandemic-fueled creativity applies to a wide variety of proteins that can be grilled to deliver a signature char flavor, from fresh seafood to red meat and poultry. To provide consumers with inspiration and instructions, Brandt Beef offers recipes curated by award-winning chefs, like a juicy bacon burger.

“As part of Brandt Beef’s partnerships with worldclass chefs, James Beard Award nominee Chef Brandon Rodgers has crafted a series of recipes for customers to learn how to prepare Brandt Beef dishes, along with a touch of certified chef techniques,” explains Summers.

Springdale, Ark.-based Tyson also spotlights different cuts and proteins to help discerning at-home grillers. “Today, confident grilling consumers can elevate their summer grilling experience by allowing different proteins, such as pork, to take center stage of the backyard barbecue,” notes Banuelos,

As consumers look to mix it up for budget and taste reasons, boneless pork chops like these from Tyson are hitting the grill.

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/™/© 2022 Tyson Foods, Inc.

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FRESH FOOD

Grilling Forecast Not Just Meat on the Grill

Grocers can promote a variety of foods that work well in grilling applications, like thick portions of fruit.

adding: “Ribs are a great way to kick off this grilling season and experiment all summer long, with a variety of options like St. Louis ribs, spareribs and back ribs, which are conveniently available at Walmart stores around the country. Other cuts to try this summer would be bone-in or boneless pork loin chops, pork tenderloin, or a pork tomahawk chop, which offers the best of both worlds, with a rib and chop all in one cut.”

Likewise, Creekstone Farms Premium Beef, based in Arkansas City, Kan., is helping home cooks beef up their grilling prowess. “This is part of the reason why in 2021, Creekstone Farms formalized a longstanding relationship with All Things BBQ and Yoder Smokers,” says Director of Marketing Dan Stewart. “Partnering with these suppliers of premium grilling and smoking equipment is a win-win.”

“We work closely with chefs and restaurants around the world to develop our beef offering, polishing traditional favorites and developing innovative beef experiences to bring to store shelves and, ultimately, to the home chef.”

—Steve Summers, Brandt Beef

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Given the rise of plant-based eating over the past few years, grocers can also tout ideas for flexitarians, vegans and others who are looking for inventive ways to grill plant-based foods. For instance, meat departments can feature plant-based meat alternatives like El Segundo, Calif.-based Beyond Meat’s new plant-based steak. Additionally, produce departments do well when promoting grill-ready plant-based items like peppers, corn and eggplant, to name a few.

Retailers can also take a cue — no ’cue pun intended — from chefs who have experimented with nontraditional foods on the grill, from lemons to lettuce and from pound cake to doughnuts. Pittsburgh-based Giant Eagle, for its part, shares recipes on its website for making fruits and desserts on the grill, such as a grilled banana split and s’mores nachos. On Brandt Beef’s recipe pages, Chef Rodgers provides a recipe for grilled romaine lettuce.

Consumers’ elevated taste expectations and experiences are reflected in accompaniments for grilled fare, too. Leading brioche brand St Pierre, for instance, has found success with its brioche buns for hamburgers and hot dogs, and the U.K. company added sesame seed brioche burger buns to its line of “grilling must-haves” last year.

"While we’re not launching any new products for grilling season this year, we are working with retailers to offer an attractive promotional calendar, kick-starting grilling season with increased marketing for National Brioche Day (May 14), which this year coincides with Mother’s Day, and we have market-leading fill rates," says Neil Pittman, director of U.S. sales for St Pierre Bakery.

With “The Barbecue Bible” now in its 25th year of publishing, Raichlen notes that the food retailing industry and consumers have come a long way since.

“When I wrote the book initially, I had to give workarounds for things like lemongrass and coconut milk — ingredients that were not available in mainstream grocery stores,” he recounts. “Now I’m amazed that grocery stores offer a dozen different types of peppers, and they have coconut milk and many different types of fish sauces. The [grocery] industry has really responded, and that’s great.”

Suppliers also continue to roll out new products for home cooks. Palatine, Ill.-based Weber, for example, is making a splash with its new electric grill that offers multiple functions in a modern design. Meanwhile, the Watkins Co. is an example of a CPG that is introducing new items in time for grilling season: The Winona, Minn.-based company recently expanded into the salt-free category by adding three new flavors to its 1868 Organic Grilling Seasoning line, including seasonings for chicken and steak.

“Given the explosion of prices last summer, people who want to cook steak may grill it in March or buy steaks to freeze and cook later, going into Memorial Day.”

“Also, with the La Nina weather pattern, the weather is supposed to be warmer across the U.S. this spring, which will encourage grilling,” adds Flickinger, “and over spring vacation, people will be traveling locally instead of long distance.”

—Burt P. Flickinger III, Strategic Resource Group Several brands will soon roll out new grilling promotions. At Creekstone Farms, the brand is supporting Light it Up retailers with consumer-facing campaigns. “As grilling As retailers and CPG companies ready their grilling fare, when season approaches, we include grilling tips and inspiis the best time to kick off in-store merchandising efforts? ration in our newsletters, and we will heavily promote Although grilling is a year-round pursuit for many aficionados, there is a certain seasonality to such promotions.

Creekstone Farms ahead of major grilling holidays like Given economic and weather patterns, those promotions may Father’s Day and the Fourth of July,” notes Stewart. be backed up a bit this year, according to Flickinger. “Typically, One World Beef’s brands, including Brandt Beef, the grilling season starts Memorial Day,” he notes. “Nevertheless, are likewise ramping up efforts for the season. this year will be different — you’ve got many more people eating According to Summers, “We work closely with chefs and entertaining at home because this is the first full calendar year and restaurants around the world to develop our beef [after COVID restrictions] with family and friends, and because more offering, polishing traditional favorites and developing people are eating at home rather than eating away from home,” due innovative beef experiences to bring to store shelves to higher menu prices at steakhouses and other restaurants. and, ultimately, to the home chef.”

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CENTER STORE

Frozen Snacks Beyond Borders

What’s Cool in Snacking THE FROZEN SECTION OFFERS A PLE THOR A OF NOSHING OPTIONS. By Barbara Sax

ueled by product innovations that are a direct response to consumer dining habits and health trends, the frozen snack category is having a strong year. Frozen snack consumption has seen nearly a 7% growth rate over the past year, according to data from Chicago-based IRI, as consumer eating habits have shifted and the lines between snacking and mealtime have continued to blur.

“Millennials, particularly older Millennials, are the No. 1 accelerator for growth in the frozen snack category,” says Braelyn Davis, co-founder and CEO of San Diego-based frozen food maker Planet Based Foods, who notes that convenience and easy preparation are top priorities for consumers in this demographic “as they juggle work, family and active social lives.”

Dollar sales of frozen appetizers and snack rolls were up more than 12% for the 52 weeks ending Nov. 27, 2022, IRI data shows. Sally Lyons Wyatt, EVP and practice leader for client insights at IRI, observes, however, that while dollar sales in the segment remain strong, unit sales and volume are starting to decelerate.

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Wyatt notes that international flavors and foods are fueling category growth in handheld frozen snacks. “Unique flavors and brand-licensing flavors are really hot,” she says. “It’s all about exploration, and what makes frozen beneficial is it allows consumers to explore different cuisines without having to cook them or go to a restaurant and spend a lot of money. Flavors and cuisines in frozen snacks is really where it’s at.”

Products such as Bibigo’s mandu dumplings and Minh’s eggrolls “are growing like wildfire on unit sales,” adds Wyatt, pointing to double-digit sales increases.

Mintel research shows that 67% of U.S. consumers would like to see frozen snacks with more diverse, internationally inspired flavors, and 73% choose Mexican as the international cuisine of choice to eat at home or in a restaurant.

Speaking of Mexican food, this past summer, Chicago-based Kraft Heinz refreshed its Delimex line with flavor-enhanced recipes and nearly double the filling, as well as updated packaging. The changes were rolled out across the brand’s Beef Corn Taquitos, Chicken Corn Taquitos, Chicken and Cheese Flour Taquitos, Beef and Cheese Flour Taquitos, and Beef and Cheddar Rolled Tacos.

Among other types of food, seafood appetizers, which saw strong growth during COVID, have continued to be popular with consumers, according to John Baxter, VP of retail sales and marketing at Baltimore-based Phillips Foods & Seafood

Key Takeaways Frozen snack consumption has risen as consumer eating habits have shifted and the lines between snacking and mealtime have continued to blur.

International flavors and foods are fueling category growth in handheld frozen snacks, with younger consumers more open to these items.

Restaurant-branded frozen snacks have long proved popular, while plant-based options are on the rise.

Restaurants. “We have seen continued growth in the category in 2022, and the many new options we developed during the past two years have led to more placements and a broader base of distribution,” says Baxter.

Baxter notes that younger consumers are more open to new flavors and cultural tastes, and new products such as the company’s Shrimp Potstickers, Clam Oreganata Flatbread and Shrimp Sriracha Flatbread hit that target. “We have tried to bring a little something different with each offering,” he adds. “We certainly have an advantage connecting with trends, due to our foodservice business.”

Restaurant-branded frozen snack products have long proved popular. In just one example of this, Columbus, Ohio-based fastfood brand White Castle and Bellisio Foods, in Minneapolis, recently teamed up to launch Castle Bites, bite-sized snacks made of 100% real beef and onions wrapped in a crispy golden crust.

The product comes in hamburger and cheeseburger varieties.

Well Planted

Millennial consumers are also a key driver behind growth in the plant-based segment of the frozen snack category. “Millennials are igniting demand for plant-based frozen foods because they are making values-driven choices and want products that deliver on sustainability and health claims,” notes Planet Based’s Davis.

In response, more products featuring better-for-you and simple

More plant-based options are entering the frozen snack category, among them MorningStar Farms Incogmeato Mickey Mouse Shaped Chik'n Nuggets.

plant-based ingredients are entering the category.

For example, Planet Based has been expanding distribution of its hemp-based, vegan, gluten-free Southwest Taquitos and Original Taquitos, which debuted in November and are now available at 700 Kroger stores.

Davis says that the company plans to add more hand-

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Frozen Snacks held items to its lineup and will launch hempbased dairy products in the second half of 2023.

Category data from Battle Creek, Mich.based Kellogg Co. indicates that the plantbased space is up nearly 2% as of July 2022.

“Data shows us that mainstream people — led by Millennials and Gen Z — are eating plant-forward foods for many reasons, including taste, health, sustainability and more choice on menus,” said a representative of Kellogg’s MorningStar Farms brand.

Meatless chicken, according to MorningStar Farms, is seeing tremendous growth.

The popularity of chicken among consumers makes it an easy entry point for flexitarians to enter the category. MorningStar has made it a priority to develop “chik’n” products that stand up to consumer expectations of taste. The brand’s line of meat-alternative products includes Chik’n Nuggets, Mickey Mouse Shaped Chik’n Nuggets and Chik’n Tenders, and MorningStar has recently added a Spicy Chik’n Filet, Plant-Based Chik’n and an Eggo Style Waffle Sandwich to the lineup.

With more segments of the population gravitating toward plantbased options, these snacks have earned a spot in the frozen aisle, but IRI’s Wyatt cautions retailers not to benchmark them against products with greater mass appeal.

“Plant-based products have a role in the category and are very popular with Millennials and Gen Z,” she says. “They are not, however, popular with the mass population, so retailers have to be smart and set expectations accordingly.”

Variety Drives Sweet Frozen Treats

If flavors and cuisines are driving snacks, variety and value are fueling the sweet frozen treat segment. Dollar sales of frozen novelties were up nearly 12% for the same time period noted above, according to IRI. “Frozen novelties is a category where you can maximize the value and minimize waste,” says Wyatt. “You can have a variety of flavors to appeal to a variety of people in your family.”

Wyatt adds that in this category, shoppers are also gravitating toward restaurant-quality products that they can consume at home. While these products may be priced at a premium, they provide a restaurant-style experience without the expense of eating at a restaurant.

After Pennsauken Township, N.J.-based J&J Snack Foods acquired Dippin’ Dots earlier this year, the company introduced a new mash-up product, Icee Cherry ‘n Blue Razz flavored frozen beads. J&J President and CEO Dan Fachner notes that

“Millennials, particularly older Millennials, are the No. 1 accelerator for growth in the frozen snack category.”

—Braelyn Davis, Planet Based Foods

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Plant Based Foods has expanded distribution of its vegan, gluten-free taquito line made from hemp.

the item is “the result of combining our expertise in frozen novelties to create new, exciting products for customers and fans to enjoy.”

Meanwhile, Unilever ice cream has launched 19 new products across its Breyers, Klondike, Magnum ice cream, and Talenti Gelato & Sorbetto brands. The multinational company’s ice cream brands had double-digit sales growth last year, according to Bentley King, head of U.S. ice cream operations at Englewood Cliffs, N.J.-based Unilever USA. “A portion of this success can be credited to Magnum, a brand renowned for its indulgent offerings, which delivered positive volume growth this year, largely due to the introduction of new offerings like Duets, which combine two types of chocolate in one decadent bite,” says King.

The company’s Talenti brand worked with chefs, mixologists and culinary creators to produce a lineup of pairings that borrowed trends from popular desserts and cocktails. “This mashup dessert experience is a quality Millennial and Gen Z consumers seek when it comes to desserts,” notes King.

Magnum also extended into a wider variety of plantbased offerings in response to more consumers’ exploration of or adherence to a nondairy lifestyle. It’s just one of many new plant-based sweet frozen snack products that offer consumers a variety of choices.

For its part, U.K. company Wicked Kitchen, whose U.S. headquarters is in Minneapolis, has launched a plant-based collection of ice creams and novelties made with the lupini bean — a first-to-market product line in the United States. The chef-crafted pints and handheld stick and cone novelties are currently available at Kroger, Dillons, Fred Meyer, King Soopers and a number of other chains.

Further, Montpelier, Vt.-based Wildgood, a first-of-itskind plant-based frozen dessert made with extra-virgin olive oil, recently added a Caramelized Fig flavor to its brand. Wildgood is currently carried by Sprouts, Publix, ShopRite and select Whole Foods Market stores.

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Beverages Fresh Thyme Market recently rolled out the Tea-Osk display of Tiesta Tea varieties in the bulk food section of the grocer's stores.

Some Things Brewing FUNCTIONALIT Y, TR ACE ABILIT Y AND SUSTAINABILIT Y ARE INFUSING CURRENT COFFEE AND TE A OFFERINGS.

By Bridget Goldschmidt ate last year, Fresh Thyme Market rolled out a kiosk highlighting the premium loose teas of Tiesta Tea in all 71 of the food retailer’s stores across 10 states. Found in the bulk food section, the TeaOsk offers a selection of black, green and herbal loose-leaf teas that can be purchased by the ounce, as well as a wide selection of tea infusers, loose-leaf teas in reusable tea canisters, and matcha green tea sourced directly from Japan.

“We’re constantly looking to expand our already vast selection of coffees and teas, which provide a depth of offerings for our customers,” says Robert

Abdee, category manager of dry grocery and bulk foods at Downers Grove, Ill.-based Fresh Thyme, which is partly backed by Meijer. “Some of our newer additions I’m excited about provide a ‘farm to cup’ experience for the consumer as well as provide details of programs that give back to origin communities or donations to charities.”

The partnership with Chicago-based Tiesta was inspired by the rise in popularity of loose teas, notes Abdee, adding that the program offers high-quality products “focused on flavor and function.”

Speaking of function, Abdee affirms that it’s currently all the rage in the coffee and tea space: “Adding functionality to various beverages has become a big trend in recent years. Being that coffee and tea are the two [most] consumed beverages worldwide, it’s only natural that this is the most efficient way to add additional functionality to a popular beverage that’s already part of a daily routine for many. It began with coffee brands such as Four Sigmatic, which set the benchmark for mushroom-based coffees, and has since expanded to other brands now offering additives such as fiber, prebiotics and probiotics. The growth continued, moving into the [ready-to-drink (RTD)]

Key Takeaways Fueled in great part by the pandemic, functionality is currently all the rage in the coffee and tea space, enabling many to get even more out of a popular beverage that’s already part of their daily routine.

Additionally, as consumers grow more concerned with coffee and tea sourcing, retailers should help convey brands’ stories and values to shoppers.

Ultimately, though, the coffee and tea category is only a microcosm of the entire grocery offering.

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Beverages Four Sigmatic set the benchmark for mushroombased coffees.

coffee [segment] next. Most recently, we have started seeing this trend also move into the tea category, [for both] bagged and RTD offerings.”

As for highlighting traceability for those consumers who “don’t just want a great-tasting coffee,” he observes, “Most craft roasters love to tell the story of where their coffee is from, if regenerative farming practices were used, or if the brand helps the origin farms by passing some of the proceeds back to the farmers or surrounding villages.”

Asked how Fresh Thyme promotes its coffee offerings in particular, Abdee replies: “The pandemic saw a rise in more people brewing coffee at home and experimenting with new ways to brew and love the coffee experience. Most of our new items are whole-bean varieties that are great for home brewing. To many, the perfect cup is an art form, and they need the best beans and the perfect roast ground and brewed at home to get that. To cover all the bases, we have made sure that we offer many brand options to cover any customer’s taste. These brands work closely with our in-house marketing and digital advertising team to help convey their brand’s story and values to the customer.”

Based on this heightened consumer interest and Fresh Thyme’s response to it, category sales are up almost 10% over last year at the grocer, according to Abdee. The tea category at Fresh Thyme is currently under review, with the retailer looking to add more items following the above trends.

Sustainable and Accessible Two key goals for Montreal-based DAVIDsTEA are to ensure that people are able to find its products and that they understand the company’s commitment to eco-friendly packaging.

“It’s DAVIDsTEA’s mission to make tea accessible for everyone, and one of the ways we accomplish this is by ensuring our products are readily available in local communities where tea lovers do the majority of their everyday shopping,” notes CEO and CBO Sarah Segal.

“Our individually wrapped tea sachets with all-new compostable overwraps not only demonstrate that we continue to make the necessary investments in product development to grow the market for specialty teas and elevate our brand, but that we are dedicated to leading the tea industry by example when it comes to sustainability,” adds Segal. “Even though we specialize in loose-leaf tea, we make convenient packaging like single-serve formats for our matcha, and tea bags filled with loose-leaf tea, to reach a wider audience.”

38 progressivegrocer.com

‘A Tea for Everyone’

Sarah Segal, CEO and CBO of Montreal-based DAVIDsTEA, agrees that wellness is big right now in the tea category, also invoking the recent public-health crisis.

“As a result of the pandemic and its lockdowns, we saw a massive shift as consumers had the time to reflect inward, reprioritize their health and wellness, and seek healthier, functional beverage alternatives,” notes Segal. “But the demand isn’t simply for a healthier option — consumers want and deserve options that are convenient, fun, functional and flavor-forward — which is exactly where tea comes in.

One of the best things about tea is the immense variety of what is available, from rare, premium single-origin teas to fun and funky herbal infusions, there truly is a tea for everyone, even if they don’t know it yet.”

This interest in health has spawned the sober-curious movement, which inspired DAVIDsTea to debut a collection of mocktail teas developed by its in-house tea mixologists. Its latest mocktail collection, which launched last December, included a Gin & Tonic variety, which Segal describes as “a tea that took years to perfect the unique blend and flavor profile: Multiple rounds of development and fine-tuning went into successfully recreating this classic cocktail’s flavor by blending lemon, coriander, juniper berries and green tea.”

Further, as consumer demand for immune health products surges, DAVIDsTEA continues to grow its line of teas featuring adaptogens — plants that are said to help the body cope with stress, anxiety and fatigue — which Segal calls “the new superfood of the decade.” In January, the company introduced two new tea blends containing adaptogens such as ashwagandha, reishi mushroom and chaga. “Our dedicated R&D team tirelessly researches and explores new flavor combinations that feature traditional ingredients and those at the forefront of health-andwellness research,” she adds, noting that over the past three years, the company has “seen tremendous growth” in its sleep, cold and defense, and matcha categories.

In the realm of marketing and merchandising, DAVIDsTea’s approach “has always been putting the customer first,” asserts Segal. “This means having the mindset of the customer and meeting them where they are and where they shop.” As well as being carried at more than 3,800 grocery and pharmacy locations across Canada, with the goal of replicating this same success in the United States, the company maintains a store-in-store retail concept at leading Canadian drug store chain Rexall that “has proved successful in supporting customers in their tea journey, thanks to showcasing branded materials that allow learning and self-exploration,” according to Segal.

In Stores and Online

When it comes to coffee, healthy attributes are also uppermost, and once again, the pandemic played a key

role in the adoption of better-for-you products.

“Over the years, we’ve seen an increasing demand for a combination of both flavor and wellness in consumer beverages and products,” affirms Kerry Sachs, president and CEO of High Point, N.C.-based Puroast Coffee. “We’ve seen this trend now transcend into coffee through several innovations of late, including mushroom- and keto-based coffee. As these remain popular, a rising potential within the coffee market is with low-acid coffee — a market that is intersecting [with] the very large coffee and antacid market trends.”

Billed as “the only low-acid coffee brand with published supporting scientific research and widescale grocery store distribution,” Puroast has experienced a sales boom “since the pandemic, as a result of expanded awareness through [our] rapidly growing — and COVID-driven — consumer presence on the web and corresponding online sales, mostly on Amazon,” explains Sachs. “Overall, the company has accelerated sales growth online, in grocery stores such as Kroger, at www.puroast.com and now in coffeehouses.”

As for how best to promote the company’s coffee, Sachs notes: “Optimum marketing is not surprisingly coming through digital marketing methods, [since] the consumer has actively increased [use of] the internet to research new and recommended products. [In another] post-COVID development, key retailers have redoubled their in-store merchandising, [which also aids] shelf performance for our products. Of late, new research shows Puroast to have seven times the antioxidants of green tea, [a fact that] we are now featuring.”

Koji and Fermented Coffee Technique: “Mold is added to the green beans, and they are allowed to ferment for several days prior to roasting,” explains Abdee. “This process is said to make dark-roast [coffee] less bold and [to lower] acidity levels of lightroast beans.”

For her part, Segal admits to being “really interested in powdered teas like matcha and hojicha [roasted Japanese green tea]. We love their versatility and benefits! Since these are powdered, you are ingesting the full leaves and ingredients, so you are getting every last bit of nutrients the tea has to offer. This is an area in the industry we’ve been keeping a close eye on for a while as we continued to research and find ways to make [tea] more accessible when it comes to availability, price and flavor.”

Ultimately, though, the coffee and tea category is only a microcosm of the entire grocery offering. As Sachs observes, “There’s no question innovation continues not just in coffee and tea, but across the products spectrum — with those combining wellness and sustainability while ensuring excellent flavor faring exceedingly well.”

Buttered Coffee and Beyond

Upcoming areas of interest in the coffee and tea space abound.

“From customers demanding more transparency about sourcing, to new flavor and product categories, we’re seeing quite a few trends that we’re excited by,” says Fresh Thyme’s Abdee.

These include: Demand for Fair Trade and Rainforest Alliance Certifications: “We are continuing to see more focus on the people involved in the growing of coffee, with organizations like Fair Trade USA and Rainforest Alliance certifying many farms that meet the higher growing and farming standards,” he says. “These ultimately all help the planet and anyone associated with the growing, selling, trading and crafting of coffee.”

Coffee Supplements and Canned Beverages: “As more consumers find how easy it is to combine their daily regimens of coffee drinking and supplements, we’ll continue to see more growth in brands offering more additives such as immune support and health-boosting nutrients,” predicts Abdee. “The younger coffee consumers and members of Generation Z are known as big coffee lovers, with canned nitro and cold-brew drinks being some of the most popular [options].”

Buttered Coffee: “Alternative creamers and milks continue to remain popular, but we’re seeing other emerging trends, too, like buttered coffee,” he points out. “The idea is that by adding butter to black coffee, it enhances the caffeine to make it stronger and brings out the natural nutrients in the brew.”

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EQUIPMENT & DESIGN

Store Cleaning Solutions

Spotless Reputation KEEPING STORES CLE AN ISN’T ONLY AN ESSENTIAL HYGIENIC PR ACTICE, BUT ALSO KE Y TO AT TR ACTING AND RE TAINING CUSTOMERS.

By Barbara Sax leaning and sanitizing became top priorities for retailers during the pandemic. Retailers that believe they can relax their standards post-pandemic are in for a surprise — customers are maintaining those higher expectations for a clean store environment and consider cleanliness a critical indicator for where they will shop.

In short, store cleanliness has become a deal breaker for shoppers.

“The pandemic has put, and is keeping, cleanliness top of mind for consumers,” affirms Lisa Robinson, VP of global food safety and public health at St. Paul, Minn.-based Ecolab. A recent Ecolab consumer survey revealed that 86% of consumers said a business’ commitment to public health and safety factors into their decision to patronize a location.

40 progressivegrocer.com

Key Takeaways Consumers are increasingly looking for higher levels of customer experience in the stores they visit, and a clean environment is a big part of that.

Grocers setting cleanliness standards have a top-down commitment to keeping stores clean.

In addition to software, other new solutions, such as training and auditing, are helping retailers assess their approaches to store cleaning and clean more efficiently.

Retailers are increasing the variety and frequency of cleaning practices to appeal to heightened consumer awareness of store cleanliness.

Automated solutions can help retailers resolve potential hazards quickly and avoid injuries to shoppers or workers.

Other studies support the idea that cleanliness is key to attracting shoppers. A recent survey by Pleasanton, Calif.-based ServiceChannel found that four out of five shoppers said they’d rather shop at a clean store than one with the newest tech, while nine out of 10 respondents said that a clean and organized store environment increases the likelihood they’ll make a purchase.

As a result, “many retailers are increasing the frequency and variety of their regular cleaning operations to ensure the highest levels of sanitation for their customers, employees and suppliers,” says William Santiago, CEO of Badger Technologies, a retail automation company based in Nicholasville, Ky. Mike Perazzo, EVP of sales at Kaivac, a Hamilton, Ohiobased manufacturer of cleaning machines, agrees that post-pandemic customers have “a heightened awareness about hygiene and cleanliness and aesthetics.” Perazzo notes that consumers are increasingly looking for higher levels of customer experience in the stores they visit, and a clean environment is a big part of that.

“First-impression areas are always a focal point for shoppers,” observes Dennis O’Brien, CEO of Cleaning Services Group (CSG), a Danvers, Mass.-based cleaning company. “This includes the parking lot, the perimeter of the store, vestibule and front end. One recent study found 52% of shoppers would avoid a store entirely if it looked unappealing from the outside.”

According to O’Brien, CSG pays close attention to these areas, especially in Snowbelt areas where excessive salt and sand can build up and create messy conditions. “We stay ahead of salt/sand buildup on the outside of the store to minimize the amount that’s tracked inside the store, and we do it without compromising safety,” he adds.

Attention to sanitation in high-touch areas is still important to consumers. Ecolab’s research shows that two of the first things consumers look for when assessing a store’s cleanliness are the availability of hand sanitizer and frequent and visible cleaning of high-touch objects.

“Our research shows that 71% of consumers say they want to see store employees cleaning while they’re shopping, 64% say they want hospital cleaning products to be used, and 47% say they appreciate knowing that the store had independent cleanliness audits,” says Robinson.

Best Practices Start From the Top

Grocers setting cleanliness standards have a topdown commitment to keeping stores clean. “Retailers have to design a best practice and keep their teams accountable,” asserts Perazzo.

O’Brien notes that adding a written policy for store associates to review and sign upon hiring can have an impact on overall cleanliness of a store. “Providing clear expectations with the store teams and leading by example is a good place to start,” he says. “CSG trains store teams on how to maintain the store’s cleanliness throughout the day, and this has proven to be very successful.”

According to Santiago, retailers that leverage real-time data collection to develop safety and cleaning protocols, and establish regular reporting processes to improve audit and compliance requirements, are most able to improve the appearance and cleanliness of stores.

CSG quality control CAP (communication, accountability, proactivity) software allows a store manager to access a store through an online portal and rate the level of cleanliness for each area in the store. Comments can also be added, and the information is sent in real time to the area supervisor, district manager and VP of operations so that the issue can be addressed immediately.

Automated Solutions Improve Cleanliness

In addition to software, other new solutions are helping retailers assess their approaches to store cleaning and clean more efficiently. Ecolab, for example, has been working with retailers to elevate hygiene standards through the Ecolab Science Certified (ESC) program, a comprehensive, science-based public-health and food safety program that combines PROGRESSIVE GROCER March 2023

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KAIVAC® CLEANING SYSTEMS FOR GROCERY STORES RESTROOMS

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Grocery store cleaning presents unique challenges. Keeping a clean, safe and inviting store is incredibly demanding, but absolutely necessary. From customer impressions to food safety, cleanliness in the grocery business is a key component in customer loyalty, reputation and profitability.

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EQUIPMENT & DESIGN

Store Cleaning Solutions the use of EPA-approved disinfectants, detailed training and periodic auditing. The program is used at Coborn’s, Cub Foods, Bristol Farms, Ingles Markets, Sprouts Farmers Market and others.

“We created the Ecolab Science Certified program to give customers confidence that retailers are approaching cleanliness the right way,” explains Robinson. “We only provide the Ecolab Science Certified seal to those who meet the program’s rigorous criteria. Consumers who see the ESC seal on the front door of a grocery store, or on a food display cabinet within the store, can have confidence in their choice of outlet.”

Ecolab’s research showed that shoppers exposed to the ESC program indicated that they could increase their visits to an ESC store location by 18%.

Clean stores are also safer environments for employees and customers, so grocers need to monitor floor and shelf conditions continuously. “Retailers need to find opportunities to automate floor checks and capture real-time data about store conditions,” says Santiago. “They also need to adopt best practices for identifying and resolving potential hazards quickly, as a rapid-response process can mitigate the risks of costly slip-and-fall accidents.”

With self-checkout becoming more common, spills have become more frequent. “Retailers need to respond to the new reality of what we call ‘unplanned liquid events’ by cleaning the store frequently throughout the day, not just once the store is closed,” notes Perazzo.

Kaivac’s hybrid floor care program helps retailers complete quick cleanups during the day without having to use heavy commercial equipment that can block aisles and pose a danger to customers. “Our turnkey systems help retailers recover soils quicker and cut the dry by

Clean and sanitary restrooms are a critical part of any retailer's store maintenance strategy.

90%, so they can keep that aisle or that checkout lane open and reduce the liability risk of an employee or customer slipping,” says Perazzo.

Badger Technologies has developed multipurpose autonomous robots that find as well as resolve potential floor hazards. Once a robot finds a spill, it stays in the area until the issue is resolved and a manager or employee directs the robot to resume floor checks. “Alerts about spills or debris can be made over in-store PA systems or sent directly to the store manager’s mobile device to expedite resolution,” observes Santiago.

Clean Restrooms Are Critical

“Retailers are doing their best to get people to stay in the store longer — they are adding a wine or craft beer bar and sampling gourmet cheese — but they are forgetting that if people are there longer, they’re likely to visit a part of the store that is typically not very pleasant. We believe you can’t be serious about having a clean store if you don’t have a clean restroom.”

—Mike Perazzo, Kaivac

44 progressivegrocer.com

Grocers too often underestimate the importance of clean and attractive restrooms. “Retailers are doing their best to get people to stay in the store longer — they are adding a wine or craft beer bar and sampling gourmet cheese — but they are forgetting that if people are there longer, they’re likely to visit a part of the store that is typically not very pleasant,” says Perazzo. “We believe you can’t be serious about having a clean store if you don’t have a clean restroom.”

He continues: “Restrooms are a key biohazard waste transfer station. If those spaces aren’t cleaned well, those biohazards find their way out into the rest of the retail space. Then everything crumbles from there.”

Perazzo notes that retailers with high run times of Kaivac’s restroom-cleaning machines have higher customer service index scores.

OPERATIONS

Sustainability

Retailers’ Eco-Friendly Efforts Gain Ground SOME OF THE BIGGEST PL AYERS IN GROCERY HAVE UPPED THEIR WASTE REDUCTION INITIATIVES.

By Marian Zboraj rioritizing sustainability is on the increase. This was one of the top trends that Jack Sinclair, CEO of Phoenix-based Sprouts Farmers Market, discussed during NRF’s Big Show this past January in New York.

“I think the pandemic had some role to play in this — people are getting more interested in it in the U.S.,” Sinclair said. “We do good by doing good. That’s something to be encouraging across the industry. How can you be much more effective at being good for your customer, good for the families of your customer, good for your communities and good for the planet at the same time? There is a win-win in that space that can drive the terms as well as a more efficient planet.”

Other grocers agree. For instance, more food retailers are realizing the importance of environmental sustainability initiatives as they increase efforts to reduce waste through recycling and composting programs, as well as implementing packaging materials that have a lower impact on the planet.

Walmart Joins the Cleancult

Only about 5% of 51 million tons of U.S. plastic waste was recycled in 2021, according to a study from global environmental advocacy group Greenpeace. This is why Walmart Inc. is betting big on a zero-plastic waste-cleaning startup called Cleancult.

Walmart's new retail partnership allows category disruptor Cleancult to provide its first-to-market paper-based refill cartons to home care shoppers at more than 3,000 brick-and-mortar stores over the coming months.

Key Takeaways More food retailers are realizing the importance of environmental sustainability initiatives as they increase efforts to reduce waste.

Major retailers such as Walmart, Target and Meijer are rolling out initiatives to reduce plastic packaging and encourage recycling.

Environmentally minded companies that these retailers are working with include Cleancult, TerraCycle, Burt's Bees and Grove Co.

On a mission to reduce single-use plastic waste, Cleancult is known as a disruptor to the household cleaning industry by packaging soaps and detergents in paper-based cartons.

The company revealed on March 2 its largest retail expansion to date into more than 3,000 Walmart stores nationwide, bringing its first-to-market paper-based refill cartons to even more customers through its partnership with the retail giant.

“Cleancult’s commitment to plastic elimination is the kind of innovation we need at scale to collectively reduce plastic use and become more regenerative,” says Jennifer R. Jackson, SVP, household essentials at Bentonville, Ark.-based Walmart U.S. A digitally native company founded in 2019, Cleancult’s refillable model transitions seamlessly to brick and mortar due to a comprehensive refill system: Instead of repeatedly buying single-use plastic bottles, consumers can purchase a refillable glass dispenser that doesn’t need to be replaced, along with soap refills in recyclable paper-based cartons to reduce the never-ending cycle of plastic consumption when it comes to conventional cleaning products.

According to Cleancult, this simple household swap reduces plastic waste created from typical home-cleaning routines by 90% and can have an enormous planetary impact. By making the switch to a system like Cleancult’s recyclable paper-based carton model, consumers can eliminate more than 330 million pounds of plastic from entering the environment each year.

The brand's retail presence has grown PROGRESSIVE GROCER March 2023

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OPERATIONS

Sustainability out Amanda Nusz, SVP of corporate responsibility and president of Minneapolis-based Target Foundation.

Hundreds of new and existing products from brands across Target’s beauty, personal care and household essentials categories were among the first in the Target Zero collection. One example is an exclusive-to-Target packaging innovation from the Durhan, N.C.-based Burt’s Bees lip balm brand that uses metal tins that are recyclable and made without single-use plastics. Select products from San Francisco-based Grove Co. and Target private brand Everspring are now also part of the collection.

Responding to increased customer interest in products that help reduce waste, Target has introduced the Target Zero initiative to elevate sustainable brands.

by an impressive 7,500% since 2019.

Kicking off with its best-selling hand soap and dish soap, Cleancult products will roll out in-store and online at Walmart over the coming months, with additional cleaning categories to follow, totaling more than 3,100 points of distribution. In tandem with the Walmart launch, Cleancult is unveiling a fresh new look and feel to its brand, debuting a premium packaging design and fresh scent portfolio. The company will incorporate new and improved formulas over the next few months.

Additionally, Walmart and its Sam’s Club division recently teamed with TerraCycle to recycle plastic food and beverage packaging.

Through the Walmart Hub Recycling Program, consumers can bring all brands of coffee capsules, water filters, plastic bottles, soft plastic food packaging and rigid plastic packaging to designated recycling hubs positioned outside of participating Walmart Supercenters in Springdale, Ark., and Broken Arrow, Okla., as well as at the Fayetteville, Ark., Sam’s Club.

“Plastic food and beverage packaging is an often-overlooked waste stream that plays an important role in our daily lives,” says Tom Szaky, founder and CEO of Trenton, N.J.-based TerraCycle. “Most are not aware that soft plastic food packaging, for instance, is usually multilayered and consists of multiple different materials, excluding it from curbside recycling. That’s why this waste stream, along with water filters, plastic bottles, coffee capsules and rigid plastic packaging, was included in the Walmart Hub Recycling Program.”

When a hub station is full, TerraCycle picks up and transports the waste to regional material recovery facilities, where the waste is sorted by material type and recycled into raw materials that can be used to make new products like playgrounds and park benches.

Target Zero

Also responding to greater customer interest in products that help reduce waste, Target Corp. launched the Target Zero initiative last year to elevate sustainable brands. Target Zero icons are found in stores and through a dedicated online experience identifying products and packaging across the retailer’s assortment that are designed to be refillable, reusable or compostable; made from recycled content; or made from materials that reduce plastic use.

“Target Zero helps [guests] make informed decisions about what they purchase and advances a collective impact across our brand partners, our product shelves, and within our homes and communities,” points

46 progressivegrocer.com

Meijer’s Roots in Recycling

Meanwhile, Meijer Inc. is encouraging its customers to bring their plastic flower pots and trays — regardless of the plants or flowers were originally purchased — to any Meijer Garden Center to be recycled.

In addition to keeping plastic out of landfills, recycled plastic uses less energy and emits less carbon in its production compared with virgin plastic. In fact, the Washington, D.C.-based Association of Plastic Recyclers reports that recycled plastic reduces total energy consumption by 88% and cuts emissions by 71% for polypropylene, which is the plastic used to manufacture plant and flower pots and trays.

“We integrate environmental sustainability into our daily operations because it makes good business sense and aligns with our values of caring about the communities we serve,” says Jeff Lynch, garden center merchant for Grand Rapids, Mich.-based Meijer. “Gardening is an activity that supports a natural environment where plants can flourish, but unfortunately, the majority are sold in plastic gardening containers. By working with our suppliers and customers to recycle those containers, it’s our way of being more environmentally friendly and moving the industry forward.”

Meijer is now encouraging its customers to bring their plastic flowerpots and trays — regardless of where the plants or flowers were originally purchased — to any Meijer Garden Center to be recycled.

The corrugated industry has a long-standing and proven commitment to sustainability and an inherently circular supply chain. Only trees from sustainably managed forests are used to make corrugated boxes, and each year, more trees are planted than harvested. In fact, more trees live on American soil today than 50 years ago, now covering one-third of U.S. land1. With a recycling rate hovering around 90 percent for the last decade, the corrugated industry closes the loop by reusing fibers from recycled boxes to make new ones.

Square? Most likely. Circular? Definitely! Renewable. Circular. Extraordinary.

Learn more about the renewability, recyclability and responsibility of boxes at boxesareextraordinary.com.

1

USDA, Forest Service

EQUIPMENT & DESIGN

Store Remodels

The ‘Look’ for Less

PHOTO: CARDENAS MARKETS

FACING SOARING L ABOR AND MATERIALS PRICES, E XPERTS DISCUSS HOW TO REDUCE STORE RENOVATION COSTS. By Debby Garbato ppearances count, particularly in grocery, whose brick-and-mortar environment should look just as fresh as the meat, milk and produce it offers. But keeping up appearances has become tougher.

The cost of labor and materials has increased dramatically, while COVID-19-related work stoppages at the height of the pandemic have decreased today’s availability of equipment and supplies.

Released in December 2022, the Construction Cost Index, from global real estate services company CBRE, forecasted a 14.1% increase in construction costs (labor and materials) by year-end 2022. To cut costs and keep renovations on schedule, retailers are performing less costly, smaller-scale facelifts. They’re also using more domestic suppliers, purchasing used equipment, sprucing up existing equipment and scaling down decor. Amid these money-saving moves, however, they’re continuing to invest in areas that are key customer touchpoints or drive new revenue, such as restrooms, self-checkout and online order pickup areas (see sidebar on page 52).

48 progressivegrocer.com

Like many retailers, Hispanic grocery chain Cardenas Markets is contending with vendor shortages and escalating prices of refrigerator cases and other equipment.

Prices can even increase post-order.

Key Takeaways Grocers’ post-COVID demand for remodeling has grown, with the pandemic and inflation driving grocery sales. But new store growth has slowed, since retailers can’t maintain opening schedules.

A category hard hit by price increases and product availability is equipment. Grocers are also spending less on décor, fixtures, and floors and ceilings.

Last-minute changes — and pitfalls — can often be avoided through use of BIM (building information modeling) software.

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EQUIPMENT & DESIGN

Store Remodels Supermarkets must pay close attention to key shopper touchpoints like restrooms and in-store dining areas, which help increase dwell time.

“We may not be touching every element we did before,” affirms Veronica Jimenez, VP of construction and maintenance at Ontario, Calif.-based Hipsanic grocer Cardenas Markets. “We may be paring down to some small decorative elements, whereas we might have gone over the top in the past.

Do we need a real brick façade, or can it be faux brick? A fresh coat of paint can work wonders in lieu of significant structural modifications. It’s the ‘value engineering’ flavor of the day. We’re putting function and form over vibrance.” Jimenez adds that building materials’ prices have increased 100% compared with pre-COVID levels.

While costs have mushroomed, budgets have not necessarily done so. “We must pivot,” notes Jimenez. “What’s the ‘look’ for less? How do we get the overall feel authentically or equipment-wise?” Cardenas renovates 10 locations annually, using its store-wide Clean & Bright model, and makes smaller changes to an additional 40 to 50 locations.

According to Rick Weinberg, EVP at Los Angeles-based CBRE, grocery stores are typically “refreshed” every four or five years and remodeled every seven to eight.

Grocers’ post-COVID demand for remodeling has increased, with the pandemic and inflation driving grocery sales. New store growth, however, has slowed since retailers can’t maintain opening schedules. “The grocery industry is flourishing,” says Blake Sloan, partner and director of business development at architecture and design firm Heights Venture, in Plano, Texas. “Prices for remodels went up and the remodel list grew. But with new stores, every day you don’t open, you’re losing money.”

Factories that closed during the pandemic have reopened, but many are behind schedule and understaffed, notes Sloan, adding that supply chain snarls “slowed down our schedules 25% to 50%.”

Freezers and Refrigeration

PHOTO: CARDENAS MARKETS

A category hard hit by price increases and product availability is equipment, namely freezers, refrigeration units, stoves and ovens.

According to Eric Truskowski, director of retail project management at CBRE, refrigeration equipment prices in particular have soared.

“Fixture and display costs have increased some, but refrigeration

“Do we need a real brick façade, or can it be faux brick? A fresh coat of paint can work wonders in lieu of significant structural modifications.

It’s the ‘value engineering’ flavor of the day. We’re putting function and form over vibrance.”

—Veronica Jimenez, Cardenas Markets

50 progressivegrocer.com

equipment has outpaced fixturing,” says Truskowski.

“Chip availability for refrigeration and HVAC controls is also a large factor.”

Costs often increase post-order. “Lead times are killing us,” notes Jimenez. “Six months down the line, you’ll get a notice saying cases went up in price. They’ll say, ‘Want it or not? We’ll give it to someone else.’ It’s hard to get units in a timely manner.”

Steve Duffy, SVP of design at Orlando, Fla.-based architecture firm Cuhachi Peterson, has seen the timeline for hardlines orders “virtually double” for a Midwestern grocery client that ordered from a major manufacturer.

“We’re trying to lock in designs on a store where the equipment won’t show up until a year from now,” says Duffy. “We’re looking at existing equipment to decide if they can keep it rather than wait.” Service technicians are also in short supply, he points out.

Retailers have turned to domestic suppliers and those in nearby countries to reduce lead times, but that’s also challenging. Used and refurbished equipment is another option. “There’s a limited number of U.S. manufacturers that make refrigerated cases for grocery stores,” says Sloan. “The refurbished market has gotten big.”

While used equipment can be a viable option, Duffy notes that some will soon be obsolete, since old technologies are being “phased out.” He adds that such equipment “must comply with Department of Energy requirements.”

Less Fancy Artwork

One area where grocers are cutting back significantly is décor. Special artwork like department murals, for example, is being replaced by more modular art or signage that’s easier to ship from local suppliers and can be replicated across multiple locations, according to Sloan. “They’re looking at more economical ways to do department décor and wayfinding,” he says. “You can spend less and people will still know where the pharmacy or seafood department is.”

Sloan has also had clients that believe expensive murals and 3D sculptures make customers think a store’s food is expensive. “There’s some psychology involved,” he observes. “A cleaner look may make shoppers think groceries cost less.”

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EQUIPMENT & DESIGN

Store Remodels Artificial materials can also come into play. Duffy points to a customer that used a printed brick pattern in multiple areas rather than real or faux brick.

On the Shelf

Like other elements, store fixtures and other display units have become less fancy. There is also less use of custom fixtures and ones specific to one store or department. Existing fixtures can often be refurbished for another use.

“How can we extend their lifecycle?” muses Billy Plummer, principal at Baltimore-based architecture firm CallisonRTKL. “Can we sand it, re-stain it, wax it, versus putting in new ones? There are more discerning audits of what still has life to live. They may use them in another store.”

“You can spend less and people will still know where the pharmacy or seafood department is.”

—Blake Sloan, Heights Ventures

Touchpoint Grooming While retailers must cut renovation costs, there are areas in which they must be careful when skimping or substituting materials. These are crucial touchpoints, meaning that they strongly affect consumers’ judgement criteria and/or drive additional profits.

The maintenance, cleanliness and in-stock positioning of restrooms, for example, is a shopper’s barometer for a store’s overall quality. Restrooms, along with foodservice areas, increase dwell time. Self-checkouts eliminate costs, while online order pickup areas are growing in popularity.

“We’re all looking at opportunities to sell more groceries,” says Veronica Jimenez, VP of construction and maintenance at Hispanic grocery chain Cardenas Markets, based in Ontario, Calif. “That’s what we’re in business for. Anything that services the customer is an important piece of the puzzle. We provide a dining experience; we want customers to stay awhile, so the environment must be inviting. A big driving force of what we do is continuing to stay competitive on the customer experience.”

While retailers may downscale furniture or dining area décor, restroom renovations are non-negotiable. “Clean stores and clean restrooms are baseline fees to entry, regardless of cost,” asserts Rick Weinberg, EVP at Los Angeles-based global real estate services company CBRE. Drive-thru areas for picking up online orders have become more important. According to the “2023 Brick Meets Click/Mercatus 5-Year Grocery Sales Forecast,” total U.S. online grocery sales are predicted to grow at a compound average growth rate (CAGR) of 11.7% over the next five years, increasing online’s share of overall grocery spending from 11.2% in 2022 to 13.6% in 2027.

Pickup sales are expected to grow at a five-year nominal CAGR of 13.6%, compared with 10.8% for delivery and 8.0% for ship-to-home.

Hence, pickup’s share of online sales is projected to expand from 45.4% in 2022 to 50.3% during 2027, at the expense of the other segments.

Total grocery sales (excluding inflation) are expected to grow at a 2.5% CAGR over the next five years.

“Efficient curbside pickup options, despite higher costs and limited returns, are proving most critical in today’s environment,” notes Weinberg.

According to Billy Plummer, principal at Baltimore-based architecture firm CallisonRTKL, curbside fulfillment areas are often replacing employee break rooms and optical departments at the front of supermarkets.

Some chains even create drive-thru pickup areas that involve “cutting a hole in the building, which gets costly,” he points out.

Many grocers are growing self-checkout. “If they had six self-checkouts, they doubled them,” says Plummer. “They save money in salaries.”

In addition to investing in profitable areas, renovations involve eliminating the obsolete. As Jimenez observes, “Maybe what was an opportunity 10 years ago isn’t so significant today.”

52 progressivegrocer.com

Supermarkets are also using more branded fixtures provided by merchandise suppliers. These offer a distinctive look and merchandise products a particular way. Additionally, according to Plummer, they’re faster and cheaper to procure.

Retailers that want to replace floors and ceilings are also cutting costs. Instead of buying new ceiling tiles, Sloan notes that grocers simply apply paint. With floors, retailers often want to remove tiles and resurface the concrete, but laying vinyl tiles is cheaper and less disruptive. This is particularly true in older stores, where existing tile glue may contain asbestos and “brings up abatement issues,” he adds.

No Last-Minute Changes

Exorbitant costs and lead times have pretty much put the lid on making last-minute changes to renovation plans, something the grocery industry is famous for.

“You don’t have that luxury,” asserts Duffy. “That’s untenable today, unless you’re just moving a case’s location. It’s hard to upgrade at the last minute.”

Last-minute changes — and pitfalls — can often be avoided through use of BIM (building information modeling) software. The 3D digital tool, in short, virtualizes a project from concept to completion and on through its whole lifecycle. In recent years, increasing numbers of retailers have begun using BIM. The software lets layers of projects be turned on and off. This facilitates activities like moving refrigeration equipment from one store to another. “With 3D, you discover things ahead of time, rather than when you’re doing surveys,” adds Plummer. “It’s easier to plan something like moving duct work. And if you move a beam to raise a portion of the store, you don’t have to worry about hitting something you didn’t plan for.”

Three-D also allows architects and designers to better communicate with retail executives about projected outcomes. According to Sloan. “[These] models are ‘smart’ enough that we can show them how something will look. It helps them make better decisions.”

At press time, the costs of raw materials like steel and lumber were declining. CBRE predicts that construction cost escalation should stabilize to the 2%-to4% range this year and the next, on par with historical averages. Long lead times and materials shortages will likely continue in the short term, however.

“Money isn’t going as far as it did a few years ago,” says Duffy, “but grocers are seeing a bit of easing up on cost and availability of materials.”

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TECHNOLOGY

Payment Options

The Future of Payments

Touchless payment options come in many forms today, ranging from smartphone apps to smart shopping carts.

WITH CONVENIENT PAYMENT OPTIONS PROLIFER ATING, WHICH SYSTEMS SHOULD GROCERS ADOPT? By Emily Crowe Key Takeaways .S. consumers have more options than ever when it comes to buying groceries.

They can choose how and when they make their purchases by shopping in a physical store or online, and they’re also being given the freedom to pay for their groceries in myriad ways.

Not only are consumers wading into these new options, but many have come to expect them as they seek out seamless shopping experiences. A flash of an Apple Watch or a QR code scanned on a smartphone is now accepted as payment at food retail establishments throughout the country, but are all consumers sold on these newfangled options?

54 progressivegrocer.com

While it’s imperative to offer standard means of payment at the register, alternative options are gaining in popularity.

Contactless payments have become an increasingly important checkout feature for many grocery shoppers, as has online acceptance of EBT SNAP payments.

New payment options will only continue to proliferate and shoppers will remain loyal to those grocers that offer convenience, speed and a positive experience.

According to a recent study from Boston-based PYMNTS.com, more grocery shoppers prefer to pay with debit, at 42.3%, while 31.9% choose to pay with a credit card. Cash or check is the preferred payment method for 13.4% of shoppers, while 6.1% choose to use a digital wallet.

Although debit still reigns supreme, PYMNTS.com also found that groceries account for 62% of all purchases made using a digital wallet, and 4% of all in-store checkouts made by members of Gen Z are done so using a digital wallet. While it’s clearly important to offer standard means of payment at the register, alternative options are becoming ripe for the picking.

Walmart offers several in-store payment options beyond the typical cash register, including smartphone-enabled Walmart Pay.

Payment Options Run the Gamut

Perhaps pushed forward by a pandemic-era desire to keep germs at bay, contactless payments have become an increasingly important checkout feature for many grocery shoppers. Today, Apple Pay, Google Pay, Samsung Pay and others are accepted at hundreds of grocery banners, and technology companies and grocers themselves are also creating new solutions.

In 2019, The Kroger Co., based in Cincinnati, rolled out its Kro-

ger Pay option, which allows customers to link a card to the Kroger app and use their coupons, loyalty card and payment all in one scan. Bentonville, Ark.-based Walmart offers a similar payment option, as well as a mobile scan-and-go service that lets shoppers scan items as they shop and than pay at a self-checkout ki-

Innovations for the Independent Retailer • Self-checkout • Electronic shelf labels • Mobile data & analytics • Scan Pay Go mobile shopping • Digital coupons • Shrink-reduction tools • Smart shelf technology • Electric vehicle charging Contact us: PSSales@unfi.com | services.unfi.com PROGRESSIVE GROCER March 2023

55

TECHNOLOGY

Payment Options osk. Giant Eagle, Albertsons Cos., Lowes Foods, Meijer, Hy-Vee, ShopRite and many other grocers offer similar options.

San Francisco-based Instacart, meanwhile, is creating a contactless payment ecosystem through its Connected Stores solutions. Independent grocer Foodcellar Market was the first retailer to fully roll out Instacart’s Scan & Pay option, which lets shoppers scan a QR code found on a sign at the front of the store and automatically add items to their digital cart and check out anywhere via their smartphone.

“Our customers have shared their surprise at how easy it is to use Scan & Pay – there’s no need to download an app or learn complicated technology,” says Metin Mangut, co-founder of Long Island City, N.Y.-based Foodcellar Market. “We’ve been really pleased with the early adoption, and our store associates love how Scan & Pay reduces stress for them, too.”

Amid inflationary times, many grocery shoppers are also turning to buy-now-pay-later (BNPL) options in an effort to stretch their dollars at the register. A PYMNTS.com study found that 40% of Millennial and 37% of bridge Millennial grocery shoppers are “very” or “extremely” interested in such a service.

Stockholm-based financial technology company Klarna partners with Walmart to give customers the option of splitting the cost of their purchase into four separate interest-free payments, with other companies, including Four, Zip, Affirm and Splitit, offering similar services at food retail.

Another payment option seeing mass adoption is online acceptance of electronic benefits transfer and Supplemental Nutrition Assistance Program (EBT SNAP) payments. Millions of shoppers throughout the United States depend on SNAP benefits, making this an important component of e-commerce operations across the grocery industry.

A Host of Considerations

Customers are becoming increasingly interested in these options, as well as everything from self-serve kiosks and endless aisles to smart shopping carts and in-app payments, giving grocers a lot to consider in terms of the flexibility they offer at checkout. Wegmans Food Markets, for example, rolled out its Scan app in 2019 and ramped it up during the height of the pandemic, but discontinued the service last year in the wake of shoplifting losses.

“Early in the pandemic, we quickly rolled out our Scan app to provide a contactless in-store shopping option,” Rochester, N.Y.based Wegmans noted at the time. “Scan users have told us they love the app and the convenience it offers. Unfortunately, the losses we are experiencing prevent us from continuing to make it available in its current state.”

Other grocers have lamented similar issues, but technology advancements are helping to ensure that these problems are addressed head-on. Instacart’s contactless payment solution, for instance, promises speed, convenience and added budget consciousness for customers, but it also lets retailers employ a dashboard aimed at monitoring Scan & Pay transactions in real time to monitor loss prevention and stay on top of any pattern shifts.

Customer data safety is another issue to keep in mind when considering new payment options. Third-party companies like Miami-based payment systems provider ACI Worldwide offer merchant omni-tokens that protect

56 progressivegrocer.com

“Grocers have a massive opportunity to migrate to new types of digital and hybrid [payment] services that resonate with — and lock in — increasingly connected consumer audiences.”

—ACI’s “Who’s Shopping at Your Store?” report

data across all in-store and online payment channels, as well as point-to-point encryption that protects customer data throughout the payment process.

The New Era

At the end of the day, new payment options will only continue to proliferate and shoppers will remain loyal to those grocers that offer convenience, speed and a positive experience. According to ACI’s “Who’s Shopping at Your Store?” report, “Grocers have a massive opportunity to migrate to new types of digital and hybrid services that resonate with — and lock in — increasingly connected consumer audiences.

“Grocers must respond by continuing to evolve with their customers while accelerating innovation and finding new ways to harness payment tech to best service their changing needs,” the report continues.

Indeed, ACI notes that enabling these payment methods, as well as others, gives grocers an unmatched opportunity to remove friction, minimize fraud and false declines, seamlessly connect services, personalize loyalty and experiences, and much more.

Foodcellar Market is partnering with Instacart to offer the latter company's Scan & Pay option, which lets shoppers scan a QR code and automatically add items to their digital cart and check out anywhere via their smartphone.

EDITORS’ PICKS

Food, Beverage & Nonfood Products

Protein Pancakes

Frozen pancake category leader De Wafelbakkers has teamed with Premier Protein, best known for its shakes and powders, on the rollout of protein-packed frozen pancakes. Premier Protein Frozen Pancakes can serve as a quick, nutritious breakfast; a filling afternoon snack; or an energizing post-workout meal. The pancakes are available in a 15.4-ounce 12-pack at retail and a 30.8-ounce 24-pack at club stores, retailing for a suggested $5.99 and $9.99, respectively. https://www.premierprotein.com/; https://www.dewafelbakkers.net/home/

On the Lamb

In response to growing consumer demand for premium products, World Select Cuts LLC has expanded its Aussie Select line of handcrafted deli products made with freerange, pasture-raised Australian lamb. The brand now offers a presliced pack in three ready-to-eat varieties: Agave Rosemary Lamb Ham, 100% pure agave syrup and fragrant fresh rosemary with subtle notes of nutmeg, fennel and garlic; Lamb Pastrami, seasoned with traditional deli flavors like coarse ground black pepper, coriander and brown sugar, and then smoked with hickory and mesquite; and Tikka Masala Lamb Ham, featuring the warm toasted flavors of classic Indian masala — cumin, cardamom, coriander, cinnamon, cloves and nutmeg — in a robust rub. Each product in the first-to-market lamb line is fully cooked, free of artificial flavors or colors, and Halal-certified. A 4-ounce pack of any variety retails for a suggested price range of $14.99-$15.99. Aussie Select also still offers roasts that can be sliced by the deli or sold whole for shoppers to take home for Sunday dinners and special occasions.

The brand additionally provides foodservice options. https://aussieselect.com/

Out-of-This-World Snacking

Better-for-you snack brand LesserEvil has now launched Space Balls, available in Interstellar Cheddar and Cinnamon Sugar Stardust flavors.

The light, fluffy, air-puffed whole grain organic corn balls swirled with avocado oil and Himalayan salt are appropriate for grade school lunches, afternoon snacks, and more. Space Balls are now available for purchase exclusively at Whole Foods Market nationwide for a suggested $5.99 per 7-ounce bag, with additional retailers to follow in the coming months. LesserEvil has also created Cosmic Rings, whole grain organic corn tossed in avocado oil and simple organic seasoning and formed in a toddler-friendly shape. Cosmic Rings’ Cosmic Cheddar and Berry Blast flavors are rolling out at Walmart locations for a suggested $3.99 per 3-ounce bag. Both Certified Organic, Non-GMO Project Verified, gluten-free and kosher snack lines are made with thoughtful, sustainable ingredients without sacrificing taste, and Space Balls are Certified Vegan.

Additionally, to help minimize waste, LesserEvil partners with NEO Plastics on the packaging of all of its snacks. https://lesserevil.com/

Spreadable Chickpeas

Now available in the United States via Gourmica and Amazon, U.K. brand Fabalous is described by its maker as the first organic chocolate spread to feature chickpeas as the main ingredient. As a result, it contains 81% more protein and 57% less sugar than a jar of any other chocolate spread. The chickpea base used in Fabalous is obtained through a patent-pending proprietary production process. Chickpeas are high in protein and a source of vitamins, minerals and fiber, and also help improve the air and soil, since chickpea plants naturally release nitrogen into the soil as they grow. The plant-based vegan spread is also free of palm oil, dairy and soy, and appropriate for high-protein and low-sugar diets. A 7.05-ounce jar, containing on average 128 dried chickpeas and eight shelled hazelnuts, retails for a suggested $4.99 for the Original variety, $5.25 for the Orange variety and $5.95 for the Crunchy variety. https://gourmica.com/; https://www.befabalous.com/gb PROGRESSIVE GROCER March 2023

57

AHEAD OF WHAT’S NEXT

By Bridget Goldschmidt

Seafood Rules the Road ASC SHARES THE SUCCESSFUL RESULTS OF ITS NORTH AMERICAN MARKE TING CAMPAIGN. he Aquaculture Stewardship Council (ASC) has wrapped up the first year of its unprecedented North American marketing campaign, which showcased responsibly raised seafood with 50-plus industry partners through a range of in-person events and online activations reaching millions of consumers. So far, the wide-ranging endeavor is going swimmingly.

Launched at last year’s Seafood Expo North America (SENA) in Boston, the campaign — the largest promotions investment in ASC’s history — strives to educate consumers on the benefits of certified seafood while explaining the difference and value of ASC certification.

“This is at least a three- to five-year campaign, and each year [we] are continuing to expand into new markets with an array of retail promotions, restaurant events, food festivals and other activations in partnership with ASC-certified producers and distributors, chefs, retailers and other companies working with ASC-certified and -labeled seafood,” notes Dr. Mark Lang, senior marketer at Wilmington, N.C.-based ASC USA. “Each year, as we add more markets, we also nurture and revisit markets and partners from prior years. [W]e’re going deep into key regions to build our awareness from store to store, chef to chef, and kitchen to kitchen.”

Asked about highlights of the 2022 campaign, Lang responds: “One of our favorite retail partnerships was with Coastal Seafoods — the trendy Twin Cities seafood grocer owned by Fortune Fish & Gourmet, a longtime supporter of ASC’s program. Last October — National Seafood Month – and into November, they held a joint promotion, Fall in Love With Farmed Seafood, in stores and at their café. The celebration highlighted a variety of ASC-certified products by offering month-long specials, a chef-driven sampling event, certified café menu items, and education about responsible aquaculture and ASC’s sea green label to shoppers in-store and online. … The partnership earned multiple local and national news stories, a wide array of social media coverage, and sampling to thousands of consumers.”

More in Store

ASC plans to continue its campaign with new and bigger activations in Portland, Ore.; Southern California; and Washington, D.C. The North American marketing team will reveal its 2023 theme and an array of new partnerships at SENA 2023, taking place March 12-14 in Boston.

Offering a sneak peek at what’s on tap this year, Lang asserts: “We’re renewing our campaign with a heavier-hitting message: Sea Green. Be Green. This is a nod to ASC’s sea green label, which serves as a powerful assurance tool.” According to Lang, ASC is the only seafood certification that ensures supply chain integrity from the farm to the store, provides the most comprehensive transparency through public disclosure, and protects the environment, workers and communities.

The organization will also present at least three more ASC Summits during the year, taking major North American retailers to 58 progressivegrocer.com

seafood grocer Coastal Last October, Twin Cities an in-store Fall in Love for ue Seafoods was the ven motion highlighting a With Farmed Seafood pro ducts. pro d tifie -cer ASC of variety

tour countries producing ASC-certified and -labeled seafood in the Mediterranean, Southeast Asia and South America.

“The ASC summits have played a crucial role in building awareness of ASC-certified and -labeled seafood for retailers, alongside our consumer-focused marketing campaign,” affirms Lang.

Regarding city-specific activities, he provides an enticing taste of what’s ahead.

In Portland, there will be an Earth Month promotion with Bamboo Sushi and Blue Ocean Mariculture, and a National Seafood Month activation with New Seasons Market and Riverence. Southern California will play host to summer sampling activations with Santa Monica Seafood, featuring a variety of ASC-certified producers and products, as well as fall restaurant experiences and festivals. Our nation’s capital will be the site of the D.C. Barbecue Battle festival with Laguna Blanca Salmon, not to mention summer dining experiences with Congressional Seafood.

“We want to remind shoppers that not all aquaculture is the same — and neither are certifications,” says Lang. “We also want to have real conversations with retailers about not settling for something less, and the risks of making claims about responsible or sustainable seafood that can’t be verified.”

Bridget Goldschmidt Managing Editor bgoldschmidt@ensemleiq.com

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