Page 1

CatMan Do

Reach across aisles to boost center store Page 62

s i 2

Truth and Consequences Exploring the ramifications of deli failures Page 80

r e t t e b

e-Shop Around

Choose the best online model for your company Page 129

! 1 n a th

Page 30

Add Nutella & GO! Pretzel Sticks to drive front-end profitability. April 2015 • Volume 94 Number 4 $10 • www.progressivegrocer.com


Nutella & GO! is ranked 2nd among top front-end SKU’s*

12cnt front end tray*

Nutella & GO! Pretzel is projected to be a Top 10 front-end item* Nutella & GO! Pretzel is the only snack offering Nutella 's delicious hazelnut spread with dip-able pretzel sticks ®

12cnt front end tray* *Also available in 24cnt front-end display

Order Nutella & GO! Pretzel Sticks today to continue driving high revenue and profit on the front-end! *Source: IRI Total US MULO, Latest 52 WE 4/20/14

© 2015 Ferrero. All rights reserved.


CatMan Do

Reach across aisles to boost center store Page 62

Truth and Consequences Exploring the ramifications of deli failures Page 80

e-Shop Around

Choose the best online model for your company Page 129

Page 30

April 2015 • Volume 94 Number 4 $10 • www.progressivegrocer.com


BREWED THE HARD WAY,

TO WORK HARD FOR YOU. The King of Beers is an asset on Grocery Store shelves. In fact, Budweiser accounts for over $1.5 billion in annual sales, meaning one case of Budweiser is sold from large-format stores every second. It’s a brand with so much stopping power that 54% of shoppers can recall seeing Budweiser on display.* Contact your local distributor to get your Brewed The Hard Way signage today.

* Sources: iri total convenience and drug, last 52 weeks IRI MULO, last 52 weeks ©2015 Anheuser-Busch, Budweiser® Beer, St. Louis, MO


#1 Hard Discount Grocery Designed for Independent Retailers Save-A-Lot has been developed with the independent retailer in mind. Contact us to learn why leading independent grocery and convenience store retailers have chosen Save-A-Lot as part of their expansion plans. Minimum $200,000 fnancial incentive. Comprehensive support including training, operations and marketing. Dedicated distribution of fresh meat, produce and exclusive private label brands.

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profit from our innovation As organic goes mainstream, Blount enables you to expand your organic offerings with an exciting variety of our delicious innovative side dishes. Hand crafted in small batches, our products are available in convenient 12 or 16 oz retail bowls. Elevate your customer’s dining experience and your stores profits.

With Blount, you get more because we do more. To learn more about our artisan-crafted organic sides, call 800.274.2526 or visit blountfinefoods.com/buildsales Visit us at the IDDBA Georgia World Congress Center • June 6-9 • Atlanta Booth# 1901


Arugula Salad with Pear Nectar Vinaigrette

©2015 Goya Foods, Inc.

Your shoppers find this and other great recipes at goya.com

The ChefsBest® Excellence Award is awarded to brands that surpass quality standards established by independent professional chefs.


April 2015

features

Volume 94, Issue 4

cover story

88

PrePared food PaCkaging

62

To Protect and Serve Retailers collaborate with suppliers on innovative packaging for prepared foods.

Category ManageMent

Delivery Solutions Reaching across aisles to satisfy shopper need states is the way to boost center store.

92

ProduCe

Pack and Play Today’s packaged produce delivers it all: convenience, sustainability, personality and fun.

grocery

70

CondiMents

Hot Stuff Sauces with a spicy kick enliven supermarket displays and customers’ palates.

frozen & refrigerated

30

98

Progressive groCer ’s 82 annual rePort of the groCery industry nd

Aisles of Opportunity

Grocers are bullish on 2015, but new specters are bringing on sleepless nights for retailers.

fresh food

ProduCe Category sPotlight

Masters of Melons Flavor-packed varieties, strategically merchandised, are key to this category’s success.

106

guest PersPeCtives

80 Progressive groCer ’s deli insights

Facing Deli Consequences Training is key to reducing prepared food product issues, out-of-stocks.

A Call for an Organic Checkoff Grocers can combat out-ofstocks by supporting a boost in organic farming.

115

74 Baked goods

A Slice of the Action Savvy promotions and a keen eye on consumer needs position frozen cakes and pies as an attractive alternative to home baking.

2015 annual Meat ConferenCe

Lessons in Meat Marketing Annual conference looks at branding, natural products, foodservice and how to enhance the shopper experience.

April 2015 | progressivegrocer.com |

7


nonfoods 120 HealtH Beauty & Wellness

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 224 632-8200 • www.progressivegrocer.com

Advances in Care Retailers can tap new technology for personal disease management to attract diabetes patients.

vP, Brand Director 201-855-7621

EDITorIAL Editorial Director Joan Driggs 224-632-8211 jdriggs@stagnitomail.com Chief Content Editor Meg Major 724-453-3545 mmajor@stagnitomail.com Editor-in-Chief James Dudlicek 224-632-8238 jdudlicek@stagnitomail.com Managing Editor Bridget Goldschmidt 201-855-7603 bgoldschmidt@stagnitomail.com Technology Editor John karolefski 440-582-1889 jkarolefski@stagnitomail.com Senior Editor katie Martin 224-632-8172 kmartin@stagnitomail.com Senior Editor Anna wolfe 207-773-1154 awolfe@stagnitomail.com Digital Editor kyle Shamorian 224-632-8252 kshamorian@stagnitomail.com Art Director Bill Antkowiak bantkowiak@stagnitomail.com Contributing Editors Bob Ingram, Jenny McTaggart, Barbara Sax, Jennifer Strailey and Christina Veiders

126

Batteries and FlasHligHts

Storm Cells In times of emergency, consumers look to grocery retailers for batteries and fashlights.

technology 129 e-CommerCe

Getting Started Now What’s the best type of service for online grocery?

134

guest PersPeCtives

The Perception Gap Here’s how grocers can use data more efectively.

138

logistiCs

The Digital Link Beyond serving consumers’ needs, up-and-coming technology can help streamline the supply chain for a new era of retailing.

equipment & design

142

sHoPPing Carts

Pushing Into Tomorrow Te ‘shopping cart of the future’ has attracted a wide array of concepts.

8

| Progressive Grocer | April 2015

ADvErTISING SALES & BuSINESS Midwest Marketing Manager John huff 224-632-8174 jhuff@stagnitomail.com western regional Sales Manager Elizabeth Cherry 310-546-3815 echerry@stagnitomail.com Eastern Marketing Manager Maggie kaeppel 630-364-2150 • Mobile: 708-565-5350 mkaeppel@stagnitomail.com Northeast Marketing Manager Mike Shaw 201-855-7631 • Mobile: 201-281-9100 mshaw@stagnitomail.com Marketing Manager Janet Blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) jblaney@stagnitomail.com 630-364-1601 Account Executive/ Classified Advertising Terry kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@stagnitomail.com Advertising/Production Manager Jackie Batson 224-632-8183 • Fax: 888-316-7987 jbatson@stagnitomail.com Classified Production Manager Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com MArkETING & ProMoTIoN Director of Market research Debra Chanil 201-855-7605 dchanil@stagnitomail.com Audience Development Manager Shelly Patton 215-301-0593 spatton@stagnitomail.com List rental The Information refinery 800-529-9020 Brian Clotworthy reprints and Licensing wright’s Media 877-652-5295 sales@wrightsmedia.com Subscriber Services/Single-copy Purchases 978-671-0449 or email at Stagnito@e-circ.net

EvEnts • MEdia • REsEaRch • infoRMation uNITED STATES MArkETS Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green

departments 10 EDITor’S NoTE: BANNEr YEAr 14 PG PuLSE 16 IN-STorE EvENTS CALENDAr: JuNE 2015 20 NIELSEN’S ShELf SToPPErS/SPoTLIGhT: frozEN AND rEfrIGErATED PrEPArED fooDS/ frozEN AND rEfrIGErATED GrAvIES AND SAuCES 22 MINTEL GLoBAL NEw ProDuCTS: SALTY SNACkS, MEAT SNACkS AND PoPCorN 24 NEw horIzoNS: ‘IT’S TIME’ for A NEw workPLACE 28 ALL’S wELLNESS: EArTh DAY EvErY DAY 146 whAT’S NExT: EDITorS’ PICkS for INNovATIvE ProDuCTS 150 ThE SuPPLIEr SIDE 154 ThE LAST worD: ANTICIPATIoN

Jeff friedman jfriedman@stagnitomail.com

CANADIAN MArkETS • Convenience • Pharmacy • Foodservice

President & CEo harry Stagnito Chief Information officer kollin Stagnito SvP, Partner Ned Bardic Chief Brand officer korry Stagnito vP & Cfo kyle Stagnito vP/Custom Media Division Pierce hollingsworth 224-632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris human resources Manager Sandy Berndt Corporate Marketing Director Bruce hendrickson 224-632-8214 bhendrickson@stagnitomail.com Promotion Director robert kuwada 201-855-7616 rkuwada@stagnitomail.com vP/Events John failla 201-855-7634 jfailla@stagnitomail.com Director of Digital Media John Callanan 203-295-7058 jcallanan@stagnitomail.com Audience Development Director Cindy Cardinal


Drive traffic and sales with innovative and exciting items from Pillsbury®.

Shoppers know they can celebrate any occasion with Pillsbury. With the bright colors and unique flavors your shoppers look forward to each season, we’re making the bake aisle a destination for inspiration all year long.

Innovation brought to you by The J.M. Smucker Company family of brands. ©/® The J.M. Smucker Company. Pillsbury, the Barrelhead logo and the Doughboy character are trademarks of The Pillsbury Company, LLC, used under license.


editor’s note by Jim Dudlicek

Banner Year

G Marketing meals, not ingredients — solutions, not products — is what’s going to keep the traditional grocer relevant and thriving.

10

rocery retailers tell Progressive Grocer they’re upbeat about their prospects for a successful 2015, and apparently the folks who supply the food they sell are happy about the year ahead as well. Despite an underwhelming performance in 2014, the near-term prospects for the U.S. food and beverage industry are encouraging, according to a new report from Chicago-based BMO Economics. “Although margins and proftability fell short of lofty expectations in 2014, stronger demand growth, falling livestock prices and still-low crop costs should help producers make up lost ground,” says Aaron Goertzen, an economist for BMO Capital Markets. Te outlook for demand is relatively upbeat, with real consumer spending expected to grow 3.3 percent in 2015 as employment continues to expand and, eventually, as wage growth shifts into higher gear. “Te profle of consumer spending growth is becoming more balanced, with less focus on durable goods such as autos and faster growth in nondurables such as food,” Goertzen notes. “Lower pork and dairy prices should also create some wiggle room in household food budgets later this year, which should provide a lift to volume demand across most segments.” He adds, “Looking ahead, a more moderate pace of global growth should help to limit upward pressure on commodity prices and help keep costs better contained.” Tis analysis mirrors what grocery retailers told us in responses to the exclusive survey underpinning our 82nd Annual Report of the Grocery Industry, which begins on page 30. On a 100-point scale, retailers score their confdence in 2015 at just above 72, six points higher than their 20/20 hindsight rating for 2014, which a year ago they gave a 71.8. Nearly half of our respondents express signifcantly more optimism for 2015, up from the 39 percent who said they felt that way last year about 2014. Among “issues keeping you up at night,” grocers put data security in frst place, up from ffth after a year of widely publicized breaches hitting Super-

| Progressive Grocer | Ahead of What’s Next | April 2015

valu, Target and other retailers. Meanwhile, a perpetually competitive retail climate, continued channel blurring and the advancement of e-commerce have made grocers more mindful of exclusive products, customization and in-store services geared toward a rewarding shopper experience that can’t be had by clicking and dragging. To prove their relevance to younger demographics that were raised on mobile technology but are foodsavvy and hungry for authentic experiences, traditional grocers are enhancing their historic competencies with digital components designed to bring speed, convenience and uniqueness to a mature channel, as if to say, “Sure, you can buy diapers online, but do you really want Amazon picking out your steak?” A mouse click can whisk ancient grains to your doorstep, but a grocery store wellness expert who knows your name and face can explain why they’re good for you, over kale smoothies at the market’s cozy café. Meat remains the top sales driver for grocers, while center store dropped to eighth, replaced at No. 2 by private label, which has hopscotched its way up our ranking. Center store’s ills might well be cured by better cross-merchandising across multiple aisles, including the fresh perimeter, as our category management report suggests, starting on page 60. Marketing meals, not ingredients — solutions, not products — is what’s going to keep the traditional grocer relevant and thriving as Millennials start bringing their kids along on shopping trips. Grocers not already thinking this way may already be in big trouble. Have your own thoughts about this? Don’t wait until our 83rd annual report — reach out to us anytime. PG Jim Dudlicek Editor-in-Chief jdudlicek@stagnitomail.com Twitter @jimdudlicek


INNOVATION IS EVERY DAY.

Consumer-led innovation delivering the

INCREMENTAL CATEGORY GROWTH you’re looking for. Another way we’re committed to creating shared success every day. SUCCESS IS AN EVERYDAY THING.

hersheys.com

Join us at the NCA Sweets & Snacks Expo, Booth 1505.


Š General Mills


Driving Growth with New Products that meet Evolving Food Trends

DELIVERING INNOVATION ACROSS THE STORE


What’s trending on Progressivegrocer.com …

Supermarkets Excel at Experience Ratings

A tip of the cap to Publix, Aldi and H-E-B, each of which earned top scores on the 2015 Temkin Experience Ratings, an annual ranking of large organizations based upon the quality of the customer experience. Also lauded from the grocery industry in the online consumer poll were Trader Joe’s and Hannaford, which cracked the list’s top 12. “Customer experience drives loyalty, so it’s a growing area of focus for most businesses,” notes Bruce Temkin, managing partner of Temkin Group, the Waban, Mass., research and consulting firm that conducts the annual ratings program based on the feedback of 10,000 U.S. consumers, who this year were asked to rate recent interactions and overall experiences with 293 companies in 20 industries across three dimensions: success, effort and emotion.

Millennials Driving Meal Prep

Meal preparation takes center stage among top evolving trends in U.S. consumers’ eating habits, according to Jacksonville, Fla.-based Acosta Sales & Marketing, whose recent survey finds that nine in 10 shoppers prefer eating at home, driven by a desire for comfort (61 percent), cost (60 percent) and convenience (59 percent). Rather than cooking from scratch, however, Americans are turning to readyto-eat and take-and-bake solutions, including “hybrid homemade meals” such as a grocery store rotisserie chicken with a salad-in-a-bag and homemade potatoes. Some 46 percent say they prepared meals at home over the past year — 48 percent when considering only the Millennial generation — which also reports eating prepared foods from grocery stores at home at a much higher rate than total U.S. diners (27 percent versus 16 percent, respectively). —Acosta Sales & Marketing’s The Evolution of Eating Survey

Making Things Personal American consumers want a more personalized retail experience but are divided on retailers’ tactics and the types of personal information they feel comfortable disclosing, according to Accenture. Nearly 60 percent of consumers want real-time promotions and offers, yet only 20 percent want retailers to know their current location

7.4%

The rise in the Hispanic population’s spending power over the past 10 years —Nielsen

14

and only 14 percent want to share their browsing history. The Dublin, Irelandbased firm’s research also found that while many consumers are willing to share some personal details with retailers, nearly all (90 percent) of the respondents say that if the option

were available, they would limit access to certain types of personal data and would stop retailers from selling their information to third parties. In addition, 88 percent would prefer to determine how the data can be used, and 84 percent want to review and correct information. —Accenture Personalization Survey

$12 Minimum Wage Yields Maximum Support Based on results of PG’s recent online poll asking readers to weigh in with thoughts on the minimum wage following Walmart’s move to increase its hourly wage rate to $10, it seems clear that more front-line associates responded than industry executives. To wit: While 40 percent of the total votes were tallied across an hourly rate range between $8 to $11, with $8 6% 23 percent voting to keep the present hourly rate intact, $9 9 the 37 percent favoring a $12 minimum wage doesn’t square with the industry’s well-established $10 19 position that a minimum wage increase $11 6 would create significant challenges for $12 37 many grocers. At left is how the votes It doesn’t need to stacked up as we went to press. be increased 23

| Progressive Grocer | Ahead of What’s Next | April 2015


FAMILIES IN NEED ARE ASKING FOR MILK Milk is one of the most requested items at Feeding America® food banks nationwide. But donations fall far short of the need. That means many of the 16 million children who struggle with hunger every day miss out on milk’s high-quality protein and other essential nutrients. It’s a big problem.

The Great American Milk Drive® is the answer.

LIFT YOUR SALES BY DOING GOOD

© 2015 America’s Milk Companies.®

Invigorate your milk sales without discounting

Drive foot traffic and new customers to your stores

Strengthen your community presence

MELISSA MALCOLM, MILKPEP Let’s discuss how to put The Great American Milk Drive to work in your stores. Mention this ad during our conversation and I’ll donate a gallon in your name for your time and interest.

1-800-945-MILK

mmalcolm@milkpep.org


June 2015 is... National Dairy Month National Candy Month National Iced Tea Month National Soul Food Month National Country Cooking Month

S

M

1

Say Something Nice Day. Let your staff know you appreciate their efforts.

T

W

T

F

S

2

3

4

5

6

9

10

11

12

13

17

18

19

20

National Rocky Road Day. Sample different brands of rocky road ice cream.

National Egg Day

Hug Your Cat Day. Put up a display of cat food and accessories.

National Doughnut Day. Make sure the bakery is ready and offer doughnut samples to shoppers.

National Yo-Yo Day. Hold a contest for the best Walk the Dog or Around the World.

World Milk Day

7

IDDBA’s DairyDeli-Bake Expo begins in Atlanta and continues through the 9th.

8

Make sure your barbecue products are well stocked — Father’s Day and the first day of summer are coming.

National Chocolate Ice Cream Day

14

Flag Day. Decorate the store in red, white and blue.

21

Father’s Day

15

National Lobster Day

22

National Chocolate Éclair Day National Onion Ring Day

It’s also the First Day of Summer.

28 2

Summer Fancy Food Show begins in New York and continues through the 30th. Finalize a sale on summer items in honor of the nation’s birthday next month.

16

29

National Waffle Iron Day

National StrawberryRhubarb Pie Day

National Iced Tea Day

National German Chocolate Cake Day

FMI Connect begins in Chicago and continues through the 11th.

16

National Fudge Day Fresh Veggies Day

23

Public Service Day. Work with your team to find a couple of community projects.

National Apple Strudel Day

Conversely, it’s also Eat Your Vegetables Day.

To celebrate International Picnic Day, build a big display of picnic baskets, recyclable cutlery, plates and glasses, napkins, and food storage containers.

24

25

National Cherry Tart Day

National Pralines Day

National Pink Day. Use your Facebook page to ask shoppers to wear something pink.

Global Beatles Day. Play music in store by the Fab Four.

National Peanut Butter Cookie Day. Schedule cooking demos to show how easy it is to make this treat at home.

National Flip-Flop Day

Kitchen Klutzes of America Day. Display items to help the clumsy — like sponges, cleaning aids, adhesive bandages, mops and brooms.

National Vanilla Milkshake Day

National Martini Day. Take an online poll: shaken or stirred?

26

National Chocolate Pudding Day

27

To celebrate National Sunglasses Day, ask all staff to wear their shades.

National Catfish Day

30

Social Media Day. Tweet your shoppers to find special deals on your Facebook page and fun ideas on your Pinterest page.

National Almond Buttercrunch Day

| Progressive Grocer | Ahead of What’s Next | April 2015

E-mail your calendar submissions to

awolfe@stagnitomail.com


Trion Cooler Merchandising ®

AMT Adjustable Merchandising Tray ™

Org ga aniz Chaos, Increase Sales Organize Designed for yogurts; dips; spreads; puddings, gelatins and snacks; ice cream and sherbet; instant soup cups; microwave single-serves; food-to-go offerings, tubs, bottles and other difficult to organize products. ■

Small AMT adjusts from 2 11/16" to 3 5/16" wide for 4-6 ounce yogurt cups and similar small products.

Medium AMT adjusts from 3 5/16" to 3 15/16" wide for 5-6 ounce greek yogurt cups and mid-range offerings.

Large AMT adjusts from 4" to 4 5/8" wide for tub, pint, 11/2 pint, ice cream and large containers.

Width adjusts in 1/8" increments and locks in place. Two breakaways allow easy adjustment in the field from standard 22" length to 20" and 18."

Built-in manual feed allows trouble-free forwarding and facing of products for increased sales and profits.

Trays lift out for rear restocking and proper rotation.

Durable, easy-clean plastic construction for long-life, even under heavy use and in harsh environments.

Optional plain-paper label, sign and flag holder provides a protected home for product and price information and improves promotional opportunities. Proudly Made in the U.S.A.

Built-in Manual Feed Optional Label/Flag Holder

Adjustable Width Breakaway Lengths

Built-in Handles Built-in Ventilation

Paddle Extenders Sidewall Extenders

Part of the Trion® Shelf Works® System of Cooler and Storewide Merchandising Solutions.

©2014 Trion Industries, Inc. 297 Laird Street, Wilkes-Barre, PA 18702-6997 Phone 570-824-1000 l Fax 570-823-4080 Toll-Free In U.S.A. 800-444-4665 www.TrionOnline.com Patents and patents pending. Note: Product photography is a simulation of a retail environment and is not meant to imply endorsement by or for any brand or manufacturer.


Trion WonderBar ®

®

Pouch Hook

Pouch Merchandising Simplified T Trust the hook-makers at Trion to invent creative solutions sspecifically for the new wave of pouch packaging and merchandising. Field-tested and already in retail use, m Trion’s new Pouch Hook is ready to back your expansion Tr into this exciting new venue of product promotion. in ■

Standard and Gravity-Feed configurations available to keep items forwarded and automatically faced.

Proprietary gate keeps product from being jostled off rear. o

FFlip-front Label Holder swings up for easy access and product removal. a

LLoads from rear, or easily dismounts to insure fast restocking, product rotation and reduced shrinkage. re

Saddle mounts on a Universal Bar design allowing Sa tool-free installation on all thick- and thin-walled to gondola and cooler uprights. go

Stocked in 4 lengths compatible with all standard St shelf sizes allowing mixed use in display. sh

Custom sizes and short-run configurations possible. Cu

Proudly Made in the U.S.A.

Proprietary Rear Gate

Insures Product Rotation

Easy Vending Front

Gravity-Feed Available

Part of the Trion® WonderBar® Family of Tray and Bar Merchandising Solutions.

©2014 Trion Industries, Inc. 297 Laird Street, Wilkes-Barre, PA 18702-6997 Phone 570-824-1000 l Fax 570-823-4080 Toll-Free In U.S.A. 800-444-4665 www.TrionOnline.com Note: Product photography is a simulation of a retail environment and is not meant to imply endorsement by or for any brand or manufacturer.


Front End

Market Intelligence By The Numbers GROCERY’S TOP 10

Shelf Stoppers

Frozen/Refrigerated Prepared Foods Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Jan. 17, 2015)

Sales % Change Dollars (Millions) 2015 2014 Entrées-Mexican (One-food-Frozen) $621.9 5.0% 1.9% Entrées-Meat (One-food-Frozen) 641.3 4.2 7.5 Sauces and Gravies-Frozen/Refrigerated 308.1 3.5 3.0 Entrées-Remaining (Two-food-Frozen) 13.3 3.5 -14.5 Soup-Frozen/Refrigerated 224.1 3.1 5.5 Entrées-Remaining (One-food-Frozen) 487.4 2.5 -0.2 Corn Dogs-Frozen/Refrigerated 200.0 0.7 -2.7 Pot Pies-Frozen 317.7 0.1 4.8 Entrées-Poultry (One-food-Frozen) 1,898.9 0.0 1.9 Pasta-Plain-Frozen 192.6 -0.4 0.0 Total Category

$8,108.1

-1.5%

% Change 2015 3.6% 2.1 2.9 -7.8 2.0 -0.3 -0.4 -1.5 -1.7 -1.8

Units 2014 1.2% 6.8 0.8 -15.1 2.2 0.0 -1.6 0.5 0.0 -1.1

-3.3%

-2.1%

-1.2%

NielseN’s Spotlight Consumption Index: Frozen/Refrigerated Gravies and Sauces LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Modest Working Towns

Plain Rural Living

Total

indicative perhaps of higher disposable incomes and a greater interest in culinary experimentation, residents of affluent suburban spreads use more frozen and refrigerated sauces and gravies than other lifestyles, across all behavior stages. Particularly enthusiastic consumers in this category are younger and older bustling families, who no doubt appreciate the products’ convenience, and empty nesters, many of whom are using their newly freed-up spare time to whip up interesting meals.

CROSS-MERCh Candidates

wITh ChILDREN: startup Families

105

169

77

67

81

103

103

small-scale Families

124

158

107

83

89

72

106

Younger Bustling Families

104

183

102

76

118

79

109

Older Bustling Families

159

177

161

65

129

89

136

Young Transitionals

57

130

66

89

90

37

77

independent singles

72

94

92

61

62

36

67

senior singles

48

81

60

92

46

49

59

established Couples

127

167

120

124

111

76

119

empty-nest Couples

133

194

125

96

112

84

126

senior Couples

125

134

129

63

99

72

105

Total

100

152

110

81

91

68

100

HHs with young children only <6 small HHs with older children 6+ large HHs with Children (6+), HOH <40 large HHs with children (6+), HOH 40+

NO ChILDREN: Any size HHs, no children, <35 1-person HHs, no children, 35-64 1-person HHs, no children, 65+ 2+-person HHs, no children, 35-54 2+-person HHs, no children, 55-64 2+-person HHs, no children, 65+

Very High Consumption (150+)

20

High Consumption (120-149)

Average Consumption=100

| Progressive Grocer | Ahead of What’s Next | April 2015

• Wine • Photographic

Supplies • Baby Needs • Yogurt • Skin Care Preparations • Disposable Diapers and Training Pants • Baby Food • Fresh Produce More ONLINE Dig up actionable e research and additional al intelligence at Progressivegrocer.com


A Taste of Sweet Excitement comes to Store Shelves!

— Introducing — ZingTM Zero Calorie Stevia Sweetener

- packets & easy-spoon jar -

and

ZingTM Baking Blend Stevia & Cane Sugar - easy-pour canister -

Real ingredients. Perfect sweetness.

The Zing™ sweetener brand was created with the discriminating Millennial demographic in mind – the younger shopper searching for products with authentic ingredients and a pure sweet taste they can believe in. For this target of youthful, well-informed consumers seeking a delicious sugar substitute made with real ingredients, Zing™ is a victory, a true reason to get excited.

ZingTM Zero Calorie Stevia Sweetener Made with only real ingredients of stevia leaf extract and dextrose. Zero calories per serving. Delicious sweetness. 1 packet or 1/4 tsp. Zing™ Stevia Sweetener = sweetness in 2 tsp. of sugar. 40-count box of single-serve packets & 9.5 oz. easy-spoon jar. Learn more at zingstevia.com.

ZingTM Baking Blend Stevia & pure cane sugar blend. 5 calories per serving. Bakes and browns like sugar for delicious, golden-brown cakes and cookies. 1 canister sweetens like 2.5 lbs. of sugar. 20 oz. canister with an easy pour spout for quick measuring and a snap-closed lid.


Mintel Global New Products Database Category Insights

Salty Snacks, Meat Snacks and Popcorn

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

Market Overview The United States is the standout market in the North American salty snack, meat snack and popcorn category, with a predicted average value growth of 5.3 percent over the next five years. Canada also offers promising average value growth of 3.1 percent during the same period, despite lower per capita consumption. key iSSueS Introducing protein to food and drink has become a major focus of innovation, due to its links to increased satiety and muscle retention. Recent new product development activity has shown that the protein trend has migrated into the salty snack category, with manufacturers fortifying their innovations with protein or by prominently marketing natural protein content on-pack. For instance, a number of brands have launched salty snacks based on vegetables and grains to achieve high-protein claims. The past 12 months have also seen how brands have been launching skinny snacks onto the market. No/low/reduced fat has been one of the main areas of innovation in North America, accounting for 14 percent of the total new product launches in the past year.

What Does it Mean?

22

High-protein snacks have huge potential in North America if brands can successfully convey the health benefits of eating protein throughout the day rather than on specific occasions.

knowledgeable about nutrition. Vegetable-based protein snacks are currently enjoying a boom, but innovations like egg-white chips suggest that there will be more variety in the future.

Protein source will become a distinguishing feature as consumers become even more

The growing interest in skinny products suggests that more brands should be looking to enter

| Progressive Grocer | Ahead of Whatâ&#x20AC;&#x2122;s Next | April 2015

the no-/low-/reduced-fat and no-/ low-/reduced-calorie segment. Convenient on-the-go formats that allow consumers to experience guilt-free indulgence should also emphasize recommended portion sizes to offer consumers control over their calorie intake.


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Nonfoods

Category

Today’s leadership model isn’t working for everyone, which means it’s not working at all.

NEW

Horizons

By Joan Toth

‘It’s Time’ for a New Workplace Women’s leadership has stalled — we’ve launched a movement to change that.

corporate culture and workforce policies to create a better workplace for everyone.

F

ourteen years ago, a handful of determined leaders launched the Network of Executive Women at the FMI Midwinter Executive Conference. At this year’s FMI Midwinter, we launched a new network with a bold vision — a workplace with no limits — and an urgent message: “It’s Time.” It’s not that “old NEW” wasn’t successful — far from it. Since 2001, NEW has grown into one of the industry’s largest and most infuential organizations. We’ve put women’s leadership on the agenda, we’ve changed hearts and minds, and we’ve helped thousands of women advance. But we haven’t “moved the needle.” In recent years, the share of women corporate ofcers has barely budged. Women represent almost half of the retail industry’s total workforce but fewer than one in fve corporate ofcers and one in 20 CEOs. Te reason for this is simple: We’ve been focusing on the wrong thing. We need to change our

24

| Progressive Grocer | Ahead of What’s Next | April 2015

Joining the Movement This message was delivered loud and clear at FMI Midwinter. More than 100 senior industry leaders gave up part of a sunny Sunday afternoon in Miami Beach to hear me; Amy Hahn, of Ahold USA; and Lisa Walsh, of PepsiCo, present a call to action on women’s leadership and workplace change. More than half of those present committed to our It’s Time movement. Our industry’s top executives know that women leaders are critical to their organizations, and they’re committed to take action. But this is no easy lift. Tere are strong cultural and business headwinds against women’s leadership and workplace change. But we must create a more fexible, collaborative, inclusive and authentic workplace if we’re to connect with our increasingly diverse consumers and workforce. Today’s leadership model isn’t working for everyone, which means it’s not working at all. Our manifesto, presented by Walsh, NEW’s marketing chair, calls for “a new leadership culture — less rigid and more fexible, less conformist and more diverse, less impersonal and more authentic.” We need a workplace culture that values the unique contributions of everyone — male and female, young and old, black and white, Latino and Asian, native-born and immigrant, gay and straight. Tis new workplace will make our industry a destination for women and a model to attract Millennials, who are the largest generation in our history — 80 million strong — and 43 percent nonwhite.


What Needs to be Done NEW has developed a researchbased action agenda that zeroes in on the top priorities needed to advance women leaders and transform the workplace:

sustainable — organizations must have targets in place that advance women.

Change the culture and the way we look at women, who are often viewed as either “too nice” or “too bossy.” Change the organization to eliminate the countless subtle barriers to advancement, including lack of role models, sponsors and access to senior leadership, and career paths and policies that favor men. Engage men and treat them as partners instead of problems to be fxed. Engage senior leadership. At PepsiCo, which has taken a strong stand on women in the workplace, 31 percent of U.S.-based executives are women. Achieve critical mass. To achieve the benefts of women’s leadership — and make these gains

Hahn closed our movement launch with a retailer’s perspective. “At Ahold USA, we make three promises every day,” she said. “First, be a better place to shop. Second, be a better place to work. And third, be a better neighbor everywhere we do business. Women’s leadership provides the talent, new ideas and customer connections we need to deliver on these promises.” To enlist in the It’s Time movement, visit newonline.org/itstime. PG Joan Toth is president and CEO of the Network of Executive Women, Retail and Consumer Goods, a learning and leadership community with 9,000 members, 750 companies, 100 corporate partners and 20 regional groups in the United States and Canada. For more information, visit newonline.org.

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25


Consuming a plant-based diet may cut one’s greenhouse gas emissions in half.

All’s Wellness By Molly McBride

Earth Day Every Day Alternative proteins, local products and waste reduction can impact health of consumers and the planet.

S

pring is upon us, and with it comes sunny weather, fowers in bloom and more fresh produce. Earth Day is April 22, and what better way to revisit how we treat our planet than looking at food, one of the greatest resources we use? How many consumers equate the way they eat to their carbon footprint? A recent study published in Climatic Change, encompassing 55,504 participants from the EPIC-Oxford cohort, addressed this concept. It found that the kilograms of carbon dioxide equivalents per day (kgCO2e/ day) was 7.19 for high meat-eaters, 5.63 for medium meat-eaters, 4.67 for low meat-eaters, 3.81 for vegetarians (no meat, poultry or fsh) and 2.89 for vegans (no animal products). Tese numbers suggest that consumers could decrease their environmental impact as fewer animal products are consumed, and that consuming a plant-based diet may cut one’s greenhouse gas emissions in half. Plant-centric diets are many times lower in total calories, saturated fat, cholesterol and sodium, while higher in fber and antioxidants. Alternatives on the shelf like soy and almond milks, legume-based proteins, mock meats, and dairy-free desserts, alongside plenty of fresh, canned and frozen fruits and vegetables, can present opportunities for supermarket customers to enjoy wholesome as well as innovative products. As dietitians, we realize that consumers have many diferent diets and preferences; however, some simple swaps for plant-based fare can be an environmental and health-conscious advantage.

28

| Progressive Grocer | Ahead of What’s Next | April 2015

Discovering Local At Kroger, our Discover Local campaign focuses on locally grown products, with an emphasis on great quality. Te less time food is on road, rail, water or air equates not only to a greener approach, but also a cost savings that can be passed on to the customer. Current numbers from the Environmental Protection Agency indicate that 13 percent of all global greenhouse emissions are from transportation and 14 percent are from agriculture. Retailers can be leaders in limiting the distance from farm to table, to control the amount of energy expended in putting brands on the shelf. Other ways to honor Mother Earth this month include adhering to the four Rs: reduce, reuse, recycle and repurpose. Customers continue to strive to use less and do more with less, in eforts to save money, decrease clutter and contribute to sustainability eforts. Capitalize on this time to talk to your packaging department, category managers or CPG manufacturers to brainstorm ways that can decrease packaging waste and make your products even more appealing. Te sustainability movement involves much more than what’s happening outside the walls of your stores. Take a harder look at plant-based oferings, waste, packaging, sourcing, geography and even seasonality to engage and retain customer interest and support resources for generations to come. PG Molly McBride, RD, LD, is a corporate dietitian for The Kroger Co., based in Cincinnati.


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30

| Progressive Grocer | Ahead of Whatâ&#x20AC;&#x2122;s Next | April 2015


82nd AnnuAl RepoRt

of the GRoceRy IndustRy

Aisles of opportunity

Grocers are bullish on 2015, but new specters are bringing on sleepless nights for retailers. Analysis by Jim Dudlicek, Bridget Goldschmidt and Meg Major / Research by Debra Chanil

G

rocery retailers’ confdence in ana rosy retail climate, up from 30 percent this year. other year of success continues to It’s obvious that current economic conditions inch upward from the valleys of the are buoying retailers’ spirits. Te Kroger Co. past decade, and their optimism for recently celebrated its 45th consecutive quarter the retailing climate has reached of same-store sales growth. Describing 2014 as new heights, exclusive research from “an outstanding year by all measures,” Rodney Progressive Grocer reveals. McMullen, chairman and CEO of the CincinnatiMeanwhile, as the manner in based grocery giant, said at Kroger’s March earnwhich business is transacted continues to evolve, ings call that the company “captured more share new issues are keeping grocers up at night. of the massive food market [and] delivered on On a scale of 0 (awful) to 100 our commitments and invested to grow (sensational), retailers surveyed by PG our business. … [O]ur core operating Grocers Are just topped 72, up nearly six points performance without fuel shows that our siGnificAntly from their score for 2014. A year ago, associates are improving our relationship however, retailers’ forecast for the com- more optimistic with customers in ways that grow loyalty About the ing year was 71.8, indicating that 2014 and generate strong shareholder returns.” didn’t pan out quite as expected. However, Ken Odeluga, senior market retAil climAte Still, sentiments are most defnitely compAred with analyst for London-based City Index, trending up, and have come a long way that future trends in the market A yeAr AGo, with warns from the score of 58.4 reported in 2009. may prevent Kroger from delivering the Overall, grocers are signifcantly more neArly hAlf of staggering numbers that it did in Q4. respondents optimistic about the retail climate com“With the shares having gained pared with a year ago, with nearly half of sAyinG they’re more than 64 percent over the last 12 respondents saying they’re sweet on 2015; sweet on 2015. months, and a 52 percent rise in 2013, that’s up from about 39 percent a year the bar is getting higher for continued ago. Just more than a ffth express less strong sentiment,” Odeluga said in Prooptimism (versus 28 percent a year ago) and just shy gressivegrocer.com’s report on Kroger’s last earnof 30 percent declare they envision no change. ings call. “Te point is, a number of forces are As is typical, chain operators are the most confcoalescing that are expected to press on Kroger’s dent, with nearly two-thirds expressing optimism for ‘batting’ average over the next few quarters, retailing this year, up from about 52 percent a year largely from fuel-related to headwinds.” Continued on page 34 ago. About 44 percent of independent operators see April 2015 | progressivegrocer.com |

31


82nd ANNUAL RePORT

of the GROceRy INDUSTRy

methodology Progressive Grocerâ&#x20AC;&#x2122;s 82nd Annual Report of the Grocery Industry is based primarily on an exclusive survey conducted among headquarters executives and store managers at 135 supermarket chains, independents, wholesalers and distributors across the United States. Sixty percent of the respondents classify themselves as independent retailers, and about 18 percent are selfdistributing chains; about 12 percent are wholesalers, and 7 percent are distributors.

Of the total respondents, more than half represent organizations with one to 10 stores, and about a third have 100 or more stores, while about 15 percent are from operations with between 11 and 99 units. Regionally, about 31 percent of respondents are from the Midwest, about a quarter are from the West, just less than a quarter are from the Northeast, and about 21 percent are from the South. Additional store count and sales data are provided by Nielsen TDLinx, which maintains a national database of supermarket and other retail format locations.

type of orgaNizatioN

Number of SupermarketS operated

perceNt of reSpoNdeNtS

perceNt of reSpoNdeNtS

Independent (Use a wholesaler) Chain (Self-distributor) Wholesaler/Wholesaler-owned Store Distributor Other type

1-10 11-99 100 or More Average Number of Stores: 770

51.2%

34.1%

60.3% 17.6%

14.5% 14.7% 0.8%

primary reSpoNSibility/job area

President/C-level Buyer/Merchandiser/Category Management Retail/Store Operations Sales/Advertising/Marketing Store Manager Distributor/Broker Other 19.2%

6.9%

regioN Midwest West Northeast South

21.4% 31.3%

13.1%

3.8%

22.9% 17.7%

41.5% 1.5%

3.1%

Source: Progressive Grocer Market Research, 2015

32

| Progressive Grocer | Ahead of Whatâ&#x20AC;&#x2122;s Next | April 2015

24.4%


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82nd AnnuAl RepoRt

of the GRoceRy InduStRy Continued from page 31

Kroger is likely “mindful of the impact lower crude oil prices, and consequently cheaper wholesale fuel, will have on customer perception,” Odeluga added. “I think essentially, Kroger is saying it will soon need to reduce prices to closer to the average forecourt rate for its biggest rivals.” Te recent drop in gasoline prices has left more money in consumers’ pockets to spend at retail, including grocery. Tat being said, consumer optimism about the economy in early March had fallen to its lowest level since August 2014, according to new survey results released by NACS, the Association for Convenience & Fuel Retailing. At the time of the report, gas prices had increased 29 cents per gallon versus the previous month as refneries began the transition to producing the more expensive summer-blend fuel required in many U.S. markets. Meanwhile, leaders of the newly combined Albertsons Safeway have expressed high hopes for an improved and invigorated shopping experience as the merger partners become a single entity in 2015. “We plan to be the favorite local supermarket in every How was 2014? How are community we serve,” said Robert Edwards, president/ prospects for 2015? CEO of the 2,230-store Rated on a scale of 0-100, where enterprise. “We will do this 0=awful, 100=sensational by knowing, listening to and delighting our customers; providing the right products Total at a compelling value; and 2015 (forecast) 72.2 delivering a superior shop2014 66.3 ping experience.” Market optimism also 2013 67.7 bodes well for the benef2012 63.6 ciaries of the 168 stores cast 2011 65.6 of as a condition of the merger, most signifcantly 2010 59.4 Bellingham, Wash.-based 2009 58.4 Haggen, which, by exponential expansion of its banner 2008 67.1 throughout several states, has 2007 70.9 the potential of becoming 2006 66.9 the next great regional West Coast grocery chain. 2005 65.2 Independents, too, have Source: Progressive Grocer reason to be excited as they Market Research, 2015 vie for the loyalty of consumers looking for new, better and more personalized shopping experiences. Companies like Minneapolis-based wholesale distributor Supervalu Inc. are feeling bullish about the future of the independent grocer. Says Brian Audette, SVP of Supervalu’s corporate independent business, “We’re really focused on keeping our customers relevant.”

RETAIL CLIMATE

Compared with a year ago, are you more optimistic or less optimistic about the retailing climate for supermarkets? More optimistic

| Progressive Grocer | Ahead of What’s Next | April 2015

No change

TOTAL 49.6% 29.8%

20.6%

THE BOTTOM LINE

34

Less optimistic

CHAIN 63.6%

22.8%

13.6%

INDEPENDENT 30.4%

44.3%

25.3% Source: Progressive Grocer Market Research, 2015


What are the big issues keeping you up at night? Current Data Protection/Security

64.3%

Rank 1

Tossing and Price Increases 59.5 2 Turning Tere was a notable Benefits (Minimum Wage, Affordable Care Act, etc.) 56.3 3 change in priorities Food Safety 37.3 4 among grocers who Labor (Recruitment, Retention, Diversity, Training) 35.7 5 responded to our question, “What are the Keeping up With Advancements in Technology 33.3 6 big issues keeping you Increasing Overhead Costs (Energy, Infrastructure, Maintenance, etc.) 28.6 7 up at night?” Topping the list: Sustainability 20.6 8 data protection and Genetically Modified Organisms (GMO) 12.7 9 security, noted by Feeding the Hungry 11.1 10 more than 64 percent of respondents. Competitive Threats 6.3 11 A year ago, data Animal Welfare 2.4 12 security ranked ffth. Since then, retailSource: Progressive Grocer Market Research, 2015 ers of all kinds have been rocked by data breaches of varying severity, from the double hit at Supervalu last summer to the lingering efects of the Target breach that resulted in an executive housecleaning. “In 2014, we saw more attention paid to cyberScore: 100=increase; 50=no change; 0=decrease risks, namely because of Target’s late-2013 attack,” observes Tracy Kitten, executive editor of the Princeton, Current Rank N.J.-based Information Security Media Group. “Media attention, coupled with the congressional hearings Wage Costs 90.9 1 that occurred throughout the year to review merchant Benefit Costs 85.5 2 security, undoubtedly are to thank for bumping cybersecurity concerns to the top of the list among grocers. Competition 84.8 3 While we actually saw a furry of breaches throughout Technology Spending 82.8 4 2013 targeting merchants across the board, including Retail Prices 78.2 5 grocers like Schnucks, none of these breaches got a ton of public attention until Target.” Capital Expenditures 66.4 6 Kitten asserts that retailers’ cybersecurity is Percent Net Profit 65.1 7 subpar. “I think more attention has been paid to Percent Gross Margin 60.0 8 PCI compliance in the last year and a half,” she tells PG, “but we are still a long way out from havEnergy/Fuel Costs 56.3 9 ing EMV [chips] fully implemented at the POS, Employee Turnover 54.4 10 and most grocers are not particularly innovative, Source: Progressive Grocer Market Research, 2015 relative to other merchants, when it comes to payments security. I doubt grocers will adopt EMV at a rate that exceeds other retailers.” Further, most merchants across the board have not historically made big investments in behavioral analytics to monitor transaction activity, Kitten notes. “Grocers and all retailers have an obligation to protect their customers’ cardholder data and personal information,” Kitten says. “If consumers do not feel that their information is safe, they will stop shopping with that merchant, so data security has

Last Year

Rank

28.8%

5

25.8

7

59.5

1

16.0

8

47.9

3

28.2

6

45.4

4

12.9

9

3.7

10

1.8

11

53.4

2

1.8

11

expected 2015 change in coMpany operational Factors Last Year

Rank

83.3

2

84.3

1

79.6

3

75.8

5

74.8

6

57.5

7

51.9

9

46.9

10

77.4

4

51.6

9

Continued on page 38 April 2015 | progressivegrocer.com |

35


82nd AnnuAL RePORT

of the GROCeRy InDusTRy

10 Ideas to support revenue Growth In 2015 By Tara Oberg Tara Oberg, a senior associate at data-driven consultancy Seurat Group, gives her top 10 list of strategies that supermarkets can use to drive revenue in the coming year:

foodservice sales as shoppers seek more quality, time-saving options. Invest space and resources in both meeting shoppers’ need for a convenient dinner to take home and driving impulse hot-meal purchases.

1.Build loyalty through trust. The continued rise of natural and specialty grocers displays the value in creating a loyal shopper base by offering products and brands that buyers can be confident about, both in terms of safety and quality. These retailers are creating proprietary rating systems that consumers trust to guide them.

7. Cautiously approach shoppers’ “deal only” purchase behavior. Given declining revenue and margins in CPG retail since 2007, retailers have placed a huge emphasis on managing pricing and promotion. More than one-third of packaged food and household products are now sold on discount, meaning that today’s shoppers are trained to purchase on “deal only.” Today’s retailers should proceed with care, but shift focus of CRM and merchandising toward value instead of price.

2. Look to frame-breaking channels for inspiration. Retailers across channels have begun to look toward smaller, more entrepreneurial channels to stay informed on the latest innovation, macro-trends and consumer preferences. Within the pet industry, Petsmart and Petco continuously learn from mom-and-pop pet stores and local/regional chains that are more in touch with their pet owner communities, and more in tune with requests and preferences. 3. Do more to understand your customers. Shopper segmentations are a common way of understanding the subsets of shoppers. However, this work becomes most actionable when retailers can prioritize high-value segments and understand the moment and message necessary to trigger a purchase. This process drastically improves efficiency and simplifies marketing, ensuring it’s not just a game of trial and error. 4. Turn double-digit e-commerce growth into triple digit. Despite slower adoption of e-commerce for certain grocery categories, online purchase remains an avenue for revenue growth for most retailers. Success in this area comes from being consumer-led and understanding how to connect the array of touchpoints, from navigational behaviors and purchase drivers to delivery options (home delivery, curbside pickup). 5. Partner to most effectively use your data. Collaborative planning is invaluable, and there are often huge benefits for retailers sharing granular purchase behavior data (at the household level, beyond reports) with go-to partners that have experience working with them. This kind of data has been used to create new insights and actions that double the rate of category growth in a market.

8. Offer shoppers price and value instead of just the lowest price. In the face of a challenging environment to raise prices, retailers can increase revenue by taking a more holistic approach to the total price-value equation and refuting the notion that pricing up or taking product out are the only levers available. Understanding the relationship between the desired benefits of a product or service and the price paid will allow retailers to better assess which items to carry and how to communicate a value message in-store. 9. Leverage private label to win. Another way to appeal to value-seeking shoppers is through a more strategic private label offering. Many retailers have created both value and premium private label lines to differentiate themselves. Success comes from fully understanding shoppers’ price and product needs and developing store-brand products to best meet them. 10. Appeal to growing customer cohorts by understanding their perception of value. The staggering growth and buying power of Millennials have already made CPG retailers and manufacturers take notice. Winning with this shopper group depends on retailers’ ability to appeal to their value equation. Millennials are less interested in specific brand names, but more interested in what brands stand for, and are more likely to pay more for natural or organic products. A retailer that can offer the right mix of private label products and premium, branded ones will appeal more to this cohort.

6. Be part of shoppers’ dinner consideration set. “Dinner tonight” is a growing source of wallet that leading retailers are capturing through prepared meals. In fact, the growth of in-store and takeout dining options is outpacing that of

36

| Progressive Grocer | Ahead of What’s Next | April 2015

Tara Oberg, a senior associate at the Norwalk, Conn.-based Seurat Group, has domestic and international experience that includes category leadership, brand and channel strategy, and organizational design work.


mcgladrey.com/retail


82nd AnnuAl RepoRt

of the GRoceRy InduStRy

Supermarket SaleS by Format Number of Stores

Continued from page 35 Percent of Total

Sales ($ Millions)

Percent of Total

$638,338

100.0%

Total Supermarkets ($2 million or more)

37,716

100.0%

Supermarket-Conventional

26,487

70.2

414,794

65.0

Supercenter (Grocery and Mass Merch.)*

4,150

11.0

159,824

25.0

Supermarket-Limited Assortment

3,242

8.6

16,106

2.5

Supermarket-Natural/Gourmet Foods

3,144

8.3

38,372

6.0

Warehouse Grocery

523

1.4

4,367

0.7

Military Commissary

170

0.5

4,876

0.8

152,120

n/a

$412,703

n/a

Gas Station/Kiosk

22,303

n/a

n/a

n/a

Superette

13,070

n/a

19,974

n/a

1,320

n/a

136,339

n/a

674

n/a

4,067

n/a

Other Food Retail Formats Conventional Convenience**

Conventional Club Military Convenience Store

a huge and direct impact on customer satisfaction and sales.” Also higher on the list: price increases, at second place, noted by nearly 60 percent of survey respondents and up from seventh a year ago. Benefts, such as minimum wage and the Afordable Care Act, ranked third this year after leading the list in 2014. Competitive threats, No. 2 last year, plunged to 11th place — an interesting development, especially amid growing challenges from alternative channels like drug, dollar and digital.

*Supermarket-type items only **Excluding gas Source: Nielsen TDLinx; Progressive Grocer Market Research, 2015

Supermarket SaleS by SaleS range Number of Stores

Percent of Total

Sales ($ millions)

Percent of Total

Supermarkets ($2 million or more)

37,716

Chains (11 or more stores)

30,925

100.0%

$638,338

100.0%

82.0%

$602,708

94.4%

$2,000,000 to $4,000,000

2,980

7.9

9,265

1.5

$4,000,000 to $8,000,000

6,858

18.2

39,604

6.2

$8,000,000 to $12,000,000

3,442

9.1

35,998

5.6

$12,000,000 to $20,000,000

4,833

12.8

79,087

12.4

$20,000,000 to $30,000,000

6,118

16.2

151,379

23.7

$30,000,000 to $40,000,000

3,217

8.5

111,580

17.5

$40,000,000 to $50,000,000

2,077

5.5

92,048

14.4

$50,000,000+

1,400

3.7

83,747

13.1

Independents (10 or fewer stores)

6,791

18.0%

35,630

$2,000,000 to $4,000,000

2,222

5.9

6,756

$4,000,000 to $8,000,000

5.6% 1.1

4,015

10.6

21,751

3.4

$8,000,000 to $12,000,000

366

1.0

3,695

0.6

$12,000,000 to $20,000,000

148

0.4

2,252

0.4

$20,000,000 to $30,000,000

33

0.09

802

0.1

$30,000,000 to $40,000,000

3

0.01

105

0.0

$40,000,000 to $50,000,000

1

0.00

46

0.0

$50,000,000+

3

0.01

225

0.0

Source: Nielsen TDLinx; Progressive Grocer Market Research, 2015

38

| Progressive Grocer | Ahead of What’s Next | April 2015

Supermarket Sales by Store Format Total supermarket sales topped $638 billion in 2014, up from $620 billion a year ago. Tat’s an increase of about 2.9 percent, the same as PG reported last year, indicating a fattening trend that follows the 3.1 percent growth in 2012. Tat fatness bears out when looking at store numbers by format. No surprise that conventional supermarkets dominate the marketplace, with 70 percent of all stores (down 1 percentage point from a year ago). Supercenters increased their share by just three-tenths of a percentage point, while natural/gourmet format stores account for more than 8 percent of stores, up about four-tenths of a point, with that growth driven in part by the rapid expansion of upand-coming chains such as Sprouts and Fresh Tyme. In share of sales, conventional supermarkets maintain a frm 65 percent


82nd AnnuAl RepoRt

of the GRoceRy InduStRy

AverAge Per-Store SuPermArket PerformAnce meASureS 2014

2013

2012

Sales Volume ($ Millions)

$16.92

$16.56

$16.26

Selling Area (Square Feet)

33,300

33,250

33,100

10.5

10.2

9.9

$325,478

$318,462

$312,758

Number of Checkouts Average Weekly Sales Dollars per Store Dollars per Square Feet Dollars per Checkout

9.77

9.58

9.45

30,998

31,222

31,592

Source: Nielsen TDLinx; Progressive Grocer Market Research, 2015

hold on total sales, supercenters take a quarter, and natural/gourmet enjoy 6 percent, up almost a full point since last year.

Supermarket Sales by Store Count Dollar sales growth outpaced unit growth among chains with 11 or more stores, as well as among

independents, with percentages holding steady year over year. Larger chains added just 147 new stores in the past year, an increase of less than 0.5 percent on a total approaching 31,000 units, or 82 percent of all stores. Tose stores accounted for nearly $603 billion in sales, or more than 94 percent of all supermarket sales, consistent with their share a year ago. Independent operators added 110 stores in the past year, an increase of 1.6 percent from a year ago. Indies’ sales contribution rose nearly 2.7 percent since last year, for a total of $35.6 billion, or a 5.6 percent overall share, unchanged from a year ago.

Store Performance Measures Investments in people, space and service continue to reap positive results. Sales volume is up more than 2 percent and selling area is up slightly over a year ago, as is the number of checkouts. Likewise, dollars per store are up about 2 percent overall in the past year.

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| Progressive Grocer | Ahead of What’s Next | April 2015


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82nd AnnuAl RepoRt

of the GRoceRy InduStRy

Enhancing thE in-storE ExpEriEncE

Evolving store concepts, amenities, marketing strategies and modes of communication shape how grocers keep shoppers coming back. Perpetually challenged by a cutthroat competitive climate, notoriously thin proft margins, and demanding — and often dichotomous — patrons, the grocery business can be brutal, which speaks directly to the need for grocers to concentrate heavily on enhancing the in-store experience to stand apart from both traditional and upstart competitors. To that end, signature products, private label and store-within-a-store specialty departments are deemed the top three most productive tactics to augment the in-store experience among retail executives respond-

Enhancing thE in-storE ExpEriEncE: MErchandising/Brand EnhancEMEnt

Percent of respondents rating each strategy as extremely or very important Signature Products

64.5 62.7

Private Label

61.5

Store-within-store Specialty Depts. Cross-merchandising

57.8

Prepared Foods

57.4

Locally Sourced Products

55.8

BOGOs

34.5

In-store Pharmacies

28.8

Free WiFI

22.2

Cooking/Meal Prep Stations

22.1

Source: Progressive Grocer Market Research, 2015

iMportancE of stratEgiEs: consuMEr MarkEting/advErtising

Percent of respondents rating each strategy as extremely or very important 58.1

In-store Signage/Digital Media 45.2

Digital Marketing

42.1

Newspaper Inserts

37.1

Newspaper Ads (ROP) Mobile Marketing

34.5 31.0

Direct Mail (Circulars, etc.) Radio Advertising TV Advertising Custom Magazines

12.1 9.5 5.3

Source: Progressive Grocer Market Research, 2015

42

| Progressive Grocer | Ahead of What’s Next | April 2015

ing to PG’s 2015 Annual Report of the Grocery Industry survey. While signature products and private label are often considered one and the same in the supermarket world, the latter, for purposes of this study, refers to exclusive products housed primarily in the fresh departments, such as gourmet desserts from the in-store bakery, store-made entrées from the fresh meat department, specialty cheese products, bundled meal deals, everyday-value bouquets in foral, and oven-ready regional seafood specialties. Meanwhile, today’s increasingly sophisticated supermarket private label products are all about differentiation, quality and the overall value proposition, and only partially about price. Retailers have invested countless internal resources and millions of dollars annually into perfecting their vast and diverse private brands across the entire store to provide customers meaningful value while shining a spotlight on items that “can only be had here.” Consequently, private label prominence has forever solidifed its place in the hearts of both retailers and consumers alike, and will remain a critical and compelling component of building the in-store experience for years to come. Conversely, as we glance back 30 years — give or take a few — a retailer’s life was certainly far easier, regardless of the channel. Food stores sold food, drug stores sold medicines and sundries, and fastfeeders sold meals. Beginning in the late 1980s and revving up in earnest by the mid-1990s, however, retailers of all stripes began to realize that they could successfully sell many products beyond the Continued on page 46


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82nd AnnuAl RepoRt

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importancE of stratEgiEs: consumEr EngagEmEnt

Percent of respondents rating each strategy as extremely or very important Customer Relationship Marketing

69.8

Social Media

49.1

Loyalty Incentive Programs

47.4 24.1

Online Surveys Comment Cards

21.6 19.8

Blogs Toll-free Hotlines

12.9

Source: Progressive Grocer Market Research, 2015

Enhancing thE in-storE ExpEriEncE: customEr intEraction

Percent of respondents rating each strategy as extremely or very important Community Involvement

71.2 65.8

Seasonal Special Events Sampling, Demos

52.7 27.9

Wellness Events/Health Screenings Healthy-eating Store Tours

18.0

Cooking Classes

18.0

Source: Progressive Grocer Market Research, 2015

Enhancing thE in-storE ExpEriEncE: in-storE sErvicEs

Percent of respondents rating each strategy as extremely or very important On-site Butchers

60.4 34.5

Seafood Specialists

26.1

Service-based Kiosks

23.4

Informational Kiosks

20.0

Children’s/Student Programs

17.1

Wellness Experts/Registered Dietitians Event Planners

12.6

Certified Chefs

10.0

Cheesemongers

10.0

Source: Progressive Grocer Market Research, 2015

Continued from page 42

edges of their traditional boundaries. Grocery stores began adding pharmacies with complete HBC sections and morphed quickly into compelling combo food/drug formats. Drug stores followed suit by making signifcant forays into food, a cause which was vigorously furthered by spunky regional Bentonville, Ark.-based retailer Wal-Mart Stores Inc.,

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| Progressive Grocer | Ahead of What’s Next | April 2015

which started selling a full line of groceries and high-volume fresh commodities in some stores. Te common denominator for migratory channelblurring can be explained by a simple answer: store size. Over the period between 1960 and 2000, the square footage of the average store grew relentlessly; the latest year’s prototype foor plan always seemed to be a few thousand feet larger than the prior year, which provided retailers with an incrementally larger platform to test and experiment with new departments housing more products in bigger cases, and with it, bigger ROI needs and expectations. But much has been learned from yesteryear’s “bigger is best” store confgurations, which brings us back to the present day of retailing, when more compact footprints are becoming the preferred choice for many retailers’ new store confgurations. Regardless of the size of the box, store-within-a-store departments have been among the most infuential tactics for progressive grocers to amp up the in-store experience with full-on specialty departments, be it beauty and wellness, kitchenware, pet food/pet care, or free-from products. To that end, the key to the most successful retailers’ store-within-a-store concepts is to capitalize on categories that drive frequent visits and concurrently surprise and delight their most important shoppers, which in turn enables them to capitalize on those visits with countless other items found throughout the rest of the store. Other elements cited as being highly infuential in enhancing the in-store experience among this year’s retailer panelists include cross-merchandising (57.8 percent), which slid nearly 10 points from last year; prepared foods (57.4 percent), which held steady from the year-ago report; locally sourced products (55.8 percent), which are expected to continue to gain prominence; time-tested BOGOs (34.5 percent); in-store pharmacies (28.8 percent); free WiFi (22.2 percent); and cooking/ meal prep stations (22 percent).

In-store Services In the current food retailing war, supermarkets are clearly in the crosshairs of many formidable contenders. For that reason, grocers are pulling out all the tools in the shed to help them shine in a sea of sameness, with strategies to help impart an experience, rather than just another place to pick up products that can be sold anywhere. To that end, many grocery leaders are accelerating ongoing eforts to enhance relevancy, diferentiation and tailor-made community appeal with specialty services and resident expertise that are available for the asking. In addition to personalized, professional advice and guidance from pharmacists, in-store nutritionists, dietitians,


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82nd AnnuAl RepoRt

of the GRoCeRy InDuStRy wellness experts and even aestheticians available to consult with shoppers on how to live with a new diagnosis such as diabetes, high blood pressure or celiac disease, many retailers are also seeing success with kids’ cooking and nutrition classes, wellness and nutrition sessions, oral care screenings, and smoking cessation seminars — all of which are usually free or inexpensive. However, the most critical in-store service cited by this year’s Annual Report of the Grocery Industry panelists is that of on-site butchers or resident meat department experts, viewed by 60 percent as the most rewarding component of an excellent in-store experience. Pacing butchers in the second seed is having seafood experts, which is also considered to yield a rewarding ROI for building bonds with consumers among 34 percent of respondents, followed next by service-based and informational kiosks.

Benefits of MoBile Devices/sMartphones Total Facebook

48.3%

e-Coupons

46.6

Digital Circulars

45.7

Interactive Websites

31.9

Price Comparison Apps

28.4

Personalized Discounts

27.6

Shopping List Apps

27.6

Personal Shopping Assistance

24.1

Delivery of Online Orders

23.3

Paper Circulars

22.4

POS Loyalty Cards

19.8

Order Online/In-store Pickup

18.1

Meal Planner Apps

15.5

Direct Mail

13.8

In-store Digitial Media

12.9

Shopping History

12.1

Twitter

11.2

QR Codes

9.5

YouTube

6.0

Pinterest

5.2

In-store Video Marketing

5.2

Geo-fencing

3.4

Other

1.7

Source: Progressive Grocer Market Research, 2015

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| Progressive Grocer | Ahead of What’s Next | April 2015

GraDe of coMpany’s strateGy for connectinG with consuMers Total A: We have a fully integrated strategy using in-store, online and digital channels (omnichannel).

12.9%

B: We’ve got a strategy that we’re executing.

32.8

C: We’re just getting started.

37.1

D: We’re barely there.

12.9

F: What’s omnichannel?

4.3

Source: Progressive Grocer Market Research, 2015

Other service-based programs scoring points with experiential retailing tactics include children’s/ student programs, at 20 percent; wellness experts and registered dietitians, cited by 30 percent of panelists; event planners (12.6 percent); certifed chefs (10 percent); and cheesemongers (10 percent).

Benefits of Mobile Devices/Smartphones Like most other aspects of our lives, technology is playing an ever more important role throughout the store to deliver a more rewarding shopping experience. Innovations in digital, mobile and social technologies have created new contemporary expectations in today’s shopper. Indeed, as consumers increasingly use smartphones and tablets in their everyday lives, mobile-based technology has emerged as the top priority for retailers in 2015. Tat fnding is reafrmed separately by the 2015 State of Retailing Online survey from Shop.org/Forrester Research, in which nearly six in 10 (58 percent) of those polled place mobile at the top of the list. Moreover, smartphone sales as a percentage of online sales grew from 8 percent in 2013 to 12 percent in 2014 — an increase of 50 percent — according to the 2015 State of Retailing Online survey, which further found that tablets’ share of online sales grew from 13 percent in 2013 to 16 percent in 2014. Additionally, many of those who list mobile as the top priority say their digital marketing budgets remain modest, knowing consumers are coming to their mobile sites whether they’re ready for them or not. Of those retailers surveyed, 32 percent report spending less than $100,000 on their smartphone development eforts in 2014, while 68 percent report spending less than $1 million. As for tablets, just 4 percent say they invested between $100,000 and $250,000 last year. However, eight in 10 surveyed plan to increase their mobile budgets by at least 20 percent in 2015. Continued on page 50


Technology, Transparency Top 2015 consumer Trends By Kyle Shamorian

reTailers and manufacTurers have The opporTuniTy To Take full advanTage of shoppers’ desire To aggregaTe more and more of Their consumer acTiviTy onTo a single device.

Smart technology, blurred channel lines, brand transparency and modernized gender roles took top billing at Mintel’s recent Big Conversation as a panel of industry experts discussed evolving consumer trends for 2015 at the market research firm’s U.S. headquarters in Chicago. The continued growth of synced devices — not only smartphones and TVs, but also wearable technology like watches and health software that monitors fitness goals — will continue their forward march into the mainstream, and not just for consumers. According to Mintel’s Director, Innovation & Insight Lynn Dornblaser, in the coming year more products will feature QR codes that sync to consumers’ personal devices, to offer not only specials and promotions, but also source-tracing information, recipes and even music downloads. Retailers and manufacturers have the opportunity to take full advantage of shoppers’ desire to aggregate more and more of their consumer activity onto a single device. Another trend carving out a substantial impact on global retail is the blurring of channels, in terms of brick-and-mortar, try-before-you-buy, pure-play online and click-and-collect. The panel made particular note of Seattle-based Amazon, which is expanding its Sunday delivery service to 15 additional cities, as well as Bentonville, Ark.-based Walmart, the world’s largest traditional brick-and-mortar retailer, which is testing its own pickup option in certain markets, a service that “answers in-transit purchases being spurred by increased connectivity,” Dornblaser said. Brands also have been using the online realm to test new products before expanding them to larger markets, Dornblaser added, including Pepsi True, the brand’s stevia-sweetened answer to Coca-Cola Life, and General Mills’ Veggie Blend-Ins. As Millennials will command more buying power than any consumer segment in just a few years, it’s important to consider that these younger shoppers demand transparency, the panel noted. Customer rights and corporate responsibility have taken center stage among consumers, and not only are manufacturers and retailers following suit, but they’re also actually enlisting consumer input and responding accordingly. In addition to what ingredients companies put in their products, consumers are also making buying decisions based on company values like LGBT issues, minimum wage, environmental responsibility, animal rights and the support of political parties. Many engaged consumers get involved in protests, social media campaigns and other such efforts, and offer up their money to those companies that heed similar calls.


82nd AnnuAl RepoRt

of the GRoceRy InduStRy Continued from page 48

“Consumers are focking to retailers’ mobile sites at a faster pace and with more interaction than ever before, so naturally they expect retailers to ofer fast, well-designed mobile services that meet their needs,” explains National Retail Federation SVP and Shop.org Executive Director Vicki Cantrell. “With that in mind and with several years of mobile commerce now under the industry’s belt, retailers feel confdent in their mobile investments. For retailers — when it comes to mobile strategies — small but continuous incremental changes really do go a long way to keep their savvy customers happy.” Omnichannel ranks second on retailers’ priority lists this year, according to the 2015 State of Retailing Online survey, which found nearly half (45 percent) of participants hoping to improve or invest in programs like buy-online, pickup-in-store, shipfrom-store and inventory visibility. Tis is up signifcantly from the 26 percent of respondents who listed omnichannel eforts as a priority last year. Nearly four in 10 (38 percent) surveyed say their third priority is marketing optimization, including initiatives related to customer retention and acquisition.

Promotions Become Social, Personal Without question, the smartphone will be the end-all/beall source of deals, personalized ofers and customer engagement going forward. Pushing a grocery cart around with a paper shopping list is becoming a thing of the past. Along their path to purchase, modern aislebrowsers want convenience and value that makes their lives better and easier. Recognizing that social networks are the ultimate hub for conversations and word-of-mouth discoveries, 48 percent of retail execs responding to this year’s Annual Report of the Grocery Industry survey rank Facebook as the leading outlet to solidify connections with shoppers. According to a recent study by Te Hartman Group, 54 percent of online consumers use social media to discover new foods and share food experiences. For years, grocers have been reducing FSI circulation, and many retailers have done so with a scalpel rather than a hatchet — testing which markets will proftably respond to transitioning some of their print circular distribution to digital. As more grocers further enrich their wealth of Next customer data — and as consumers 5 years make digital an even bigger part of 28.4% their lives — the race to ofer the most 13.8 relevant promotions for each customer will continue to intensify. 4.3 Bearing out that the days of coupon 17.2 clipping may be numbered, e-coupons (46.6 percent) and digital circulars (45.7 11.2 percent) are rated as the second and 6.9 third top-rated benefts for an increas14.7 ingly mobile-using base of shoppers. As grocers look to further increase 6.0 share of wallet, they’re also investing 4.3 more heavily in interactive websites 0.0 (32 percent) and price comparison apps (28 percent), both of which 11.2 gained double-digit traction from last 1.7 year, as well as personalized discounts 2.6 (27.6 percent). Other growing in-store tech1.7 nologies include indoor positioning 1.7 systems to push customized ofers in real time. A handful of retailers are 0.0 already piloting beacon technologies 0.9 that enable them to blast promotions 0.9 to customers’ smartphones as they stroll through the aisles.

Best Investments In the Past 5 years/next 5 years Past 5 years Remodeled/Invested in Existing Stores

27.4%

Built New Stores

12.0

Expanded Assortments, i.e., Free-from Section, Organic Section

10.3

Technology Upgrades/New Investments

8.5

Upgraded Infrastructure to be More Efficient

7.7

Geographic Expansion

7.7

Enhance Social Media Strategy

6.8

Invested in Private Label/Store Brands

6.8

Changed Format (Smaller, Bigger, Different)

6.0

Streamlined Assortments/Trimmed SKUs

4.3

Training and Retention Programs

3.4

Overhauled Loyalty Program

2.6

Closed Underperforming Stores

2.6

Developed Sustainability Program

1.7

New PR Campaign to Promote Store to Community

0.9

Enhance Sustainability Strategy

0.0

Transitioned to Employee-owned Company

0.0

Other

5.1

Source: Progressive Grocer Market Research, 2014

50

| Progressive Grocer | Ahead of What’s Next | April 2015

Continued on page 54


Advertor i Al

Q &A

Talking with…

Kon Ostaficiuk President Camber Pharmaceuticals

Camber’s Impressive Growth Is Tied to Quality, Service and Teamwork Tell us why Camber has grown so dramatically over the past several years. It begins with a commitment by each individual in our company to never lose sight of the needs of our customers. From sales, to pricing, to customer service, everyone is pulling in the same direction. We know we have to earn our customers business every day and in every way. So if it means developing a customized program for a particular partner, or staying late on a holiday weekend to make sure all our orders are shipped, it’s really just part of the culture here at Camber. PG: Is this commitment refected in your results for 2014? Yes, defnitely. Based on the latest IMS data, Camber is number 14 overall among generic companies in dispensed prescriptions and number 1 in % growth with an 18.9% increase for 2014. We are very proud of these accomplishments but we’re not the type of company to rest on our laurels. PG: Tell us about your parent company, Hetero Drugs As the Chairman of Hetero, Dr. B.P.S Reddy likes to say; “We are in the life saving business.” Hetero’s business model is based on providing affordable, lifesaving medications to as many people as possible. An example

of that is their dedication to improve the quality of life for HIV patients worldwide. In addition to being a member of PEPFAR (Presidents Emergency Plan for AIDS Relief), Hetero and Camber currently provide anti-retroviral medications to some 3.5 million patients in 140 countries. Hetero is also one of the largest API manufacturers in the world, which gives Camber a distinct advantage when it comes to maintaining the integrity of our supply chain. PG: What plans does Camber have for 2015? : For 2015 we are planning an aggressive new product launch schedule. We have already launched 4 new products since January, (Valsartan, Zolmitriptan, Pantoprazole and Rizatriptan), and we have 20 or so more in the pipeline. We have also launched a new OTC division of Camber Pharmaceuticals called Camber Consumer Care, which will focus on the Pain, Allergy, Sleep and Cough/Cold categories. We believe our current success, great reputation and strong existing customer relationships will give us a good opportunity to break into and thrive in the competitive OTC marketplace. At the end of the day it is our quality products, commitment to teamwork and passion for the business that will drive Camber’s continued growth.


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82nd AnnuAl RepoRt

of the GRoceRy InduStRy

success across the store

Meat still reigns supreme, but other categories swap places as they jockey for consumers’ dollars and ongoing loyalty. When respondents to PG’s survey were asked which categories generate the most sales, meat once more comes out on top, chosen by 50.9 percent. Te second spot belongs jointly to private label, which rocketed up from 12th place last year, and produce, which rose slightly from its third-ranked position in 2014; both were selected by 47.2 percent of respondents. Rounding out the top spots are beer/wine/liquor and frozen food, each with 39.6 percent; general merchandise, at 38.7 percent; and dairy, at 36.8 percent. Interestingly, center store, No. 2 last year, drops to No. 8 this year; deli/prepared foods, which ranked ffth in 2014, falls to ninth in 2015; and organics have gone from seventh to 11th. Such dramatic downward shifts may indicate that these categories are in need of fresh marketing and merchandising strategies to boost customer purchases, particularly center store, which faces stifer-than-ever competition from fresh categories, while organic may be afected by the plethora of better-for-you, natural and free-from items on the market, giving healthconscious shoppers more to choose from. On the ascendant, meanwhile, are frozen foods, which last year were in ninth place, and fresh bakery, up six Most successful DepartMents:

Most successful DepartMents:

GeneratinG sales

Source: Progressive Grocer Market Research, 2015

54

Most successful DepartMents:

DrivinG traffic Total

Meat Private label Produce Beer/Wine/Liquor Frozen Foods General Merchandise Dairy Center Store Deli/Prepared Foods Fresh Bakery Seafood Organic Health, Beauty & Wellness Gourmet/Specialty Floral Ethnic Pharmacy Checklanes

rungs to ninth this year, buoyed perhaps by consumers’ increased interest in the perimeter. When it comes to driving trafc, meat is again the winner, at 41.7 percent, paced by produce (39.6 percent), deli/prepared foods (38.5 percent), and dairy (37.5 percent), while the next-ranked category, beer/wine/liquor, most likely because they’re not carried by all stores, lags somewhat behind, at 25 percent. Last year’s second-ranked trafc driver, center store, plunges to seventh, while frozen foods, 17th last year, surges to sixth place.

50.9% 47.2 47.2 39.6 39.6 38.7 36.8 34.0 28.3 28.3 27.4 25.5 24.5 20.8 18.9 17.0 16.0 11.3

coupon reDeMption Total

Meat Produce Deli/Prepared Foods Dairy Beer/Wine/Liquor (if applicable) Frozen Foods Center Store Fresh Bakery Pharmacy Private Label Ethnic Gourmet/Specialty Organic Floral Seafood Health, Beauty & Wellness Checklanes General Merchandise Source: Progressive Grocer Market Research, 2015

| Progressive Grocer | Ahead of What’s Next | April 2015

41.7% 39.6 38.5 37.5 25.0 24.0 21.9 21.9 18.8 18.8 15.6 15.6 15.6 12.5 12.5 11.5 10.4 7.3

Total Center Store Frozen Foods General Merchandise Health, Beauty & Wellness Dairy Checklanes Deli/Prepared Foods Gourmet/Specialty Seafood Ethnic Beer/Wine/Liquor (if applicable) Fresh Bakery Meat Private Label Produce Floral Pharmacy Organic Source: Progressive Grocer Market Research, 2015

50.2% 21.1 21.1 17.5 14.0 10.5 5.3 5.3 5.3 3.5 1.8 1.8 1.8 1.8 1.8 0.0 0.0 0.0


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What Shoppers Want Meat’s supremacy in sales and driving trafc is no doubt due to the industry’s heightened awareness of shoppers’ motivations and desires, as evidenced by the in-depth “Power of Meat” study, published yearly by the Food Marketing Institute (FMI) and North American Meat Institute (NAMI). At the recent Annual Meat Conference, in Nashville, Tenn., in February, various sessions discussed such timely issues as the implications of the proposed 2015 Dietary Guidelines, which don’t recognize consumption of lean meat as part of a healthy lifestyle; food safety; and sustainability through modern factory farming. Tis awareness is coupled with an aggressive approach to getting consumers to buy. Sherry Frey, SVP at Schaumburg, Ill.-based Nielsen, noted at the conference that grocers can increase basket rings by delivering solutions through crosspromoting meat across multiple store categories. She added that, to shore up meat against incursions from the prepared foods department, grocers should strategically target two key categories: versatile quick-cuts (premium-priced smaller packs) and planned occasions (larger family packs), and promote meat in circulars as part of multicategory solutions, not as isolated ingredients. Other advice in this vein provided at the conference included the need for retailers to market meals rather than ingredients; promoting premium extensions of conventional brands, clean labels and other trending concepts such as gourmet, artisan and craft; and engaging meat consumers through social media. What’s more, ample feed stocks and fat ethanol use are expected to help boost herd development and ultimately moderate meat prices, which should encourage more consumer purchases. A good economy and changing preferences have created “a very positive demand situation for meat,” said Steve Meyer, president of Adel, Iowa-based Paragon Economics, at the conference. Frozen foods’ substantial gains appear to stem from such trends as the introduction of a greater number of natural and organic frozen oferings, which in turn is spurring interest in consumers who are sufciently attracted by their convenience to opt for them over comparable fresh items. Rockville, Md.-based Packaged Facts estimates that sales of frozen foods, Most successful DepartMents:

Most successful DepartMents:

custoMer InteractIon

custoMer Buzz

Total

Total Organic Deli/Prepared Foods Ethnic Gourmet/Specialty Meat Floral Fresh Bakery Produce Checklanes Health, Beauty & Wellness Seafood Beer/Wine/Liquor (if applicable) Private Label General Merchandise Center Store Dairy Pharmacy Frozen Foods source: Progressive Grocer Market Research, 2015

31.3% 28.8 28.8 27.5 18.8 17.5 17.5 16.3 13.8 12.5 12.5 10.0 10.0 6.3 5.0 5.0 5.0 1.3

Checklanes Deli/Prepared Foods Floral Meat Pharmacy Fresh Bakery Produce Seafood Organic Ethnic Health, Beauty & Wellness Beer/Wine/Liquor (if applicable) Center Store Gourmet/Specialty Dairy Private Label General Merchandise Frozen Foods source: Progressive Grocer Market Research, 2015

54.4% 32.4 26.5 19.1 19.1 17.6 16.2 16.2 13.2 11.8 10.3 8.8 8.8 7.4 2.9 2.9 1.5 0.0


82nd AnnuAl RepoRt

of the GRoceRy InduStRy as it was last year, with 50.2 percent of respondents including dinners/entrées, pizzas, side dishes, selecting it in 2015. Next are frozen food (up from and appetizers/snacks, will grow from $22 billast year’s ffth place) and general merchandise, both lion in 2014 to $23 billion in 2019. with 21.1 percent; health, beauty and wellness, at As for the deli/prepared foods section, while 17.5 percent; and dairy, at 14 percent. Chicago-based Technomic fnds that sales are up According to Marx, a solution from Minneap30 percent since 2008, compared with about 10 olis-based Kantar Media, retailer participation in percent for the overall foodservice industry during free-standing insert (FSI) coupon events and digital this period, the category’s slipping sales among coupons distributed on retailer websites benefted PG’s survey respondents point to the idea that from double-digit increases from 2013 to 2014, many grocers haven’t quite fgured out how to make increasing by 11.8 percent and 16.5 percent, respecthe “shift from the historical ingredient/component tively. During this same period, retailer feature ad approach we have seen for many years” to what pages grew 4.2 percent, while overall retailer adverMark Hayden, president of Acosta Foodservice for tising among CPG retailers declined 2.8 percent. Jacksonville, Fla.-based Acosta Sales & Marketing, “Tese trends indicate retailer and manufacturer sees as the next logical step for the category, given marketing dollars are increasingly being directed tothe explosive growth of the “grocerant,” or grocery ward programs that communicate specifc and easystore-restaurant hybrid concept featuring a greater to-understand value to the shopper,” notes Marx Acnumber of convenient ready-to-eat meals. count Solutions VP Dan Kitrell. “Although retailer “It’s important to create oferings that are advertising provides continuity and builds equity high-quality and executed consistently day to day,” with shoppers, retailer FSI couHayden notes. “Tis is where pon events efectively reach bringing foodservice expertise shoppers in the home when they is important to consult on areas are writing shopping lists and such as equipment, packaging, planning shopping trips, while food preparation, menu design digital coupons distributed on a and marketing strategies, to creretailer’s website provide relevant ate visibility for their programs.” incentives to shoppers who are One major area of opportulikely planning a trip to that nity for deli/prepared foods is to retailer. Finally, retailer feature court Millennials, who, accordads frequently make the value ing to Mary Kay O’Connor, VP of the combined ofers easier for education at the Madison, Wis.the shopper to understand by based International Dairy-Deli‘showing the math,’ including Bakery Association (IDDBA), regular price, feature price, and represent a crucial demographic net price paid after the coupon for the cheese industry, as they savings are applied.” increasingly demand a wider Marx noted considerable spectrum of favors and varieties shifts in advertising and promocompared with older generations. tion activity among various “[Millennials are] also more retailers. For example, Benlikely to visit the specialty cheese tonville, Ark.-based Walmart department than Baby Boommaintained the highest level of ers and the Silent Generation,” actual advertising expenditures notes O’Connor, citing fndings and the highest level of particifrom the association’s 29th annual pation in retailer FSI promotion “What’s in Store 2015” trends repages, and also increased its port. “Given the rise in snacking consumer promotion activity, as a prominent eating occasion Total with a 15.7 percent increase and the interest in consuming Meat 45.8% in FSI promotion pages and more protein, specialty cheese is Produce 28.1 an 18.4 percent rise in digital well aligned to position itself as a Center Store/Grocery 9.4 coupon events on Walmart.com unique snack category that’s both Deli/Prepared Foods 8.3 in 2014. Minneapolis-based healthy and indulgent.” Fresh Bakery 7.3 Target, meanwhile, had the secOrganic 3.1 ond-highest levels of advertising Coupon Redemption Gourmet/Specialty 2.1 expenditures and retailer FSI In the area of coupon redemppromotion pages after Walmart, tion, PG’s survey fnds center Source: Progressive Grocer but cut back on advertising by store unsurprisingly in the lead, Market Research, 2015

Most InfluentIal DepartMents In DrIvIng store’s overall BranD/IMage/poInt of DIfferentIatIon

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| Progressive Grocer | Ahead of What’s Next | April 2015


6.1 percent, FSI promotion pages by 11.1 percent and digital coupon events on Target.com by 36.6 percent in 2014. Tese advertising and promotion shifts may ultimately lead to shifts in share of shoppers, trips and sales between the two retailers. Several leading pure-play grocery retailers — Kroger, Albertsons and Supervalu — lowered their advertising expenditures in 2014. FSI coupon pages and digital coupon events rose for most of these retailers, while retailer feature ad page changes were mixed in 2014. “Tese retailer trends may refect several factors, including retailers exiting select markets, the sale of retail banners, or a response to retailerrelated news stories,” observed Kitrell, adding that manufacturers should time their programs to the specifc periods in which a retailer has higher advertising and promotion activity.

Customer Buzz and More It may be down in generating sales, but organic tops other categories in customer buzz, at 31.1 percent, rising from No. 7 in 2014 to supplant last year’s deli/prepared foods, which shares second place with ethnic, at 28.8 percent. Other most talked-about

categories are gourmet/specialty, at 27.5 percent; meat, at 18.8 percent; and foral and fresh bakery, with 17.5 percent apiece. In the realm of customer interaction, checklanes and deli/prepared foods have switched places, with checklanes now out in front by a wide margin, 54.4 percent to deli/prepared foods’ 32.4 percent. Floral makes an impressive leap from 12th last year to third this year, at 26.5 percent, pushing meat down one spot, with 19.1 percent, where it ties with pharmacy. Despite the opportunities opened up by its showing on the customer buzz chart, organic comes in ninth, three spots up from last year but still fairly low down on the list. Given the buzz it engenders, grocers should ensure their associates know the benefts of organic and how products receive organic certifcation, thereby enabling consumers with questions to understand what they’re purchasing, and increasing customer interaction that will inspire more shoppers to buy organic. Most infuential in driving stores’ overall brand, image or point of diferentiation is once more the meat section, with 45.8 percent, while produce, which was No. 2 last year, is a distant second, at 28.1 percent. Center store/grocery is third, with 9.4

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82nd AnnuAl RePoRt

of the GRoceRy IndustRy percent, followed by fresh bakery and organic (which didn’t even chart last year), at 7.3 percent and 3.1 percent, respectively. Finally, when asked to name the tools they use to engage with consumers, a whopping 73.2 percent of PG’s survey respondents choose social media, up from 69.8 percent last year. Next in popularity are electronic communications/digital surveys, at

36.5 percent, down slightly from last year; customer service hotlines, at 36.3 percent, an increase of nearly eight percentage points; loyalty card data, at 33.3 percent, down from 37.2 percent in 2014; and associate feedback, at 29.2 percent, a small uptick from last year. As grocers continue to embrace digital marketing, we can expect the use of social media and e-communications to keep growing. PG

How MulticHannel SHopping iS cHanging tHe grocery induStry By Julian Highley cal contact — will continue to be dominant in-store. This will force retailers to think about how they rebalance There’s no doubt that the online channel is increasing its space in their physical stores and deliver on different customer presence in the grocery sector. There’s also no question that needs. Using the store as a depot allows retailers to manage it’s taken a long time. the transition of key categories, but it also introduces its own While 83 percent of leisure flights were booked online complications. Retailers will need to provide customers the in 2014, Google’s Consumer Barometer found, less than 1 ability to pick up quality produce and food to go, while rapidly percent of grocery sales were, according to Planet Retail. innovating the rest of the in-store experience. And with Bloomberg Businessweek estimating that online’s share of the grocery business could reach 11 percent by 2023, it’s understandable to think that there’s still considerOnline Merchandising able time before those in the grocery space need to turn How shoppers navigate the store online is fundamentally their focus toward online shopping. different from in-store. Although devoid of tried-andHowever, recent Dunnhumby research has found true in-store stimulus, online purchasing is that the online channel is going to have a profound ef- tHe virtual significantly healthier than in-store purchases. fect on grocery brands and retailers, with 50 percent Also, based on customer behavior, promotions environMent of sales in key categories being sold online well before work very differently online versus in-store. iS currently 2023. Planning for this shift needs to start now. For instance, the end-of-aisle display is a staunderuSed ple of trade promotions in the physical world, by retailerS, while the online equivalent contributes to only Key Categories for Growth and Moving 6 percent of online purchases. The in-aisle Established markets’ total online sales account for equivalents are far more important online. less than 5 percent of total grocery, yet categories forward we While the online behavior of shoppers is such as frozen meat, canned food, baby food and anticipate MucH profoundly different from in-store, the apcare, and breakfast cereals are seeing almost 20 pergreater uSe of proach of most retailers has been to translate cent of their sales through online. With online annual the physical store online (with some tweaks growth rates in excess of 20 percent, one-third to half tHe freedoM tHat tHe virtual such as a search function and favorites). The of all sales could easily be online for these categories virtual environment is underused by retailby 2019. For the most part, the shift from in-store to environMent ers, and moving forward we anticipate much the online channel is a zero-sum game. provideS. greater use of the freedom that the virtual Retailers will need to ensure that they have an environment provides — not to the futuristic online presence to respond to this dynamic. Within extent of virtual reality, but more thoughtful and simple the categories that are already well established online, there ways of improving the online experience. are a significant number of brands that have close to 40 For example, providing dedicated entry points for spepercent of their sales from online today. In a few years, there cific mission-based shopping (e.g., party planning versus will be grocery brands that see the majority of their sales full shop versus stocking up on staples), and the introduccoming from online grocery shopping. tion of features like “have you forgotten …” to remove the frustration of an additional trip to pick up items that were Think Multichannel, not Online omitted from the original shopping trip. While there are categories that will see sizable shifts to online, for customers it will be about a balance between the online and in-store environments. Even in the most established online grocery markets, those shopping solely Julian Highley, global capability director and head of global online equate to less than 2 percent. Fresh produce, the deli trends at London-based Dunnhumby, influences strategy at the executive level across a number of retail and brand partners. counter — categories where it’s important for consumers to gauge the quality and freshness of products through physi-

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| Progressive Grocer | Ahead of What’s Next | April 2015


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Category Management

Center Store

Delivering

Solutions Reaching across aisles to satisfy shopper need states is the way to boost center store.

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By Jim Dudlicek

rocery retailers and industry analysts alike say the fresh perimeter exhibits the strongest continuing growth, but where does that leave center store? Fewer and fewer consumers are shopping both the perimeter and center store — currently only 43 percent, noted John Rand, SVP of retail insights at Boston-based Kantar Retail, in his presentation at the recent 2015 Annual Meat Conference.

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According to PG’s own survey of grocery retailers, fully explored in our 82nd Annual Report of the Grocery Industry in this issue, center store is the eighth-highest salesgenerating department in the store, down from second a year ago, on a list led by meat, produce and frozen foods. Both Rand and Sherry Frey, SVP at Te Nielsen Co., in Schaumburg, Ill., assert that fresh and center store categories must be cross-merchandised to deliver meal solutions for shoppers. “Competition and partnerships hinge

| Progressive Grocer | Ahead of What’s Next | April 2015


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Skate to where the customer is going and you will be rewarded. Center store may not have the same glamour that fresh has, but there are great opportunities when properly mined.” —Richard Meyerkopf, Hannaford

Center Store

on connections across aisles,” said Frey, also speaking at the Meat Conference. Tat means “thinking diferently on how to merchandise the store,” Frey said. “If you’re not willing to think diferently and get creative, you’re vulnerable.” Tat vulnerability can be overcome by marketing solutions, rather than isolated ingredients, to address need states in demand by consumers. Meals that deliver on convenience, great taste, ease of preparation and solid nutritional profles allow busy shoppers to put dinner on the family table with as much ease as going through the fast-food drive-through, but without the guilt. Moving center store out of the shadows and demonstrating how it’s an essential partner to fresh and other categories will boost excitement and basket rings for key consumer age groups, and help elevate the category from the “chore” status it holds as part of the shopper experience.

Wants and Needs “It’s important to have equal passion for center store as fresh,” says Richard Meyerkopf, VP of merchandising at Scarborough, Maine-based supermarket chain Hannaford. “Diferent consumers have a variety of needs and wants, and a lot of those needs and wants have center store solutions for them. My job is to ensure we are moving in sync with our primary customers.” In center store, Meyerkopf tells PG, that means knowing what categories matter most, and then ensuring the assortment, merchandising, price, promotion, display and fxtures all deliver a strong impression and experience. “Skate to where the customer is going and you will be rewarded,” he says. “Center store may not have the same glamour that fresh has, but there are great opportunities when properly mined.” Gordon Wade, SVP for best practices at the Wimberley, Texas-based Category Management

Association, describes the reasons for center store’s malaise as “numerous and complex, therefore no one magic prescription will solve the sickness.” Wade looks to Te Kroger Co., based in Cincinnati, and its seemingly perpetual same-store sales gains as a best-practice beacon. “In my judgment, they are leveraging their loyalty card data to identify the categories and shopper cohorts where they are underperforming, and designing programs to capture the proft pools among shoppers in the store but less loyal in category X,” he says. Wade points to a recent VideoMining shopper behavior study that tracked consumers’ actual movements through a supermarket. “Tis work suggests that specifc category end cap choices will enhance center store trafc,” he says, urging that retailers “should jump on this learning because it is something they can do immediately with little or no additional expense or labor.” Further, Wade recommends leveraging categories with high household penetration and frequent purchase, particularly dairy: “Numerous studies indicate that cross-merchandising with milk drives shoppers into the middle of the store.” Ultimately, Wade asserts, retailers need to truly understand the “problem” categories in center store, “those where shoppers are satisfying a low percentage of their need in my store, and then design programs with vendors to recapture this volume.”

Understanding Shoppers Making center store more shopper-friendly is a common goal of retailers and CPG companies. “Te linear aisle structure of center store was originally designed to optimize operational efciencies. For the most part, this structure is uninspiring, hard to navigate and hard to shop,” declares Ja-

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| Progressive Grocer | Ahead of What’s Next | April 2015


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Category Management

The linear aisle structure of center store was originally designed to optimize operational efficiencies. For the most part, this structure is uninspiring, hard to navigate and hard to shop.” —Janine Shearer, The Coca-Cola Co.

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Center Store

nine Shearer, VP for category advisory services at the Atlanta-based Coca-Cola Co. “Much has changed in the decades since this original center store design was conceived. Not only has shopper behavior changed, but our depth of understanding of shoppers and their behavior has also grown tremendously.” According to Shearer, understanding behavioral, emotional and functional insights helps retailers and CPG companies focus on solutions that can drive more trafc, transactions and conversion, while improving shopability; connect with shoppers’ motivations, needs and occasions; help shoppers better navigate the aisle to locate their preferred brands; and optimize shelf sets by understanding how shoppers visually navigate the shelf. Adding excitement to the center store often means staying on trend and fexing merchandising space to refect growing categories. “Brick-and-mortar retailers sometimes struggle with getting ahead of these growing categories, and as a result, merchandising space can often lag behind the trends,” says Nicole O’Connor, director of category and shopper solutions for Stamford, Conn.based Nestlé Waters. “We have seen successful retailers add excitement to center store by identifying trending categories whose growth is driven by macro-trends (i.e., health and wellness or demographics). Tey watch these trends and have the confdence to add space and assortment just ahead of demand.” Northfeld, Ill.-based Kraft Foods Group has developed an action plan for center store focused

| Progressive Grocer | Ahead of What’s Next | April 2015

fve key areas: shopper insights, category basics, space management, aisle/total store and “more on the foor,” or leveraging modular shipper displays to sell more products. Further, retailers should modify their store layouts according to evolving shopper navigation principles “to convert shoppers to buyers,” according to Art Sebastian, Kraft VP of category leadership and shopper insights, in a recent presentation to the Wisconsin Grocers Association. As envisioned by Kraft, a reimagined center store creates new aisles focusing on specifc need states such as meal solutions, a dinner aisle, protein snacking, a cofee aisle or front end solutions.

Crossing Categories Michael Ganey, VP of marketing at Four Oaks, N.C.-based baking mix maker House-Autry Mills, suggests promoting “go-with” items across categories — for example, bacon and eggs, cooking oils with fried foods, and fruit with cereals. “A compelling in-store signage program is needed to connect center store with the fresh perimeter via ‘healthy eating’ messages,” Ganey says, “and direct suggestions to add fruits and veggies to all meals using easy-to-prepare center store items.” House-Autry Mills is developing load-to-card and IRC cross-couponing programs to tie its products to related purchase items. “It is important to provide the consumer a look at a complete meal, and cross-promotions can accomplish that,” Ganey asserts.


Revitalizing Center Store With Natural and Organic Coca-Cola has been working with some of its retail partners on a beverage aisle reinvention project, Shearer notes. “Te principles of category management have been critical in understanding the right assortment based on shopper demographics and key beverage occasions, as well as the right merchandising and in-aisle messaging to maximize shopper engagement,” she says. “Tis work has driven positive results in terms of purchase incidence and basket size.” And, with more than a quarter of trips lasting 10 minutes or less, putting even more pressure on center store, basket analysis helps retailers identify logical product adjacencies to create more convenient solutions for shoppers. “Additionally, neuroscience research has shown that purchase incidence is higher when complementary items are co-merchandised, for example, snacks and beverages,” Shearer says. “In the future, if stores are designed to meet the needs of the shopper, then we will see less of a clear delineation between perimeter and center store, and will see more of a store-within-a-store concept where visual beacons communicate logical clusters of products.” At Nestlé Waters, opportunities abound in a variety of consumer occasions and shopper crosspurchasing dynamics. “Our imported sparkling water brand, S. Pellegrino, has very high afnities with perimeter categories,” O’Connor says. “S. Pellegrino appeals to the foodie who enjoys at-home entertaining. It most frequently shares a basket with specialty cheeses, specialty crackers, and organic fruits and vegetables. Ofering a premium sparkling water alongside perimeter categories, or suggesting the addition of a sparkling water to a specialty cheese purchase, is an example of how you can connect the perimeter to center store in a shopper-relevant way.” Nestlé Waters is partnering with retailers to reexamine total beverage space. “By reallocating space from declining beverage categories to higher-ring or higher-margin categories like still and sparkling bottled water, retailers are able to improve basket ring and proftability,” O’Connor says. Te brand also is collaborating with retailers to promote sales of singles on premium items. For example, S. Pellegrino Sparkling Fruit Beverage (SFB), sold in a 6-pack, typically retails for about $4.99, a price that O’Connor says may be a barrier to putting it in the cart. “We have worked with retailers to authorize sales of the single cans that retail for $1 each, efectively a 20 percent premium to the 6-pack. Te results have been tremendous,” she says — an eightfold increase on total S. Pellegrino sales, with shoppers returning to purchase 6-packs at a rate of three times more than before the promo, at full price. “Te 6-packs become a value to the single-can purchase, and adding $5 to a cart is substantial.”

By Daniel Lohman Consumers are continually looking for solutions to improve their health and vitality. You can’t turn on the TV, listen to the radio or read anything today without seeing a story focused on improving health. Some of the stories discuss things we should avoid, while the majority are about healthier trends, for example, lowering sodium and sugar consumption. Natural and organic solutions are fueling these conversations and are at the heart of the trends of growing sales of natural/better-for-you products. Core natural consumers carefully read labels and are better educated about nutrition than most shoppers. They’re happy to pay a premium for products that deliver exceptional value and fully meet their needs. The natural channel is growing at more than twice the pace of conventional. Natural product innovation comes from disruptive brands laser-focused on providing solutions that meet and exceed consumers’ needs and wants. Natural products are responsible for developing entirely new categories like glutenfree, vegan, clean label and organic. These shopper need states fuel natural product innovation. How does this strategy work and why does it matter? Integrating natural and organic products side by side with other items invites consumers to try new and different things, products that meet specific needs. For example, shoppers might consider a gluten-free pasta alternative like quinoa, rice or chickpea noodles instead of processed pasta made with wheat flour. This strategy matters because it capitalizes on better-for-you trends that bring incremental sales growth to the pasta category. The other benefit is that the retailer now has a richer selection that caters to consumers with specific needs like food allergies, or those who want clean-label products. Quality natural and organic products can be found in almost every category. They support every meal occasion (breakfast, lunch, dinner and snacks). One key aspect of natural and organic products that’s frequently overlooked is their true value. While they’re typically higher-priced, they provide better nutrition and are often more satisfying, so consumers tend to eat less of them. For example, a sandwich made of cheap white bread may sustain you for a couple of hours, while the same sandwich filling on high-quality gluten-free bread will fill you up for a longer period because it better meets your body’s nutritional needs. In addition, the gluten-free product provides better overall nourishment to those with gluten sensitivity. In this example, the better-quality bread may prove to be less expensive in the long run. Retailers looking to compete more effectively in any channel and in any economy need to remain dedicated to meeting their shoppers’ needs. There are a lot of untapped opportunities to grow center store sales and make shopping there an adventure. Natural products provide an excellent way to drive shopper foot traffic and grow sustainable sales at retail. Daniel Lohman is a strategic adviser in the CPG and organic industry. His company, Category Management Solutions (CMS4CPG), based in Littleton, Colo., assists companies in expanding their retail distribution and improving their merchandising. Lohman can be reached at dan@cms4cpg.com or 303-748-3273.

April 2015 | progressivegrocer.com |

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Category Management

We believe retailers must constantly redefine their categories in the same ways shoppers define categories.” —Michael Ganey, House-Autry Mills

Center Store

Crafting a New Center Store What does the future hold for category management in center store? “We believe retailers must constantly redefne their categories in the same ways shoppers defne categories,” says Ganey, of House-Autry Mills. “Simply because particular products have similar physical characteristics does not mean it matches up with consumer perceptions. Dedicated gluten-free sections are a good example. We are launching a line of gluten-free baking mixes, and retailers are split on placing them either in line or in a dedicated section. Sales would seem to indicate the latter creates the best opportunity for a sale.” Coke’s Shearer says category management will become ever more critical in understanding and optimizing center store. “Te key to the future will be ensuring not only a complete understanding of the four Ps — product, place, price and promotion — but also the ffth P of ‘people,’ or shoppers, which underpins every insight and recommendation,” she says. “Finally, being able to efectively segment stores so that the ofering in each store exactly matches the needs of the shoppers in that specifc store is critical. Optimizing assortment, pricing, merchandising and marketing in this way will enable our retail partners

to maximize their sales and profts.” Nestlé Waters’ O’Connor notes that health-andwellness trends, coupled with e-commerce growth, will put more pressure on retailers to “revolutionize” the center store. “We believe that shoppers will come to expect the product selection and assortment in the center store to become as healthy and natural as what they demand from items around the perimeter,” she says. “How can we reinforce the healthfulness and naturalness of center store items to improve the perception of center store?” According to Hannaford’s Meyerkopf, adding general merchandise to displays makes a lot of sense, giving as an example another retailer’s display featuring vegetable steamers in the produce department. “Tat’s not driving them down the aisle, though,” he cautions. “I don’t think the answer is through fresh. It’s going to be through relevance and drawing power of the category, by assortment, price, brands, favors, merchandising, décor and store design.” PG Read more about center store category management at Progressivegrocer.com/catmancenterstore.

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treated with the utmost dignity and respect. Tey live in a cratefree environment and are 100% vegetarian-fed. All of this leads to Creekstone Farms delivering high-quality taste while leaving behind the lowest environmental footprint possible. PG: Your new “case-ready” program has been highly anticipated by grocers. Tell us why. JR: Trust me, we’re just as excited as they are! Our case-ready program applies to Premium Black Angus Beef steaks and roasts, as well as all-natural further processed pork items like franks, sausages and bacon. It provides extra fexibility for grocers that stock our products. Two of the major benefts are an extended shelf life – 28 days from production – and smaller pack sizes, about 6 to 12 pieces per case. Te longer shelf life means less markdowns and throwaways, which supports our overarching goal of sustainability. We’re creating less waste in the community while increasing profts for our partners. Our customers will see immediate benefts by encountering fewer out-of-stock situations.

| Progressive Grocer | Ahead of What’s Next | April 2015


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Grocery

Condiments

Hot Stuff Sauces with a spicy kick enliven supermarket displays and customers’ palates. By Bridget Goldschmidt

N

o doubt about it — hot sauces are hot. Tis month alone, the 2015 NYC Hot Sauce Expo (just one of many such themed events for spicy food lovers) is scheduled to blast of at the Brooklyn Expo Center, with a full slate of demos, eating contests and ceremonies planned, and New York’s resident hipster borough will become home to a Kickstarter-funded hot sauce emporium — punningly dubbed the Heatonist and already active as a mail-order business — in the city’s oh-so-trendy Williamsburg section. Just how hot are hot sauces? According to Te NPD Group, a Port Washington, N.Y.-based global information company, 56 percent of households have hot sauce on hand in their kitchens. When broken down by demographics, females age 18-44 and 55-64 and males age 18-54 and 65-plus, eat more than the average amount of hot sauce over the course of a year, according to NPD’s ongoing food and beverage market research, National Eating Trends, which also found that dual-income, no-kids households, or DINKS, eat more hot sauce than any other type of household, and that consumers in the South eat more hot sauce than any other region of the country, while easterners eat the least. “Hot sauce is clearly part of the diet of many U.S. consumers, and it’s a food that crosses gender, age, ethnicity and income,”

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| Progressive Grocer | Ahead of What’s Next | April 2015

notes Annie Roberts, VP of NPD SupplyTrack, a monthly service that tracks every product shipped from major broadline distributors to their foodservice operators. On the retail front, Minneapolis-based Target stole a march on other retailers at the end of last year with the rollout to select SuperTarget locations of Tabasco Premium Sriracha Tai Chili Sauce, which, as lovingly described by a representative of Te McIlhenny Co., on Louisiana’s Avery Island — an iconic 147-year-old enterprise that’s virtually synonymous with hot sauce — “boasts hints of sweet garlic and just the right amount of spice. Every batch is made with a small amount of Tabasco pepper mash, which has been aged in white-oak barrels for up to three years for a hint of Tabasco signature favor.”

Just Say ‘Sriracha’ Tat, of course, brings us to the current favor sensation, sriracha, made from a paste of chili peppers, distilled vinegar, garlic, sugar and salt, and named for a coastal city in eastern Tailand. Te sauce is now present in 9 percent of total U.S. households and 16 percent of households headed by someone


Watch a special Texas Pete TVÂŽ episode about The Pantry youtube.com/texaspetefoodservice


Grocery

With the growth in popularity of hot and spicy foods at home and in restaurants, we knew that [consumers] would love a new, bold take on their favorite condiment. The sriracha flavor brings the excitement and versatility that [they] are craving.” —Joseph Giallanella, Heinz

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Condiments

under age 35, according to NPD’s recently released audit of U.S. kitchens. Sriracha frst came to public prominence through the eforts of Irwindale, Calif.-based Huy Fong Foods, whose founder, David Tran, remains committed to keeping his company’s most popular ofering super-spicy, even in the face of complaints — since dropped — from locals about the pungent odor of chilies emanating from its factory. “Hot sauce must be hot,” he insists on Huy Fong’s website. “If you don’t like it hot, use less. We don’t make mayonnaise here.” Te company’s sriracha sauce is made with California-grown red jalapeño peppers and sold in bottles sporting the now well-known rooster logo. Consumer enthusiasm regarding sriracha has prompted other sauce makers to try their hands at similar products. Along with McIlhenny, Frank’s RedHot, a brand of Chester, N.J.-based French’s Food Co., which is owned by multinational consumer goods company Reckitt Benckiser, has come out with Slammin’ Sriracha, which Miguel Gonzalez, French’s VP of food, says is “great for drizzling on pizza and scrambled eggs, or as a marinade for grilled chicken or short ribs,” adding that the sauce “combines the right heat of sun-kissed chili peppers and jalapeños, with a hint of smoke.” Meanwhile, Winston-Salem, N.C.-based T.W. Garner Food Co. has its own rendition, Cha! by Texas Pete, an extension of the brand’s hot sauce line. Te favor has also migrated to other condiments, as in the case of Lee Kum Kee’s Sriracha Chili Ketchup and, amusingly enough, given Tran’s comments above, Sriracha Mayo (the Hong Kongbased company also makes a Sriracha Chile Sauce). Heinz Ketchup Blended with Sriracha Flavor is another recent introduction, available at select retailers, including Target and Walmart. “Consumers told us that they have been in search of unique and versatile favors to add to their favorite foods,” notes Joseph Giallanella, brand manager of Heinz Tomato Ketchup at the Pittsburgh-based company. “With the growth in popularity of hot and spicy foods at home and in restaurants, we knew that they would love a new, bold take on their favorite condiment. Te sriracha favor brings the excitement and versatility that consumers are craving.” Hillsboro, Ore.-based Beaver-

| Progressive Grocer | Ahead of What’s Next | April 2015

ton Foods, meanwhile, has brought the distinctive favor to extra-hot mustard sold under its Inglehofer and Beaver brands. “We are getting great feedback from our customers about the favor of the new Sriracha Mustard,” asserts Beaverton CEO Domonic Biggi. “It’s a one-of-a-kind combination of our award-winning mustard … with sriracha — they go together great, and the customers are telling us that with their comments and in sales.” In other pairings, Tessemae’s All Natural, based in Annapolis, Md., has teamed with self-confessed “food nerd” and cookbook author Michelle Tam’s Nom Nom Paleo blog on a forthcoming clean-label sriracha ranch Bufalo sauce, in deference to the favor’s status as “the king of hot sauce right now,” according to VP of Production and “Youngest Brother” Matt Vetter, who points out that all of the family-owned company’s Bufalo sauces boast clean profles. Beyond the now omnipresent sriracha, other zesty favors predominate; for instance, Heinz’s other favored ketchups include blends with Real Jalapeño and Tabasco Brand Pepper Sauce. Frank’s RedHot is looking ahead to perhaps the next big condiment trend with its Rajili Sweet Ginger Sauce, which, according to Gonzalez, ofers an “exotic spicy favor [that] will add excitement to all favorite foods. Its sweet, mildly hot and tangy profle has the right balance of favor and heat that can be used as an ingredient in recipes, or alone as a topping or dipping sauce.” Te item, due to hit store shelves next month, will aim to capture the taste buds of the growing number of consumers “looking for variety and big, bold favors,” he notes, adding that sweet, savory [and] bitter” are particularly in demand.

Calling all Heat Seekers When it comes to encouraging trial, the proof of the sauce is in the eating, to paraphrase an old saying. “Getting consumers to try our products is the best way to promote them,” says Gonzalez. “Once they try it, they won’t share it with anyone. We are pleased to see that we enjoy above-average repeat rates in most of our products.” Te brand likes to play up its ubiquity among fans with the somewhat saucy slogan/hashtag “I put that **** on everything”/#IPTSOE. “We’ve found that our consumer is familiar with hot sauce as a condiment but is looking for usage ideas that utilize the product as an ingredient,” notes the McIlhenny rep. “As a result, we pair promotions with recipes to inspire and motivate them to create favorful meals.” In a similar move, Beaverton Foods ofers appropriate recipes online featuring its spicy condiments. “You need to pair them with the appropriate foods so they complement each other,”


observes Biggi. “It’s important to develop easy recipes to use with the product. We like to show consumers how to best use the product.” Asked about additional placement and promotional measures for the segment, Gonzalez responds: “Displays are always a welcome asset in the key summer season, and, of course, cross-promotions with compatible products [are] always a smart move.” Beaverton’s Biggi seconds the use of displays, singling out end caps as prime locations. “Te best promotional/merchandising tactics are those in which we are closely aligned with our retail partners to ensure strong execution in-store, online and wherever the stores’ shoppers are looking for new and exciting ideas,” explains Heinz’s Giallanella. For instance, in the case of the company’s new sriracha-favored ketchup, “we have worked closely with our retail team to ensure it is carried nationally and can be located easily in aisle and on display.” Sometimes, getting the word out involves some truly novel attention-grabbers. “At this point, very few people know our Bufalo sauce,” admits Tessemae’s Vetter, “so for us, the key has been to create some unexpected moments and recipes. ... For instance, we have a Bufalo sauce lemonade. It’s something so rare that you almost have to try it … and once you do, we then can compete in the expected spaces (e.g., chicken wings) of extreme brand loyalty.”

Sauce of the Future What’s in store for hot sauce? In common with Frank’s RedHot’s Gonzalez, Vetter sees the rise of more “Asian-style” products on the horizon, while the McIlhenny rep expects greater consumer demand for international favors in general, and both Vetter and Biggi anticipate cleaner ingredient lists as people continue to try to eat more healthfully. But tastes will defnitely remain in the culinary torrid zone. “We defnitely don’t see the heat trend going away,” asserts Biggi. “It’s not a fad. Tere’s a population of consumers out there who want hot products, and we’re going to keep looking for hot new products to ofer them.” PG For more information on hot sauces and other condiments, please visit Progressivegrocer.com/condiments.


Frozen & Refrigerated Foods

Baked Goods

A Slice of the Action

Savvy promotions and a keen eye on consumer needs position frozen cakes and pies as an attractive alternative to home baking.

“C

By Bridget Goldschmidt

ustomers are looking for three [main] things when it comes to frozen baked foods: quality and freshness, convenience, and selection,” along with “unique and new items that don’t sacrifce that homemade quality,” says Sean Maurer, portfolio lead — frozen at Carlisle, Pa.-based Ahold USA. “Our customers are busier than ever before and sometimes do not have the time to make something homemade for their special occasion. It’s a convenience for them to know that they have quality options that just need to be baked or thawed.” Te company’s banners consequently “carry a wide variety of types and favors of baked goods available every day, so customers can purchase for their special occa-

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sions throughout the year,” notes Maurer, adding that the grocer has “had success in working with our vendors on bundling dessert options, i.e. cakes with ice cream in the summer months. Promotions have also included bundling frozen desserts with another category. For example, a customer can purchase several selections and receive a free dessert: Buy a dinner, get dessert.” Certain periods call for a stepped-up approach, however. “Merchandising pie is critical in the big holidays, as is ofering the traditional seasonal favors: pumpkin, pecan and apple,” Maurer points out. “Sufcient display space is dedicated to both fruit and crème pies in the weeks leading up to Tanksgiving, Christmas and Easter. Crème pie is also a favorite for barbecues and summer events, and should be featured in the display case during those months as well.”

| Progressive Grocer | Ahead of What’s Next | April 2015


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•Leading brand for frozen cream puffs and éclairs

According to 2014 52-week Nielsen data:

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•Ranked among the top five U.S. brands in Bakery/ Dessert cakes/Frozen sales volume

•New flavors and website Join us today at www.delizza.us

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Frozen & Refrigerated Foods

It’s a convenience for consumers to know that they have quality options that just need to be baked or thawed.” —Sean Maurer, Ahold USA

Baked Goods

Pie With Wine Te Chicago-based Sara Lee brand, part of Tyson Foods Inc., knows a lot about capitalizing on the seasonal appeal of frozen baked goods. “Last holiday season, we partnered with Pacifc Rim Riesling wine for a ‘Riesling to Feast’ cross-marketing promotion,” observes Angie Dobrofsky, assistant brand manager at Sara Lee Desserts. “Te promotion was ofered to select retailers across the country and provided consumers with valuable rebates when they purchased both Pacifc Rim wine and Sara Lee dessert products.” Continues Dobrofsky: Tis program worked well because Sara Lee dessert products, especially pies, are synonymous with holiday traditions and pair wonderfully with the Pacifc Rim Riesling wine portfolio. Retailers liked the natural connection between the two products, and consumers benefted from fun wine-and-dessert pairing ideas that were delivered via POS materials as well as shared online by popular food and lifestyle bloggers.” Te result was “a win for both retailers and consumers,” she recounts. Beyond the festive season, Dobrofsky notes that “smaller portions for individual snacking and enjoyment, as well as more convenient and timesaving options, remain a trend in the frozen baked goods category. In response to these trends, we added our frozen Sara Lee Original and Double Chocolate Pound Cake Slices to the iconic pound cake portfolio to allow consumers — especially those with children, boomers, and one-person households — to be able to enjoy this classic treat whenever they choose. Te individual packaging ensures every slice stays fresh.”

New favor varieties from the brand include Blueberry Pound Cake, introduced last October and marketed as a whenever treat. “We know consumers enjoy our pound cake for breakfast, afternoon snacks and when creating unique dessert dishes; the fresh blueberry favor is great any time of day, and it’s perfect for spring and summer,” says Dobrofsky.

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| Progressive Grocer | Ahead of What’s Next | April 2015

The More the Merrier How about when company drops by in time for dessert? “Multiserve frozen baked goods ofer something that tastes homemade, but in frozen format, so it can be enjoyed anytime for those special times with family and friends,” asserts Amy Morgan, manager, public relations and social media at Marie Callender’s, a brand of Omaha, Neb.based ConAgra Foods, which also ofers “perfectly portioned” single-serve items. “Te convenience allows you to enjoy time with loved ones, rather than spending time making your own [baked goods], and without sacrifcing taste or quality.” Further, such ease for consumers comes with the psychological satisfaction of preparing the closest thing to homemade. “Marie Callender’s provides consumers with the feeling that they are baking themselves, due to the quality and freshness of the fruits that were picked at the height of the season and locked in the frozen dessert,” says Morgan. “As the pie bakes, consumers are still able to savor the delicious aromas that come from an apple pie baking in the oven.” But to get shoppers to buy frozen dessert cakes and pies, both of which, for the 52 weeks ended Jan. 15, 2015, saw sales dollar and unit declines at food stores with sales higher than $2 million, according to Schaumburg, Ill.-based Nielsen, a little prompting is often necessary. “Given the infrequent purchase nature of the frozen dessert category, it’s important to constantly remind the consumer of the benefts of frozen baked goods,” notes Morgan. “To keep it top of mind, you do have to rely on things such as FSIs, ad features, consumer rewards mailings and in-store displays. More so than many other types of products, this really requires a tight partnership with all of our individual retailers. For example, [thanks to] a partnership with a natural complement like Reddi-wip, Marie Callender’s is able to ofer consumers more incentive to purchase.” Educating shoppers about the products’ unique points of diference is a good idea as well. “It is important to insert the brand into trending conversation topics,” afrms Morgan. “For example, real, fresh ingredients are important to consumers, and


many are unaware that real Key lime juice from Florida is in our Key Lime Pie, or that our Apple Pie is made with 100 percent Fuji apples.”

Keeping it Real For Chicago-based Eli’s Cheesecake Co., whose products can be merchandised either refrigerated or frozen, authenticity is of particular signifcance, since “the consumer is more educated about food and has expectations of how the product should look and taste,” according to VP of Marketing Debbie Marchok. Eli’s commitment goes much deeper than just sourcing the best ingredients, however. For example, in the case of the company’s Honey Mediterranean Cheesecake, a honey-sweetened item topped with honey-glazed pistachios and almonds that was introduced last year, when honey as a natural sweetener started to gain real traction among consumers, “the honey … is harvested by student beekeepers from the Chicago High School for Agricultural sciences (CHSAS), one of the only agricultural high schools in the country,” notes Marchok. “Proceeds from honey sales go toward college scholarships for deserving high school seniors. … Tis product is made with an authentic ingredient, honey; made locally by a school, CHSAS; [and] supported by a business, Eli’s Cheesecake Co., which not only purchases honey from the school, but [also] supports the school with job shadowing, mentor programs, scholarships and internships.” Additionally, the company is a member of Brooklyn, N.Y.-based Slow Food USA, which Marchok describes as “an organization devoted to preserving traditional foodways and educating people about food as a center of community. Eli’s prefers using regional ingredients from local farms and producers who share Eli’s commitment to quality.” As its Honey Mediterranean Cheesecake illustrates, Eli’s isn’t afraid of product innovation. Among its latest products are a new favor in its GMO-free, 1.5-ounce mini pie line, Dulce de Leche, described by Marchok as “a caramelized, sweetened condensedmilk confection baked in an all-butter shortbread pie crust”; a 7-inch mousse-topped Tres Leches Cake; and, most novel of all, a Vegan Cheesecake. Of this last item, Marchok admits: “We know it’s an oxymoron, but Eli’s Cheesecake has created a vegan dessert so rich and creamy, we couldn’t resist calling it ‘cheesecake,’ drawing a parallel to the Chicago-style cheesecake for which Eli’s is known. Certifed vegan by the Vegan Awareness Foundation, Eli’s Vegan Cheesecake contains no animal products or byproducts, has not been tested on animals, and is dairy-, egg- and cholesterol-free. Tofu and vegan dairy-free cream cheese replace cream cheese and sour cream, making Eli’s Vegan Cheesecake zero cholesterol and lower in fat than traditional cheesecake.” Introduced last May in

Belgian Chocolate and Carrot Cake varieties, the product is slated to roll out nationally this June. Why create a vegan option? Marchok cites “the country’s growing awareness of healthier eating, the fact that the vegan market has doubled over the past fve years, and over 100 million people, vegans and non-vegans, are choosing more plant-based foods.” In keeping with its passion for the authentic, the company carefully chose such ingredients as tofu from Phoenix Bean, in the Edgewater neighborhood of Chicago; single-source Madagascar Nielsen-Massey vanilla extract; Callebaut Belgian semi-sweet chocolate, which contains no milk; fresh carrots; pecans; ginger; and Saigon cinnamon. When asked about how to get cold confections selling like hotcakes, Marchok similarly spotlights the seasonal opportunity: “Integrated promotions with the retailer’s promotional themes work well in this category. Tis may be a seasonal feature or a local theme executed in-store. For example, a heartshaped cheesecake rather than a traditional round cheesecake for Valentine’s Day draws consumer attention to the product in a seasonal display.” Eli’s also relies on in-store demos to initiate product trial, with handout coupons to encourage purchase. “Te personal interaction enables the consumer to ask questions and enables our demo team to engage in conversation about the brand and the product,” explains Marchok. “For example, we have conducted demos for several of our new favors, [which] invited a lot of discussion with the consumer because of their unique profles and attributes.” Perhaps due in part to the company’s eforts, cheesecake is one of the bright spots in the frozen baked goods case, with Nielsen reporting, for the 52 weeks ended Jan. 15, 2015, sales dollars and units up 1.8 percent and 6 percent, respectively, at food stores with sales higher than $2 million. As frozen baked goods continue to evolve in step with shifting shopper demand, a blizzard of ever more inventive products like Eli’s should hit retail. As Marchok notes, “We expect to see continued growth in artisanal products and mashup desserts as consumers continue to look for locally sourced, handcrafted and unique desserts.” PG

It’s an oxymoron, but Eli’s Cheesecake has created a vegan dessert so rich and creamy, we couldn’t resist calling it ‘cheesecake.’” —Debbie Marchok, Eli’s Cheesecake Co.

For frozen baked goods beyond cakes or pies, visit Progressivegrocer.com/frozbakedgoods.

April 2015 | progressivegrocer.com |

77


Q &A

Advertor i Al

Talking with…

Bill Monroe Director of Marketing Pompeian

What’s happening in the olive oil category? Bill Monroe: Something very interesting has been happening to the category over the last few years. Sales of extra virgin olive oil have been expanding at a rapid rate. The Extra virgin segment is now over 70% of the total olive oil sales…and it’s still growing! We see some real opportunities in the EVOO segment. PG: How’s Pompeian’s business doing? BM: Our olive oil business is up as of December 31, 2014. In fact we were the fastest growing national olive oil brand at the end of the year and plan on continued growth. Our Extra Virgin is one of the leading brands with almost a 20% share by volume. Not only are we doing well in the olive oil category but we are the leading brand of Gourmet Wine Vinegar and the leading brand of Balsamic Vinegar. PG: What makes Pompeian different from your competitors? BM: In a word, plenty. It all begins with our sourcing model. We build strong relationships with quality farmers from around the world which helps us keep our quality high while maintaining competitive pricing. This also gives us 100% traceability for total quality assurance. We then ship our oil in bulk to our U.S. bottling facility — not overseas bottling that adds to shipping costs and creates traceability questions. With our state-of-the-art bottling operation based in the U.S., we can maintain a high quality standard which is why Pompeian is the only Extra Virgin to participate in the USDA’s Quality Monitored Program. PG: Anything new on the horizon from Pompeian? BM: Yes, we are launching our new Smooth Extra Virgin Olive Oil. It has a more delicate taste than our original Robust Extra Virgin Olive Oil. Our Smooth Extra Virgin is perfect for sautéing, sauces and stir frying while our Robust Extra Virgin is for marinades, pastas, and salad dressings.

We did extensive national research that concluded that 93% of the respondents would purchase our new Smooth while 91% said they would also purchase our Robust. These incremental sales are the best way for the retailer to beneft from the EVOO growth trend! And both of these items will be the same price making it easy for the retailer to feature both in promotions. The launch of this new item was the perfect opportunity to redesign our line of olive oil packaging to have strong consumer appeal by featuring the distinctive taste profles along with usage suggestions. These new designs did extremely well in our market research. PG: What do you see in Pompeian’s future? BM: I see nothing but continued growth for Pompeian. We have always grown our business on innovation and will continue to do so in the future.


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This is t part ein a thre igating s e v t series in nges and e the chall ities of n u t r o opp ed t prepar e k r a m r . supe s gram food pro

Facing Deli

Consequences Training is key to reducing prepared food product issues, out-of-stocks. By Joan Driggs

F

rom long wait times to out-ofstocks, Tyson Foods research reveals that many issues common to grocery retail are magnifed in the deli area. In this, the fnal installment of Progressive Grocer’s 2015 Deli Insights series, data from two major Tyson Foods research initiatives, “Consequences of Failure” and “In-store Observation,” demonstrate that general deli and product issues can undermine shoppers’ trip missions, but that investing in associate training can solve long-standing problems. More than 3,000 consumers who purchased

80

| Progressive Grocer | Ahead of What’s Next | April 2015

or considered making a prepared chicken purchase at grocery retail during the past three months were tapped in December 2014 for Tyson’s “Consequences of Failure” research, which delves into deli issues and the impact they have both in the deli and store-wide. In-store observational studies were carried out in November and December 2014 at more than 1,300 stores across 36 retail banners to shed light on operational and product issues at in-store delis. PG also felded a proprietary survey of retailers that weighed in on their operations, fndings of which are included in this article. As reported in PG’s March 2015 “Shore Up


Costly Results Cleanliness is table stakes, with consumers barely registering sanitation as a problem. Retailers indicate they have the processes in place to ensure that it’s not an issue. “Clean cases, no streaks,” says Tony Orlando, owner of Tony O’s Supermarket & Catering, in North Kingsville, Ohio. “It has to be fresh-looking. No dirty spoons, no dishes in the sink. … We have an open kitchen, so people see us. We have to keep it clean.” Tony O’s deli associates continually scrutinize the area with a consumer’s eye for visual appeal and cleanliness, he says. Tis is proof that investing in procedures and training pays of. But there are other issues in need of addressing, including long wait times, product preparation and availability, and product quality. General deli and product issues have a tremendous impact on purchase behavior, with approximately two-thirds of shoppers who didn’t make a purchase indicating that general deli issues and product issues were the reasons.

When a Shopper Doesn’t Make a Purchase, it’s Because: Percent of shoppers reporting

65.9%

68.3%

26.7%

Valuable Deli Area” article (http://magazine.progressivegrocer.com/t/149254), executional failures disrupt 21 percent of shoppers’ usual trips. Failures in the deli area are defned by general deli issues (long wait times, availability of product, cleanliness and appearance), product issues (overcooked or dry product, as well as appearance and taste of product), and stafng issues (staf knowledge, friendliness, helpful or rude), the latter of which was the focus of the March article. Some 41 percent of all shoppers surveyed say they had a problem at the in-store deli, with signifcant issues identifed as general deli (42.9 percent of respondents) and product issues (46.7 percent).

General deli issues

product issues

staffinG issues

Source: Tyson “Consequences of Failure” Study, 2015; base 712: Consumers who considered, but didn’t make a purchase.

Time — and Timing — is Everything Similar to checklane issues, retailers are plagued by long wait times at the in-store deli. Nearly a quarter of consumer respondents won’t make a purchase if they feel the lines are too long. Wait times are a chronic problem, reported by shoppers and acknowledged by retailers. Pre-ordering capabilities via store apps and kiosks are gaining traction, but most Continued on page 84

April 2015 | progressivegrocer.com |

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Tyson Deli, Inc.

Boosting Staff Performance % of shoppers reporting 42.9%

46.7%

When prepared foods customers experience a problem with a deli staf member, they take it personally—and they take action.

Product issues

Even though stafng issues aren’t the most common problem reported by customers, these issues result in the most severe repercussions for deli sales, suggests a new study from Tyson Foods on purchasing prepared chicken products from the supermarket deli. Shoppers who report stafng problems also report more deli problems of any type, and they’re much more likely to bypass the deli on future shopping trips for prepared foods, either temporarily or permanently.

22.2% Staffing issues

General deli issues

Among shoppers reporting problems, the most common staffing issues were:

Staff was not friendly

Staff was not helpful

Staff was not knowledgeable

Staff was rude

12%

11%

9%

8%

®/© 2015 Tyson Foods, Inc.

Advertorial


Tyson Deli, Inc.

Investing more resources in staff training will likely create significant increases in customer satisfaction and repeat purchases. — Tyson In-Store Observation Study, November-December 2014 Te key to reducing stafng problems lies in better, more efective training, however, rather than simply adding more team members behind the counter, according to a Tyson In-Store Observation Study completed in November-December 2014. Te study found that the number of store associates working in a deli department does not correlate with cleanliness, organization or in-stock position in major product categories (although there is a correlation with customer perceived freshness). But you can likely create significant increases in customer satisfaction and repeat purchases by investing more resources in staf training, especially in these areas: Coaching about key customer service issues such as courtesy, friendly attitude and product knowledge

Average number of total problems reported by shoppers who reported:

4.1

3.1

Operational training on cooking to temperature and following holding procedures, to help alleviate the most common deli product problem—dryness Upgrading staf training to improve performance on key metrics, and stopping the churn that can result when shoppers experience repeated problems, can help the deli department achieve sales increases at full margin—and without increasing stafng.

Staffing problems

Product problems

2.9 General deli problems

Customers who stopped shopping at their grocery deli due to problems 38% 25%

Staffing problems

22% 9%

For a short period of time Chart data provided by Tyson Foods

®/© 2015 Tyson Foods, Inc.

7%

4%

For a long period of time

7%

3%

3%

Product problems General deli problems

Permanently

Turn to Tyson Tyson Deli can support you with products, insights and tools to help grow your deli business. Contact Eric LeBlanc at (800) 248-9766 for more information.

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Continued from page 81

retailers continue to rely on staf efciency. Tony O’s Orlando has mapped out peak trafc times and cross-trained managers to jump in as needed in the deli. “We always have backup,” he says. Randy Yochum, supervisor of perishables departments at Newport Avenue Market, in Bend, Ore., ofsets wait times with appropriate stafng. “When you walk into our deli, you’ll see eight or nine people working,” he notes. “We visit large chains and we’ll see no more than two people working in a deli that’s double the square footage.” Following closely behind in wait times in general deli issues is the lack of availability of products, either because they’re not ready or not in-store. Orlando says his team is in the deli at 5 a.m. to ensure that by 8 a.m., everything — all items made in-house, from scratch — is ready for business. “Te deli manager can’t arrive at 7 a.m. and think it will all come together,” he says. “Tat means the early-morning customers will be [disappointed].” Te right products at the right time are crucial for success in the deli area; you can’t sell what you don’t have. Nearly three-quarters — 74 percent — of retailer respondents to PG’s deli survey agree that “at all times, the products that our shoppers want are available.” Tis indicates that 26 percent of the time, products

Key Shopping Measures No Problems

Any Problems

shoppers want aren’t available. Shoppers say product availability is a top-three reason for where they shop, according to “Solving the Out-of-Stock Problem,” a 2015 report produced by the Trading Partner Alliance of FMI and GMA, yet out-of-stocks remain at 8 percent. Such a problem encompasses lost revenue and, even more relevant to grocery retailers, a damaging dent in shopper experience. In-store research commissioned by Tyson Foods indicates that out-of-stocks are even higher in the deli area, where a run on prepared dinner items, such as rotisserie chicken, leads to out-of-stock rates of 10 percent to 11 percent. Compounding the problem of in-stocks/product not ready, deli managers indicate they’re selling more prepared foods compared with a year ago. More than 70 percent of respondents to PG’s deli survey indicate they’re selling more prepared foods such as rotisserie chicken, fried chicken and salads, compared with just 2.4 percent who are seeing a volume decrease and fewer than 5 percent who don’t ofer prepared foods. For many retailers, their point of diferentiation is fresh prepared food, but if not executed properly, it could be the reason that shoppers are going elsewhere. Increasing the amount of prepared foods being sold has the potential to solve part of the problem of meeting shopper demand, but any solid execution will include an exponential gain in training. “Solving the Out-ofStock Problem” reports “a disturbing three-strikesand-you’re-out pattern.” As a result of the frst Product General Deli strike, the shopper will Problems Problems substitute another item 70 percent of the time; for the second strike, the shopper will make a substitution, make no purchase or go to another store; and on the third occurrence, 70 percent of shoppers will go to another store.

How satisfied are you with overall shopping experience?

82% 65% 47% 49%

How satisfied are you with the prepared food shopping experience?

77

48

36

43

How likely are you to recommend shopping for prepared foods?

77

51

40

47

How likely are you to shop for prepared foods?

81

57

45

51

Source: Tyson “Consequences of Failure” research, 2015, based on top three “satisfied” and “likely” responses, 3,018 consumer respondents.

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| Progressive Grocer | Ahead of What’s Next | April 2015

Facing Failure Seen in the harsh light of reality, not only do shoppers believe their deli


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shopping experience could be better, but also their lack of satisfaction in shopping for prepared foods is having a ripple efect on the total shopping experience. Shoppers who report any problem already have diminished levels of satisfaction and demonstrate a lower likelihood of recommending or purchasing products than shoppers who haven’t encountered deli problems. Satisfaction levels sink further when focusing on product and general deli problems, with just one-third (36 percent) of those who reported product problems, and 43 percent of those with general deli issues, saying they’re satisfed with their deli shopping experience.

Product Issues: It’s Complicated While a bad in-store experience carries consequences, there’s an additional layer of complexity with product issues, as many won’t come to light until after the shopping trip, when consumption occurs. “Te product should be formulated and prepared to make it suitable for the way in which it is used,” says Eric Le Blanc, VP of marketing, deli at Tyson Foods, in Springdale, Ark. “If the product does not meet the shopper’s expectations when she reheats it, retailers and suppliers need to partner to fnd ways to deliver a product that does.” While Le Blanc believes that retailer and supplier share a joint responsibility in ensuring the customer has a good experience with the product, it’s up to the manufacturer to properly formulate for cook and hold, and it’s up to the retailer to prepare the product according to those procedures. “Te frst evidence for believing that the quality issues are present before the consumer takes the product is their behavior at the shelf,” says Le Blanc. “Rotisserie chicken has the highest shelf engagement in the deli department. … Nearly every shopper will stop to look at multiple chickens, rejecting those that look old, burned or dried out.”

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Among respondents who considered but didn’t make a purchase, 68 percent attribute their lack of purchase to product issues, including nearly 25 percent who didn’t make a purchase based on appearance; and nearly 60 percent of other issues wouldn’t come to light until the shopper — and, in most instances, their family and/or friends — are eating. Retailers admit there’s room for improvement with product issues: 80 percent of retailer respondents indicate that “products always appear fresh to shoppers.” And just less than that amount — 79 percent — agree that “products are always prepared (cooked, stored, packaged) in the same manner to ensure quality.” Retailers admit, and research supports, that procedures for food prep need to be supported with training. “Consistency is probably the main problem,” says Kathy Holtzinger, store manager of Hammer and Wikan, in Petersburg, Alaska. “Many times, I fnd an employee changing how a product is baked or cooked of. Everyone needs to be doing things the same way so that when the customer comes back, they’ll get the same item the same way every time.”

Product Issues Product was too dry Product didn’t appear fresh Product was overcooked Breading wasn’t crispy Product taste was poor Product quality was poor

17.6% 12.6 12.4 10.5 7.5 7.4

Source: Tyson “Consequences of Failure” Research, 2015

Responses to the open-ended question “What can your deli department do to improve the efectiveness of delivering excellent products and customer service to your shoppers?” were overwhelmingly tipped toward “better training, improved training and communications, and continuous training.” Tyson’s fndings indicate it’s not even additional bodies that will make the diference in terms of improved product quality, ensuring stock during peak periods or customer engagement. Rather, investing more resources in staf training, including product preparation and hold times, will create signifcant increases in customer satisfaction and repeat purchases. PG


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Fresh Food

Prepared Food Packaging

To

Protect and

Serve

Retailers collaborate with suppliers on innovative packaging for prepared foods. By Jim Dudlicek

P

repared foods are the future of grocery — foodservice is the top strategic initiative for many retailers, and many analysts are saying those not already playing in this arena are sitting out at their own peril. Grocery prepared foods accounted for $25 billion in sales in 2014, up $10 billion since 2004, according to data presented by Wade Hanson, principal with Chicago-based Technomic Inc., at the recent Annual Meat Conference, in Nashville, Tenn. Of course, it’s not enough just to attract business — you also have to keep it, and a huge part of that is delivering delicious, satisfying and fresh selections. Packaging plays a crucial role in the appeal of supermarket prepared foods. Tat means packaging that’s more sustainable, and that can maximize visibility of the food inside, says Lewis Shaye, VP of culinary concepts at Schenectady, N.Y.-based grocery chain Price Chopper. “People want to see clearly what they are getting and know that it is not cluttering up the waste stream, whenever possible,” he says. “We are conscious of not overpackaging food.” Demand for those attributes is supported by fndings in the latest trends report released in late 2014 by the Falls Church, Va.-based Foodservice Packaging Institute (FPI). Current trends focus on both the environmental attributes and the look of containers, FPI reports. Survey participants expressed a “demand for products that can be recycled and/or composted, with

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perhaps a greater interest this year in compostable products, which could be the result of a growing number of food waste diversion initiatives throughout the foodservice industry,” FPI notes on its website. “Respondents also pointed to the use of unique colors, shapes and sizes that help to incorporate branding in a package. Interestingly, clear (transparent) packaging was also mentioned, which focuses the visual cues on the foods and beverages, instead of the container.”

Freshness and Function Beyond that, preservation of food quality is key. “Our guests want restaurant replacement food, not home meal replacement,” Shaye says. “Tey expect our products to be made fresh, customizable to their particular liking and want us to have consistency in our food ofers. Tey want food packaged properly — they want hot foods kept hot and cold foods kept cold, and now, more than ever, want packaging that works for dashboard dining. More and more, carry-out occasions involve portability, so just like in a typical fast-casual restaurant, our guests want to be able to eat on the go.” Te supplier community is taking note as well. “Much of the growth opportunity we’re seeing right now pertains to freshness and food safety,” says Sean Brady, marketing director for ready meals at Elmwood Park, N.J.-based Sealed Air Corp.’s North America Food Care Division. “As supermarkets try to compete with restaurants for those quick take-home meal options, consumers are expecting the same freshness and food safety that they’d experience at a restaurant. To help meet that demand, retailers are ofering more full-


entrée options on the ready meal side.” Indeed, food quality and freshness are the most critical drivers for prepared foods, followed by convenience, asserts Keri Olson, marketing director at Lenexa, Kan.-based Robbie Fantastic Flexibles. Olson points to Mintel research showing that consumers place the highest importance on food packaging’s ability to retain freshness. “As a packaging supplier, we continue to listen to consumers and retailers to meet their needs,” she says. “We created the Hot N Handy pouch for rotisserie chicken after conducting in-store intercepts with shoppers at multiple large chains. According to the study, the chicken stayed fresher and moister in a pouch versus rigid packaging. Tis research has led us to further listen to create additional packaging to hold crispy items as well.” Partnering with retailers also is par for the course at Anchor Packaging, which has developed containers as a result of problems reported at retail. “Understanding how food is prepared and handled, how it will be packaged and displayed, and if the consumer is expected to eat as-is or be able to reheat the food all play a role in how a package is designed,” explains Marilyn Stapleton, marketing director at the St.

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Louis-based company, noting one example: “Fried chicken becomes soggy when packaged, even when numerous vent holes are included in the package. Store tests helped to develop our patented cross-fow ventilation system that keeps fried foods crispy.”

Partnering on Innovation Retailers like Price Chopper are constantly reviewing their foodservice packaging for functionality as well as visual appeal. “Big opportunities lie in maintaining product freshness and shelf life without looking too manufactured,” Shaye says. “Since we both prepare on-site and selectively use manufacturers for our menus, we try and get our food to the guests as soon as it has been made, and we want it to perform well for its shelf life, whether it is being consumed on the spot or three days later. Convenience in cooking or reheating is also very important, so microwaving or easy oven-prep bags or containers are being reviewed and considered as good options.” Companies like Sealed Air aim to help grocers deliver. “Consumers have told grocery retailers they wanted the variety and fexibility to bring home more than one prepared meal to satisfy their family mem-

People want to see clearly what they are getting and know that it is not cluttering up the waste stream, whenever possible.” —Lewis Shaye, Price Chopper


Fresh Food

Consumers have told grocery retailers they wanted the variety and flexibility to bring home more than one prepared meal to satisfy their family members’ varied tastes.” —Sean Brady, Sealed Air Corp.

Prepared Food Packaging

bers’ varied tastes,” Brady says. “At the same time, they want the fexibility to serve that meal [on the] same day or to wait several days to serve it. Consumers want to be served on their own timelines.” Sealed Air’s Cryovac Simple Steps packaging ofers consumers the favor and freshness of a chef-prepared meal, served on a white plate with vacuum-skin packaging — a ready-to-serve product that can be fnished and served in store or at home. “Te steam-assisted technology allows consumers to heat the food more evenly, creating the ideal eating experience,” Brady explains. “It’s a higher-quality product, thanks to the packaging, than consumers’ previous choices. Additionally, this package format can help boost food safety that the consumer demands by reducing the risk of cross-contamination from serving or handling.” For its part, Robbie is “focusing on providing packaging that helps keep the prepared foods tasting just as fresh from the time the consumer purchases the [product] until they get home to sit down at the table,” Olson notes. “Savvy retailers have already fgured out that the package is an ambassador for their brand and will ultimately help a consumer decide if they are going to return

to that supermarket for their next meal to go.” Elk Grove Village, Ill.-based Clear Lam Packaging Inc. has successfully worked with retailers to develop rigid and fexible packaging solutions such as fresh fruit and vegetable containers, platters sealed with peelable lidding flm, and salad and fruit trays sealed with the company’s Peel and ReSeal lidding system technology. “Te opportunity is to develop intuitive packaging solutions for a variety of meal options,” says Jim Foster, Clear Lam’s senior marketing manager. “Te challenge is creating packaging that conveys ‘fresh’ while delivering the protection and ease of use con-

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| Progressive Grocer | Ahead of What’s Next | April 2015


New Bowls Aim to Keep Animal Byproducts, Chemicals Out of Plastic sumers need across multiple consumer segments.” Innovation also extends to seemingly small details like packages that stay shut but are easy to reopen. An innovative adhesive, developed by Columbus, Ohio-based Battelle in cooperation with Deerfeld, Ill.-based Mondelēz International, combines high self-adhesion with low tack for a product that’s easy to use, easy to apply, consistent and only sticks to itself. Low-tack adhesive will be applicable to prepared foods that come in fexible, reclosable packaging after it gets FDA approval, expected early this year, according to Battelle spokeswoman Katie Pearson. Unlike traditional pressure-sensitive adhesives, low-tack adhesive isn’t messy, sticky or expensive. “For example, it won’t pick up crumbs from crackers or cookies, which makes traditional adhesives inefective,” says Cindy Conner, a Battelle senior market manager. “All consumers need to do is press it together to create an efective and consistent seal that stands the test of repeated cycles of opening and reclosing.”

Expanding the Market What’s needed to take prepared food packaging to the next level? “Consumers want transparency and visibility of what’s in their food, and they are bringing that same expectation to prepared foods,” says Joe Ramirez, marketing director for fuids at Sealed Air. “Te consumer perception is that prepared foods are not fresh because they are served in a package or are not prepared on-site. To move this segment to the next level, retailers need to address this challenge, potentially through consumer education, and demonstrate that prepared foods can be as fresh, if not fresher, than other options.” Meanwhile, the folks at Sealed Air see room for growth in the areas of food safety and shrink loss. “Tose challenges present the greatest opportunity for retailers,” Brady says. “By educating the consumer on what they’re really buying and the freshness of the food in their prepared meals, retailers can continue expanding this product line.” Clear Lam’s Foster says retailers will likely need a variety of meal solutions and corresponding delivery methods that appeal to multiple demographic segments with disparate levels of cooking knowledge. “Retailers also need packaging solutions that will position the products as fresh, while still ofering food protection and ease-of-use functionality,” he says. Consumer trends toward smaller portions, less time for food preparation at home, increases in snacking, and nontraditional eating times have all created a demand for new package sizes to handle an increase of food varieties, Anchor’s Stapleton asserts. “Retailers are fghting for market share with convenience stores and fast-food chains, so custom orders will help drive trafc to the store,” she says. “Packages that allow the food to look fresh and

Fairfield, N.J.-based Premier Classic Products has launched a Kickstarter campaign to help finance a new line of food containers aimed at vegans, health advocates and those following religious-based dietary laws. Premier has developed a set of containers — purported to be pure to one part per billion — that resists the leeching of harmful chemicals and animal byproducts into food that may occur with other plastic packaging and storage containers. Premier’s parent company has invested more than $1 million in the project and is now seeking funds to produce the containers in large quantities for the key audiences noted above. Beyond food, Premier plans to market its innovation to the health care industry for items like blood bags, inspection devices, medicine containers, gelatin capsules and anything that can come in contact with the human body. Premier’s goal is to raise $30,000 through pledges of $100 each, for which donors will each receive a set of nine containers with lids, valued at $49.50. www.kosherplastic.com

appealing on display or made to order, with features that include leak resistance and reusability, will help to diferentiate the retailer from other segments.” Also something to consider: new regulations aimed at reducing waste. “Local legislation banning Styrofoam and polystyrene-based packages is causing retailers to explore other options,” Stapleton cautions. “Although foam packages are not being used to a large degree in the deli, there are many OPS [oriented polystyrene] lids and hinged packages on grab-and-go displays. It’s time for the retailers to get ahead of these pending changes so they can transition on their time frame to curbside recyclable products made with polypropylene or PETE [polyethylene terephthalate]. Packages made with these materials not only ofer improved performance for heat tolerance and merchandising, they also provide the retailer with a positive environmental platform.” While it’s no secret that prepared foods will continue to be an integral part of supermarket operations, it’s also clear that the right kind of packaging is essential for grocery foodservice. “Supermarkets need to fnd ways to cater to, and expand on, the market,” Robbie’s Olson says. “Prepared foods are just not for dinner anymore. Convenience stores have already set the stage for fast pickup of breakfast and lunch foods, but they haven’t captured the desire for more-healthful options. Supermarkets have all the tools in the perimeter now; they just need to make it easily ready for the consumer to get in, chose their meal and exit. Consumers are already familiar with the perimeter of the store, but just don’t have the time to put their meals together. Retailers that set up a drink bar, sandwich, salad and fruit center will capture consumers very quickly.” PG

Packages that allow the food to look fresh and appealing on display or made to order, with features that include leak resistance and reusability, will help to differentiate the retailer from other segments.” —Marilyn Stapleton, Anchor Packaging

April 2015 | progressivegrocer.com |

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Fresh Food

Produce

Pack and Play Today’s packaged produce delivers it all: convenience, sustainability, personality and fun. By Jennifer Strailey

S

tyle and substance have raised the stakes in packaged produce and are redefning the way consumers interact with supermarkets, suppliers, and fresh fruits and vegetables. “Te trends in produce packaging are all-encompassing from a marketing and a technology standpoint,” observes Dr. Bob Whitaker, chief science and technology ofcer at the Newark, Del.-based Produce Marketing Institute (PMA), and a judge since 2008 of its Impact Awards for excellence in produce packaging. From convenient portability to sustainability to maximizing messaging, today’s produce packaging is not only delivering what consumers desire, but also enticing them to buy new fresh food products in formats they didn’t know they needed — until now.

Fresh Convenience “Clearly, there has been a trend in recent years toward portability, ready to eat, ready to go and single serve, and I think that portability trend will continue this year — both in snack format and something you can eat in your car,” Whitaker predicts. Fresh produce packaged for just such on-thego convenience is the idea behind Chelan Fresh Marketing’s two newest products: Te Rockit and Cup O’ Cherries. Next month, the Chelan, Wash.-based company will re-release the Rockit, an innovative, high-graphic sleeve similar to tennis ball packaging, which contains four or fve smaller New Zealand apples. “It’s a great way to take whole fresh fruit on the go,” says Chelan Director of Marketing Mac Riggan, who adds that the Rockit is so revolutionary, it may be a little ahead of its time. “It’s like bottled water. Initially, people thought, ‘Why would you need that?’” But as consumers continue to demand healthier options for on-the-go eating, Riggan is certain the convenience of the Rockit will

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resonate with more shoppers, and thus anticipates increased sales momentum. “I think packaged produce is the future,” asserts Riggan. “Tey say that 25 percent of our meals are eaten in a car, so convenience is essential.” For cross-country or cross-town road trips, Chelan created its Cup ‘O Cherries, an 8-ounce cup of washed and de-stemmed cherries that features a smart lid: One section of the lid dispenses cherries, while a diferent compartment provides a place for pits.

Supreme Green “Te other trend we see, and I suspect it will grow this year, is more and more sustainable packaging — both in terms of materials used and how they are applied, including the use of compostables, biodegradable fber and an overall efort to decrease packaging,” notes Whitaker. Even seemingly small reductions, such as cutting back on the lip of a bag that runs over the seal, can have major impact. “Tat’s miles of packaging over the course of a year,” says Whitaker, who adds that the industry can expect to see “better use of packaging, more

consistently.” Te newest packaging from Wada Farms, in Idaho Falls, Idaho, is designed to help retailers meet their sustainability objectives and win the attention of consumers in the produce aisle. Tat’s because Wada Farms’ Tater Made eco-friendly bags are made in part from potatoes — as much as 25 percent. “Packaging is one of my passions,” afrms Chris Wada. “It gives us the ability, through packaging style, artwork, messaging, etc., to bring consumers something they are going to touch, read and understand.” Te bags represent a “substantial carbon-footprint reduction,” explains Wada. “Te most common response from consumers to the bags has been, ‘Tat’s cool.’ And that’s what we want. You can talk about sustainability, but until it’s something you can touch, pick up and look at, the concept is less clear.”

Smaller packs that result from more frequent [store] visits is the No. 1 trend right now.” —Hillary Femal, IFCO


Fresh Food

You can talk about sustainability, but until it’s something you can touch, pick up and look at, the concept is less clear.” —Chris Wada, Wada Farms

Produce

Wada notes that more growers are using the Tater Made logo, which launched this past November, and several large retailers are employing it in their private label programs. In an area of the store where local and organic matter most, it makes sense that sustainable packaging is also on shoppers’ radar as they peruse the produce department. One female shopper recently e-mailed Wada Farms with a message that Wada believes underscores the potential of Tater Made. “She said that she only purchases organic fruits and vegetables, but upon seeing the 5-pound bag of russet potatoes in the eco-friendly packaging, she felt that was enough for her to switch, and she bought them even though they aren’t organic,” he says. Katharine Grove, of Wenachee, Wash.-based Columbia Marketing International Inc. (CMI), one of the state’s largest growers, packers and shippers of premium apples, pears and cherries, also sees the heightened importance of sustainable packaging. “Today’s produce consumer is earth-friendly and wants to know that we are doing everything we can to protect their fruit, and that we’re putting it into a package that can be recycled,” she notes. CMI is committed to seeking out more sustainable solutions, while at the same time providing highimpact packaging. “We will continue to be environmentally conscious and look to sustainable packaging vehicles, while continuing to create packaging that acts as a billboard to tell consumers what is special about the fruit inside the package,” says Grove. Other suppliers leading the green packaging trend include Naturipe, of Salinas, Calif., with its organic blueberries in a compostable and recyclable natural-fber tray, and Mastronardi Produce/Sunset, of Kingsville, Ontario, which last year introduced the 100 percent recyclable Eco Flavor Bowl, made from recycled materials.

Packaging Connectivity Increasingly, produce suppliers are using packaging as a way to communicate with consumers. Whether through recipes, nutritional information, or QR codes to connect the consumer with the brand and the farm, packaging is bringing consumers and the produce industry together like never before.

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| Progressive Grocer | Ahead of What’s Next | April 2015

“We continue to see a better use of real estate on produce packaging in a way that provides consumers with a personal link to the product,” notes Whitaker. Personal connection and consumer satisfaction are the ideas behind a new initiative at Driscoll’s. Te Watsonville, Calif.-based berry grower is inviting consumers, through a code on its packaging, to provide feedback on the Driscoll’s berries they eat. “We’re allowing our consumer to rate their berry-eating experience with us,” explains Frances Dillard, the company’s director of marketing. “We take great-tasting berries very seriously, and the Consumer Advisory Panel is our report card from berry consumers on whether we deliver on delight.” Te code on the packaging links to Driscoll’s community page where consumers can register for the Rewards Club and participate in the advisory panel by taking a quick online satisfaction survey about the Driscoll’s berries they’ve eaten. Consumers receive a savings coupon for every completed survey. Te code on the packaging also allows Driscoll’s to trace the berries back to their farm of origin. Connecting to consumers through recipes is also important, as market research confrms that many consumers would buy a wider variety of fruits and vegetables if they knew how to prepare them. Packaged produce provides an opportunity to communicate recipes and serving suggestions that can give consumers the confdence they need to buy. MountainKing is one potato supplier making the most of its packaging “real estate.” Te Houstonbased company recently introduced fve attentiongrabbing Kwik Lok bag tags that recommend the best uses for MountainKing potato varieties via easy-to-prepare recipes. Te 2-inch-by-2-inch tags are designed to help shoppers diferentiate potato types and their key cooking diferences. For example, the bag tag for MountainKing’s Butter Reds touts the variety as a boiling potato and includes a recipe for Butter Red Dill Potatoes, while the tag for Butter Gold potatoes suggests a recipe for Garlic Gold Mashed Potatoes. Te tags also help retailers to avoid mixing varieties in the same display.


Safe Bets Delivering fresh, delicious and, above all, safe foods to consumers is a priority for everyone in the produce business. Packaged branded and local produce that’s traceable back to the farm may prove to play an increasingly important role in building consumer confdence in food safety. “Freshness, safety and convenience are the three factors we keep hearing as most important with produce packaging,” afrms Keri Olson, marketing director for Robbie, a fexible packaging solutions provider in Lenexa, Kan. “Young consumers think brandname and organic fruit and vegetable products are safer than their unbranded and nonorganic counterparts,” she continues. “Flexible packaging ofers an easy way for this to happen by printing valuable information right on the package.” Olson points to research that shows consumers prefer locally grown produce whenever possible, often citing food safety as a factor in their preference. Robbie’s new Locally Grown produce pouch was designed with this in mind. “Te pouch has the words ‘locally grown’ printed in large letters right on the handle of the pouch to quickly connect with the consumer that their produce is locally grown,” she explains.

weeks. Today, consumers go to the store that day to buy dinner for that evening.” Te result has been a decrease in demand for 5and 10-pound bags of potatoes, and a move toward smaller bag sizes and specialty items. Wada Farms has embraced the shift by focusing on value-added products such as individually wrapped russet potatoes that microwave in eight minutes, and Small

Good Things in Smaller Packages “Smaller packs that result from more frequent [store] visits is the No. 1 trend right now,” asserts Hillary Femal, VP global marketing for IFCO, a global provider of reusable packaging solutions for fresh products in Tampa, Fla. She also sees the rise in smallerfootprint stores infuencing this trend. “Urban and small store formats are expanding quickly, so the fresh supply chain has had to respond with smaller and more frequent shipments due to space constraints at these locations,” she explains. “In addition, the packaging sector is providing smaller pack sizes to meet the store conditions and more frequent shopping visits among urban customers.” Chris Wada agrees. “Tere’s a trend toward less pantry stocking,” he says. “In the past, consumers bought groceries for a couple of April 2015 | progressivegrocer.com |

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Produce

Artisan potatoes in a microwave steamable bag. Both products ofer dinner-tonight appeal, while the latter has a decidedly specialty look. “We wanted to keep the packaging simple and give it an almost nostalgic or retro feel,” notes Wada. “We hope the look disrupts the consumer’s line of sight. Like they say, lead with emotion and follow with logic.”

Packaging that Cooks Te demand for convenience is driving more than portable, healthful snacks in packaged produce. Consumers are also looking for products that will help them make nutritious and favorful meals in less time. From salad kits with protein to seasoned vegetables in microwaveable bags, suppliers are responding with no-fuss oferings. Te recently launched Ready.Chef.Go! line of cook-in bags gives retailers and consumers a modern solution to traditional cooking in one neat package. “It’s essentially quick and convenient en papillote cooking, which is French for ‘in parchment,’” explains Kevin Gallahan, Elkay Plastics’ director of Sirane Products. Commerce, Calif.-based Elkay introduced Ready.Chef.Go!, manufactured by U.K. company Sirane Products, in the United States. Retailers can choose from two cooking bags — a dual-ovenable bag that pairs a combination of high-density paper and clear flm for microwave or traditional oven cooking, and an oven and grilling bag that combines aluminum foil, parchment paper and clear flm. Te bags are available with a selection of 16 seasoned compound butters and nine sauces. “Every retailer in the U.S. may have certain favor profles that best ft their region,” notes Gallahan. “Tis is why we ofer a wide variety of recipes to choose from. How about Brussels sprouts with a bacon balsamic butter?” he suggests. Te bags allow supermarkets to showcase seasonal produce and local favorites as quick and easy meal options. “Produce merchandised and sold in the Ready.Chef.Go! cooking bags, with their low carbon footprint, natural artisan feel and incredible cooking performance, brings retailers closer to what the consumers, especially Millennials, are looking for today,” asserts Gallahan. Te Ready.Chef.Go! line is supported by a full program that includes POS, social media marketing, advertising support and limited in-store demo support. Art and Science Some of today’s best produce packaging embraces both aesthetics and technology. It’s this perfect marriage that Whitaker and his fellow judges look

96

| Progressive Grocer | Ahead of What’s Next | April 2015


for at the annual PMA Impact Awards. “Visibility of the product, uniqueness, convenience, sustainability of the packaging, food safety and traceability — some way to trace the product, should there be an issue — all of this factors into our selections,” explains Whitaker of the highly competitive event. From breathable flms to packaging with micro-perforations, the technology side has evolved in the past seven or eight years, according to Whitaker, who also sees companies distinguishing themselves with various shapes: “oblong, round, all kinds of permutations to create differentiation.” From a style standpoint, one of the most profound changes in recent years has been the use of full-color, more sophisticated designs in produce packaging. It’s a trend not lost on CMI’s Grove. “Over the last two years, CMI and our customers have seen great success with the use of the 2-pound high-graphic

prep in the bag ready.Chef.go! bags make the preparation of seasonal produce a snap.

pouch bag,” she notes. “Tese pouch bags ofer us full use of color, with a crystal-clear viewing window.” More dynamic produce packaging has also raised the bar with regard to how supermarkets want their produce departments to look and feel. “Retailers want to reap the benefts of retailready packaging in fresh produce, as they do in center store, but not at the expense of their brand’s ‘look,’ ” says IFCO’s Femal. “Increasingly, we are seeing demand for branding capabilities with reusable plastic containers (RPCs) such as placards, sign holders and wraps. All of these trends are driving continued increase in use of RPCs for fresh produce.” PG

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Fresh Food

Produce Category Spotlight

Masters of

Melons

Flavor-packed varieties, strategically merchandised, are key to this category’s success. By Jennifer Strailey

S Consumers are looking for a more flavorful cantaloupe.” —Barry Zwillinger, Legend Produce

98

upermarkets across the country are teeming with untapped melon customers. Some are former cantaloupe thumpers and honeydew dabblers, but many may be under the mistaken impression that too many melons just aren’t that favorful, so they don’t bite. Barry Zwillinger, sales manager at Legend Produce, the largest supplier of cantaloupe in the United States, hopes to change that. Te Dos Palos, Calif.-based company sources melons from multiple growing regions in California and Arizona, as well as of-shore farms in Honduras and Guatemala, to supply melons 12 months a year. “Consumers are looking for a more favorful cantaloupe,” asserts Zwillinger, who says that a pursuit of higher yields and a longer shelf life in cantaloupe and honeydew cultivation led to an era of less aromatic and favorful fruit. “It’s kind of like what happened with heirloom tomatoes,”

| Progressive Grocer | Ahead of What’s Next | April 2015

continues Zwillinger. Consumer demand for unblemished tomatoes led to a rise in more uniform and waxy options that lacked the juicy and compelling favor of heirloom varieties. But demand for full-favored fruit has returned, he says, fueled in large part by the popularity of local farmers’ markets and increasingly favorobsessed chefs who want what Zwillinger calls “the old-school” taste of cantaloupe and other melons. Two years ago, Legend Produce secured the exclusive U.S. rights to the Origami cantaloupe. “It has a high Brix [level]. It’s highly aromatic, very favorful, and it has a small, dense seed cavity and thin skin that ofers a lot of melon that you can eat,” notes Zwillinger. “It also travels well and cuts nicely, holding its shape and favor, which makes it excellent for processors and foodservice. “Origamis are bringing back the old-school favor of cantaloupes, but with a longer shelf life,” he continues. It’s a combination that’s resonating with retailers, from club stores to major supermarket chains,


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Fresh Food

Cantaloupe is a fairly efficient crop when it comes to water.” —John Gilstrap, California Cantaloupe Advisory Board

Taste and Traceability

Produce Category Spotlight

as well as with processors. “In the processor business, 100 percent of our clients who cut Origami melons have seen an increase in their sales,” says Zwillinger. “And the retailers who cut that fruit in their back room — in a lot of cases, their sales are upwards of 100 percent.” While consumer demand for the convenience of cut fruit may be fueling part of this demand, when it comes to honeydews, there may be more to the story. “Actually, the best honeydews are often the rough ones with scarring or sugar netting. Tose are typically your sweetest melons,” notes Zwillinger. Sampling is one way to demonstrate the fact that a honeydew with scarring is favorful and sweet, in spite of its appearance. “Try to focus more on favor and the eating experience, and not so much on visual presence,” recommends Zwillinger.

Stepping Up Food Safety A number of melon suppliers, including Legend Produce, have ramped up food safety initiatives in recent years. Tey’re getting the word out on

Food safety and traceability are top of mind for the entire produce industry. At Dos Palos, Calif.based Legend Produce, rigorous third-party audits and certifications are employed. “Food safety is priority No. 1,” says Sales Manager Barry Zwillinger. Legend Produce’s farming, harvesting, packing, cooling and shipping are audited in accordance with Global G.A.P. and GFSI standards. This summer, if not before, the company will launch a new website that will offer full traceability on all of its products back to the farm. “It’s my job to make the consumer feel comfortable,” says Zwillinger, who adds that the new website will also include consumer education about how Legend Produce grows and picks its melons, as well as how to identify a flavorful melon in the store.

company websites, and perhaps one day soon, on the product itself. In 2011, news broke of cantaloupes linked to a deadly listeria outbreak at Jensen Farms, in Colorado. Te event afected the whole cantaloupe industry.

ADVER TORI AL

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100

Sausage Bites and Colby Jack Cheese, and Apples with Turkey Sausage Links and Mini Pancakes. The new Del Cafe™ line up of salad bowls comes in four recipes and is the perfect solution to your customers’ busy lifestyles. Del Café™ salad bowls are fresh, hearty, and made with delicious, quality ingredients. Each salad is an all-in-one meal, contains dressing and a fork, and is a great addition to any and every channel’s fresh on-the-go line. Selections available: Greek Style Salad with Chicken, Caesar Salad with Chicken, Turkey and Bacon Cobb, and Chef Salad. The Del Café™ salad bowls and snacks are made to order from our CFIA certified facility in Toronto as well as our USDA certified facility in Dallas.

| Progressive Grocer | Ahead of What’s Next | April 2015


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Produce Category Spotlight

“People didn’t just stop buying Colorado cantaloupes, they stopped buying all cantaloupes,” recalls John Gilstrap, of the California Cantaloupe Advisory Board, in Dinuba, Calif. “Obviously, things like this can impact a whole industry.” Gilstrap adds that although California has thankfully never had a food safety issue with cantaloupe, there’s no such thing as being too cautious when it comes to food safety. California mandates government inspections of all growers of a certain size — any large enough to supply supermarkets. “It’s comprehensive,” notes Gilstrap of the auditing program, now in its third season. Field audits began in 2012, and 2013 was the frst year handlers were certifed. While certifed growers are permitted to use a certifed mark on letterhead, bills of lading, and cartons, the industry has yet to develop a “certifed sticker” for use on individual cantaloupes. Te board has applied for a grant to study whether such an identifying label would make a diference to consumers. In October, the board will learn whether its grant has been approved, and, if it’s greenlighted, this is the question it will explore through a formal survey. In the meantime, Gilstrap says that cantaloupe sales have recovered from the 2011 incident. Any current dip in sales has to do with somewhat lighter crops due to California’s water shortage, he explains. “We had some reduction in volume last year, but not as much as we thought,” notes Gilstrap, adding, “Cantaloupe is a fairly efcient crop when it comes to water. Dry growing regions are really great for it, [although] it sounds counterintuitive.”

Fresh Food

health and versatility of our product, which also happen to be some of the primary drivers for watermelon sales,” she says. And cross-merchandising is even better. “Demos and promotions that involve more than one commodity always have great success,” notes Rosado. “Tey not only drive the sales of more than one product, they also have the potential to showcase

Our bag leaves the competition sweating

Watermelon Mania While a well-planned and -executed merchandising strategy can increase sales across all categories in the produce department, Juliemar Rosado, director of retail operations and international marketing for the National Watermelon Promotion Board (NWPB), in Winter Springs, Fla., believes it’s particularly critical with watermelons. “Good merchandising is important because it confrms the value,

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Fresh Food

Hydration has been a growing area of focus for us over the past year. You can’t spell watermelon without the word ‘water.’” —Juliemar Rosado, National Watermelon Promotion Board

Produce Category Spotlight

the products’ versatility if shown in a recipe.” When it comes to what’s selling in watermelons, NWPB reports an increase in fresh-cut sales in general. “Cut watermelon equals convenience,” says Rosado. “Consumers can pick it up and take it to go.” For supermarkets that feature bins of watermelons in season and also ofer value-added that’s fresh-cut in-store, the board recommends merchandising whole watermelons near the fresh-cuts. NWPB, which has run a retail display contest in July for a number of years, says watermelon is the biggest item in the produce section, so retailers should use it. While promoting the health benefts of watermelons is one way to spur sales, Rosado further notes, “Hydration has been a growing area of focus for us over the past year. You can’t spell watermelon without the word ‘water.’”

Enticingly Exotic Te “Eat One Fruit a Day Tat Scares You” campaign, launched by the specialty produce experts at Frieda’s Inc., in Los Alamitos, Calif., recently gained national attention through a health blog for U.S. News & World Report written by registered

dietitian, nutritionist and author Janet Helm. Citing low U.S. fruit consumption fgures, Helm issued a challenge to America, inspired by the Frieda’s campaign: “Get over your fear of fruit.” Taking a further cue from the company, Helm suggested new, exotic fruits, especially for children. Te kiwano, a member of the melon and cucumber family, made Helm’s list of recommendations. Te fruit, which is also known as a horned melon or horned cucumber, is grown in the United States and New Zealand; is high in vitamin C and A, iron and potassium; and provides a good source of omega fatty acid, notes Frieda’s website, which also urges consumers not to refrigerate them and includes a video on how to enjoy the exotic fruit. PG

american Grown The California Avocado label is a symbol of quality and a promise of the most preferred avocado in the U.S.A. Call 1-800-344-4333 or visit CaliforniaAvocado.com/A-Look-Behind-The-Label to learn more. Produce of U.S.A. © 2015 California Avocado Commission. All rights reserved.


Nonfoods

Category

Retail stores face shortages of organic products every year because domestic organic production just can’t keep up with the robust demand for organic.

Guest

Perspectives

By Sarah Bird

A Call for an Organic Checkoff Grocers can combat out-of-stocks by supporting a boost in organic farming.

O

rganic is a big seller in today’s supermarkets, and this trend is here to stay. No longer available only at farmers’ markets or specialty stores, organic labels and even organic store brands are now available at local grocery stores, and customers are digging a little deeper into their wallets to purchase such items. In 2014, U.S. sales of organic foods and nonfoods are estimated to have hit nearly $40 billion, a new record. More than 80 percent of U.S. families now buy organic products. Conventional grocery stores are seeing double-digit growth rates in their organic aisles. Despite this growing appetite, however, consumers continue to be confused not just about all of the benefts and guarantees of organic, but also by all of the other labels and unregulated claims on food throughout the supermarket. Te organic sector is at a critical juncture. We now have the incredible opportunity — and, more importantly, the need — to better explain what organic stands for and, in so doing, take organic sales and stores’ revenues to even higher levels. America’s certifed-organic stakeholders — farmers, ranchers, distributors, food makers and retailers — are now considering whether to adopt a national organic checkof program.

Consumer Confusion, Empty Shelves An organic research and promotion checkof program would be a game changer for the entire organic sector. It would address the industry’s two major challenges: consumer confusion about what it means to be organic, and the need to increase organic supplies so retailers don’t get caught short as their customers clamor for more organic choices. An organic checkof program would enable a large, coordinated promotion plan to educate consumers. Attention-getting promotions on television, on social media, in newspaper fiers, on billboards, and via in-store ads, activities and customer education days — the options are endless! A checkof would clear up the current consumer misunderstanding; drive trust in organic; further fuel the growth of the

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| Progressive Grocer | Ahead of What’s Next | April 2015

organic sector, as more consumers would seek out organic products; and drive store revenue. It would also fund research to encourage farmers to transition to organic, ultimately increasing supplies. Organic food companies and retail stores face shortages of organic ingredients and products every year because domestic organic production just can’t keep up with the robust demand for organic. To prevent your store’s organic egg shelves from standing empty, or your having to put a “temporarily out of supplies” sign on the door of your organic milk case, we need more organic farmers in America. An organic checkof program could raise up to an estimated $40 million annually through a collective fund to which all organic stakeholders could contribute. It’s proposed that organic certifcate holders in the supply chain with gross annual sales above $250,000 be assessed for one-tenth of 1 percent of net organic revenue, with a maximum $1,000 assessment for every $1 million in net organic revenue. Te Organic Trade Association (OTA), the principal trade group for the organic sector, has taken the lead in formulating the checkof proposal, and will soon submit an application for an organic checkof to the U.S. Department of Agriculture. Tis proposal will ultimately be voted on by certifed-organic stakeholders.

The Vision is Still Clear All of the organic chain must act collectively to ensure our future. If organic stakeholders want to take the industry to a new level of success and sustainability, now’s the time to act. Te organic sector was founded by visionaries who believed in a better, more healthy and sustainable way to raise food and be the stewards of our precious land. Putting in place an organic checkof program is the most powerful way to make this vision a reality. For more information on the proposed checkof, visit UnitedForMoreOrganic.com. PG Sarah Bird is chief commercial officer of Oakland, Calif.-based Ecologic Brands Inc., a sustainable packaging company, and VP on the Organic Trade Association’s U.S. board of directors. She can be reached at mmcneil@ota.com.


SERVING UP MORE SALES IN THE CEREAL AISLE Five steps to grow profits and customer loyalty in a fast-changing category

C

ereal remains a favorite on Americaâ&#x20AC;&#x2122;s breakfast tables. But for retailers, although cereal is the No. 2 dry grocery category, itâ&#x20AC;&#x2122;s been hard to fnd ways to increase category profitability and build customer loyalty in the

cereal aisle amid economic pressures, population shifts and changing consumer preferences.

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To succeed in the current retail

infation-adjusted 2012 income

environment, it’s important to

level but still nearly $4,500 below

understand the key factors that

what they earned before the start of

are impacting consumers’ buying

the recession in 2007. Middle-class

behavior. With this knowledge,

incomes have been either stagnant

retailers can then take steps to

or declining since peaking in 1999.

meet their customers’ evolving

As a result, median household

needs and wants—while boosting

income in the United States is now

their bottom line.

actually less than it was in 1989— nearly a quarter of a century ago.1

Economic pressures: recession afershocks

Particularly hard hit by recession

The recession may be over, but

aftershocks are lower-income con-

consumers are still feeling the

sumers, who now make up almost a

aftershocks.

third of the U.S. population. Nearly 104 million Americans fall into the

According to an analysis of U.S.

low-income category, defned as

Census Bureau data by Amer-

those earning between 100 and 199

icanProgress.org, the typical

percent of the federal poverty line.

middle-class household earned

Yet this large group of consumers

$51,939 in 2013, a statistically

presents an enormous opportunity

insignifcant $181 above their

for retailers, with nearly $833 billion in spending power, most of which is

Lower-income consumers: an opportunity for retailers

spent on necessities.2

The Census Bureau esTimaTes ThaT 106,376,000 ameriCans live on inComes aT 200% of The poverTy line and Below.

State of the plate: what America eats for breakfast Cereal remains Americans’ No. 1 choice for breakfast. According to a 2014 survey among 1,000 U.S. con-

34%

LOW-incOmE cOnSumErS

sumers by Carbonview Research, on any given weekday, 60 percent of adults and 79 percent of kids start a typical morning with their favorite cereal before heading off to work or school, making it the most commonly consumed breakfast food in the country. When asked which foods they feel defne breakfast, cereal came in second out of 20 options—surpassed only by eggs.3

Source: Census.gov

2

ADVERTORIAL


Top 5 items that defne breakfast for consumers

Eggs

54%

Cereal

48%

Breads/ toast

34%

Bacon

27%

Fruits/ berries

20%

Source: Carbonview Research, September 2014

Beyond traditional sit-down

Children under 13 consume 126

breakfast foods like cereal, eggs

servings of cereal per capita annu-

and toast, consumers today have

ally, more than any other age

an ever-growing array of new

group, and the under-13 population

breakfast options to consider,

is expected to grow 8 percent by

whether it’s for ease of prepa-

2020.4 Also a vital part of the mix

ration at home or eating on the

is the up-and-coming generation of

run. Over the years, new quickand-easy breakfast items such as toasted goods, hot cereals, frozen items, yogurt and granola

Top breakfast foods consumed on weekdays

bars have begun competing for the breakfast dollar. In addition, foodservice operators such as quick-service restaurants and

60%

Cold cereals

54%

Prepared breakfast items (eggs, pancakes, etc.)

54%

Toasted goods (toast, bagels, frozen waffes)

49%

Fruits

43%

Breakfast meats (bacon, sausage, etc.)

43%

Hot cereals

38%

Yogurt

26%

Frozen breakfast items that are heated up

26%

Breakfast bars

convenience stores have added an array of breakfast options to their menus. Despite these alternatives, cereal still remains a $9 billion category.

Population shifs: who’s at the breakfast table? There are a number of shifts in America’s demographic landscape that bode well for the cereal category. Not surprisingly, children continue to be big cereal eaters.

ADVERTORIAL

Source: Carbonview Research, September 2014

3


population, likely due to their typ-

In addition to great taste and good

ically larger household size. Today,

value, other attributes impacting

one of four children is of Hispanic

food purchases include a product’s

7

origin. Furthermore, Census pro-

ability to satisfy hunger and how

jections suggest that between now

well it provides parents with “foods

and 2050, the Hispanic population

my kids will eat.”10

will grow by 49 million to nearly 106 million, or 26.5 percent of the

The number of American consum-

U.S. population.

ers who consider healthfulness when purchasing their food and

For retailers, catering to specifc

beverages has shown a signifcant

consumer segments presents new

uptick in the past two years, accord-

opportunities to fulfll these shop-

ing to IFIC. As a factor in food and

pers’ unique needs and preferences

beverage purchases, healthfulness

while building store proftability.

rose from 61 percent of consumers

Having a better understanding of

in 2012 to 71 percent in 2014, a 10

what drives consumers to purchase

percentage point increase.11

cereal is part of the equation. To address consumers’ interest in

Top purchase drivers: taste, value, health, convenience

healthfulness, many cereal manu-

When it comes to factors infu-

range of better-for-you options

The growTh of The hispanic populaTion remains a dominanT demographic Trend. These households purchase cereal aT a raTe of 23.1 pounds per year vs. 22.7 pounds among The general populaTion.

facturers are now offering a wider

encing consumer food purchases, taste continues to reign supreme. According to the International Food Information Council (IFIC) Foundation’s 2014 Food and Health

Top purchase drivers in the cereal category: cereal buyers driven by taste and quality

Survey, taste and price consistently have been the top two factors that impact consumers’ food and beverage purchases, at 90 percent and 73 percent respectively.8 In fact, taste is so powerful with consumers that it can trump even brand name. Eighty percent of cereal buyers value product quality and taste over brand name, when

82%

80%

42%

Product quality

Taste

Brand name

asked to rank each factor in terms of how important it was in the cereal aisle.9

adverTorial

Source: Custom Panel, GROCERY, 52 weeks ending April 6, 2013; Path To Purchase study October 2013

5


focusing on healthful ingredients, such as whole grains, protein and fber, and more hot cereal options. Manufacturers also are moving toward cleaner labels, making it easier for consumers to see the product benefts.

Five steps to boost profitability in the cereal aisle

1

Offer more value through everyday low pricing.

Consumers need and want value, so offer it to them through everyday low pricing. Instead of relying

Given these considerations, here

on increasingly less effective

are fve steps retailers can take to

promotions to sell more volume,

serve up more sales, boost prof-

offer value brands that todayâ&#x20AC;&#x2122;s

itability and increase customer

cash-stretched consumers are

loyalty in the cereal aisle.

looking for.

80%

Of cEREAL buyERs VALuE pRODucT quALITy AnD TAsTE OVER bRAnD nAmE

2

Evaluate the mix. Assess product velocity and cate-

gory incrementality in the cereal aisle to see how fast products are selling, then make sure the product mix correlates to the turn. It may be necessary to stock the shelves with a better mix of options to meet the needs of people near your location. Bulk packaging for big, multifamily homes nearby. Nutritious options to help Boomers maintain their health. Quick, convenient cereal choices that make it easy for on-the-go millennials to eat breakfast on the fy.

3

Stay on top of food trends. The cereal

category is constantly evolving as consumer needs and wants change. For example, the health

6

ADVERTORIAL


trend has created the opportunity for many new cereal options that help people lead healthier lifestyles, so make it simpler for them to fnd solutions: offer cereals that bear the Whole Grains Council Stamp or that indicate added protein or fewer calories on the label. Also include more hot cereals, as consumers perceive them as a better-for-you option. While cereal is already a convenient product, consider adding single-serve cereal options to your assortment to appeal to consumers seeking more convenience or an on-the-go snack.

4

Stock the shelves with true innovations. Grocery stores

are flled with brand extensions that manufacturers create to look like something “new.” Offer cereal products that meet a need or solve

By offering customers high-quality,

a problem in a specifc and mean-

great-tasting and affordable cereals to

ingful way. For example, another

feed their families, retailers can help

new favor in a brand lineup is one

customers save money—while increas-

thing, but a product that enables

ing their margins in the cereal aisle.

consumers to address health concerns or save money will help to keep them in the category.

5

Don’t underestimate the power and sophistication of low-in-

come consumers. Low income doesn’t correlate with low interest when it comes to customers wanting high-quality cereal that offers great taste, value, health and convenience. While one product may not offer all of these benefts simultaneously, include in your lineup a mix of cereal brands that can deliver on these value propositions.

ADVERTORIAL

Sources 1 Americanprogress.org, Sept. 16, 2014, https://www.americanprogress.org/issues/economy/news/2014/09/16/97203/ what-the-new-census-data-show-about-the-continuingstruggles-of-the-middle-class/ 2 Census.gov 3 Carbonview Research survey, September 2014 4 NPD, U.S. Census Bureau 5 NPD, U.S. Census Bureau 6 NPD, U.S. Census Bureau 7 Pew Research, http://www.pewresearch.org/ fact-tank/2014/02/26/the-u-s-hispanic-population-has-increased-sixfold-since-1970/ 8 IFIC, 2014 Food and Health Survey, http://www.foodinsight. org/press-releases/more-americans-choosing-foodsbeverages-based-healthfulness 9 Custom Panel, GROCERY, 52 weeks ending April 6, 2013; Path To Purchase study October 2013 10 NMI’s 2013 Health & Wellness Trends Database® 11 IFIC, 2014 Food and Health Survey, http://www.foodinsight. org/press-releases/more-americans-choosing-foodsbeverages-based-healthfulness

ThE hEALTh TREnD hAs cREATED ThE OppORTunITy fOR mAny nEw cEREAL OpTIOns ThAT hELp pEOpLE LEAD hEALThIER LIfEsTyLEs.

7


DRIVING PROFITABILITY IN THE CEREAL AISLE Founded in 1919, MOM Brands® today is among the largest cereal companies in the United States. Today, one in 11 servings of breakfast cereal eaten every day is a MOM Brands cereal. Here’s How MoM Brands Helps retailers drive profitaBility in tHe cereal aisle: • Ofers an extensive house of brands featuring 103 varieties of familyfavorite ready-to-eat, natural,

organic and hot cereals that deliver on consumer needs for taste, value, health and convenience. • Everyday low-price strategy keeps consumers in the cereal aisle and creates higher margins for retailers. • Dedicated to finding better ways to make a better breakfast at a better price. MOM Brands has saved families nearly $1.5 billion on cereal purchases since 2007.

Put MOM Brands to work for you. For more information, visit www.MOMBrands.com.

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2015 Annual Meat Conference

Fresh Food

Lessons in

Meat Marketing Annual conference looks at branding, natural products, foodservice and how to enhance the shopper experience. By Jim Dudlicek

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hese were among the messages delivered to grocers attending the 2015 Annual Meat Conference, hosted by the North American Meat Institute (NAMI) and the Food Marketing Institute (FMI), Feb. 22-24 at the Gaylord Opryland Resort in Nashville, Tenn. “Meals should be a vehicle for great service,” said John Rand, SVP of retail insights at Boston-based Kantar Retail, in his presentation, “Securing the Perimeter: Te Red, White and Green of Retail Branding,” the colors representing meat, dairy and produce. Integrating fresh into these solutions creates cross-merchandising opportunities across the store and enables retailers “to move from item statements to meal concepts.” Rand noted that fewer and fewer consumers are

shopping both the perimeter and center store, and only 43 percent shop both. Yet supermarket marketing has been “almost entirely co-opted” by center store suppliers with large marketing budgets. Grocers, he said, need to market meals, which are the solutions sought by consumers looking for a retail experience that solves their daily challenges. Such is the essence of branding: delivering on a meaningful, consistent, relevant promise. In “Navigating the Growing Demand for Natural and Organic Meat,” Mary Ellen Lynch and Clay Sayers, of Schaumburg, Ill.-based SPINS, urged retailers to stay ahead by watching natural consumers because they’re driving the trends. Tat’s defnitely the case, especially where meat is concerned. While still a small part of the overall meat category, natural is driving a lot of the growth

If you’re not willing to think differently and get creative, you’re vulnerable.” —Sherry Frey, Nielsen Perishables Group

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CRaFteD with CaRe Kent harrison displays tyson Foods’ Crafted Creations line.

2015 Annual Meat Conference

at retail, most of it coming in what SPINS calls the natural standard (brands that follow strict standards) and specialty natural (marketed as artisan, premium and ethnic). Of the overall $1.2 billion meat category, just $200 million is natural, but the segment has grown nearly 24 percent, compared with 4.7 percent for conventional meats. Showing the most growth are products claiming “hormone-free” and “grass-fed,” among other sales-driving claims, including “antibiotic-free” and “humanely raised.” Meanwhile, the latest top 20 food trends identifed by the Washington, D.C.-based National Restaurant Association (NRA) are dominated by natural, free-from and better-for-you concepts. Retailers can cash in by promoting premium extensions of conventional brands, clean labels and other trending concepts like gourmet, artisan and craft. Natural shoppers, the speakers said, prize honesty, transparency and compelling farm-to-fork stories.

More Meat, Bigger Rings Grocers need to leverage meat’s connection to other categories to drive bigger baskets — that was the advice from the Nielsen Perishables Group to retailers looking to deliver on evolving consumer preferences amid high protein prices. Sherry Frey, SVP at Schaumburg-based Nielsen, asserted that grocers can grow basket rings by delivering solutions through cross-promoting meat across multiple store categories. “Competition and partnerships hinge on connections across aisles,” Frey said. It’s a solution aimed at halting category attrition, as price increases are driving people away from the

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meat case, leading to a 1 percent average decline in household penetration for historic protein mainstays of beef, pork and chicken. Likewise down are meat sales volume and the number of meat-buying trips. Further, meat case sales are leaking to the in-store deli. “Deli is changing and really becoming a competitor to foodservice,” but it shouldn’t erode sales within the store, Frey said. Grocers need to strategically target two key meat categories: versatile quick-cuts (premium-priced smaller packs) and planned occasions (larger family packs). Reduced trade-advertising activity has contributed to volume loss, Frey said, recommending that grocers promote meat, not isolated ingredients, in circulars as part of multicategory solutions. Meat should be treated in-store as such, too; that means “thinking differently on how to merchandise the store,” Frey said. “If you’re not willing to think diferently and get creative, you’re vulnerable.” Marketing meat-based solutions should focus on three things, she noted: creating excitement, simplifying lives and personalization.

‘Digisumers’ Calling the Shots Neil Stern, senior partner with Chicago-based Ebeltoft USA/McMillanDoolittle, ofered a “Visual Journal of Global Retail and Meat Trends,” with an international look at how retailers are exploring new formats and new trends in visual merchandising, and experimenting with new disruptive business models. With consumers and their needs more diverse than ever, retailers must “understand and respond, or disappear,” Stern said. With the rapid adaptation of technology, he continued, it’s “digisumers” who are calling the shots in retail. Among Stern’s key points: “Local” resonates with freshness, sustainability and community support. Foodservice mashups bring theater

to retail grocery. Retailers must boldly deliver experiences that can’t be duplicated online. Experiences must refect demographic

specialization; the Millennial population is

35 percent ethnic. Grocers should experiment with new ways to reach shoppers, such as food trucks, curbside pickup, home meal delivery and vending. “We’re really seeing profound changes happen-


ing in the marketplace,” Stern declared. In common with Stern, Wade Hanson, principal with Chicago-based Technomic Inc., singled out foodservice as a must-have in his presentation, “Te Changing Face of Supermarket Foodservice and the Keys to Long-term Success.” Restaurants “are looking at this as a threat to their business,” Hanson said of the evolution and refnement of supermarket prepared foods. “Te growth potential is there, much more so than other areas of the grocery industry.” In fact, he said, grocery foodservice can expect 7.5 percent annual growth over the next 10 years. And in Technomic’s latest consumer ranking of the top 10 foodservice operators, four of them are grocers, including the top-ranked Wegmans Food Markets, along with Mariano’s and Standard Market in the Chicago area, Market Bistro by Price Chopper in New York, and Kroger’s Chef on the Run, which Hanson named as standouts in this category. So important is foodservice to grocery, Hanson asserted, that without it, grocers risk losing the rest of their overall basket. He cited data showing grocery prepared foods with $25 billion in sales for 2014, up $10 billion since 2004, with foodservice being the No. 1 strategic initiative for many retailers. Hanson pointed to the following emerging trends in grocery foodservice: Breakfast, beverages and dessert are

prime opportunities. As fresh expands to other channels, grocers are under pressure to more clearly defne and own it. Brand loyalty will depend on relevance and customization: “Be on-trend and relevant,” he said, “and adapt to your consumer.”

‘The Power of Meat’ Meat and poultry products remain among the top choices for shoppers at retail, but the 10th annual “Power of Meat” study — published by FMI and NAMI, and sponsored by the Cryovac Brand, a part of Sealed Air’s Food Care Division — highlights several trends in the way consumers are changing their purchasing behavior. Anne-Marie Roerink, principal at San Antonio-based 210 Analytics, which felded the study, laid out this in-depth look at the meat category as seen through the shopper’s eyes. Key points include the following: Price increases prompted shoppers to seek alternatives: Price hikes for beef and pork

caused shifts in buying behavior among 40 percent of shoppers, with most looking for ways to save. Others returned their focus to quality, convenience and nutrition. Consumers most often look at price per pound.

Shoppers are open to switching among proteins, cuts and brands: Many sought protein

outside the meat case, mostly eggs and beans. Millennials are more likely to use meat alternatives for ease of preparation. Megatrends affect the meat purchase: Shoppers are infuenced by local sourcing, sustainability, health and wellness, and organic, and are looking at leaner cuts and portion control. Alternative channels take some of the fresh dollar: Supermarkets remain the dominant outlet

for fresh meat and poultry; farmers’ markets are the greatest source of the occasional purchase. Meat purchase decisions are increasingly shifting to in-store: While meat and poultry

remained well-researched list items for many shoppers, a greater share made the ultimate buying decisions among species, cuts and brand in-store — putting additional emphasis on operational excellence. Value-added is a fast-growing but narrow segment: One-quarter of shoppers say they

purchase value-added items sometimes or regularly, but for most, cost (21 percent) or preferring to prepare items themselves (46 percent) are the greatest barriers to purchase. Despite all of the value-added solutions provided by food retailing, foodservice continues to win the last-minute dinner decision.

sMarT ideas Chef Chris Mayer gets creative with Perdue Chicken’s simply smart line.

Full-service counters are highly valued: 63 percent among shoppers with

access consider this a store advantage. The natural/organic segment continues to grow: Te top reasons for pur-

chasing natural/organic are “free-from” and better health and treatment of the animal. For those not yet engaged in the segment, price is the largest barrier. Meat and poultry provide nutrition and balance to the diet: Meat is most highly

associated with being a source of important nutrients. Millennials are more likely to associate it with functional benefts and de-emphasize enjoyment. Winning while faced with volume pressure:

Shoppers want better everyday and promotional pricing; and better quality; better in-stock perforApril 2015 | progressivegrocer.com |

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2015 Annual Meat Conference

mance and variety in package sizes, cuts and specialty items, along with customer service excellence.

Exhibits and Tasting Expo An Annual Meat Conference highlight was the annual tasting reception, which this year combined with the lunchtime tech expo to create a fve-hour exhibition of meat purveyors and equipment supplibe on-trend ers, featuring more than 60 companies. Among the and relevant, exhibitors: and adapt AHT Cooling Systems, launching a propaneto your fueled cooler, extolled the benefts of its plugin multideck merchandisers and slim units consumer.” designed for midaisle placement in alternative —Wade Hanson, store departments. Technomic Bubba Burger sampled its new veggie burger and beef-based bacon cheddar burger, and also announced a grass-fed burger, to be sold in fourcount 1-pound boxes.

life. Also on display were examples of the Elmwood Park, N.J.-based company’s evolving microwaveable plated entrée packaging. Smithfield Farmland sampled its new dry-rub

ribs and pork-based Italian meatballs, and also showed its seasonal favored-glaze spiral hams. Springer Mountain Farms sampled its glutenfree breaded chicken breast chunks. Tyson Foods showed its Crafted Creations line, which brings several pre-seasoned and premarinated beef and pork entrées under a common banner. Te 16-item line includes Beef Skirt Steak with Smokey Chili Sauce and Pork Shoulder for Carnitas; packaging includes callouts such as “Great for Grilling” and “Skillet Ready.” PG

Follow trade show reports online at Progressivegrocer.com and on Twitter (@pgrocer and @jimdudlicek).

Clemens Food Group sampled new thick-cut,

triple-smoked applewood and maple bacon under its Hatfeld brand. Hillphoenix displayed its Coolgenix 2.0 meat and

seafood case with a glycol-based refrigeration system that purports to extend product shelf life. Land O’Frost sampled its new Pure and Simple

line of antibiotic-free, veg-fed luncheon meats, consisting of two ham and two turkey varieties. Miller Poultry is launching Katie’s Best, a full

line of Non-GMO Verifed chicken that’s vegetarian-fed, air-chilled and free of antibiotics. After extensive development, John Morrell Food Group has released a 50 percent reducedfat hot dog line under the Nathan’s Famous brand, which “doesn’t sacrifce favor, with half the fat,” said Michael Paribello, senior director of marketing. Cincinnati-based Morrell has also expanded its LunchMakers kid-centric line with breakfast and snack items, and continues to grow its Eckrich smoked sausage business. National Beef is targeting Millennials with its

Food.eez “recipe-ready” beef cuts, which sport on-pack labels featuring product useage tips and recipes. Te line will be supported by a mobilefriendly website. Perdue Foods ofered dishes prepared with its

Simply Smart chicken; the clean-label line, which proclaims “no antibiotics ever,” includes fresh, heat-and-eat and frozen products. Sealed Air showed its Darfresh on Tray packaging

system that promises to speed plant packaging times, yield no scrap and extend product shelf

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HErE’s THE bEEF Andy stenson shows off bubba burger’s new grass-fed burger.


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Health, Beauty & Wellness

Advances in Care

Retailers can tap new technology for personal disease management to attract diabetes patients. By Christina Veiders

F

orecasters indicate that no end is in sight to rising diabetes rates — 29 million Americans and counting, plus 89 million prediabetics who are at risk of developing the disease. Even more worrisome, an estimated 8.1 million people live with diabetes but don’t know it. Food and drug retailers have long recognized the importance of targeting the diabetic population from a public health standpoint as well as to tap such consumers’ value and loyalty. Canadian diagnostic company Miraculins Inc.,

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which is in the process of testing its Scout DS diabetes-screening kiosk in its home country, notes independent research that puts the average spend of diabetes patients at $6,000 per year for treating the disease, of which $3,000 may be spent at the pharmacy. Tat fgure doesn’t include purchases in a grocery/pharmacy setting. While diabetes numbers keep rising, the health care system remains in fux, and advances in therapy and mobile technology stand to impact how retailers go to market with services and oferings for diabetic shoppers. Will Bevins, director of pharmacy operations


evaluate the patient’s overall medication profle and identify any gaps in therapy and work with the prescriber to close these gaps,” he adds. Te Afordable Care Act, which has ushered in about 16.4 million insured, stipulates that diabetics can’t be denied insurance coverage and requires health insurers to cover some basic needs, including free preventive care, diabetes screenings for adults with high blood pressure and for pregnant women, and medical nutrition therapy. However, with more people insured, the supply can’t meet the demand, since there are, as mentioned earlier, around 29 million diabetics and only about 5,000 endocrinologists in the country.

for Abingdon, Va.-based K-VA-T Food Stores, has observed a trend toward personalized therapies and notes the importance of the pharmacist in the diabetes management equation. “Advances in therapy have provided patients and prescribers many new and unique treatment options. Tese new advances target diferent and novel ways to treat the patient. With many of these new medication classes, prescribers may be able to individualize treatment plans based on the patient’s needs and symptomology,” Bevins says. “Te pharmacist is in a unique position to

Acute Care to Clinical New venues and models for health care are in development, and the retail landscape has become a proving ground. Last year, retailers Walmart and Target, for example, began moving from acute care clinics to primary care services Te Bentonville, Ark.-based mass merchandiser opened a handful of Walmart Care Clinics, which it owns and operates. Tis is in contrast to the 100 or so Clinics at Walmart that are leased and operated by third parties. Broad-range services ofered at Walmart Care Clinics include chronic condition management for those with uncomplicated diabetes, notes Walmart’s Ben Wanamaker, senior manager strategy and operations. Te cost of entry is low: $40 per visit, with Walmart employees and their dependents paying just $4. Te mega-retailer also ofers an exclusive line of afordable Reli-On diabetic products, including test strips for just $9, regardless of whether customers have health insurance. Further, shoppers can fnd in-depth information on diabetes, treatment options and healthy living tips at relion.com. “Te biggest challenge facing our diabetic customers is the rising cost of health care,” notes a Walmart representative. “We will continue to remain committed to providing afordable products to help them manage their disease and reach optimal health.” Meanwhile, Minneapolis-based Target, through a partnership with Kaiser Permanente, opened four California clinics ofering primary care services delivered by Kaiser staf. Telemedicine is being used to connect patients to Kaiser staf doctors. And earlier this year, in a interview with Bloomberg Business News, John Mackey, co-founder and coCEO of Austin, Texas-based Whole Foods Market, foated the idea of a Whole Foods medical clinic, frst for employees, and then possibly for consumers. “Te big question is, how long will it be before Whole Foods wants to cater to patients with chronic conditions [like diabetes]?,” asks Dave

With many of these new medication classes, prescribers may be able to individualize treatment plans based on the patient’s needs and symptomology.” —Will Bevins, K-VA-T Food Stores

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ADVE RTORIAL

Kyle Stenzel Vice President Sales, Beiersdorf, Inc.

Established over 100 years ago, Eucerin is one of the most respected brands within the skincare category. Even with the constantly evolving landscape, Eucerin continues to innovate and provide the effective skincare solutions that consumers have come to expect.

PG: What’s next for Eucerin? KS: Eucerin will continue to deliver the innovations that consumers in the therapeutic skincare space are looking for. Our strong product pipeline, which is developed in consultation with our network of dermatologists and pediatricians, helps Eucerin continue to grow the brand and bring new consumers into the category by delivering on the skincare issues most impacting consumers. We look forward to continuing to provide consumers with proven solutions that keep them feeling confident in their skin.

Progressive Grocer: Recently, Eucerin launched a new line of lotions and cremes, Eucerin Diabetics' Dry Skin Relief. How did this innovation come about?

www.EucerinUS.com

Kyle Stenzel: Eucerin works hand-in-hand with dermatologists when developing new products. Dermatologists have reported an increase in patients with very dry, rough skin. Eucerin aims to provide consumers with hardworking products that effectively moisturize to soften even intensely dry skin.

PG: Eucerin products are used and trusted by many with dry, itchy or sensitive skin. How does the Eucerin Diabetics’ Dry Skin Relief line of products meet the needs of those with intensely dry skin? KS: Through extensive research and testing, we know that, the best way to address most dry skin conditions is the routine use of effective, long-lasting moisturizer. Eucerin Diabetics' Dry Skin Relief formulas gently exfoliate and intensely moisturize leaving skin smoother and softer. People with diabetes saw noticeably moisturized skin in just one use. Eucerin’s Diabetics’ Dry Skin Relief line offers three complementary products specifically designed for the body — in a creme or lotion formulation—and the feet, which are particularly prone to drying and cracking. These products’ gentle, non-greasy and fast absorbing formulas are gentle enough for everyday use and help build multi-item baskets.

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This product is intended to moisturize dry skin and not cure, treat, or mitigate symptoms of diabetes.

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SOFT, SMOOTH SKIN IN JUST ONE USE. INTRODUCING EUCERIN DIABETICS’ DRY SKIN RELIEF. In just one use, its effective combination of ingredients noticeably moisturizes the rough, dry skin of people with diabetes. Soft, smooth skin. Now, how good does that feel?

PROUD SPONSOR of the AMERICAN DIABETES ASSOCIATION®

Skin Science That Shows. Want to learn more on how to grow? email us: ShopperMarketing@Beiersdorf.com

Intended to moisturize dry skin and not cure, treat, or mitigate symptoms of diabetes.


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Continued from page 121

Wendland, VP at Waukesha, Wis.-based Hamacher Resource Group. “If they collaborated with a strong pharmaceutical partner, the [Whole Foods] patient base that expects fresh may gravitate to that kind of environment.” Wendland sees a growing demand for diferent health care access points, and retail health clinics make perfect sense. “I’ve seen a stepped-up number of health clinics being integrated into grocery,” he says. “If you look at the DNA, it isn’t just about acute care. [Grocers] are beginning to focus on chronic care and management, and the biggest food retailer player in the world isn’t bashful about saying, ‘We can replace primary care physicians.’” Jim Wisner, president of Libertyville, Ill.-based Wisner Marketing Group, who has worked in the area of retail wellness for more than a decade, says those with a clinic/pharmacy model have an advantage when it comes to managing chronic conditions like diabetes. “With a medical care model, consumers are completely linked in, and, better yet, if you can impact their lives, that is the best of everything,” he observes. Wisner believes many grocery chains are doing a good job on the diabetes front and will continue to hone their services and oferings.

“Medication adherence and cost of medications are two of the biggest challenges with tackling diabetes moving forward,” says Maria Brous, a spokeswoman for Lakeland, Fla.-based Publix Super Markets, which operates 925 pharmacies in a chain of 1,000-plus stores. Five years ago, the grocer began a multifaceted diabetes management system. Te frst phase offered diabetic patients a free medication, Metformin; online resources; and the beneft of a knowledgeable pharmacist. Customers could also sign up to receive a monthly e-newsletter containing diabetes-related articles, a featured recipe of the month, and special ofers from Publix and Publix Pharmacy. Te program additionally included a voucher for a free Publix branded glucose meter. Last year, Publix expanded a Sync Your Reflls program established to assist customers with synchronization of their medications to be reflled on the same day of the month. Te program is designed to help with medication adherence.

Staff Training With 93 Food City locations and 78 pharmacies in Food City stores, K-VA-T has invested in training programs for pharmacists to become diabetic coaches

Mobile Tools for Health Management For the millions living with diabetes, the condition often involves finger sticks and constant monitoring and recording of blood glucose levels. New digital medical devices and mobile apps may change the daily grind for diabetics and provide caregivers and patients with valuable data to manage the disease. Diabetes is a condition of high blood glucose levels over a prolonged period due to insufficient insulin or insulin resistance. Left untreated, it can wreak havoc on the body, causing heart and kidney disease, nerve damage, and vision problems. “With such a large portion of the population smartphone-enabled, the next wave of consumer interaction will be mobile-driven,” predicts Dave Wendland, VP at Waukesha, Wis.-based Hamacher Resource Group.

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The FDA recently issued final guidelines on its oversight of mobile health apps, indicating that generally it would take a hands-off approach to regulating apps that pose no threat to users if they fail. Accordingly, expect more wearables that measure important biometrics, such as a “smart lens,” currently being developed by Google and Alcon, that can measure glucose in tears, and the potential of the Apple Watch to be used as a blood glucose monitor. In a similar vein, product developers are using advanced technology to design tools that make it more convenient and easier for diabetics to track their health. The KiCoPen device (pictured at left), developed by U.K.-based Cambridge Consultants, was designed to capture when the exact dose of insulin is delivered and send the information to a smartphone app for accurate tracking. The pen has no battery and is powered through “energy harvesting.” For retailers, such technology means understanding how their consumers will use it and having more health data to help patients and customers stay healthy. “Retailers will use the information to connect back through their omnichannel experience,” Wendland explains, “to personalize communication with the patient that says, ‘Mrs. Jones, today I’ve got green peppers on sale, and they are great for someone living with diabetes.’”

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and provide overall medication therapy management. For company associates and their family members, K-VA-T ofers through its Healthy Initiatives department health coaching to those enrolled in its Diabetes Management Program. Te program provides the incentive of a reduced co-pay on diabetic supplies and medications that lower blood sugar for associates/family members who comply with its requirements, one of which is meeting with a pharmacist health coach, who provides education, support and counseling. Te Healthy Initiatives department also partners with Kingsport, Tenn.-based Wellmont Health Systems Diabetes Treatment Center to ofer free in-store tours. Tese small group tours focus on shopping and consuming foods that will help those with diabetes better manage the disease. Further, K-VA-T reaches out to other organizations and businesses to ofer free diabetes educational sessions and support groups. “We strongly feel that diabetes management must begin with the patient as the central person caring for

their diabetes, but that a team approach, including their family members/support persons, is critical to a better quality of life and outcomes,” Bevins says. Besides new therapeutics, technology is changing the way retailers will deliver services and how patients manage their diabetes. Telemedicine, being used by Target and some large drug chains, is just one example. Miraculin’s Scout DS, which was tested earlier this year in several Lovell Drug stores in Ontario, is able to determine whether the user has type 2 diabetes. Te kiosk reads, via a light source, AGEs (advanced glyscosylated end-products), among other biomarkers) in the skin and, based on age, provides normal, borderline or elevated results on those tested. Christopher Moreau, president and CEO of Winnipeg, Manitoba-based Miraculin, says the kiosk provides a 90-second no-blood, no-fasting screening test for type 2 diabetes that’s 80 percent sensitive. “It is ideal in a food-pharmacy environment to identify those who may be prediabetic or diabetic,” Moreau says. Te company will seek FDA approval to market the kiosk in the United States. PG

Medication adherence and cost of medications are two of the biggest challenges with tackling diabetes moving forward.” —Maria Brous, Publix Super Markets

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B

Batteries and Flashlights

atteries and fashlights are some of the frst items consumers look for when they prepare for weather-related power outages. “Even minor storms lead to a bump in battery sales, and major storms can quickly wipe retailers out of stock,” says Ann Rule, senior director of marketing at Rayovac, part of Middleton, Wis.-based Spectrum Brands. Since weather and power outages occur throughout the year, storm prep can be a yearround category at many chains. “Battery companies have stressed to consumers the importance of being prepared during the power outages brought about by extreme weather conditions,” says Nick Cunningham, an analyst with The Freedonia Group Inc., in Cleveland. Duracell’s biggest push for emergency preparedness has historically been in the spring and summer, targeted to help consumers gear up for the summer hurricane season. But winter storms in the Northeast and Mid-

west can also create power disruptions, making winter another key selling season. To promote emergency preparedness last year, Duracell significantly expanded its Power Forward program. “The program is designed to provide power relief to those who are without power due to natural disasters,” explains Win Sakdinan, a spokesman for Duracell, a brand of Cincinnati-based Procter & Gamble. “Our five Power Forward trucks are positioned throughout the country, enabling them to get to any disaster location with free batteries and charging stations within 24 hours.” Since 2011, the brand has deployed the trucks 18 times throughout North America. “We’ve donated over 380,000 batteries and provided thousands of people with mobile device charging from our trucks,” Sakdinan says. “With the help of our retail partners, we also use the trucks to help spread a message of storm preparation, so families can be prepared for the next big storm.”

Storm Cells In times of emergency, consumers look to grocery retailers for batteries and flashlights. By Barbara Sax

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Selling Preparedness According to Rule, Rayovac’s internal forecasting team communicates weather reports to account managers, who then help retailers get needed supplies on the selling foor before a storm hits. “We had a 200 percent lift in sales during Hurricane Sandy,” she says. “It’s important for retailers to have the product in the store not only from a sales perspective, but as a public service.” Tis past winter was a rough one in New England. At Springfeld, Mass.based Big Y Foods Inc., batteries are merchandised regularly on foor stands throughout the year, but when it comes to storm prep merchandising, the chain uses tables to maximize display. “We place them in high-trafc locations near the front door or at the checkout,” says Scott Brackney, Big Y’s general merchandise sales manager. “Te stores get creative, merchandising candles, can openers and other stormrelated SKUs all together. It’s a onestop shop that flls a customer’s need.” Brackney continues: “It really comes down to opportunity merchandising, having the right product in store, in the right place, at the right time. It’s something our customers have really come to expect and appreciate from Big Y. In this situation, it’s so much more than just selling product. Tese items now become a necessity, a public service.” Weather emergencies are a yearround threat in the Texas markets in which Brookshire Grocery Co. operates. “Customers in our market areas have to be prepared to deal with extremes in weather, from thunderstorms and fash foods to tornadoes and hurricanes, during the spring, summer and fall, along with snow and ice in the winter,” points out Steve Delello, category manager of general merchandise/seasonal categories at the Tyler, Texas-based chain. To help customers prepare for inclement weather, the Brookshire’s seasonal display plans always include batteries and fashlights. “We maintain a preloaded battery clip-strip inventory in our warehouse that is ready to ship at a moment’s notice,” says Delello. Te chain also developed lane closure displays on wheels to bolster stores’ in-stock position and capture last-minute buys at the

front of the store. “We have developed storm-specifc displays for all of our retailers that feature one of our Duracell Power Forward trucks,” notes Duracell’s Sakdinan. “Tis display encourages consumers to stock up prior

®

www.grimmway.com

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It really comes down to opportunity merchandising, having the right product in store, in the right place, at the right time. … It’s so much more than just selling product. These items now become a necessity, a public service.” —Scott Brackney, Big Y Foods

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to the storm. We also are prepared from a supply chain perspective to ship product to our retail partners ahead of signifcant storms or immediately following to help replenish their inventory as quickly as possible.” Rayovac helps retailers prepare for storm seasons with fexible and easy-to-assemble displays for its Rayovac branded batteries. “Te correct product mix and secondary locations are key to the success of a retailer’s emergency operations center,” says Rule. “AA, C, D and 6-volt batteries and value-priced fashlights have the highest lift during storms, so it’s important that retailers get enough product on the foor to meet consumer needs.” While the basic battery and fashlight products are a crucial part of the mix, manufacturers have introduced new products that are good additions to an emergency operations center. Long-lasting batteries are becoming a bigger part of the category, for instance. “With our Duracell with Duralock technology, our batteries last up to 10 years in storage, so there is no downside on purchase if the storm doesn’t hit,” says Sakdinan. “While all battery sizes are important, we see a signifcant increase in demand for C and D batteries during storms, as those are used in many fashlights and lanterns.” For its part, St. Louis-based Energizer recently launched Fusion, a value-priced high-drain battery positioned against Energizer Max and Duracell with Duralock. Portable power packs that can recharge with AA bat-

| Progressive Grocer | Ahead of What’s Next | April 2015

teries are another important part of the category; Rayovac’s 7 Hour Power is a strong seller in this segment. In July, the brand will launch a StormPrep line of lanterns and fashlights featuring NiteGlow locator technology. All products feature a glowing on/of button powered by a long-life lithium battery that makes them easy to locate in the dark. Energizer promotes its WeatherReady fashlights during storm season. “Our WeatherReady line of fashlights is perfect for emergency situations because of critical benefts of long runtimes, area lighting and water resistance,” notes Nguyen Violette, Energizer’s director of marketing.

Beacon for Shoppers Promotional activity for fashlights peaks in October and November in tandem with hurricane season, and then again in November through January, timed to the winter storm season in many parts of the country. Grand Rapids, Mich.-based Meijer promoted the category most heavily in the supermarket channel for the year ending Feb. 21, 2015, according to Solon, Ohio-based ECRM, which also found that Energizer was the leading branded fashlight promoter in the category, with 17 percent of promotional activity linked to the brand, while Rayovac accounted for 5 percent of category promotions. Manufacturers also advertise their battery brands during storm seasons. Duracell was the most frequently promoted brand, with 24 percent of all battery ads promoting it, ECRM found. P&G also marketed the Duracell Coppertop brand heavily, with nearly 12 percent of category promotion devoted to it. Energizer Holdings ran 18 percent of category ads for its fagship Energizer brand. Ads for the company’s Energizer Max brand accounted for nearly 12 percent of category advertising, and Advanced Lithium and Advanced Ultimate Lithium brands accounted for a combined share of 2 percent of category ad spending. More than 75 percent of promotions in the battery category were price-point driven, according to ECRM. Promotional support spikes from the end of November to mid-January are targeted to the holiday selling season. Kroger, Safeway and H-E-B were the most frequent promoters of the battery category in the supermarket channel. PG


Online Grocery Shopping

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uying groceries online is becoming more popular as consumers become comfortable with this shopping option. To serve these customers, some supermarket retailers have been ofering grocery e-commerce for some time, while others are testing various services or considering getting involved. It’s no wonder why. Online grocery shopping is one of the fastest-growing retail channels. According to Rockville, Md.-based Packaged Facts, the annual growth rate will result in a market of nearly $100 billion in 2019. So grocers need to get their fair share of this business. Tey need to determine the best way to assemble online orders and deliver groceries while ensuring prompt service at a reasonable price. Online grocery shopping certainly can ofer a competitive advantage for traditional food retailers, according to Graeme McVie, VP of business development for Toronto-based Precima, a retail analytics solution owned by LoyaltyOne. Tis is especially true if companies can successfully integrate a loyalty program that rewards their best customers. “It is a highly engaged medium,” he says. “Since shoppers are apt to share products, recipes and experiences socially, online grocery shopping can also play a unique role in helping the retailer build its brand both in brick-and-mortar as well as in digital forums.”

Technology

But if grocery e-commerce ofers so many benefts to grocers, what’s preventing some from embracing it and gearing up for a growing part of the business? “It’s a pure cost play, and the logistics behind it,” says Lee Peterson, EVP of brand strategy and design at Columbus, Ohio-based WD Partners, citing the costs of picking ordered groceries, trucks, gas and delivery people. “If you’re a grocer with three stores in Sacramento, that’s a tough one. Tat’s why you might use an outside resource.” And there are several outside resources from which to choose. For example, San Francisco-based Instacart, which operates in 15 cities across the country, enables shoppers to browse through the online catalogs of partnering supermarkets and then deliver selected orders to users’ homes. Some of the grocers using this service are Whole Foods Market, Costco and Harris Teeter. Ahold recently launched grocery ordering and delivery in the Harrisburg and York, Pa., markets through its Giant Carlisle and well-known and successful Peapod divisions. Consumers can create personal shopping lists, read nutrition information online, and sort products rapidly by price or nutrition criteria. Giant Bonus Card users can quickly get started with their frst order online, from a list of items they’ve bought at their local store, by entering their card number online.

If grocery e-commerce offers so many benefits to grocers, what’s preventing some from embracing it and gearing up for a growing part of the business?

Getting

Started

Now

What’s the best type of service for online grocery? By John Karolefski

April 2015 | progressivegrocer.com |

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Technology

Online Grocery Shopping

“It’s all about making it easy for our customers to shop for their groceries,” says Giant President Tom Lenkevich. “With the launch of Peapod by Giant, our customers now have a full range of shopping options. Whether it is shopping in our stores, ordering online and picking up, or having their groceries delivered to their home or ofce, Giant customers truly can shop when, where and how they want.”

Since shoppers are apt to share products, recipes and experiences socially, online grocery shopping can also play a unique role in helping the retailer build its brand both in brick-andmortar as well as in digital forums.” —Graeme McVie, Precima

Controlling the Threat Meanwhile, experts believe online services from Amazon and Walmart are the two biggest threats to supermarkets. Seattle-based Amazon began expanding its grocery service, called AmazonFresh, in the second half of last year to California, while Walmart, based in Bentonville, Ark., is running tests of its Walmart to Go service in San Francisco and Denver. Both have the resources and national footprint to become dominant players in grocery e-commerce. Some larger grocery chains understand that threat and therefore might want to have complete control of the process rather than rely on a third party. Naturally, this requires considerable IT investment — plus supply chain, marketing and CRM integration on the back end. Beyond that, grocers will need to put time and efort into the user experience. “Shoppers want an easy-to-use service that can be accessed by a mobile device, so they can shop on the go, as well as [via] tablet or desktop,” says McVie. “So out of the gate, it’s critical to make sure you have platforms for all devices. Let’s not forget the delivery experience. Consumers will have an expectation that you are paying attention to this level of detail and that they can count on you to not only get them what they need with the push of a button, but that it will land at their door packed as though they packed it themselves. Te challenge on that front is on the ability to knit online with delivery.” For chains that want their own e-commerce services, McVie lists critical operational decisions that must be considered thoroughly and managed efectively: How do you revamp management and back-end systems that span a vast array of business-critical logistics? Do you have the same prices online as in-store? How do you manage inventory and the supply chain to minimize out-of-stocks? How do you manage the picking/delivery workforce? Where do you do the picking — in current stores during slow hours, at “dark” stores or at warehouses? How do you manage the delivery feet and plan delivery routes? How do you manage images and product information?

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Get the Onliners In-store The increasing popularity of online grocery shopping makes this channel a priority for grocers. There’s a problem, however: Many customers are quick to “abandon” their carts before checkout. Recent data indicate that almost seven in 10 consumers do so when shopping online. This is an issue for online and brick-andmortar retailers alike. However, the latter have an edge, according to new data from LoyaltyOne, which revealed a way not only to get consumers to complete their online purchases, but also to enter the brick-and-mortar store. The survey of 1,000 American consumers nationwide points toward a simple answer: Offer a discount to the online purchaser who’s willing to pick up his or her purchase in-store. For instance: 73 percent of consumers say a discount for picking up the online purchase at the closest retail store would make them more likely to complete the online purchase. 68 percent would visit the store to pick up their online purchase for a discount of 15 percent or less. Respondents reveal a strong desire to avoid shipping costs. Nearly seven out of 10 (69 percent) say that simply avoiding shipping fees alone would entice them inside a retailer’s doors to pick up their online purchase. Receiving additional loyalty program points was also a driving factor, influencing more than 40 percent of respondents to go in-store. “If used smartly, in-store pickup may just be the edge retailers need to combat serial cart abandoners,” says Graham McVie, VP of business development for Toronto-based Precima, a retail analytics solution owned by LoyaltyOne, “as well as providing an additional touchpoint in the consumer experience by getting the online shopper in the store.”

“Te accuracy and availability of this product information is the frst step in giving shoppers the confdence they need to buy groceries online, and a pivotal frst step as grocers’ e-commerce strategies evolve,” notes Sue Sentell, president and CEO of Lisle, Ill.-based Gladson. “To get started on meeting shoppers’ online expectations, grocers need to begin with a foundation of digital product content to power their online strategies and e-commerce engines. Tis includes a consolidated resource of product images and comprehensive product details, ranging from ingredients and marketing claims to nutrition facts and package size, to give buyers a true ‘digital representation’ of each product.”


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CoMinG ThreAT AmazonFresh presents a challenge to brick-and-mortar grocers.

With same-day delivery, the question is how to deliver to many people within the narrow windows they are going to require, and still be on time and efficient.” —Victor Allis, Quintiq

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Same-day Challenges According to a recent LoyaltyOne survey, 21 percent of consumers say an additional fee is worth the convenience of same-day delivery for their online purchases. Also, 27 percent say an additional fee is worth the convenience of having the grocery products they need ready for pickup upon their arrival at the store. Same-day delivery is obviously an attractive option. But it’s challenging, explains Victor Allis, CEO and co-founder of Quintiq, a Netherlandsbased software company servicing the logistics needs of such customers as Walmart and DHL. To illustrate the difculty, he urges retailers not to become like a pizza delivery service, in which a courier goes out, delivers to the house and comes back. “Tat’s very inefcient, because you can only make one delivery by only one person,” says Allis. “With same-day delivery, the question is how to deliver to many people within the narrow windows they are going to require, and still be on time and efcient.” On the other hand, the click-and-collect option — shoppers order groceries online and then pick them up at the store — solves logistical issues and the delivery expense. Tere are other advantages to this service that many experts say is the way to go. WD Partners’ Peterson points out that getting the shopper to enter the store prompts them to purchase fresh food, especially produce. Grocers need to protect this business from niche online players such as Relay Foods, Door-to-Door Organics and others that are delivering produce to homes. “Te real beneft of in-store pickup is the opportunity for additional unplanned, high-margin impulse purchases [in the store],” says Professor Emeritus Richard George, of the Haub School of Business at St. Joseph’s University (SJU) in Phila-

| Progressive Grocer | Ahead of What’s Next | April 2015

delphia. “Consumers use the amount of items in their shopping cart as a heuristic of their spending. Since the online items will be deposited directly into their car, they can visit the store with an empty basket. In addition, research has indicated that persons shopping both online and in-store spend more than those shopping online only and in-store only.” By contrast, he adds, the number of Europeans ordering groceries online has grown 60 percent in the past fve years. Britain leads the way, with 22 percent of its population ordering groceries from a desktop. In these markets, the preferred delivery model is click-and-collect.

Millennial Movement Te industry consensus is that online grocery shopping will continue to grow because younger consumers will accept this option more. Also, the group starting families that will account for big grocery bills will be Millennials, “a demographic 80 million strong that checks smartphones on average 43 times per day,” says Gladson’s Sentell. “My recent national research on Millennials — those 18-34 years old — underscores the sense of urgency for traditional brick-and-mortar retailers to enter the online space,” says SJU’s George, noting that: Only 56 percent of Millennials have shopped for groceries in the past 30 days in a regular or fullservice supermarket. 24 percent of Millennials have shopped for online groceries in the past 30 days. Millennials shop 4.5 times per month online, versus 3.9 times per month at a regular or full-service supermarket.


“Millennials may eventually behave like their parents and older consumers,” says George. “However, at this stage of their life cycle, their attitudes, lifestyles and behaviors are sufciently unique to suggest the development of specifc marketing strategies and tactics by food marketers that will capture a greater share of total food needs. Traditional food retailers need to develop a strategy that makes online shopping a capstone of their organization’s eforts and investment, rather than simply an add-on form of distribution.” Precima’s McVie acknowledges the importance of Millennials as the primary online grocery shoppers of the future, but he points out that it’s important to build a strategy to serve current customers while also looking forward. At the same time, he advises grocers to tie their online eforts to a loyalty program to reap several benefts: Tracking demographics Seeing the products most popular by demographic and psychographic Tailoring ofers and specials Hypertargeting marketing across age segments

“Tis strategy builds loyalty with current customers and helps to build loyalty with upand-coming customer segments,” stresses McVie. “As Millennials become even more of the overall revenue stream, you’ve cultivated them into the fold and have shown them you can deliver exceptionally customized experiences.” Whether they settle on an online grocery service with or without a loyalty component, using a thirdparty partner, developing a home-grown service, or click-and-pickup or click-and-deliver-home, WD Partners’ Peterson urges grocers to get started now. “You have to try it,” he afrms. “You need to learn as much as you can. Walmart and Amazon are so far ahead of the curve in what they will be able to deliver. Tey have the logistics to basically go nationwide right now to at least deliver center store groceries. If you don’t understand the model, that’s a problem. You have to start testing. Ten you get the kinks out.” PG


Retailers that understand and satisfy the needs of shoppers better than the competition will be on a path to sustainable competitive advantage and profitable growth.

Guest

Perspectives

By Graeme McVie

The Perception Gap Here’s how grocers can use data more effectively.

C

ustomer-centric strategies produce results. When grocers make the investment to understand who their shoppers are and use that knowledge to make the shopping experience truly focused on customer needs, they earn their loyalty and encourage them to consolidate their spend, resulting in increased frequency of shopper visits and basket size. When retailers use a customer-centric strategy, they could see a net incremental sales increase of 1 percent to 4 percent, and an average increase of 4 percent to 7 percent in gross profts. For a $2 billion retailer, this could potentially equate to an additional $80 million in sales per year and an additional $30 million in gross profts per year. Retailers and manufacturers understand that building pricing, promotion, assortment and marketing decisions around customer needs is an essential approach to success. In fact, retailers and manufacturers cite a customer-centric strategy as the most important factor for success, according to a 2014 survey of U.S. food and drug retailers and CPG manufacturers conducted by LoyaltyOne. What’s troubling is a perception gap between how good a job retailers think they’re doing and how customers really see their relationships with retailers. Top retailers may believe they’re embracing shopper insights, but something’s not resonating.

Shoppers Aren’t Buying It More than nine in 10 top U.S. retailers say they consistently leverage customer insights to develop strategies and plans across the organization. Tey say they regularly track customer metrics; use customer insights for digital, social and mobile plans; heavily invest in stafng and technical resources; and educate store personnel on using customer insights in their daily jobs. Tese retailers also say they consistently draw from customer insights to improve the in-store experience, to deliver personalized marketing communications and to collaborate with manufacturers. However, we also surveyed U.S. shoppers who say they aren’t feeling personalization or relevance in their shopping experiences overall. Instead, they’re reporting lukewarm attention: 64

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percent say the ofers (e.g., coupons) they get are the same as everyone else’s; 50 percent say companies don’t consistently send personalized and relevant marketing communications; 40 percent say companies don’t know how they prefer to receive promotional ofers (e.g., coupons by mail); and 35 percent say they don’t receive promotional ofers for products that they want. While retailers say they’re delivering, shoppers aren’t buying it. Interestingly, customers say they want the experience to be more personalized. Ninetytwo percent say they’d like the retailer they most recently shopped at to send them relevant coupons. Ninety-four percent say they’d like a loyalty card or app with the ability to earn and redeem points or miles, and would like to receive special offers and discounts based on their loyalty. Eighty percent say they’d like companies to use their data to decide which products and services to offer or eliminate. Te problem is that even as shoppers are essentially asking retailers to use their data, most retailers aren’t acting on the material they have. Tey’re still struggling to share, analyze and respond to customer data across the organization. Only half (55 percent) report that they’re using customer data in customer service, and fewer than one in three use customer data in operations (28 percent), assortment management (28 percent) or purchasing (32 percent).

Winning With Shoppers Grocers can overcome these challenges. Here are six areas where companies should focus on using data better to close this perception gap: Strategy: Shopper data

insights should be used to assess current spend and model


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Guest

Perspectives

potential spend for each individual shopper at the category level. Tis allows the grocer to identify the greatest growth opportunities by category, customer and store, which enables them to allocate stafng and fnancial resources against the shoppers, categories and stores in a way that will allow them to most efectively pursue the best opportunities to proftably grow the business.

will align grocer and manufacturer trade investments in the most productive areas, with grocers deploying promotions that target specifc shopper segments and needs. Selecting the right items to promote, determining the right discounts to ofer, and allocating ad and display support to the right items to maximize productivity of the space also leads to dramatic improvements in performance.

Pricing: Pricing insights can be developed at the lowest levels of the store, product and even shopper hierarchies. Grocers can then aggressively price the items that are most important to their most valuable shoppers, aligning price plans with the needs of these shoppers. If they do this correctly, grocers can expect to see sales and gross proft increases while enhancing price perception and improving market share.

Assortment: Maximizing the productivity of fnite shelf space is key to retailer performance. Shopper insights should be used to identify which low-productivity items can be safely removed from the assortment to be replaced with higher-productivity items. Understanding item importance to most valuable shoppers and the extent of demand transfer by individual item ensures that only low-risk items are candidates for removal. Tis approach improves the sales performance of the low-productivity items and gross profts.

Promotions: Shopper insights should be

used by grocers and CPG manufacturers to identify which promotions are performing well, which arenâ&#x20AC;&#x2122;t performing well but can be improved and which should be terminated. Tis collaboration

Marketing: Incremental sales from shopper marketing campaigns are usually less than 1 percent, but with a personalized approach based on shopper data, this improves to nearly 4 percent in incremental sales. Retail and CPG marketers can tailor customer marketing communications along multiple dimensions to consistently improve efectiveness in future campaigns. With these insights, grocers can gradually shift the marketing budget from mass, untargeted activities to personalized cross-channel marketing that drives enhanced response rates, meaningful incremental sales and highly positive marketing ROI. Manufacturer Collaboration: Manufacturer trading

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partners allocate a signifcant percentage of their revenues to the marketing mix. Manufacturers, retailers and shoppers would all beneft signifcantly if these marketing dollars could be deployed in the most effective way to deliver enhanced customer-driven media ads, consumer promotions and trade promotions. Retailers that share customer insights with manufacturer trading partners maximize their chances of aligning manufacturer marketing investments with the needs of the specifc customers in their stores. Retailers that understand and satisfy shoppersâ&#x20AC;&#x2122; needs better than the competition does will be on a path to sustainable competitive advantage and proftable growth. Grocers would do well to honestly evaluate where they are on the journey to becoming more customer-centric and put a plan in place to steal a march on their competitors to win with shoppers. PG Graeme McVie is VP of business development for Toronto-based Precima, a leading retail analytics solution owned by LoyaltyOne. He leads customer analytics and loyalty services sales efforts across North America.


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Technology

Logistics

The

Digital Link

Beyond serving consumers’ needs, up-and-coming technology can help streamline the supply chain for a new era of retailing. By Jenny McTaggart

M

ost of the talk about digital technology at retail these days is centered on consumers. Who will buy the new Apple Watch, and how might shoppers use it? Are online ordering and home delivery requirements for 21st-century food retailing? How should supermarkets market to mobile users at the point of sale? While retailers should certainly take a closer look at these and other consumer trends, they would also be wise to investigate how digital innovation can not only serve their wired customers, but also help to streamline the new supply chain of the digital era, retail analysts tell Progressive Grocer. “Shoppers have “Shoppers have become digibecome digitally tally connected with the supply chain for the frst time, and the connected with the efects are already profound,” supply chain for the notes James Naylor, senior knowlfirst time, and the edge expert in McKinsey & Co.’s effects are already European retail practice. “It ofers profound.” the potential for new operating —James Naylor, models for marketing and distriMcKinsey & Co. bution, as well as an explosion in analytic possibility.” In a paper published last year by New York-based McKinsey, the authors surmised, “To stay competitive, companies must stop experimenting with digital and commit to transd fforming themselves into full digital businesses.” d For food retailers, supply cchain management is at the heart of that business. h In its report, McKinsey outlined seven traits that successful digital enterprises share,

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and one trait speaks directly to the grocery industry’s squeezed proft margins: “Follow the money.” Te authors note that while many organizations are focusing their digital investments on customer-facing solutions, they can extract as much value, if not more, from investing in back-ofce functions that drive operational efciencies. Indeed, the retail world appears to be on the brink of a digital evolution in terms of operations, and supply chain efciency is one of the critical areas that will be afected. Of course, grocers will and should be cautious about jumping on any killer app that has yet to prove itself. But that shouldn’t stop them from putting on a set of digital lenses, so to speak, as they plan their future strategies. Several experts who spoke with PG had slightly diferent takes on how exactly digital technology will impact the future of the business, but all agreed that while the need for transformation is evident, there will likely be no sole magic bullet that the industry can rally around — at least for now. Instead, they see a focus on multiple tools that can advance supply chain efciencies for suppliers, distributors and retailers — such as data visibility, consumer analytics and 3D visualization, among others.

Beyond the UPC Code In the past half-century of retailing, the evolution of the UPC code was perhaps the most innovative widespread technology to impact the grocery industry’s supply chain, notes Peter Wietfeldt, a partner in London-based PricewaterhouseCooper’s retail advisory practice. “UPC is probably the best example of the industry rallying around a technology,” he observes. “Everyone agreed to use it. But there really has to be a vertical alignment across the supply chain to have a new technology become universal.” While he isn’t seeing any mass adoption of supply chain technology right now, Wietfeldt is excited about what may be coming down the pipeline. “If we close


our eyes and picture what will be going on 20 years from now, you certainly have to think that there will be some type of digital technology at play,” he says. RFID technology defnitely showed a lot of promise, especially back in 2003, when Bentonville, Ark.-based Walmart committed to having all of its suppliers apply RFID tags to pallets and cases of goods sent to its distribution centers. But because of the high cost of implementation, the technology was perhaps a bit ahead of its time — at least in the grocery industry. Still, some observers say that the technology is becoming more cost-efective and could be more widely adopted in the near future, especially considering its potential for tracking items to better address food safety and security concerns. High-value nonfood retailers have already found RFID to meet their return on investment, notes Wietfeldt, but that’s because the products cost a lot and require a higher level of security in stores. “Some people think that visual technology — visual readers — is the next wave, since it’s easier to print information, but the industry is still a long way from having that as a standard,” he says.

Impact of Industry Consolidation Some supermarket chains have more recently focused on gaining efciencies through supply chain consolidation, either through M&A activity or through outsourcing the supply chain, according to Jean-Michel Fally, principal of New York-based Deloitte Consulting. “Tis helps remaining supply chains gain volume and velocity, and better leverage existing digital technologies,” he says. Some supermarket operators are cautiously beginning to leverage digital technology to address dot-com orders, pickup points and home deliveries, observes Fally. Meanwhile, some of the larger chains are focused on improving cross-functional execution with merchandising and store/dot-com operations. Fally also points to 3D visualization and analytical tools, which can help merchants communicate their plans to operations and supply teams, and make problem solving faster and more cost-efective. “Retailers are looking at better collaborating with their suppliers and other partners to optimize the end-to-end supply chain from factory to store shelf,” says Fally. “Shared digital analytic platforms can help retailers and suppliers get the metric and data visibility to solve supply chain problems more efciently. Tese technologies will allow a new level of transparency into measurement, fow and execution — fnally, the supply chain visibility long awaited by professionals.” Augmented reality, a technology that provides a live direct or indirect view of a physical, real-world environment whose elements are supplemented by computer-generated sensory input such as sound, video, graphics or DPS data, is a futuristic tool with ex-

citing possibilities, according to Fally. Te solution “will ... help merchants see execution issues visually through operators’ glasses and problem-solve together, or help warehouse associates share quality control issues with suppliers and retailers.” 3D printing, meanwhile, could have a “profound impact” on supply chains, he notes. “For example, for general merchandise manufacturers, hard-to-source parts could be printed on demand in metal, ceramic or composite materials in the warehouse, using blueprints at the touch of a button, fnally allowing justin-time inventories.”

“Shared digital analytic platforms can help retailers and suppliers get the metric and data visibility to solve supply chain problems more efficiently.” —Jean-Michel Fally, Deloitte Consulting

Need for Speed As McKinsey’s Naylor sees it, most savvy food retailers are on board with new technology that can improve the supply chain, or any area of the business for that matter. (In PG’s G’ 2015 Annual Report of the Grocery Industry, technology spending jumped to No. 4 on the Operational Factors index, indicating that more retailers expect to boost their tech investment this year.) “Grocery retailers have had mission-critical IT systems for decades to run their distribution and payment systems,” notes Naylor. “Te tougher question is how rapidly they can bring digital capabilities to bear upon the rest of their business — customerfacing omni-channel, analytics-driven merchandising and loyalty, and new performance management systems.” Consumers’ ongoing adaption of mobile applications ups the game, he adds. “Te move to mobile is pretty much inexorable. What makes this even more challenging for retailers is that shoppers are not going to see mobile presence as a point of distinction. Tey’ve gone straight to regarding omnichannel fuency as a hygiene factor,” he points out. “Tis is starting to put enormous pressure on retailers,” continues Naylor, “not so much to develop mobile sites and apps, but to overhaul their entire ERP systems so they can show live data across multiple online points of access, use common product information databases to support them, and ofer online ordering and fulfllment to all their customers. Equally, it means the capacity for online growth is extraordinarily quick.” PG For more information on supply chain technology, visit Progressivegrocer.com/digitalsupplychain.

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Advertor i Al

Q &A

Talking with…

Sue Sentell

CEO and President, Gladson

Gladson provides consumer packaged goods product images and information along with high-impact category management and Store Optimization Services to help its customers increase sales and operational effciency. The Lisle, Ill.-based Gladson empowers retailers to plan and execute more effectively so they can meet shopper expectations across the path to purchase, from in-store to online.

With people continuing to shop for groceries at brick-and-mortar stores, why should grocers be thinking about and acting on their digital content now? Sue Sentell: Although research shows that consumers — even those with the latest digital devices that they use all day — still like to shop at the grocery store and will in the near future, developing a comprehensive digital content strategy now is important for several reasons, not the least of which is sales. Digital content via “virtual shelves” can positively impact in-store traffc, conversion, order size and loyalty when executed professionally, accurately and consistently across multiple platforms. On the fip side, retailers that ignore digital content risk missing sales and growth opportunities not only today, but in the future. BI Intelligence estimates that between 2013 and 2018, online grocery sales will grow at a compound annual growth rate of 21.1 percent, reaching nearly $18 billion by the end of 2018. PG: How do photos and product information come together in digital content to enhance sales, and how is digital content different from a traditional weekly circular? SS: Quite simply, grocers won’t get traction on their digital efforts if they don’t have appealing photos and product information available on websites and mobile apps. Digital content — including photos and informative copy — infuences shoppers’ product research, shopping list creation and, ultimately, in-store purchases. Reaching consumers today is about being present where they are. That should include both digital touch points and more traditional methods, such as weekly circulars.

PG: What are some key things to keep in mind when deciding on product images and information for digital platforms? SS: Remember that today’s shoppers have high expectations, especially when it comes to the availability of and access to products that they research online. Grocers need a strong foundation of digital product content to ensure that consumers can fnd the information they need quickly. That foundation should include web-ready images; nutritional information, including ingredients, allergens, calories/fat per serving; and other relevant product or consumption information. Engaging copy that describes a product’s attributes and benefts is pivotal. To build this content foundation, retailers must obtain comprehensive, accurate and up-to-date product images and information from product content providers and/or their CPG suppliers, and ensure that content is delivered in formats compatible with the retailer’s systems. PG: What are some benefts to working with a digital content provider? SS: A content partner helps retailers create, maintain and distribute digital product images and information. This allows retailers’ internal teams to perform their jobs more effciently, by having the right content in the right formats specifc to the content’s end use. At the same time, by ensuring the content is available for the retailer to make accessible to the shopper, a product content provider can help retailers build shoppers’ trust and loyalty and support a retailer’s goal of increased sales and operational effciency. For more information, visit www.gladson.com.


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The ‘shopping cart of the future’ has attracted a wide array of concepts. By Bob Ingram

T

he humble, ubiquitous shopping cart is something most shoppers — and many retailers — take for granted, yet while these wheeled enablers scoot through supermarket aisles, there are creative forces at work on the next generation, the so-called “shopping cart of the future.” In addition to already established shopping cart manufacturers, sources as disparate as an eighth-grade student and the U.S. Department of Agriculture are diligently conceptualizing their own versions of these supermarket mainstays. Last July, the USDA released an 80-page report aimed at the 42 million Americans receiving SNAP benefts (formerly food stamps) in an efort to “nudge” them into healthier eating. Among the report’s suggestions were talking shopping carts, called “MyCarts,” which would be color-coded, physically divided by diferent food groups, and outftted with a system that detects when the cart reaches its healthy “threshold,” congratulates the customer and notifes them

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that they qualify for rewards like movie tickets or discounts. Te USDA estimates that the cost would be $30,000 per store for MyCarts. If that holds true, a retailer like Cincinnati-based Kroger, with 2,625 locations at most recent count, would need to spend nearly $79 million to outft its stores with MyCarts.

Shopping or Stalking? Te most futuristic, “Jetsons”-like shopping cart of the future is the Z-Cart, designed by Mete Mordag at his Mordag Design studio, in Istanbul, Turkey. Te Z-Cart can carry both the shopper and groceries. It has storage space and a rechargeable scooter that can be optionally integrated into the main body. Te scooter features stopping lights, brakes, a small digital display to show battery level, and an accelerator ftted into the handlebars. Te user is carried in a standing position, and the cart’s main body can hold removable baskets and bags in diferent sizes, and can be expanded as needed.

| Progressive Grocer | Ahead of What’s Next | April 2015


Equipment

Shopping Carts

Image courtesy of SK Telecom

CartlEss Cart sK telecom’s smart shopper platform uses a virtual shopping cart.

thinking of the future of shopping carts, when it comes to technology, it’s really more about the grocery store of the future, which is completely connected 24/7 to the customer.” —Bill Gillespie, IBM Global Business services

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At the Technion-Israel Institute of Technology’s Control Robotics and Machine Learning Laboratory, cousins Ohad Rusnak and Omri Elmalech have come up with what they’ve termed an “autonomous shopping cart,” which others have deemed “creepy” because its 3D camera and controls actually let the cart follow the shopper around the store. In St. Petersburg, Russia, CartPay Co. has developed a cart that allows customers to pay for the goods as they go into the basket. Te buyer scans the barcodes and puts the products in the cart. Payment can be made at either the cashier or at selfcheckout without shifting and rescanning. According to CartPay CEO Evgeny Evnukov, the mobile application, now being tested, allows users to maintain shopping lists and check on expiration dates and the calories in products, and it doesn’t require additional labeling. In the U.S., Rogers, Ark.-based Mart Cart has gone electric with its entry in the cart derby. “Repeated requests from our customers for a larger, more robust electric shopping cart led us to design the Ultima to better serve their need for a more comfortable and stable electric cart,” explains Gavan Dufy, Mart Cart’s SVP of sales and marketing, of the wider 24-inch seat and high capacity cart. Dufy expects that the electric shopping cart of the future will be able to communicate more efectively with its passenger and the store about its condition and state of readiness, while also conveying useful information for an enhanced shopping experience. “We will continue to evaluate new and existing technologies to assess their viability in the Mart Cart,” he says.

Beyond the Cart South Korean tech giant SK Telecom has gone its

| Progressive Grocer | Ahead of What’s Next | April 2015

competitors one better by producing an advanced shopping system called “Smart Shopper,” a platform that allows customers to shop without a shopping cart, according to Public Relations Manager Cindy Hyungsung Kang. “Te Smart Shopper platform is one of SK Telecom’s most recent innovations, introduced earlier this year at Mobile World Congress 2015,” she says. “We plan to commercialize the platform later this year, starting with large retail chains in Korea.” According to Kang, a customer picks up a designated portable scanning device to read barcodes on items, adding them to a virtual shopping cart. Ten, at the order viewer terminal (a touchscreen device installed in several spots within the store), the customer can check and edit items in the shopping carts by placing the scanning device on a dongle (a piece of hardware that attaches to a computer and allows a piece of secured software to run). Finally, the customer walks up to the self-checkout counter and touches the device to confrm the selected items, get the total amount owed and make a payment. Te purchased products are then home-delivered at a convenient time. Te platform employs near-feld communication (NFC) technology to access customer purchasing data such as product information and special ofers on devices located within the store and through customers’ smartphone applications, according to Kang. In addition, a variety of in-store promotions are made possible through BLE (Bluetooth lowenergy) technology and beacons. “For the retailer,” notes Kang, “Smart Shopper will not only enable them to reduce the size of their stores, but also relieve them from holding large stocks in stores, which equates to improved efciency and bottom lines. In the future, for low-involvement consum-


The Youngest Innovator

able products, we expect virtual stores only showcasing sample products to replace physical retail stores.” Back in 2004, IBM introduced what it called a personal shopping assistant, the Shopping Buddy, which has a web-style screen with a variety of display options such as sales items or a list of products bought most frequently. A location-tracking system monitored through ceiling-monitored beacons enables the retailer to pinpoint shoppers’ locations and deliver relevant real-time information as they move through the store. “While the Shopping Buddy doesn’t exist as it did when we originally announced it,” says Bill Gillespie, grocery lead for IBM Global Business Services, in Armonk, NY, “it has evolved into solutions with a focus on helping our clients create personalized, individual shopping experiences for customers using cloud, analytics, mobile and social technologies.” Continues Gillespie, “Tinking of the future of shopping carts, when it comes to technology, it’s really more about the grocery store of the future, which is completely connected 24/7 to the customer via technology that simplifes and personalizes the shopping trip for each individual customer.” He asserts that, for a physical store, it’s not necessarily about the store itself, but how a retailer

Melissa Feingold, an eighth-grader at the Academy of the Lakes, in Land O’Lakes, Fla., took top honors at the University of South Florida Young Innovator Competition in February 2014 for her invention, “Shopping Cart with Tech Functions.” “The idea came to me as I was shopping with my family at Thanksgiving,” she recalls. “The checkout lines were so long, and everybody was holding long paper lists of what they needed for their holiday dinner. “My Fast Lane Shopping Cart has a software application that you can log into to manage all your shopping,” she continues. “The application also records what items you place in the cart and totals your bill so you can check out right on the application. You can upload lists and recipes, and the application can tell you if you’re missing anything. It can also review the items in your cart and make recipe suggestions, and even notify you of any items that cause allergies.” Now a high school freshman, Melissa also loves singing and sports, and has a second-degree black belt — to go with her first-degree “conveyor belt” in shopping carts.

brings together the entire shopping experience for a consumer through mobile technologies, with a main focus on creating personalization. Tat seems to be the thrust of most shopping carts of the future, but only time will tell. PG

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April 2015 | progressivegrocer.com |

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Food, Beverage & Nonfood Products

Protein Power

“With 36 percent of consumers using meat alternatives, we’re excited to offer more delicious, healthy plant-based options packed with flavor and protein,” Brad Lahrman, director of marketing at Lightlife, says of the company’s latest offerings. Lightlife’s new Smart Patties in Original with Quinoa and Black Bean varieties, along with Harvest Apple Smart Sausage, are designed for anyone reducing or eliminating meat from their diets. Kosher-certified, cholesterol-free and grill-ready, Smart Patties and Smart Sausage each come in 4-packs for an SRP of $4.99. www.Lightlife.com

Reaping the Harvest

Following its successful launch in spring 2013, Harvest Snaps has unveiled a new Black Bean variety to provide consumers with additional better-for-you snack options. Emphasizing wholesome ingredients, great taste and simplicity, Black Bean Harvest Snaps, available in Habanero and Mango Chile Lime flavors, are made from whole natural black beans and designed to deliver a satisfying crunch full of protein and fiber. Suggested retail price varies by market.

Innovation with an Exclamation

Stonyfield has launched its latest yogurt innovation, Oh My Yog!, made with organic whole milk and fruit. Delivered in a three-layer format — fruit on the bottom, honey-infused yogurt in the middle and a layer of cream on top — the offering comes in Madagascar Vanilla Bean, Wild Quebec Blueberry, Pacific Coast Strawberry, Gingered Pear, Apple Cinnamon and Orange Cranberry flavors. Oh My Yog! 6-ounce containers appear in grocers’ refrigerated sections in bold, colorfully striped packaging that reflects the product’s unique format. SRP is $1.59. www.stonyfield.com

www.harvestsnaps.com

seasonal spotlight A ‘Spirited’ Collection for Moms

Moonstruck Chocolate Co. is helping consumers celebrate the exceptional women in their lives with the launch of its 2015 Mother’s Day collections. This year’s offerings, which infuse wine and spirits into signature ivory, dark and milk chocolate, include the Oregon Pinot Noir Collection, Cocktail Collection, Honey Bee Truffles, Nesting Doll Eclipse Truffles, Hiwa-Kai Hawaiian Black Sea Salt Caramels, and Wrapped Collections. Moonstruck’s Mother’s Day line has an SRP range of $6-$35. www.moonstruckchocolate.com

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Compostable Coffee

The launch of OneCoffee’s 99 percent compostable coffee pods pairs consumers’desire for more single-serve beverage options with a greater focus on environmental sustainability. Made with 100 percent certified-organic and Fair Trade Arabica coffee beans, the pods come in Breakfast Blend, Colombian Blend, French Roast, Sumatran Blend and Decaf varieties. OneCoffee’s new offerings are compatible with K-Cup coffee makers and retail for $9.99-$10.99 for a box of 12 cups. www.canterburycoffee.com

Almost Like Homemade

Clif Bar & Co. is beefing up the sports nutrition category with its new Clif Organic Energy Food, a line of pouches made from real food ingredients in sweet or savory flavors. Designed to capture the look and taste of homemade foods, each recipe contains USDA-certified and gluten-free ingredients, without added artificial flavors or synthetic preservatives. Clif Organic Energy Food is available in 90-gram pouches (sweet, SRP $2.29) and 120-gram pouches (savory, SRP $2.99) in Banana Beet with Ginger, Banana Mango with Coconut, Pizza Margherita, and Sweet Potato with Sea Salt varieties. www.clifbar.com

Skin Soothing

From the makers of Aquaphor Healing Ointment comes a new diaper rash cream formulated with zinc oxide to prevent, soothe and treat diaper rash flare-ups. Clinically proved to relieve irritation within six hours, the preservative- and fragrance-free cream is easy to apply and remove. Aquaphor Diaper Rash Cream retails for $6.99 for a 3.5-ounce tube. www.discoveraquaphor.com

Shelf Score™ — February 2015 New Product

1 2 3 4 5 6 7 8 9 10

Butterfinger Peanut Butter Cups Minis Wheat Thins Toasted Pita Prego Italian Sauce: Merlot Marinara Quaker Quinoa Granola Bars: Yogurt Fruit & Nut Kraft Macaroni & Cheese Dinner: Garlic & Herb Alfredo Van’s Gluten Free Pasta: Ultimate Cheddar Penne BelVita Bites: Chocolate Atkins Beef Fiesta Taco Bowl Harmless Harvest 100% Raw Coconut Water: Dark Cacao Mountain Dew Kickstart

source: Instantly Shelf Score

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Purchase INteNt score

77% 72 67 65 64 63 55 50 47 45


Sealed Air Honored for Flexible Packaging Innovations

Green Giant Fresh Completes Network of Herb Facilities Salinas, Calif.-based Green Giant Fresh has completed its national network of fresh herb-packing facilities, extending the supplier’s ability to deliver premium herbs around the country from certifed local and regional farms. “Tese strategic locations mean better efciencies and shorter lead times, adding to the products’ shelf life, retailer profts and consumer satisfaction,” says CEO Jamie Strachan. “Our local and regional certifed farms supply local herbs when possible, and draw from common regional farms to deliver year-round supplies.” In addition to its original herb farm near Chicago, Green Giant Fresh packs and ships its line of 15 farm-fresh herbs from Saco, Maine; Miami; Dallas; Los Angeles; and Salinas, Calif. greengiantfresh.com

Elmwood Park, N.J.-based Sealed Air’s Food Care Division received Flexible Packaging Achievement Awards for two packaging innovations on March 3 at the Flexible Packaging Association’s 59th annual Achievement Awards and Innovation Showcase, during FPA’s annual meeting, in Naples, Fla. In the retail category, Cryovac Darfresh on Tray received the Highest Achievement award. In the Technical Innovation and Sustainability categories, Cryovac Freshness Plus won Gold awards. “Te Cryovac technology behind both Darfresh on Tray and Freshness Plus is an excellent example of packaging designed with the latest consumer-driven food trends in mind,” says Sean Brady, Sealed Air Food Care’s director of marketing. Combining a pre-made tray system with vacuum skin, Darfresh on Tray extends product shelf-life, reducing food waste. Tis packaging solution eliminates flm scrap to ofer a more environmentally friendly alternative, using 40 percent less material than other available tray skin oferings. Te Freshness Plus odor-eliminating materials help extend shelf life and reduce shrink by protecting foods’ aroma profles. Te unique active packaging technologies pull odors away from the food to maximize product favor, color and quality, while eliminating and reducing the need for additives or preservatives. www.sealedair.com/foodcare

Cooking Oil Management Goes Mobile with RTI Foodservice operations in supermarkets, hotels, casinos, airports, hospitals, educational institutions and malls can take advantage of a new mini portable oil solution from Minneapolis-based Restaurant Technologies Inc. (RTI). Te mobile oil-management system conveniently fts the needs of commercial kitchens that are hauling fryer oil long distances from one kitchen to the next, or from the kitchen to a loading dock, to dispose of used cooking oil. Te RTI Mini-Portable Oil Solution holds up to 300 pounds of fresh and 300 pounds of used cooking oil. At 52 inches long, 25 inches wide and 53 inches high, the compact container can move easily across kitchen foors and ft comfortably in small spaces. Te closed-loop system takes care of oil storage, distribution to the fryers, handling and disposal. Te complete system comes with all of the hardware, software, installation, training and support services needed to easily automate oil management, at no upfront cost. It allows for automatic fltration of fryer oil, improving food quality while reducing oil waste. Te system eliminates oil spills in kitchens or the need to manually lift and haul oil from one area to the next – reducing strains, slips, falls, burns and associated workers’ compensation claims. From an aesthetic standpoint, kitchens look cleaner and more professional without open, unsightly containers of used cooking oil. www.rti-inc.com

Clear Springs Eyes Sales Force Realignment, Expansion Buhl, Idaho-based Clear Springs Foods will create a separate retail sales division to accommodate increased rainbow trout production. Te company’s domestic production has risen by 30 percent within the past three years, due to farm acquisition and production efciencies, further augmented by Chilean rainbow trout sourcing, with which Clear Springs has enjoyed a 14-year strategic partnership. Te realignment will enable Clear Springs to service foodservice and retail customers separately. clearsprings.com

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Columbus Foods Appoints Two New Executives Hayward, Calif.-based premium deli meat purveyor Columbus Foods has made two leadership appointments aimed at strengthening the company’s brand-building capabilities as it approaches its 100th anniversary. Joe Ennen, formerly SVP in charge of Safeway’s exclusive brand portfolio, was named president of leading sales, Ennen Fox marketing and human resources. He’ll assume the company’s leadership position when current CEO Timothy Fallon retires at the end of 2015. Ennen brings more than 20 years of food and CPG industry experience to his new role; he was group VP at PepsiCo’s Frito-Lay division, managed the Healthy Choice business as VP and GM for ConAgra Foods, and spent nearly a decade with the Kellogg Co. in the states and abroad. Michael Fox takes on the newly created position of SVP of marketing and innovation. Fox spent close to a decade at PepsiCo, working on the Stacy’s, Doritos and Cheetos snack brands; and was a VP at Safeway, where he advanced the O Organics, Open Nature and Eating Right brands. www.columbussalame.com

CandyRific Promotes Clark Taylor to VP of Sales Louisville, Ky.-based CandyRifc has promoted Clark Taylor to VP of sales. Taylor, who has been with CandyRifc for the past three years, has been instrumental in bringing a new perspective to sales operations and in the implementation of a new long-range planning direction for the company. “Clark’s new role will help CandyRifc accelerate our focus on customer-centric products, and a more tailored approach to the licensed sales of our existing and future new partners,” says Rob Auerbach, the company’s president. Prior to his promotion, Taylor worked with CandyRifc’s western region and several of its national accounts in a sales and marketing role. He has worked for more than 30 years on such brands as Pez, Del Monte Foods, Shikai Natural Products and Dow Consumer Brands. www.candyrific.com

Black Gold Farms Expands Potato Production, Packing Capabilities Grand Forks, N.D.-based Black Gold Farms recently acquired the legacy potato production operation George Wood Farms, located near Camden, N.C. Production will consist primarily of chip stock potatoes, and will also include fresh red, yellow and white potatoes. Te on-site packing facility has the capability to pack poly and paper as well as tote and bulk capacity. “Tese changes will allow stronger service to our customers by reducing risk through greater geographic diversity,” says Matt Wood, partner at George Wood Farms. “Te result is a more sustainable organization for all of our team members and customers.” Longtime George Wood Partner and Manager Jimmy Harrell will remain the leader of this operation, assisted by Black Gold Group Manager Chris Hopkins. www.blackgoldfarms.com

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Earth Renewable Technologies Debuts EarthBottle Brevard, N.C.-based Earth Renewable Technologies launched EarthBottle, a plant-based packaging solution touted as a responsible and sustainable alternative to petroleum-based plastics, on March 6 at Ingredea, in Anaheim, Calif. Suitable for natural products, personal care products, pharmaceuticals and household goods, EarthBottles claim to be comparable or superior to HDPE and PET in most key parameters. “Our product is a versatile plant- and mineral-based solution for brands looking to meet the demands of end users with packaging options that respect our resources and protect our earth, at a cost that may be comparable to what they are using now,” says Owen Schultz, VP of new business development. Boasting a sustainable cradle-to-cradle footprint, EarthBottles are made using plant-based materials without toxic plasticizers or fossil fuels and are recyclable at facilities that accept #7 plastics. In addition, during the decomposition process of the biopolymer, no chemicals or hazardous materials are leached into the water or land, but instead vital minerals and antioxidants are returned to the earth. www.earthrenewable.com


advertiser index Agro America Anchor Packaging Anheuser-Busch Inc. Beiersdorf, Inc Blount Fine Foods Butler Home Products California Avocado Commission Camber Pharmaceuticals Campbell Soup Company Candle Lite Carrs Foods International CH Robinson Charles & Alice Coca Cola NA Conagra Foods Creekstone Farms Del Monte Fresh Produce Delizza Inc. Domino Foods ECR Software Corporation Elkay Plastics Energizer Personal Care

95 44, 45 Inside Front Cover 122-123 4, 5 149 104 52-53 87 151 56 135 26, 27 23 57 68-69 100-101 75 21 131 39 65

Ferrero USA Inc. Cover Tip Forte Product Solutions 25 Fresno Food Expo 125 General Mills Inc 12, 13 Gladson Interactive Services 140, 141 Goya Foods Inc 6 House-Autry Mills, Inc. 49, 61 IT Retail 137 International Dairy Deli BAK / IDDBA 43 Jelly Belly 63 Kelloggs Company 33 Limoneira 96 Louisiana Seafood Promotion and Marketing Board 47 Loving Pets Products 147 Mars Chocolate NA 51, 155 Mason Ways Indestructible 136 McGladrey 37 Milk Pep 15 MOM Brands 51, 107-114 Musco Family Olive Co. 119 Nature Sweet 102 Nepa Carton & Carrier Company 133 Nestle Nutrition 17, Insert Pfizer Consumer Health 29 Placon 93 Pompeian Olive Oil 78, 79 Robbies Flexibles 103 Sandridge Food Corporation 89 Save-A-Lot 3 Sticky Fingers Bakeries 59 Tabletops Unlimited Back Cover The Fremont Company 73 The Hershey Company 11 The J.M. Smucker Company 9 The Wine Group 105 Trimino 145 Trion Industries Inc. 18, 19 Turkey Hill Dairy 41 TW Garner Food Co 71 Tyson Foods 82-83, 85 Well-Pict, Inc. 99 Wholesum Family Farms 97

www.onebananas.com www.anchorpac.com www.anheuser-busch.com www.eucerinus.com www.blountfinefoods.com/buildsales www.thebutler.com www.avocado.org www.camberpharma.com www.campbellsoup.com www.candle-lite.com www.stpierrebakery.com www.accelerateyouradvantage.com www.fruitfriends.com www.coke.com www.conagrafoods.com www.creekstonefarms.com www.freshdelmonte.com www.delizza.us www.dominosugar.com www.ecrs.com www.readychefgobags.com www.energizerholdings.com/en/brands/ Pages/default.aspx www.ferrerousa.com www.forteproductsolutions.com www.fresnofoodexpo.com www.generalmills.com www.gladson.com www.goya.com www.OurHouseGF.com www.itretail.com www.iddba.org www.jellybelly.com www.kellogg.com www.limoneira.com www.buy.louisianaseafood.com www.lovingpetsproducts.com www.effem.com www.masonways.com www.mcgladrey.com www.milkpep.org www.mombrands.com www.olives.com www.naturesweet.com www.nepacartons.com www.nestlenutritionstore.com www.Nexium24hr.com/routine www.placon.com www.pompeian.com www.robbieflexibles.com www.sandridge.com www.save-a-lot.com www.stickyfingersbakeries.com www.ttucorp.com www.fremontcompany.com www.hershey.com www.pillsburybaking.com www.flipflopwines.com www.drinktrimino.com www.triononline.com www.turkeyhill.com www.texaspetefoodservice.com www.tysondeli.com www.wellpict.com www.wholesumharvest.com

Progressive Grocer (ISSN 0033-0787, USPS 920-600) is published monthly by Stagnito Business Information, 570 Lake Cook Rd. Deerfield IL 60015. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Deerfield, IL 60015 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to Progressive Grocer, P.O. Box 1842 Lowell, MA 01853. Copyright ©2015 Stagnito Business Information All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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the last word

Anticipation

A

s the frst three months of 2015 unfolded in the midst of a prevailingly fertile climate for food industry mergers and acquisitions, it was logical to presume at least a few key deals were in the works in the CPG supplier community in the aftermath of a sharp uptick in retail deal fow over the past two years. But few saw the blockbuster $46 billion union of H.J. Heinz and Kraft Foods Group brewing, the consummation of which is expected to close in the second half of the year, and which will most assuredly go down in the books as one of the most widely watched and carefully chronicled mergers for years to come. Spearheaded by the $72 billion Oracle of Omaha, Warren Bufett, chairman and CEO of Berkshire Hathaway, the resulting Kraft Heinz Co. — assuming all goes of without a hitch — promises to further dilute the U.S. food industry’s fundamental complexion, alongside what’s largely anticipated will bring about a dramatic reshufing of the center store deck, whose shelves have housed the two companies’ ubiquitous brands for decades. For retailers such as Delhaize America — which is radically transforming its center store strategy to cull irrelevant products across 80 percent of the overall category, with the goal of impacting 10,000 SKUs in its Food Lion banner in tandem with a major divisional overhaul — the advent of the merged entity would seem to be right on time. While history hasn’t always been kind to mergers of this magnitude, the preliminary prognosis for the head-turning Heinz-Kraft pact — which was reportedly inked in a record four-week timeframe from start to fnish — is a bit better than the average mega-merger introductory forecast. Even so, past history also looms large as profound uncertainty swirls around anticipated dramatic cost-cutting measures likely to transpire on the watch of majority equity partner-owners Berkshire Hathaway and 3G Capital, which are expected to hit the ground running to achieve meaningful short-term

proftability. Te majority of industry execs I’ve spoken with are betting on more upbeat prospects for product innovation, greater global synergies, increased scale and relevance both in the United States and abroad, and more efcient operations that will lower expenses and up the new conglomerate’s clout with commodity costs. Consumers, meanwhile, will largely be unafected by the transaction, for which antitrust concerns are muted in view of little overlap in the product lineups of the iconic brands’ parents. Out of the gate, Heinz CEO Bernardo Hees will take the reins of the combined global company, whose new executive team will be revealed during the transition period. Indeed, while 2014 may have been the year of retail food mergers — with still more likely on the way — 2015 could well wind up being the year of signifcant supplier mergers. “Many traditional brick-and-mortar retailers have fewer opportunities for growth, and are turning to M&A to gain market share through consolidation or enter new markets to extend their brand and reach,” notes Ted Vaughan, partner in BDO’s consumer business practice, in regard to the recently released results of his frm’s ninth annual Retail Compass Survey of retail CFOs, 59 percent of whom expect M&A activity in the retail industry to further surge this year. Indeed, as we look ahead to what’s widely viewed as open season for more acquisitions from the ranks of other center store stalwarts, the industry is clearly headed for a new phase of irrefutable evolution where further upheaval is all but guaranteed. It thus seems appropriate to invoke the lyrics of Carly Simon’s timeless ballad that Heinz ketchup used for years in its memorable TV ad campaign: “We can never know about the days to come, but we think about them anyway.” For now, anticipation will surely make us wait to see how the thick — and emphatically rich — arrangement of two legendary CPG leaders will ultimately play out. PG

Meg Major mmajor@stagnitomail.com Twitter @Meg_Major/@pgrocer

Looking ahead to what’s widely viewed as open season for more acquisitions from the ranks of other center store stalwarts, the industry is clearly headed for a new phase of irrefutable evolution where further upheaval is all but guaranteed.

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OPPOSITES ATTRACT. NEW SWEET® BAKED & SALTY COMBOS

SNACKS.

% Lift by Any Promo

% Lift by Any Display

® COMBOS BAKED SNACKS

184%

266%

1,754%

SALTY SNACKS

59%

54%

137%

Food

% Lift by Any Feature & Display

72 ct. Shipper

any promo units % lift and any feature & display % lift

Quarter

First Delivery Date

Last Delivery Date

Last Order Date

Q4 2014

12/1/2014

3/20/2015

3/13/2015

Q1 2015

12/29/2014

3/20/2015

3/13/2015

Q3 2015

6/15/2014

9/4/2015

8/28/2015


Women in A S U P PL E ME N T T O P R OG RESSI VE GR OC ER & RETAIL LEADER

Leadership

A reinvigorated Network of Executive Women is launching a new movement for workplace change


It’s Time for a New Retail Workplace

I

Women need it. Millennials want it. The times demand it. t’s time to recognize an important truth: Women are the key to your success. The retail, consumer goods and services industry will rise — or fall — with its women customers and employees. Women drive our business. Women make 63 percent of trips to grocery stores and make or influence 93 percent of food purchases. They are the sole or primary breadwinners in 40 percent of U.S. households with children and wield growing influence over consumer spending in the United States (and around the world). But 59 percent of women polled by Nielsen said food marketers do not understand them. That’s a problem — and an opportunity. Consider the competitive advantage that’s possible when companies’ decision-makers reflect their customer base. And, research shows, organizations with more women leaders perform better. A 2011 Quotes appearing in this supplement have previously appeared in special reports published by the Network of Executive Women.


Women’s Leadership Quiz

Q:

study by Catalyst reported that companies with three or more female board members outperformed those with no women directors. These companies saw an 84 percent higher return on sales, a 60 percent higher return on investment capital and a 46 percent return on equity in at least four of the five years analyzed.

1. Which of these statements is not true? A. Women are more likely to have high school diplomas B. Women are more likely to have college degrees C. Men are more likely to have post-graduate degrees 2. The U.S. public perceives men to be stronger than women in which of these leadership traits? A. Intelligence B. Compassion C. Decisiveness D. Creativity 3. Organizations with mostly male leaders__________________ A. Have a greater affinity with female consumers B. Are more focused on transactions C. Have a stronger financial performance D. Have more innovative and motivated teams 4. Since 2008, the share of women corporate officers in the retail industry has: A. Increased 5 percent B. Decreased 5 percent C. Stayed about the same

How did you do? The answers are 1, C; 2, C; 3, B; 4, C. Surprised? Women are more likely than men to be high school graduates and to have undergraduate and postgraduate degrees. And, according to a 2008 study by Pew Research, they’re more likely to be perceived as intelligent, compassionate and creative leaders. As a group, women leaders are more likely to prioritize relationships over transactions, according to research by The Centre for Women in Business. But the result is not fewer transactions. According to Catalyst, companies with the most women leaders had higher returns on sales, equity and invested capital than organizations with fewer female leaders.

Wired for leadership Other research shows talented women bring unique perspectives and leadership qualities to once-maledominated teams. In a 2007 study of 100 work teams across 21 organizations in 17 countries, the Centre for Women in Business at the London Business School found teams with at least 50 percent women were more motivated and innovative than those where women were in the minority, while teams with a clear majority of women — 60 percent — expressed greater self-confidence. Beyond the benefits of gender diverse teams, women are especially well suited to lead in today’s changing marketplace and evolving workplace. The Pew Research Center asked 2,250 people to name the most important leadership traits. The survey results, reported in “Men or Women: Who’s the Better Leader?”, found that women were rated as better than or equal to men in seven of eight top leadership characteristics, including honesty, outgoingness, compassion and creativity. (They tied men on being ambitious and hardworking.) Dr. Daniel Amen, author of Unleash the Power of the Female Brain (Harmony 2013) and conductor of the biggest brain-scan study ever (46,000 scans), found that “female brains were dramatically more active. Women are really wired for leadership… they really make great CEOs.” But despite the strong case for women’s leadership, women are vastly under-represented in key decision-making and leadership roles. Although there’s a general impression that women are moving up the ranks as never before, the numbers don’t bear that out. The percentage of women in officer roles in

How much do you know about the power of women and their leadership traits?

the retail industry has remained virtually unchanged in the past five years, moving from 18.5 percent in 2008 to 18.6 percent in 2013, according to Catalyst.

What Millennials Want

53% aspire

to become the leader or most senior executive within their current organization.

59% of

men would like to secure the “top job” in their organization.

47% of

women would like to advance to the top.

28

% feel their current organization is making full use of their skills.

34% of

women said they’d emphasize employee growth and development as leaders.

30% of

men said they’d emphasize employee growth and development

“Millennials are just as interested in how a business develops its people and how it contributes to society as they are in its products and profits,” said Barry Salzberg, CEO of Deloitte Global. “The business community, particularly in developed markets, need to change the way they engage Millennial talent or risk being left behind.” Source: Millennial Survey, Deloitte Touche Tohmatsu Ltd., 2015.

Women in Leadership: It’s Time

3


Women and Millennials The typical workplace with a traditional hierarchy and corporate culture, and lack of diversity among its leaders, is not only holding women back — it’s holding business back. When organizations look to diversity, inclusion and women’s advancement as major components of their strategic plans, they significantly enhance their competitive position for today and for the future. Why? Workplace changes that have long been championed by women appeal to tomorrow’s leaders, Millennials born between 1980 and 2000, too. Women want a more flexible, more collaborative, more authentic, less authoritative corporate culture; a focus on work/life balance; more opportunity for advancement; and the chance to make an impact. Millennials, 80 million strong, want the same. In a 2011 survey of more than 4,000 graduates across 75 countries by PricewaterhouseCoopers (PwC), more than half of respondents said they

About the Network of Executive Women Founded in 2001, the Network of Executive Women, Retail and Consumer Goods and Services, is a not-for-profit educational association representing nearly 9,000 members, 100 corporate partners and 20 regional groups in the United States and Canada. Network members come from more than 750 industry organizations, including grocery, chain drug, mass retailers, wholesalers, manufacturers, service providers, associations and universities. The mission of NEW is to advance women, grow business and transform our industry’s workplace through the power of our community. To support this mission, the organization provides best practices on gender diversity, career development opportunities, research, learning events and networking programs designed to advance women’s leadership in the retail, consumer goods and services industries. NEW is open to women and men, emerging leaders and senior-level executives. NEW hosts more than 100 regional learning and networking events each year and two national conferences, the NEW Leadership Summit and the NEW Executive Leaders Forum. For more information on NEW’s programs and events, visit newonline.org. To help executives transform their organizations, NEW is rolling out four new programs: The NEW Executive Institute, an intensive 12-month learning course for emerging executives which creates a safe environment for leadership exploration and deep learning at three off-site immersion sessions, a series of webinars and conference calls, one-to-one sessions with an executive coach, ongoing education and networking over a 12month period, and access to the NEW Executive Institute Alumni Support Network.

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Women in Leadership: It’s Time

preferred employers who offered opportunities for advancement, while 35 percent cited “excellent training/development programs.” Virtually every Millennial surveyed — 95 percent — said work/life balance was important to them when choosing where to work. Female Millennials, in particular, seek out employers with a strong record on equality and diversity — and employers that do more than “talk the talk,” according to the 2014 PwC report “Developing Tomorrow’s Female Leaders.” l

Founded: April 1, 2001 Members: 9,000 Organizations: 750 Corporate partners: 105 Regions: 20

NEW Career Accelerator workshops, designed specifically for leaders in the retail, consumer goods and services industry using cutting-edge research developed in partnership with the Center for Creative Leadership. Using the NEW Career Accelerator Model, team members are rated by superiors, peers and direct reports on critical career competencies and derailers. Innovation You, a webinar series led by thought leaders in career advancement. In eight one-hour webinars, industry professionals will learn dynamic ways to control their career path, build a personal brand, navigate pitfalls and better manage work-life balance. The webinars may be viewed live or recorded, and are offered free for NEW members. Nonmembers may view webinars at $99 each. Multigenerational Leadership, a series of six webinars designed to help every leader or aspiring leader — from Millennials to Boomers — manage today’s multigenerational workforce. The course — led by Sarah Sladek, founder of management consulting firm XYZ University — deep dives into the unique buying habits of Millennial consumers and the 2020 work environment. These webinars also may be viewed live or recorded, and are offered free for NEW members. Nonmembers may view webinars at $99 each.


ADVERTORIAL

Talking with…

Lisa Walsh,

Senior Vice President, Sales and Marketing, Frito-Lay North America, a Division of PepsiCo

Q: A:

How would you characterize the gender achievement gap in the retail/consumer goods industry?

Today, women control 70 percent of household spending and they make or influence 93 percent of all food purchases, while taking 63 percent of all trips to the grocery store. Yet the majority of decision-makers in our industry continue to be men. Although more women have entered the workforce, women continue to be underrepresented in top leadership roles. According to research done by Catalyst in 2012, women accounted for less than 15 percent of executive officers and less than 17 percent held board seats for Fortune 500 companies. The numbers are striking and unfortunately they highlight the fact that we are not seeing a material shift toward equality in the executive ranks, even though research shows companies with more women in leadership roles outperform less diverse companies. I believe that the challenges surrounding female retention and advancement in our industry need to be addressed if companies are going to be poised for long-term, sustainable growth. We need to change corporate culture, we need to break organizational barriers and we need to involve males as partners in the journey. We need to have leaders set the example and we need to transform the workplace for the future. Only then will the gender achievement gap start to shrink.

Q:

The Network of Executive Women found that workplace initiatives long championed by women (flexibility, career development, the opportunity to make a difference) are also desired by Millennials. How might this intersection change our workplaces?

A:

Millennials, now in their 20s and 30s, are 80 million strong and will become the majority of our workforce this year. They are confident, independent, connected and diverse. Moreover, Millennials share the same workplace priorities as women. Namely, they want balance between work and life. They want a flexible work environment. And they want to

make a difference. When you create a workplace that attracts and retains women, you create a workplace that attracts and retains Millennials, too. Given the impact that Millennials are having, it is clear that we need to address diversity and inclusion challenges head-on, or risk that they migrate to other companies, leaving our industry with a massive talent void. Just look at the tech industries that are successfully recruiting out of the top schools — they empower their workforce to work when, where and how they want. They create a workplace that is fluid, dynamic and unstructured. And they take risks in charting new ways of doing things while challenging the status quo. We are competing for the same talent so evolution is a ‘must do’, not a ‘nice to do.’

Q:

Last fall, NEW published a report on the status of multicultural women in the retail and consumer goods industry and the career challenges they face as women and as people of color. Why should this “double bind” be addressed?

A:

We’ve been speaking about solutions that affect women as a whole — but women come from all backgrounds — 36 percent of U.S. women are multicultural and they comprise nearly 12 percent of our managerial workforce. These numbers are growing fast. Still, the wage gap between white women and nonwhite women is as big or bigger than the wage gap between women and men. Multicultural women have different workplace experiences and career challenges related to both gender and race/ethnicity. But companies often do not recognize that there are differences that need to be acknowledged and addressed between non-white and white women. The same is true for young and old, black and white, Hispanic and Asian, native born and immigrant, gay

and straight. The tapestry of women in our industry is vast and we need to be mindful of that so we develop programs and solutions that benefit everyone.

Q:

How has being a mother impacted your career and the work/life choices you’ve made?

A:

One of the reasons I am so passionate about diversity is because I am a mom. I have a son and daughter and my hope is that when they enter the workforce they don’t see a difference in gender. My daughter sees me as an example of a successful working mom who is thoughtful of the choices she makes for both her family and her career. My son sees a strong, independent woman who isn’t afraid to have a voice and provide for the family. My kids also have a strong father figure who stays home to do the homework, coach the teams and manage the household. One isn’t more important than the other, both roles need to work successfully… and gender isn’t a factor in who assumes which role. As a working mom I make choices every day about work/life….I know that I will not make every school event, but I also know which ones are critical. Declaring what is important and then being visible and transparent about it is critical as a leader. I also realize, however, that others have not been as fortunate as I have been. Research shows that working mothers are often penalized on a host of measures, regardless of hours worked or commitment to their careers. They are offered lower starting salaries, are less likely to be offered training opportunities and often are not supported for leadership roles. Eliminating bias against mothers and instituting familyfriendly benefits and work arrangements is a win-win. At PepsiCo, our CEO Indra Nyooi talks about ‘bringing your whole self to work.’ Parents — female and male — should be able to embrace that role both inside and outside of the office. There are lots of things you can outsource, but you can’t outsource being a parent.


Behind

6

Women in Leadership: Itâ&#x20AC;&#x2122;s Time


the Gender Gap Everyone says they support women leaders. So why aren’t there more of them?

W

omen leaders have the insights and skills that retail and consumer goods companies need and their priorities and career goals align with those of tomorrow’s leaders — male and female. Why, then, have women fallen behind their male counterparts in pay and career advancement? The reasons are many and complex, and they start with conscious and unconscious bias embedded in today’s workplace. A 2011 survey by McKinsey & Company revealed that “deeply entrenched beliefs within corporate culture” are causing the biggest resistance to advancing women to leadership roles. Women candidates are frequently judged differently from their male counterparts when opportunities for promotion arise, the study found. A woman may be seen as too passive or too aggressive, or even more vaguely, “not right for that position” based on long-held gender stereotypes. Male executives have even admitted to overlooking a woman simply because they “didn’t know how to talk to or mentor her.” The old boys’ club continues to halt women in their tracks. Participants in Network of Executive Women (NEW) focus groups for the NEW 2020 research initiative said male leaders in the retail and consumer goods industry often devalue their contributions in meetings, disregard their requests for mentoring opportunities and are quick to take credit for women’s ideas in high-visibility arenas. Moreover, women said they are habitually excluded from informal networking opportunities, where influential decision-making takes place. “I’m the only [female] V.P. in my company,” recounted one female industry leader. “When the men went on a retreat, they accidentally emailed photos while they were away, and I thought, ‘Oh, so this is what you do without me.’ It can be lonely to be the only woman.” One problem: Too few women are advancing to Women in Leadership: It’s Time

7


roles that lead to the most senior positions. A 2011 Catalyst study found that while advancement within organizations is dependent on the receipt of projects that are “highly visible, mission-critical and international in scope,” significantly more men than women are chosen for these roles. A 2013 report by the International Consortium for Executive Development Research backs up Catalyst’s findings. Women are not typically given the risk or stretch assignments required to broaden their experience to the levels expected for entry into the c-suite, according to “Taking Charge: A roadmap for a successful career and a meaningful life for high potential corporate women leaders.” There is a stubborn assumption among many decision makers that women — especially mothers — won’t be interested in the line positions, special projects or The Network of traveling opportunities that would Executive Women help propel their careers forward. Manifesto “[To] assume that I cannot It’s time for a new take on a senior role and work beyond 5 p.m., well, I have a workplace. One nanny, and, I can,” said one that’s less rigid and female executive in the report. “I will decide where I can and more flexible. Less cannot be and how to prioritize. authoritative and I were a man, nobody would more collaborative. Ifassume that I need to get home to Less conformist and feed my children.”

more diverse. More authentic and less impersonal. NEW is creating a new model for workplace transformation. To advance women and create a workplace with no limits for everyone.

Signs of progress Some organizations are making a determined effort to break down traditional hierarchies, change the way leaders are developed and promoted and create a new corporate culture that’s more inclusive, flexible and authentic. Colgate-Palmolive Co., for example, has worked to put women into “stretch positions.” The company offers executives who cannot relocate permanently opportunities to take on shortand long-term assignments in the U.S. and abroad, allowing them to raise their profiles and broaden their skills. And at Schwan’s Consumer Brands, leaders have made a concerted effort to move women out of support functions and into line roles. “Women tend to do more staff roles,” says Diane Cooke, vice president of strategy and compensation at Schwan’s. “The challenge is getting

8

Women in Leadership: It’s Time

women to move into those line positions, getting them onto the track that would lead them to the CEO role. Whether it’s by choice that women are not taking risks, or that it’s corporate perception that women don’t want to take risks, I’m not sure.” Change will not happen overnight, and not without a corporate-wide commitment to change. At Hallmark Cards, a three-pronged approach to diversity is taken: developing products that are relevant to a broad range of consumers, recruiting talent from many backgrounds and creating a work environment that makes the best use of each individual’s talents. Hallmark’s Diversity and Inclusion Council has developed initiatives that appeal to all employees, including several specifically focused on women. Its employee resource groups (ERGs) provide opportunities for employees to learn about different ethnicities, cultures, religions, generations and sexual orientations, while offering personal and professional mentoring and networking opportunities. The ERGs are a resource for Hallmark’s research, marketing and product development teams, providing cultural insights and understandings. And, mindful that employees have multiple stressors at home and at work, Hallmark supports work-life balance and makes it a central part of the company’s recruitment, retention and employee satisfaction programs. The company offers flextime, job-sharing, part-time, telecommuting, remote working and other flexible work options where possible. It also provides up to six months of parental leave to new parents and financial support for adoption. To support working mothers who are nursing, Hallmark provides private lactation rooms, electric breast pumps and refrigerators. To further help employees juggle work and home responsibilities, the company has established relationships with a number of local agencies to connect employees to childcare, eldercare, pet-sitting and other services and organizations. “As a working mother of two boys, I know how critical it is to have flexibility in the workplace,” says Hallmark National Sales Director Sharon Belto. “Continuing a career would have been virtually impossible without it.” l


ADVERTORIAL

Talking with…

Deborah Rosado Shaw,

Senior Vice President, Chief Global Diversity and Engagement, PepsiCo

Q: A:

Why is developing and advancing women a good business?

The need to support and advance women in the work force goes beyond good business strategy. If we don’t make this a priority, I believe the stability of the global economy and the future of our family households are at great risk. Today women represent nearly half of our industry’s workforce and control roughly $20 trillion of consumer spending. In addition, a 2014 report from the White House Council of Economic Advisors shows that women are completing college and graduate school at higher rates than men. When combined with longer life expectancy rates than men, we have a confluence of events that represent a “perfect storm” for our industry. Yet women continue to be underrepresented in management and executive levels. Fewer than 5% of CEOs are female and women only represent 19% of those serving on corporate board of the S&P 500. The disparity is even greater for women of color. This is particularly concerning, as women of color will represent the majority of the U.S. female population by 2050. Not addressing these disparities will ultimately hurt the industry’s ability to attract and retain the best talent. Without representation and active engagement at senior levels in the consumer industry, we lack understanding of women’s needs along their life cycle and we miss opportunities to innovate and design products and services that appropriately and respectfully address this growing market.

Q: A:

How would you characterize your own company’s efforts to advance more women to senior roles?

As a company doing business in more than 200 countries and territories, diversity and engagement (D&E) is integral to everything we do. Performance with Purpose is our commitment to deliver sustained value, which can’t be done without engaging the collective intelligence of our talent. Our commitment to D&E has made

our company a strong and attractive place to work by building a diverse, inclusive and engaged culture with a workforce reflective of the consumer base in our local markets. PepsiCo’s goals and initiatives reflect a desire not only to include, but also to support and engage women at all levels of our operations. This is accomplished through a three-pronged approach that includes promoting gender diversity in the workplace, advancing female leadership through corporate sponsorships and empowering and educating women and girls through the work of the PepsiCo Foundation. As the percentage of women in the workforce increases, PepsiCo prepares to meet the challenges of hiring new talent, assisting women with re-entry into the workforce and building skills capacity of female associates through local customized programs. Regional Diversity & Engagement Councils assist in identifying local challenges and work with those teams to build solutions. Female associates at PepsiCo can take advantage of a number of mentoring programs to help advance their careers. From the front-line to executive positions, we provide functional and leadership development opportunities. We also offer functional development through our online courses on PEP University that offer greater flexibility for women to customize their training programs. Leadership Investment For Tomorrow (LIFT) is an 18-month leadership/ talent-development program that provides women of color with access to direct executive mentoring. Participants focus on development, network acceleration, career advancement, executive awareness, and career strategy. The Women’s Inclusion Network (WIN), one of PepsiCo’s most powerful

and active Employee Resource Groups, elevates women internally and in the community by encouraging members to share their personal and professional experiences and network to support business initiatives. The learnings from this spectrum of programs and initiatives allows the company to “lift and shift” best practices to better address women’s issues worldwide. And we are seeing results. In the United States, 31 percent of PepsiCo’s executives are women. While the company is proud of this progress, PepsiCo remains focused on supporting the advancement of women to achieve even greater gains.

Q:

In what ways must today’s corporate policies and culture change for companies to leverage the best talent, regardless of gender?

A:

We all want gender equality in opportunities and pay, and this can be achieved if we deploy a holistic approach to analyzing and developing solutions. I believe it begins with developing a mindset to reduce unconscious bias so we can truly harness the collective intelligence and passions of everyone. Working together we can identify new challenges and solutions in our ever-complex multicultural markets. For example, can we leverage technology across the enterprise to provide f lexible work arrangements to women of all levels? At PepsiCo, the men on our leadership teams are aligned on policies and processes that help create a workforce that mirrors the markets in which we operate. They demonstrate this through leadership in community and leveraging the many programs we offer. Although new in my role as Chief Diversity Officer, I have been affiliated with PepsiCo for more than 14 years as a former Ethnic Advisory Board Member. I am excited to work with our leaders to help usher in this new era of engagement and emphasis on women as part of our on-going legacy of diversity.


It’s Time to Leverage Multicultural Women Commit to, and embrace, cultural diversity.

N

ot so long ago, diversity was seen as black and white, male and female. Little attention was paid to the extraordinary experiences, contributions and career challenges of multicultural women. This has created an achievement gap that persists. Not only are multicultural women underrepresented in the retail and consumer goods industry’s leadership, their unique challenges are not being addressed — something we have to do if we’re to achieve a workplace with no limits. Multicultural women face two career challenges, as women and as persons of color. Company policies and corporate cultures that ignore those challenges and the unique contributions of multicultural women are doing the women and the company a disservice. “We are seeing a big difference in performance between companies that are more diverse and those that are more insular,” says Valerie Lewis, assistant vice president, assistant secretary and senior corporate counsel for Safeway Inc. Indeed, while industry leaders have been talking about the importance of the multicultural consumer for the last decade, no real progress has been made advancing multicultural women to senior roles. As a result, most retail and consumer products companies are not fully benefitting from the rich diversity of thought these employees offer. Last year, NEW released the “Tapestry” report, based on research; interviews with industry leaders; and an online survey exploring multicultural women’s advancement opportunities, the workplace experiences of women and men

10

Women in Leadership: It’s Time


IT’S TIME. It’s time for women’s leadership. It’s time for a movement.

It’s time for a new workplace. NEW is creating a new model for workplace transformation to advance women and create a more fexible and inclusive workplace for everyone.

Unifed Grocers has proudly served as a regional sponsor of NEW since 2008.

323.264.5200 | unifiedgrocers.com corporatemarketing@unifiedgrocers.com


ADVERTORIAL

Talking with…

Sarah Chartrand SVP Talent and Human Resources, Ahold USA

Ahold USA is a $26 billion business and the leading food retailer in the Northeast United States, with approximately 770 stores and four operating divisions: Giant/Martins; Giant Food of Maryland; Stop & Shop New York Metro; and Stop & Shop New England. Its Peapod business is the country’s leading online grocery retailer, which operates across the market areas of the company’s retail divisions and is a purely online business in Chicago and surrounding areas. Diversity & Inclusion is important to Ahold USA, which is why the company has invested in the launch of business resource groups in order to further facilitate the connection and collaboration between people with a common affinity. Sarah Chartrand, the SVP Talent and Human Resources, spoke to Progressive Grocer about the importance of D&I to Ahold USA, along with its women’s resource groups and Ahold USA’s strong partnership with the Network of Executive Women (NEW). Progressive Grocer: What is the history and legacy of Ahold USA’s approach to and success with diversity in its mentorship and development approaches and programs? Sarah Chartrand: We have a long and rich commitment to diversity within Ahold USA and our Divisions. In the 15 years I have been with the company, all of the senior leaders I have worked with have taken a genuine interest in embedding diversity and inclusion within our business, in everything from our management development and recruiting practices to engagement strategies, to our community partnerships. At the same time, there is a constant desire to get even better in this space, which is very exciting to me. PG: What are some examples of Ahold’s innovative ways of mentoring and developing associates to reflect the organization’s diversity of team members? How is this executed — in both different and customized ways — across your brands and stores? SC: About two years ago, the very active and energetic Women Adding Value (WAV) Business Resource Group (BRG) in our Giant Landover Division implemented a “Mentoring Circles” concept, where small groups of associates gather on a monthly basis to discuss career progression, give advice, and learn from one another. We have seen great success with this program and it was later launched in our Ahold USA Support Offices and other divisions. Additionally, we are just beginning to replicate this type of model within our ALANA/Mosaic multicultural BRG. PG: In particular, how has your relationship with the Network of Executive Women impacted or influenced programs that directly involve and benefit Ahold’s employees, and ensure strong and diverse future leadership? Can you share some examples of your collaboration/participation with NEW? SC: Our partnership with NEW is very fulfilling, both organizationally and personally. We connect the regional groups directly with our Divisional WAV BRGs, providing robust leadership development and networking opportunities for our associates. We send numerous leaders to the national conferences each year, connected to our management development program. We create opportunities for our female leaders to speak at national and regional conferences, giving them much deserved recognition and visibility within the industry. And for me personally, I have spent the past four years on the NEW Board of Directors, which has been an amazing developmental experience. As a board member, I have been able to help shape the future educational strategy and offerings of NEW, which will contribute to the growth and advancement of women throughout our industry!


How to Close the Multicultural Achievement Gap of all backgrounds, corporate practices and the role of white women and men in closing the career achievement gap. As white women make slow but steady progress into executive levels, the report revealed, multicultural women can find their upward advancement stalling out in hidden places of the organizational chart while the circumstances that hinder their movement go unnoticed. “There are folks [of color] who were superstars [at their jobs], but who are no longer with their companies because they weren’t considered for advancement,” Lewis said. “Sometimes a person of color will get feedback that sounds a lot like, ‘Gee, you are doing so well, why aren’t you happy? Look at what you have now.’ Senior management may promote one or two minorities who they are comfortable with and think we should be happy with that ‘diversity.’ However, for there to be meaningful change, there has to be a top-down commitment to diversity in all areas of the enterprise.” At PepsiCo Inc. that commitment exists and the bottom line has benefited from it. Multicultural women have helped grow businesses that may not have been developed by other employees, according to Tom Greco, CEO of Frito-Lay North America. For example, a Latina employee helped PepsiCo see the opportunity in securing the sponsorship of the Mexican national soccer team in advance of the 2014 World Cup. “We embraced the multicultural consumer and we advanced multicultural leaders who have a visceral understanding of our consumer,” Greco said. “As a result, we’re growing faster.” To create an inclusive environment, companies must recognize the differences in how women perceive the workplace and nurture a culture that will leverage the talents and traits of multicultural women leaders, rather than continue the encouragement of “covering” — which finds multicultural women feeling pressure to hide certain aspects of their lives, and feeling uncomfortable being their authentic selves at work. An African-American woman responding to the NEW survey noted the majority of high-level executives — white males — are more comfortable working with white women than multicultural women, because “[white women] were the first to break through the ceiling, and they’re what white men executives are used to [as] wives, mothers, sisters.

Here are strategies for women of all races and ethnicities for building bridges and connecting to each other: Increase your awareness of your group and your own privileges and disadvantages. Acknowledge and challenge your own biases and stereotypes. Be honest; explore the critiques and concepts you most wish to reject. Take responsibility for your own lack of knowledge about other groups of women. Read, watch documentaries and begin to educate yourself about others. Be willing to honestly and thoughtfully engage in courageous conversations, where you will hear others’ truths about you. Recognize that each group of women has something to learn and to share. Become comfortable in the roles of teacher and student. Ask for help. Give help when asked. Offer help when possible. Embrace your own power and influence. Be open to new relationships. Seek a mentor or sponsor outside the company. Source: Tapestry: Leveraging the rich diversity of women in retail and consumer goods

[Among men of all races and ethnici“We embraced ties], there’s a comfort level of talkthe multicultural ing sports, etc. Women of color just consumer and don’t have that one thing that brings comfort to the executives, so it can we advanced sometimes provide a barrier.” multicultural Respondents to the NEW survey leaders who ranked “corporate culture is not diverse” as the No. 1 reason there are not have a visceral more multicultural women in leaderunderstanding ship roles in the retail and consumer of our consumer. goods industry, proof that to leverage the diversity of thought and leadership As a result, we’re skills that multicultural women bring growing faster.” to corporate America, companies must — Tom Greco, CEO, champion cultural fluency through role modeling, policies and procedures. Frito-Lay North America “People are making progress in advancing the presence of multicultural women, but not enough,” says Rodney McMullen, CEO of The Kroger Co. “We must not be satisfied until the diversity of our workforce represents the diversity of our customer base. We have to find a way to do more and do it faster.” l in Leadership: It’s Time

13


Launching a Movement Inside NEW’s bold new campaign for women’s leadership in retail and consumer goods.

A

t this year’s FMI Midwinter Executive Conference in Miami Beach, Fla., the Network of Executive Women (NEW) launched its new “It’s Time” movement for women’s leadership and workplace change. A summary of this presentation, given by NEW CEO Joan Toth and NEW Board members Amy Hahn of Ahold USA and Lisa Walsh of PepsiCo Inc., is excerpted below. Video highlights can be found on NEW’s “It’s Time” website at newonline.org/itstime. Since its founding in 2001, NEW has been highly successful in putting women’s leadership on the industry’s agenda. We have built a powerful organization and grown to more than 9,000 members. We have helped tens of thousands of leaders. But we’ve sent these leaders back to companies that haven’t changed. The share of women in leadership roles in our industry has barely budged in the past five years. So NEW set a new course. We asked ourselves, what would it take to create a workplace where women had the same leaderJoan Toth, CEO, Network of Executive Women ship opportunities as men and everyone could be their best? We interviewed our stakeholders and industry leaders, both women and men. We conducted focus groups and surveys. We engaged more than 1,500 people in all. NEW members told us they wanted better career strategies, greater opportunity, authenticity in the workplace and work/life flexibility. Women told us they needed to develop better leadership skills, reconcile their careers and lives, and be accepted as they are at work. Senior leaders told us they were under enormous competitive pressures, that they needed to prove ROI, do more with less, and find and keep talent. These overlapping needs are the foundation of our movement to transform the workplace, win the war for talent and create a better workplace for women, men and the Millennial generation. The name of the movement is simple, direct and accurate: “It’s Time.” It’s time to adapt to the changing nation and our changing workforce, one that is half female and one-third non-white.

What you can do Changing an industry is not an easy “ask.” But emerging leaders, mid-level leaders and senior executives can all 14

Women in Leadership: It’s Time

play a part in creating a workplace with “no limits” for every man and woman. Companies that want to increase the number of women in senior roles — and reap the rewards of women’s leadership — must make gender diversity a company priority and drive home the business case for women’s leadership. Changing corporate culture means thoroughly challenging existing norms and stereotypes.

Organizations will need to:

1. Redefine leadership. Transformational leaders engage,

2.

3.

4.

5.

6.

collaborate and value employee contributions. Organizations must incorporate these “feminine” leadership characteristics into a new leadership model. Engage men. Too many existing diversity and inclusion efforts treat white men as problems that need to be “fixed” instead of partners who need to be engaged. Engage senior leaders. Companies making progress on women’s leadership share one trait: Committed executives driving change. Nurture female talent. Fair hiring practices and work-life policies are not enough. Organizations must implement robust, corporate-wide programs that move the needle on women’s leadership. Achieve critical mass. Advancing women’s leadership requires a critical mass of women in top roles — a minimum of 30 percent, according to a report published by The White House Project, a nonprofit committed to getting more women in the talent pipeline. Enforce accountability. Organizations must have targets in place that are frequently audited and revised with the goal of increasing women in senior leadership positions.

Changes such as these will not come about on their own. Women must champion women’s leadership and enroll those who have the authority to help their cause. They should take risks and advocate the work-life changes that will help create a better workplace for everyone. While women are not expected to bring about this change alone, they are far from powerless. Women can speak up and speak out; they can mentor other women and act as role models; they can demand challenging assignments, equal pay and promotions, and they can seek employment elsewhere if they do not get them. Bringing about change requires a joining together of forces, not just of women, but of all who support women’s leadership. To get started on this transformative journey, visit the NEW It’s Time website and sign the wall of leaders supporting a workplace with no limits at www.newonline.org/itstime. l


“Delhaize believes in a workplace where everyone can achieve their best.”

Linda Johnson

Corporate Director of Human Resources Delhaize Group NEW leader and member since 2009

Women leaders are the key to your success They drive collaboration, spur innovation and connect you to consumers. NEW is the authority on women’s leadership. Our learning and leadership community inspires thousands of women — and men — each year. Now NEW has a bold new vision — a workplace with no limits — and robust new learning programs to advance your women leaders, build your business and create a better workplace for all. Find out more. Join the Movement now at newonline.org/itstime.

The distinctive Network of Executive Women and NEW Logos are service marks of the Network of Executive Women, Inc.


Mary Ellen Adcock VP, Merchandising, Columbus

Christine M. Albi VP, Operations, Michigan

Philecia C. Avery VP, Pharmacy, Corporate

Katy Barclay Sr. VP, Human Resources, Corporate

Lisa M. Chenny VP, Operations, QFC

Annette Franke VP, Technology, Corporate

Monica Jean Garnes VP, Merchandising, Fry’s

Donna F. Giordano Division President, Ralphs

Penny U. Goddin VP, Merchandising, Louisville

Lisa E. Holsclaw VP, Promotional Planning, Corporate

Jayne Homco Division President, Michigan

Valerie L. Jabbar VP, Merchandising, Ralphs

Colleen Juergensen VP, Operations, Smith’s

Kathy Kelly President, Kroger Personal Finance

Laurie A. King VP, Operations, Nashville

Christina C. Lindgren VP, Accounting, Corporate

Sukanya Madlinger Division President, Cincinnati

Molly J. Malone VP, Merchandising, Corporate

Lynn Marmer Group VP, Corporate Affairs

Pamela J. Matthews VP, Merchandising, Delta

Margaret M. McClure VP, Merchandising, Corporate

Jill V. McIntosh VP, Merchandising, Corporate

Theresa M. Monti VP, Corporate Benefits, Corporate

Marnette Perry Sr. VP, Corporate

Cindy L. Rantanen VP, Customer Experience, Corporate

Natalie M. Ream VP, Marketing, Corporate

Sharon M. Sever VP, Merchandising, Mid-Atlantic

Erin Sharp Group VP, Manufacturing, Corporate

Marlene A. Stewart VP, Merchandising, QFC

Cynthia A. Thornton VP, Labor Relations, Corporate

Katherine K. Wolfram VP, Merchandising, Central

Dana M. Zurcher VP, Operations, Southwest

Ann M. Reed Martha C. Sarra VP, Customer 1st Promise, VP, Chief Ethics and Compliance Corporate Officer, Corporate

Beth Van Oflen VP, Finance, Corporate

Christine Wheatley Group VP, Secretary and General Council Corporate

Women Executives Leading the Way The Kroger Co. is proud of our women leaders, working tirelessly every day to fulfill our Customer Promise. The individual talents and collective dedication of this remarkable group of professionals are setting new standards for excellence in the food retail industry.

Profile for ensembleiq

Progressive Grocer - April 2015  

Progressive Grocer - April 2015