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SUSTAINABILITY: Regenerative Retailing & Breakthrough Innovations CONSUMER EXPENDITURES Our 74th Annual Report CPG INNOVATION Unilever & Hormel Foods CANDY & SNACKS Better-for-you builds more momentum STORE OPERATIONS The power of parking lots

FOOD, FAMILY & FUN How Food City CEO Steve Smith and daughter Katie Penny run the best stores in town

July 2021

Volume 100, Number 7

International Food Fair

fieramilano 22-26 October 2021

Adding value to taste #BetterTogether

Contents 07. 21

Volume 100 Issue 7

24 Features COVER STORY

18 Food, Family & Fun

A winning combination for Food City.



24 Sustainability: The Regenerative Retailer

Sustainability leaders are improving the planet instead of simply doing less harm.

28 36 40 44 48 58 69

Unilever Makes Sustainability Its Business Gem City Market Shines in Dayton For the Love of Local The Power of Purpose in Upstate New York Indoor Farming in Growth Mode Ocean Health Is Wealth Electric Supply Chains Are Charging Ahead




America’s Most Trusted 12 IN-STORE EVENTS CALENDAR

September 2021 13 MENU TRENDS

A Trip Through the Pacific 4


Soap, Bath and Shower Products


The Future of Impulse


Promoting Healthful School Lunches and Snacks


Contents 07. 21

Volume 100 Issue 7

8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631 Phone: 773-992-4450 Fax: 773-992-4455 GROCERY GROUP PUBLISHER John Schrei 248-613-8672



Wild Ride

MANAGING EDITOR Bridget Goldschmidt 347-962-9395

Fluctuating consumer expenditures define 2020 and continue through 2021.

SENIOR DIGITAL & TECHNOLOGY EDITOR Marian Zboraj 773-992-4405 SENIOR EDITOR Lynn Petrak 708-945-0415


CONTRIBUTING EDITORS Mike Duffy, Debby Garbato, Jenny McTaggart and Barbara Sax

How Hormel Became a Snack Company


Acquisitions, adjacencies and innovation define the global branded food company’s growth strategy. 92 SOLUTIONS

The New Normal for Snacks

The post-pandemic consumer will demand better-for-you meal solutions more than ever before.



JUNIOR ACCOUNT MANAGER-GROCERY GROUP Natalie Meehan p 773-992-4410 m 619 823-4926 ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 EVENTS VICE PRESIDENT, EVENTS Michael Cronin EVENTS DIRECTOR Karen Mahoney 952-467-8592 MARKETING BRAND MARKETING MANAGER Rebecca Martin 773-992-4407 AUDIENCE LIST RENTAL MeritDirect Marie Briganti 914-309-3378 SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES Toll Free: 1-877-687-7321 Fax: 1-888-520-3608


Bring It Home


As consumers transition from cooking for themselves at home to welcoming guests once more, the housewares category shows no sign of slowing down.






Just Outside the Box The humble parking lot has become a different kind of retail destination and hub of commerce.

100 6

PROGRESSIVE GROCER (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Single copy price $14, except selected special issues. Foreign single copy price $16, except selected special issues. Subscription: $125 a year; $230 for a two year supscription; Canada/Mexico $150 for a one year supscription; $270 for a two year supscription (Canada Post Publications Mail Agreement No. 40031729. Foreign $170 a one year supscrption; $325 for a two year supscription (call for air mail rates). Digital Subscription: $87 one year supscription; $161 two year supscription. Periodicals postage paid at Chicago, IL 60631 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to brand, 8550 W. Bryn Mawr Ave. Ste. 200. Copyright ©2021 EnsembleIQ All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.



f you had your head down the past 18 months, running stores, resolving supply chain issues, hiring staff and keeping up with e-commerce growth, you might have missed the other pandemic. The global communications firm Edelman conducts a study each year called the “Trust Barometer,” and this year it revealed an epidemic of misinformation and widespread mistrust of societal institutions. It described the situation as a rampant “infodemic,” with institutions such as business, government, NGOs and the media in an environment of information bankruptcy. Without trusted leadership sources to look to, people don’t know where or from whom to get reliable information, according to Edelman, which noted that trust in all news sources sank to record lows. While other institutions were busy letting Americans down, grocers stood tall when Americans needed them most. Throughout the pandemic, grocers earned respect and trust through millions of daily interactions in stores and online. There were bumps here and there, as the sheer volume of people served increased the odds of occasional disappointment, but nothing remotely close to lumping grocers in with the level of widespread institutional mistrust described by Edelman. Things are so bad, according to the firm, that it has launched the Edelman Trust Institute, where work with clients will include exploring ways to close trust gaps between society and institutions. Meanwhile, PricewaterhouseCoopers (PwC), the big professional services firm, has identified trust as a business opportunity, too. It revealed a three-year, $300 million commitment “to embed trust-based principles into the core of today’s and tomorrow’s business.” One aspect of its plan involves the creation of the PwC Trust Leadership Institute. Between PwC and Edelman, there’s a lot of money and energy being spent to, as Edelman CEO Richard Edelman says, “build a deeper understanding of trust and its linkage to success.” Does this topic really require a great deal of study? There’s a strong correlation between trust and success. The more you have of the former, the more you’ll have of the latter. Grocers understand this, because, when it comes to selling products that people feed their families, they have to maintain high levels of trust with shoppers and the communities in which they operate, or they won’t be operating there for very long. 8

Retailers earn trust through daily interactions with shoppers, employees and communities, but that’s not the only way. They also engage in a wide range of environmental, social and governance (ESG) activities that often go unheralded. Grocers are a force for good in ways that aren’t always fully appreciated, despite the fact that serving others is the foundation on which the food and consumables industry was built. At Progressive Grocer, we wanted to call attention to the efforts of retailers, as well as suppliers and solution providers, that make up the grocery industry’s trust ecosystem. To recognize the exceptional efforts of industry leaders in nine key ESG areas, we created the Impact Awards. This program will amplify their accomplishments, highlight innovative approaches and further inspire the industry at large to greatness. We call this approach “honoring exceptionalism.” Trust may be in short supply in other sectors of the economy and certain institutions, but that’s not the case in the grocery world. We look forward to highlighting some of the industry’s most exceptional efforts. NOTE: to learn more about the Impact Awards, visit Impactaward.

There’s a strong correlation between trust and success. The more you have of the former, the more you’ll have of the latter.

Mike Troy Editorial Director, Grocery Group



























Better Breakfast Month Hispanic Heritage Month National Chicken Month National Honey Month

National Italian Cheese Month National Mushroom Month National Potato Month National Rice Month



National Gyro Day. Provide directions on how to prepare this classic street-food sandwich at home.


National Blueberry Popsicle Day National Grits for Breakfast Day


National Food Bank Day. Present a generous donation to your preferred hunger relief organization.


National Macadamia Nut Day

Eat an Extra Dessert Day




Labor Day

National Salami Day





National Cheese Pizza Day. Gather all of the ingredients needed to make a pie at home at your instore meal solution center.

National Chocolate Milkshake Day. For a fun quiz, ask customers whether they like to dip their fries in this iconic beverage (not us!).

National Butterscotch Pudding Day. Butterscotch as a flavor is due for a resurgence, and you could help it along by touting this tasty dessert.

National Key Lime Pie Day National Pancake Day





















National Coffee Ice Cream Day

National Kids Take Over the Kitchen Day

National String Cheese Day. Market this perennial kids’ snack to carbcounting on-the-go adults.

National Corned Beef Hash Day. Remind shoppers that they can go the Dinty Moore route or they can make their own.

National Acorn Squash Day

National Cream-Filled Doughnut Day. Jelly is fine, but we’re partial to these.

National Chai Day. Spotlight this sweet and milky Indian beverage at your in-store café.

National North Carolina Day. Showcase local brands and famous dishes from the Tar Heel State.

National Date Nut Bread Day. Provide a can’t-fail recipe for this moist classic in your e-newsletter.

National Linguine Day. Crossmerchandise in the seafood department so shoppers can whip up a killer linguine with clams.

National White Chocolate Day. How many products made from this confection do you offer? Now’s the time to promote them.

National Mocha Day. Post a demo to show how to prepare the frothiest mocaccino.

National I Love Food Day. Get customers to share on social media their favorite G-rated culinary experiences.

Mexican Independence Day. This is the perfect occasion to promote foods and products from our neighbor to the south.

National Teal Talk Day. Give shoppers the information they need to diagnose and treat ovarian cancer early.

National Chewing Gum Day. Make the front end pop with a vibrant display.

International Makeup Day. Highlight all of your beauty solutions, not just in the makeup aisle, but also across the store.

National Monte Cristo Day. It might be just a fancy grilled ham-and-cheese sandwich at heart, but we wouldn’t say no to one.

Schwenkfelder Thanksgiving. This observance that dates back to 1734 is the ideal time to give thanks for hearty Pennsylvania Dutch cuisine.

Patriot Day

World Bamboo Day. Direct shoppers’ attention to all of the products you carry that are made from this versatile fiber.

National Cooking Day. Request your customers’ all-time-favorite recipes, and share them online.


Research & Analysis

A Trip Through the Pacific Asian cuisine has blown up on menus as operators embrace traditional flavors with an American twist. Michelin-starred restaurant Parachute, in Chicago, serves up Korean-style fare with some fine-dining upgrades, from its Korean fried chicken to bing bread with sour cream butter. It’s not just restaurants taking on Asian trends, however; even ready-to-eat snacks have upgraded their flavor profiles with spices and flavors like gochujang, furikake and togarashi. As we look forward to future trends, it has become evident that Asian-inspired cuisine isn’t slowing down. Centuries-old techniques and dishes are being reimagined by chefs who are trying to provide a glimpse into their family heritage or travel experiences. Bulgogi MAC stage: Inception – International markets, global independents, and fine dining. Trends start here and exemplify originality in flavor, preparation and presentation. A staple dish in Korean barbecue, bulgogi translates to “fire meat.” To recreate the dish, beef tenderloin is placed in the freezer for two hours and then sliced thin against the grain. Bulgogi marinade is a balance between sweet and savory, often made with soy sauce, brown sugar, Asian pear, garlic, ginger, black pepper and sesame oil. Once marinated, the meat is grilled, giving it a smoky flavor, and then served with rice and bonchon, small plates often paired with Korean barbecue. On 1.5% of U.S. restaurant menus

Karaage MAC stage: Adoption – Globalfoods aisle at supermarkets, casual independents, fast casual. Adoption-stage trends grow their base via lower price points and simpler prep methods. Still differentiated, these trends often feature premium and/or generally authentic ingredients. Take fried chicken to the next level with karaage, a 300-yearold Japanese dish. Karaage is a cooking technique often used for chicken, but can also be used for fish and vegetables. The chicken is cut up into bite-size pieces, and then marinated in cooking sake, ginger and minced garlic. From there, it’s coated in karakuriko potato starch and deep fried until golden brown. Traditionally, karaage is served with shredded cabbage, a lemon wedge and Kewpie mayo, a Japanese brand.

Up 37% over the past four years

Tempura MAC stage: Proliferation – Proliferation-stage trends are adjusted for mainstream appeal. Often combined with popular applications (on a burger, pasta, etc.) Japanese chefs spend years mastering the technique of tempura. This light, airy batter of flour, egg and ice water is used to coat vegetables and seafood, which are then deepfried. If you can imagine it, you can tempura it, from lotus root and shrimp to mushrooms and even onion rings. Tempura can be served with many sauces and seasonings, including matcha, yuzu salt, tentsuyu made from dashi, soy sauce, and mirin.

Menu Example Seoul Taco Korean Beef Taco Slow-cooked beef marinated with Korean bulgogi sauce. Served in two flour tortillas, topped with Asian slaw and drizzled with a sriracha crema

Sushi starts with rice — a medium-grain white variety called Japonica that has been prepared with rice vinegar, salt and sugar. The addition of raw or fermented fish, seafood, sauces, and fresh vegetables make the sushi. There are several styles of sushi, developed over centuries in Japan. On 7.9% of U.S. restaurant menus Up 6% over the past four years

On 9.3% of U.S. restaurant menus

89% of consumers know it/55% have tried it/40% love or like it

Up 3% over the past four years On <1% of U.S. restaurant menus

26% of consumers know it/15% have tried it/10% love or like it

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

Up 57% over the past year 14% of consumers know it/7% have tried it/4% love or like it Menu Example District Kitchen + Cocktail Chicken Karaage Sake soy-marinated chicken thigh, potato starch-fried, chili lime aioli, lemon

69% of consumers know it/ 52% have tried it /39% love or like it Menu Example Shibui Japanese Restaurant Ebi-Ten Soba Buckwheat noodles in broth with shrimp tempura, chikuwa and scallions

Menu Example Sushi Mazi Chirashi Seasoned sushi rice topped with eight pieces of daily fresh sashimi and caviar. Gluten- free




Shelf Stoppers


Basket Facts

Total Department Performance Latest 52 Wks W/E 5/29/21



Latest 52 Wks YA W/E 5/30/20

Latest 52 Wks YA W/E 6/1/19



Top Produce Categories by Dollar Sales Soft Drinks


Fruit Drinks

Fruit Juices

Energy Drinks

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





on all beverages, up 12.3% compared with a year ago




Latest 52 Wks W/E 5/29/21

Latest 52 Wks YA W/E 5/30/20

Latest 52 Wks YA W/E 6/1/19

Source: Nielsen, Total U.S. (All outlets combined) — includes grocery stores, drug stores, mass merchandisers, select dollar stores, select warehouse clubs and military commissaries (DeCA) for the 52 weeks ending May 29, 2021

Working from home, reduced commuting and online schooling had a direct, negative impact on many on-the-go CPG categories in 2020, yet beverage sales remained elevated throughout the entirety of the pandemic and captured almost 11% dollar growth in the latest 52 weeks, translating to an additional $6.9 billion. This comes as little surprise, since we know by now that shoppers upped their in-home consumption and stocked up on staples throughout the pandemic, but what’s surprising is that energy and soft drinks have been driving this overall growth. It seems that consumers are looking for a little pick-me-up as they work from home, and we can expect them to increase their consumption of caffeinated beverages even further as shoppers resume their pre-COVID lives, host and attend more social gatherings, and look to meet new needs with on-the-go items.”


on energy beverages, up 12.6% compared with a year ago


on sports drinks, up 6.1% compared with a year ago

—Carman Allison, VP of Consumer Insights, NielsenIQ

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


Gen Xers


The Greatest Generation





Source: Nielsen Homescan, Total U.S., 52 weeks ending May 1, 2021



on water, up 7.7% compared with a year ago

Source: Nielsen Homescan, Total U.S., 52 weeks ending May 1, 2021


Global New Products Database

Bath and Shower Products Market Overview

The soap, bath and shower product market was expected to continue its slow yet steady sales performance in 2020; however, with the advent of COVID-19, preventing the spread of germs has become crucial, fueling the demand for these products, particularly hand sanitizer and soap.

Although concerns regarding exposure to COVID-19 are easing with the administration of vaccines, usage frequency of hand soap and sanitizer isn’t expected to return to pre-pandemic levels, as the virus has embedded the importance of maintaining good hand hygiene habits.

The anxiety and loss of normalcy in today’s COVID-19 environment has also had a profound impact on consumers’ mental wellbeing, leading to an uptick in self-care shower/bath rituals.

Key Issues

After a year of heightened awareness of the importance of good personal hygiene, many consumers find it important to use hand sanitizer on a regular basis, not just during flu season or the pandemic, leading to tremendous segment growth.

Instead of showering and/or bathing less frequently as a result of the COVID-19 outbreak, consumers are more likely to say that they’re showering and/or bathing more frequently, contributing to market gains. Thanks to their strong association with health and wellness, probiotics and vitamin C are among the topcited ingredients that consumers look for when shopping for beauty and personal care products.


What Consumers Want, and Why Post-pandemic, soap, bath and shower brands can position the importance of self-care as a proactive way to stay healthy, particularly given consumers’ more holistic approach to managing their well-being and recognizing the link between mental and physical health. As consumers move through the recovery phase of the pandemic and embrace the “next normal,” secondary influencers, such as moodboosting qualities and added skin care benefits, will become important factors, along with efficacy.



ALL’S WELLNESS By Diane Quagliani

Promoting Healthful School Lunches and Snacks

However, nearly a third (32%) of parents with children under the age of 18 grocery shop online at least weekly, compared with 16% of respondents without children under the age of 18. (The IFIC survey was fielded in late March 2021, so expect these findings to change as vaccination rates increase and COVID-19 cases decline). While many children are headed back to a physical classroom, some will continue learning online or in a hybrid situation, creating the need for both brown-bag and athome lunch and snack ideas. Also, as many parents get back to packing lunch for their kids, they, too, are returning to in-person work. These time-strapped parents require speedy, convenient solutions like “twofer” dinner ideas that form the basis of the next day’s packed lunch or snack.

RE TAILERS SHOULD CONSIDER A MIXED BAG OF FACTORS. s back-to-school lunch and snack promotions heat up in July, COVID-19 continues to present retailers and retail dietitians with unique challenges, as does a less-than-stellar report card on children’s eating habits, based on national survey data.

COVID Concerns Keep Shoppers Online

As store operations transition to normal, many parents continue to feel uneasy about in-store shopping and remain faithful to online ordering, highlighting the need for retailers to strike the right balance between in-store and digital promotions. Almost four in 10, or 39%, of consumers are still concerned about COVID-19 exposure when shopping in person at the grocery store, with parents of schoolage children under 18 more likely to be concerned about exposure than those without children in that age group, according to the 2021 Food & Health Survey from the Washington, D.C.-based International Food Information Council (IFIC). Not surprisingly, more people in general are shopping online compared with last year, with parents of school-age kids doing so more often, according to the IFIC survey. In 2021, 20% of respondents Time-strapped shop online at least weekly, compared with 11% in 2020, and parents require 42% shop online at least monthly, compared with 33% in 2020.

Kids Are Failing Nutrition

On average, kids’ eating habits get a failing grade, according to the Healthy Eating Index, an overall measure of how dietary intakes align with key recommendations of the Dietary Guidelines for Americans, based on a score of 0 to (an ideal) 100. For instance, the overall diets of kids ages 5 to 8 scored 55, ages 9 to 13 scored 52, and ages 14 to 18 scored 51. Specifically, the 2020-25 Dietary Guidelines for Americans report that kids in all three age groups fall short on getting enough whole grains speedy, vegetables, and seafood, and, especonvenient solutions cially among ages 9 to 18, fruits and dairy. All ages like “twofer” dinner consume more than the ideas that form the recommended amounts basis of the next day’s of saturated fat, sodium packed lunch or snack. and added sugars. To counter this, team up with your retail dietitians to develop tasty, kid-friendly lunch and snack promotions that help fill nutritional gaps and minimize problematic components. Additionally, toss in an always needed refresher on food safety basics to keep packed lunches and snacks safe.

Diane Quagliani, MBA, RDN, LDN, specializes in nutrition communications for consumer and health professional audiences. She has assisted national retailers and CPGs with nutrition strategy, web content development, trade show exhibiting, and the creation and implementation of shelf tag programs.



Food City

FOOD, FAMILY & FUN The key ingredients of a winning combination at Food City. By Mike Troy


esidents of Winchester, Tenn., won the equivalent of the food retailing lottery in late June, when a 54,000-square-foot Food City store opened on the edge of town. The store features a bakery and a deli with premium Dietz & Watson meats, a large foodservice operation with a Blodgett pizza oven, a hickory smoker and a hot bar. A 38seat café with a fireplace is next to the only Starbucks in town, and a floral department is staffed seven days a week with a designer. The full-service meat and seafood department offers prime beef. There are large grocery and produce departments with gourmet, international and specialty


items, and a huge beer and wine section, along with a tasting station with seating. Additional features include a pharmacy, a Gas n’ Go fuel center and a drive-thru pharmacy. The new location would stand out in any market, but in a community like Winchester, an hour and a half south of Nashville, near the border with Alabama, with a population of roughly 10,000, Food City is living up to the goal of founder Jack Smith to “run the best store in town.” It’s doing so by a wide margin, as the company’s 137th store far surpasses anything offered by the limited competitive set in Franklin County.

Growth this year saw the company enter its fifth state with a new store in northern Alabama, not far from the new Winchester location, and another store planned for the company’s home state of Virginia later this year. In addition to store expansion, 20 stores are undergoing décor changes and other upgrades. Next year, Smith says that Food City plans to open six stores — four new locations and two replacements of older stores. Upgrades such as those seen in Winchester include energy-saving concepts like glass cooler doors, parking lot lights and refrigeration systems, along with motion sensors that control 100% LED lighting and an open-rafter ceiling design. “We’re a pretty modern company right now,” Smith notes with a characteristic tone of humility.

“We try to size the store appropriately to the market and the competition.” —Steve Smith, president and CEO, K-VA-T Food Stores Inc./Food City

Humble Beginnings, Bright Future

“We like county-seat towns, and this is one of our favorite prototypes,” notes Steve Smith, the president and CEO, and son of the founder. “We try to size the store appropriately to the market and the competition.” The extensive product assortment, service offering and attractive design is something that Food City, the operating banner of parent company K-VA-T Food Stores Inc., is looking to replicate elsewhere, according to Smith. “My goal is to grow our square footage by somewhere between 3% and 5% a year,” he says. “Two things happen when you meet that goal: You can continue to provide good opportunities for people in your company that are looking for growth, and we are able to fund most of our growth through cash flow.”

Food City President and CEO Steve Smith and his daughter Katie Penny enjoy themselves at the grand opening of the company's newest store, in Winchester, Tenn.

When Jack Smith was discharged from the U.S. Navy and returned home to Virginia, he needed something to do. He saw an unmet need for the type of food retailing he had experienced while stationed in San Diego, and bought an 8,800-square-foot Piggly Wiggly store, along with his father, Curtis; cousin Ernest; and uncle Earl. The company grew slowly at first by acquiring other Piggly Wiggly locations until it reached 11 stores total in 1979. That was the year that Steve Smith joined the company. “The way we got our Food City name is we bought Quality Food Stores doing business as Food City in 1984,” he recounts. “We went from 11 stores to 30 stores overnight. Then, five years later, we went on to Knoxville, Tenn., and bought the White stores, which totaled a little over 40 stores, and doubled the size of the company.” He became CEO in 2001 and by 2008, a year after the elder Smith’s death, PROGRESSIVE GROCER July 2021



Food City

Prepared foods are a cornerstone of Food City's strategy, with departments in some stores accounting for 10% of sales.

Food City had opened its 100th location. More steady growth followed, and then, in 2015, Food City experienced another growth spurt when it acquired 29 Bi-Lo locations from Jacksonville, Fla.-based Southeastern Grocers, enabling it to move into northern Georgia. While Food City has achieved much of its growth through acquisition, when asked if there’s a preferred method of growth for the company, Smith responds: “It depends. If you are going into a town the size of Chattanooga, Tenn., and you need 10 locations, I would rather acquire someone. You get instant scale and people.” “People” is a word that comes up a lot during a conversation with Smith, because the company’s employee ownership model and value proposition to run the best store in town is dependent on caring associates providing top-flight customer service. Roughly 13% of the nearly $3 billion company is owned by employees, a fact that prompts Smith to share some folksy wisdom. “No one ever washes a rented car,” he says. “If you own something, you take a little better care of it. You’ve got to have the best people to run the best stores, and you have to give them the tools to do their job.”

Running the Best Stores


K-VA-T Food Stores Inc./Food City Throughout its trading areas, the Food City 16 name is synonymous with KENTUCKY NASCAR, as the retailer is a longtime sponsor of two of the 86 sport’s most popular events, TENNESSEE the spring Food City 500 and fall Food City 300 at Bristol Motor Speedway, in Bristol, Tenn. In 2017, Food City celebrated the 25th anniversary of its race sponsorships, as well as the 30th anniversary of 1 Food City Race Night. The ALABAMA company is the secondlongest-running sponsor in NASCAR history.




Just as Steve Smith assumed leadership from his father, Smith’s daughter Katie Penny is expected to one day become CEO. Such a change isn’t imminent, however. Smith, 64, says, “I love what I do and I feel good,” noting that Penney “ is learning the business just the way I learned the business.” Penny has an MBA degree, spent six years with Hyatt Hotels after graduation, and recently participated in the National Grocers Association Foundation Executive Leadership Development Program. She currently a senior staff member and management trainee. “She wants to run the company, and I want to see her run the company,” Smith notes. “And most importantly, my senior leadership team wants to see her run the company, and they are helping her.” At 31 and with limited experience, Penny isn’t ready for the top job yet if her father were to step down for some reason, but according to Smith, “That’s what Greg Sparks is here for right now.” Food City’s COO, Sparks has a wealth of retail experience and is about five years younger than Smith. Prior to joining Food City about five years ago, he spent three years as the EVP of operations at Goodlettsville, Tenn.-based Dollar General, and prior to that, spent 34 years at Pleasanton, Calif.-based Safeway in key leadership roles. Smith relishes the fact that Food City is small, nimble and family-owned, which gives it speed, flexibility and a different perspective when making decisions. “One of the best things about our company is that we are not publicly traded,” Smith asserts. “We always take a long-term view. We are able to do a lot of things that are store- and customer- friendly.” For example, he cites a piece pick program in which the company will ship a single item to a store if requested by a customer. This is operationally inefficient, to be sure, but a move that contributes to


Food City

A large selection of beer and wine and an adjacent tasting station make Food City's Winchester, Tenn., store a destination.

customer loyalty over the long run. Another example of a service Food City offers that would have been done away with years ago at a publicly held company involves a checkout process called “cashier unload.” As the name implies, Food City cashiers unload shoppers’ purchases before scanning items. John Jones, EVP and director of store operations, knows the process, currently available in 80% of Food City stores, isn’t efficient, but when asked about removing it, he says, “We’ve been a little hesitant, because we don’t want to be perceived as taking away a service.” Instead, the company is adding self-checkouts and expects to have that option in 40 stores by year end. Jones, a 41-year Food City veteran, oversees a field operations organization that consists of three divisions, each with three to four districts comprising between 12 and 15 stores. The stores are served by a single 1.2 million-square-foot distribution center near the company’s headquarters in Abington, Va., in the western part of the state. In addition to Jones and Sparks, another of Smith’s top lieutenants is Dan Glei, EVP of merchandising and marketing. He joined the company in 2014 after holding key merchandising, e-commerce and format development roles with Ahold USA and its Carlisle, Pa.-based Giant Food Stores division. Before that he was with A&P, Polaroid, Harris Teeter and Frito-Lay. “We have more fun here than any place I’ve ever been,” Glei says. What makes it fun is the freedom that comes with pur-

Food City offers a compelling produce presentation with refrigerated tables and numerous callouts for its commitment to local growers.


suing the “run the best store in town” vision that Smith inherited from his father, Jack. At the company’s new store, in Winchester, those words appear on a large sign with the likeness of Jack at the front end. “We have a simple mission statement, and I doubt we will ever have another,” Glei notes. As for Smith, he sees the benefit of being a regional operator with a fairly concentrated group of stores — 86 of its 137 stores are in Tennessee — and in having a team of senior leaders with diverse experiences. “We have a group of people that have come from different backgrounds,” he observes. “We are able to embrace new ideas and try to take the best of those ideas and meld them together.”

Stiff Competition

Being the best at anything can take many forms, but for Food City, its current interpretation of the best in food retailing involves a big emphasis on service, selection, foodservice and competitive prices. “We want to be close enough to Walmart prices where people are not going to say, ‘Holy cow, I can’t afford that,’” Smith says. “So we are very conscious of Walmart and Kroger’s pricing. We are not going to beat Walmart at what Walmart does, but we are going to be close enough that people will say, ‘I really like this store because I like its perimeter; I love its produce, fresh seafood, foodservice department; and it’s got the best wine and beer selection.’” Foodservice is easily the most compelling aspect of Food City’s store in Winchester. The expansive department, with large overhead menu boards branded as “Let’s Eat,” is the first thing that shoppers see when they enter the store and move past the Starbucks and the adjacent Jack’s Café. “Foodservice is huge right now, and it is the biggest changing part of our business,” affirms Jones. More than 30 stores have hot bars featuring a range of entrées prepared in-store, along with 36 varieties of soup that are made from scratch.

Food City’s Philosophy on Brands

Foodservice could account for 10% or more of the Winchester store’s sales, according to Smith. “We pride ourselves as much as possible on store-made products,” says Glei. The company also prides itself on a large produce department adjacent to the Let’s Eat foodservice operation. It could account for roughly 13% of sales, according to Smith. Through partnerships with local farmers, some Food City stores receive fresh-from-the-field fruits and vegetables, with many items delivered to stores on the same day they’re picked. Food City buys approximately $5 million in fresh produce from local growers. In the perimeter, both Smith and Glei are particularly proud of the full-service meat department, which features prime beef and an 18-hour freshness guarantee on grinds. After 18 hours, the product is marked down, and then, if it doesn’t sell, it’s donated. “We’ve got a great fresh ground beef program I’ll put up against anyone in the industry,” Smith says. Whether it’s fresh ground beef, prepared foods or any of the other elements of Food City’s merchandising strategy, the company’s newest retail concept compares well with the best in the industry, even if it’s a little off the beaten path in Winchester.

Food City provides grocery pickup and promotes that the service is provided by its own employees, while Instacart is relied on to execute deliveries.

National brands are an important element of Food City’s merchandising strategy, but the retailer also employs a unique approach with store brands. As part of the Elk Grove Village, Ill.-based Topco cooperative, Abingdon, Va.-based Food City offers brands that are also sold by other members, but also has its own company-specific brands, in addition to having acquired regional brands that it offers exclusively. “We are big supporters of Topco, as they are a center of excellence we can draw upon,” says Dan Glei, Food City’s EVP of merchandising and marketing. Food City store brands are sold under an extensive roster of names such as Food Club, Food City Fresh, Full Circle Market, Wide Awake Coffee Co., Tippy Toes, Harvest Club, Paws Happy Life, Evolve, Over the Top, Nostimo, Crav’n, CharKing, Misty Mountain, Flock’s Finest, b-lieve, Simply Done, TopCare, Culinary Tours, That’s Smart and Pure Harmony. In addition, Food City has resurrected some regional brands that had gone under in its trading areas, and breathed new life into them. Brands such as Kern’s Bread, Kay’s Ice Cream, Lay Meats, Terry’s Snack Foods and Moore’s Potato Chips have become household names once again, thanks to Food City’s backing. “We have a pretty good variety of regional brands,” Glei notes. In some categories, Food City may even have four separate store brands, as is the case with pasta and peanut butter, which Glei gestures to while standing in the aisle of the company’s newest store, in Winchester, Tenn. Why so many? According to Glei, it’s about customer choice. He describes the concept of SKU rationalization employed by some retailers as a strategy for not carrying the products that customers want. PROGRESSIVE GROCER July 2021



Sustainability etailing with a purpose isn’t new to CEO Chieh Huang’s company, Boxed. The New York-based digital grocer, which said in June that it would go public in a transaction that will value the company at about $900 million, has always seen itself as an environmental, social and governance (ESG)-focused food retailer since its founding in 2013. Huang recently explained that his company’s idea of ESG stewardship is to ship groceries in a single box from one fulfillment center, thereby reducing its carbon footprint. Another factor that makes Boxed an ESG-focused company, Huang said, is that in its corporate office, a majority of its employees identify as minorities. The vertically integrated retailer is also all “locally grown,” from its customer-facing front end to its proprietary technology to its highly automated replenishment operation. Boxed is just one example of how food retailers have graduated from terms such as corporate social responsibility and sustainability to the newer ESG and what’s now called “regenerative retailing.” As the world enters the post-pandemic era, everything has changed, including grocery shoppers and why they choose to shop with one retailer over another (hint: It’s not just price or assortment). To appeal to these new consumers, companies like Boxed, Walmart and other food retailers are increasingly seeing themselves as purpose-driven, regenerative retailers offering products and services that reflect demands for environmental, social and individual activism. More consumers than ever before want to understand how retailers will lead the way on healing not just the planet, but also societal problems. That’s why this issue of Progressive Grocer has a special section highlighting some of the retailers, trends and movements that are having the biggest, most meaningful impacts on the food retail industry now, from a sustainability perspective. From ocean health to community-owned grocery models to vertical farming, these innovations are creating positive changes by actively creating healthier communities, fashioning more equitable workplaces and fighting environmental damage. Last year, Walmart was the first and largest retailer to aim beyond the ambition of sustainability at the business level when it laid out its regenerative-retail strategy. The Bentonville, Ark.-based retailer declared that its sustainability journey continues, but the destination has changed.


Regenerative RETAILER By Gina Acosta


Sustainability leaders are setting a new benchmark as the focus shifts to improving the planet instead of simply doing less harm.


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“We want to go beyond sustainability to become a regenerative company dedicated to placing nature and humanity at the center of our business practices,” CEO Doug McMillon said at the time. “Restore, renew, replenish. That’s regeneration. That’s a better world.” McMillon went on to define “regenerative” as “restoring, renewing and replenishing, in addition to conserving. It means decarbonizing operations and eliminating waste along the product chain. It means encouraging the adoption of regenerative practices in agriculture, forest management and fisheries — while advancing prosperity and equity for customers, associates and people across our product supply chains. And, working with our suppliers, customers, NGOs and others, we hope to play a part in transforming the world’s supply chains to be regenerative.” For McMillon and Walmart, progress on climate, waste, nature, and economic opportunity for people isn’t enough. Collectively, we must do more, he said. “Racial equity is a necessary ingredient for the peace and prosperity of everyone,” McMillon explained. “The events before and after the murder of Unilever Makes George Floyd have renewed and deepened Sustainability our resolve to use our business capabilities to Its Business address systemic drivers of racism and be part of collective action to advance equity in this Gem City Market Shines in Dayton country and beyond. We are determined to make progress on this and our ongoing efforts For the Love of Local to make Walmart a place of inclusive economic The Power of Purpose opportunity and advancement for all associin Upstate New York ates, through our jobs and career paths, our Indoor Farming culture, our compensation and benefits, and in Growth Mode our training and education.” The National Retail Federation (NRF) recently Ocean Health Is Wealth held a State of Retail and the Consumer event, Electric Supply Chains which explored the emergence of the “citizen Are Charging Ahead shopper”: the consumer who wants retail stores to be more than just places to shop. Today’s shoppers vote with their wallets, supporting brands and stores that stand for important causes, including equity, sustainability and climate change — all of the issues that Walmart is targeting with its regenerative-retail strategy. According to the Washington, D.C.-based NRF, retailers looking to lead with purpose should focus on four key areas: socioeconomic issues (including social equity, tolerance and unconscious bias); appealing to the “citizen shopper” (retailers that stand up for social and political causes might alienate some customers, but can also create loyalty among customers who do share their values); improving omnichannel (Vivek Sankaran, president and CEO of Boise, Idaho-based Albertsons Cos., has emphasized the need for brands to shift to a quality omnichannel experience — maintaining the convenience of online shopping while continuing to provide a valuable in-store experience); and not ignoring price (consumers ranked affordability the highest among their key values). During a time when the food retail industry has been challenged in monumental ways, companies are already taking some of these specific actions to be more environmentally proactive and socially equitable. Now is the time for more retailers to adopt the regenerative-retail practices that will allow the industry to come out of the pandemic stronger than ever before. PROGRESSIVE GROCER July 2021



CPG Innovation Profile

Unilever Makes Sustainability Its Business HOW INNOVATIVE PRODUCTS AND PROCESSES AND CHANGED CONVERSATIONS WITH RE TAILERS ARE HELPING ONE OF THE WORLD’S L ARGEST CPG COMPANIES CHANGE THE WORLD. By Mike Troy nilever published its first corporate social responsibility report in the late 90s, and the London-based multinational company, with U.S. headquarters in Englewood Cliffs. N.J., has been expanding its sustainability efforts ever since. That strategy has worked: Unilever’s annual sales are nearly $58 billion, its products are sold in 25 million retail outlets in 190 countries, and 13 of its brands have sales greater than $1 billion. Playing a key role in advancing the company’s sustainability-driven growth strategy is Jostein Solheim, EVP of foods and refreshment for North America. Solheim assumed that role in 2018 after an eight-year stint as CEO of Unilever’s Ben & Jerry’s brand. He spoke with Progressive Grocer about leading with purpose, taking on big problems and having new types of conversations with retailers. Progressive Grocer: Unilever’s purpose is to make sustainable living commonplace. What does that mean for consumers? Jostein Solheim: The fundamental belief behind Unilever’s purpose and mission is that by connecting sustainability and social responsibility with our business, internally and externally, we perform better as a business and deliver better results to shareholders. The magic of our strategy is to connect the two, connect the performance of the business with a bigger mission of doing the right thing for the planet and communities. And through that leverage, we get top-level performance. If you disconnect it, it doesn’t work. The leverage comes through the engagement of the whole team, the whole community. About 2 billion portions of Unilever products are consumed every day, so we need communities that are stable and thriving. PG: How does that philosophy come to life in conversations with senior retail executives? JS: The conversation is about moving from a relationship which has traditionally been grounded in negotiation to a relationship that is more grounded in innovating together. PG: Are you structured in such a way internally that teams working on these things come together with trading partners? JS: If we start with the big picture, on the customer side and retailer side


and on our side, what we are seeing is that the silos of the way the organizations have been classically built have evolved. One simple example is our customers have become our media partners, and our marketing folks have to integrate their campaigns with the retailer’s platform. We’re getting a lot of data and information from this, which drives our innovation. We can work with our customers to look at the data and say, “There looks to be an interesting space here.” Then we bring our cross-functional team in to deliver on that in what the tech industry refers to as “agile ways of working.” PG: Are there certain areas you are focused on? JS: There are two main types of sustainability-based innovations. One is consumer-led. It’s what we are seeing with a huge trend towards flexitarianism. People are balancing out their diets and choosing to avoid some meat and dairy products, and that’s created a boom in vegan products. We see that in the ice cream category and nondairy ice cream. Ben & Jerry’s is now the No. 1 nondairy ice cream, and it’s a huge growth area. So is vegan mayonnaise, with Hellmann’s. Ben & Jerry’s nondairy has a 40% lower carbon footprint than a dairy equivalent, but it is still a fully indulgent product. That’s what I call consumer-led, where there is a trend and we meet it. The other part is what I call driving loyalty and connection with consumers. That is something like PCR [post-consumer recycled] packaging. Hellmann’s is now at 100% use of post-consumer recycled plastic. Most people don’t run around the store and look for PCR packaging, but when they realize slowly over time that it is used, people say: “This is a good company. These are people that care.” It builds loyalty. PG: And you’ve got data that validates that? JS: Ben & Jerry’s is a great example. I was CEO for eight years, and what you can see very clearly is consumers that bought Ben & Jerry’s and were aware of our initiatives were twice as loyal as the people who just thought about the brand as being good ice cream.

PG: And the trend of people caring about the sustainability attributes of brands and the companies that produce them has only intensified. JS: When I started in 2010 as CEO of Ben and Jerry’s, I was asked, “Why are you doing all this [sustainability] stuff?” Now, it’s like, why aren’t they doing it? In 10 years’ time, the situation has flipped, and the reason is because consumers care, and they feel they can make a difference by buying the products that do better for the things they care about. PG: Let’s revisit the conversations you are having with retailers about Unilever’s product innovation pipeline, marketing support, taking price and other real-world considerations of retail partnerships. JS: Phase one of any strategic discussion with a retailer today is centered around the big issues that we’ve got to solve together, be that data and insight, be that around how we optimize our investments around their shoppers, be that around how we address plastic. Even diversity and inclusion is high on the agenda. It is clearly on the retailer’s, and our interest that that shopper who comes into that store and cares about these different issues is engaged and connected around them. We’ve really moved to, how do we solve this, and what are the best ways of doing it? Let’s be also very transparent and honest that on pricing and promos, we’re sort of in the same boat as we’ve always been. We’re negotiating, we have different points of view, and we argue and we analyze and all of that. We’re still in a competitive marketplace with different pressures, and we see those sometimes differently with retailers. But it’s very different when you’re trying to solve these issues fundamentally to how do we drive engagement of the shopper in your stores and on your e-commerce platforms, and then we go to pricing and all that other stuff. PG: You hear more companies talking, as Unilever does, about being a regenerative company, and the concept of doing more good instead of less harm. It’s a very aspirational goal you have.

“Consumers care, and they feel they can make a difference by buying the products that do better for the things they care about.” —Jostein Solheim, EVP of Foods and Refreshment for North America, Unilever JS: The idea is that through your whole ecosystem as a business, can you move from being a carbon emitter to carbon neutral to carbon positive? And that’s not by using financial instruments. Are we there yet? No. A couple of big things are really tough. One is just a basic measurement. We know for a fact that we have studies and science behind the basic

practices of regenerative agriculture and its impact on soil health, and, to some extent, implied carbon sequestration. But it is another thing to measure these impacts at scale and claim them in your annual report. We are also looking at things like deforestation and reforestation. Again, how do you measure it? Those are the things that we want to solve as an industry over the next 10 years, and how we make it work economically throughout the entire supply chain. PG: That’s a challenge with a lot of sustainability initiatives. People want to recycle, but the system is fragmented and broken. JS: There’s sort of a three-step process. We are investing in the recycling infrastructure through funds and partnerships. Then we move to post-consumer recycled plastic use, and we have technology that really allows us to create as close to a clear plastic as humanly possible. And that, of course, creates a demand and a value in the recycled plastic, which allows the recycling industry to spend a bit more money sorting it, because they can sell it back to us.

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Feeding Your Shoppers — Safely & Sustainably AN INTERVIEW WITH KEVIN IGLI, SVP & Chief Environmental Officer, Tyson Foods, Inc.

As an industry leader in protein-centric brands, Tyson Foods plays a critical role in feeding the world — and that includes your shoppers. As Kevin Igli, Tyson’s SVP & chief environmental officer, told Progressive Grocer, the company takes that responsibility to heart. Here, he shares the company’s vision of sustainability — one focused on social, environmental, and economic stewardship.

Progressive Grocer: How is Tyson Foods meeting its mission to sustainably feed the world? Kevin Igli: Online searches related to food safety are the highest they’ve been since October 2020. Food safety, along with sustainability, are top-of-mind for consumers. They should be top-of-mind for grocery retailers, too. At Tyson Foods, we integrate safety, sustainability, quality, and continuous improvement at every touchpoint through the supply chain. Throughout our history, we have found innovative ways to feed people responsibly, and we’re on a journey to find new ways to do so as the world’s population continues to grow. Through our new sustainability framework, The Formula to Feed the Future, we’re thinking differently about how to solve the most complex problems and how we can partner and collaborate with a broad group of stakeholders as we aim to sustainably feed the world, together. Regulatory compliance, of course, is fundamental and continuous improvement is our focus. We take stringent measures to ensure the safety of our food, our team members, the environment, and the animals within our supply chain. We’re proud of our food safety and quality assurance (FSQA) team of more than 3,200 professionals who support operations at 139 facilities in the U.S.

PG: The beef industry has been under fire for misconceptions about issues such as greenhouse gas emissions, and nonmeat proteins have reaped the benefit. How do you counter those criticisms? KI: In FY2020, during a global pandemic, we made great strides toward accomplishing our emissions-reducing goals: • We reduced water intensity by 7.7% against a 2015 baseline year — a big step toward reaching our goal of reducing water use by 12% by 2020. • We enrolled 408,000 acres as part of our land stewardship target to influence environmental outcomes on 2 million acres of row corn crop.

We’re continuing our work with Where Food Comes From and their BeefCARE program to verify sustainable beef production practices on 5-million-acres of grazing land. We diverted almost 5.2 million pounds of waste from landfills, a 60% increase from the previous year. That moved us farther along our path toward reducing operational waste output, increasing our recycling footprint, and reusing secondary materials. We recently announced our ambition to achieve net zero greenhouse gas (GHG) emissions across our global operations and supply chain by 2050. This ambition is an expansion of our target approved by the Science Based Targets initiative (SBTi) to reduce GHG emissions 30% by 2030. A few key focus areas for achieving net zero include: › Updating our baseline for emissions to align with limiting global temperature rise to 1.5°C, consistent with the Paris Agreement, by the end of 2023. › Establishing a pathway to using 50% renewable energy across our domestic operations by 2030. › Completing our initial land stewardship target of engaging 2-million feed acres and expanding the total acres by 2025, including a total target of 100% of feed purchased by 2030. › Expanding our current 5-million-acre grazing lands target for sustainable beef production practices by 2025. › Continuing work to eliminate deforestation risk throughout its global supply chain by 2030.

PG: How is Tyson Foods addressing workplace safety, too? KI: At Tyson Foods, the health and safety of our team members is our main focus, which is why we have an ongoing goal of reducing OSHA recordables by 10% year-over-year. In FY2020, we reduced our total OSHA recordable incident rate by 17% compared to FY2019. That followed our FY2019 introduction of Exposure Reduction Coaches as part of our We Care safety initiative. These coaches are dedicated to in-field coaching and one-on-one mentoring and develop plant safety governance to identify when exposure changes and how to react. Our commitment to a more sustainable food system is a key part of our purpose: to raise the world’s expectations for how much good food can do. Sustainability is key to the future success of our company. To learn more about how Tyson’s commitment to sustainability is enhancing its product offerings, visit


CPG Innovation Profile PG: There are a lot of elements to sustainability, including the consumer piece and the in-home usage and preparation of products. How are you integrating those factors into your sustainability discussions?

“If we could get people to, once a week, open their fridge and say, ‘I’m going to make dinner out of this,’ whatever it is, we would halve this food waste problem.” —Jostein Solheim, EVP of Foods and Refreshment for North America, Unilever Now, that’s still a loop which is suboptimal. So then we try to reduce the amount of plastic we use, either through coming up with new technology or different packaging formats that are better for the environment. Then, of course, you try to reuse. And that’s an experiment which, in our industry, is tough. It is tough because if you end up shipping your container of mayonnaise and then picking it up and then cleaning it and then filling it and then shipping it, that’s burning a lot of energy. PG: And very complicated? JS: It is complicated. That’s why a lot of people say people don’t care. People care about the outcomes. They care about the fact that when they go to the beach and see plastic debris, then you see this plastic floating in the ocean, so people care about the outcomes. Sustainability companies want to brag about all the good work they do. People don’t really care about how you make the sausage. They want the outcomes. That’s what we’re focusing on. How can we make these outcomes relevant and motivational for our consumers?


JS: You have what we call scope one, two and three of your carbon footprint. Some folks that talk about how environmentally friendly they are, they talk about scope one, which is just the energy that they use themselves. Scope two is with your extended supply chain, and then scope three is everything, including consumer use. As a sustainable company, we are looking at scope three, which means we assess everything that our products create, from the freezing to the boiling of water to the use of hot water in the shower. Some of those things you can impact, and some you can’t. The key is not to get frustrated about the things you can’t, but to work with the things that you can.

PG: What’s a good example you can share? JS: The Hellmann’s Make Taste, Not Waste campaign we launched at the Super Bowl, with Amy Schumer as the Fairy Godmayo, is really clever. About a third of all the food we make is wasted, and about 40% of food waste happens at home. So how do you engage with that? Nobody wants to seem like they’re criticizing people and ourselves, so that’s where we came up with Make Taste, Not Waste. It is anchored on several key things. One is to save money. If you’re throwing away 40% of the food you bought, that’s losing a lot of money. Another is that we often open the fridge and look at what’s in there and go, “I don’t know what to do with this.” We’re doing a bunch of different initiatives around how do you take whatever ingredients you’ve got and make them into a meal? If we could get people to, once a week, open their fridge and say, “I’m going to make dinner out of this,” whatever it is, we would halve this food waste problem.

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Progressive Grocer: How did Kellogg Company’s commitment to sustainability originate? Amy Senter: It dates back to our founder, W.K. Kellogg. He was an early conservationist, a leading philanthropist and an original wellbeing visionary. The commitment to sustainability, for us, is really not about adhering to a recent trend — it’s built into our heritage and values. And today it’s epitomized in the Kellogg’s® Better Days global purpose platform. We’ve pledged to create Better Days for three billion people around the world by the end of 2030, by focusing on the interconnected issues of wellbeing, hunger relief and climate resiliency. We’re heavily invested in the initiative, targeting specific goals and tracking our progress on a regular basis. This type of sustainability pledge harks back to the very beginnings of Kellogg Company.

PG: In what ways are Kellogg products helping to sustain the planet? AS: Research shows that eating a plant-diverse diet is good for people and for the planet because foods made from plants support physical wellbeing while requiring less land and water to produce than do animal-based foods. Today, across Kellogg globally, we’re proud that 86% of the recipes for our foods are made from plants. And we’re doubling down on plant-based foods to drive our growth — in 2020, 100% of our breakthrough innovations, launched globally, were plant-based. Because of these ongoing commitments, Kellogg has been included on the Dow Jones Sustainability Index, and recognized with some of the highest honors from FTSE4Good, the Corporate Human Rights Benchmark and other notable organizations. We’ve received the highest Environmental Social Governance rating by MSCI

— the only U.S. food company to do so. As a leading cereal and snacks company, we truly embrace our role in taking care of our planet.

PG: Is Kellogg able to maintain these sustainability efforts on its own? AS: Not at all. Kellogg believes in the power of partnerships. We team up with many stakeholders, including farmers, retailers and non-profit organizations, to achieve the big ambitions that we’ve laid out. Our partnerships with retailers can help them achieve their own sustainability goals as we create effective ways to bring all this positive work to life in their stores. Customers like Walmart collaborate with Kellogg through the Midwest Row Crop Collaborative, with the goal of supporting farmers to grow sustainably and regeneratively. Others like Ahold-Delhaize help us address the critical issue of food waste. And smaller partners also share our ambitions — Niemann’s, for instance, is collaborating with Kellogg and the National Young Farmers Coalition to support the next generation of Illinois farmers.

PG: How have all these efforts affected the farming community? AS: Our work is genuinely focused on peoplecentered outcomes, especially when it comes to U.S. farmers and women farmers. These individuals are at the heart of all that we do. Kellogg is committed to supporting one million farmers and workers by 2030 — to date, we’ve already supported almost 500,000 farmers and workers! We work specifically with family-owned farms. One example is the partnership we’ve formed with Meijer stores to support farmers like Mike Milligan around Michigan’s Saginaw Bay, where we collaborate with local conservation partners who give farmers technical support to adopt soil health practices that protect the watershed. Beyond this, we like to highlight the partnerships we’ve formed with women-owned farms. Rice farmers like Meryl Kennedy in Mer Rouge, Louisiana and Jennifer James in Newport, Arkansas supply the grain for our beloved Kellogg’s® Rice Krispies. We help with innovative efforts to employ sustainable practices on these farms, and the farmers in turn take great pride in placing their ingredients inside Kellogg products.


Retail Innovation

Gem City Market Shines in Dayton A COOPER ATIVE RE TAILER DEBUTS A UNIQUE CONCEPT. By Mike Troy o one quite knows how Dayton, Ohio, came to be known as “the gem city,” but a recently opened food retailing cooperative near the city’s downtown is lending credence to the name. Following a six-year process, Gem City Market opened in May to serve a neighborhood lacking convenient access to fresh, affordable food and other amenities commonly found in stores located in more affluent areas. Gem City Market offers fresh categories such as produce and case-ready meats, a full-service deli, a community room, and a teaching kitchen with six residential style cooktops and Top: At only 15,800 square feet, Gem City stoves. The store also features a health clinic with two exam rooms, and a Above: Market is a full-service grocer with small coffee shop operating in a leased space near the entrance. numerous amenities. An emphasis on fresh produce “It all kind of works together,” says Lela Klein, co-executive director of Co-op is a key differentiator for Gem City Market. Dayton, and a Gem City Market board member. “We knew we needed to be more than just a store, so we are trying to do a lot. We have a really strong focus on fresh produce, because there’s not another grocery store within 3 miles of us that has a produce department to speak of. So that is one of our differentiators.” Gem City Market managed to squeeze all of its features into a 15,800-square-foot store, with a sales floor of 8,200 square feet, at the intersection of Salem and Superior avenues, just across the Miami River from downtown Dayton. The location has special meaning for Klein, because it’s only about three blocks from where she grew up. “My role with Gem City Market has been in partnership development financing and the — Leah Bahan-Harris, Gem City Market community-organizing side of things,” explains Klein, a graduate of Harvard Law School with a background as a labor and employment attorney. “The store was six years in the making, and there were thousands of people involved. The collaboration with AWG [Associated Wholesale Grocers], which is also a cooperative, was really crucial.” AWG and a local architect collaborated on the store design and merchandising layout in a building owned by a 501(c)(3) nonprofit, according to Klein. Additional advice was provided by Columinate, a Madison, Wis.-based national consulting cooperative focused on supporting mission-driven organizations. To keep occupancy costs low, Gem City Market obtained donated equipment and interest-free financing through tax credits. The store is owned by 4,300 people, most of whom made a donation of $100 or more.

“The store is a little small, but we have one of the best locations and serve an area of about 19,000 people. It may be small, but we have a lot of stuff here.”

By The Numbers

An outpouring of community support made Gem City Market a reality, but now the store needs to operate efficiently and generate financial returns to remain viable. The task of day-to-day operations falls to Leah Bahan-Harris,


who has the role of store manager. She oversees a staff of 30 employees, half of whom are full-time and receive an hourly wage of $14.75. Roughly 80% of the employees are local, and half live so close to the store that they can walk to work, according to Bahan-Harris. Gem City Market’s labor model is supplemented by volunteers who perform various duties around the store because they want to make a difference and see the store fulfill its vision of community impact, she adds. The store targets a profit margin rate of 1.8% to 3% by operating as a small-format full-service grocer catering to an underserved customer base. “The store is a little small, but we have one of the best locations and serve an area of about 19,000 people,” Bahan-Harris says. “It may be small, but we have a lot of stuff here.” Like Klein, Bahan-Harris spent much of her childhood near Gem City Market’s location: She grew up in the Five Oaks neighborhood of Dayton before moving to the Trotwood community northwest of the city, an area now also exploring the co-op model. “There is a group of neighbors in the Trotwood community that is already coming together and talking about could they do the same thing we are doing, and we’ve also had calls from around the country,” says Klein. “A lot of people are watching to see how it works.” Klein is also working with groups in Louisville, Ky.; Rochester, N.Y.; and Baltimore. “The cooperative spirit is really strong,” notes Klein. “We would like to help support other food-related social enterprises in Dayton, and we would love to think about expansion, but it will really be up to our community.”

Top-of-the-Line Tech

Gem City Market may be a co-op, but that doesn’t mean the store is lacking top-of-the-line technology, thanks to the generous support of leading industry suppliers. For example, Bridgeton, Mo.-based Hussmann Corp., a Panasonic company, partnered

Gem City Market store manager Leah BahanHarris (pictured on page 36) oversees a staff of 30 employees, some of whom are shown above.

with Emerson and The Chemours Co. to create an innovative and sustainable refrigeration solution. “This effort went beyond the typical supplier-manufacturer-end customer transaction,” explains Andres Lacassie, Hussman’s VP of core and distributed cases. “We were able to bring together engineers, designers, community leaders and several others to outline the needs and design a truly innovative solution that will have a positive impact.” That impact involves using equipment with all of the functionality that a modern grocer would expect from its refrigeration systems, with a lower overall carbon footprint. To do so, Hussmann assembled the overall refrigeration system, which is made of assembly components, 10 low-temperature booster systems from St. Louis-based Emerson, and a low global-warming-potential (GWP) refrigerant, Opteon XP10, from Wilmington, Del.-based Chemours. As part of the donation to Gem City Market, Hussmann also included its medium-temperature Protocol systems, refrigeration units and display cases with CoreLink micro-channel condensers and unit coolers. “Any time you can work together with some of the top companies in the industry to solve needs on multiple fronts, the results can be amazing,” says Buzz Schaeffer, Hussman’s principal engineer. “We created an environmentally friendly refrigeration solution for a store that will serve an area that needs an outlet, with options that were not previously available.” PROGRESSIVE GROCER July 2021


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Packaging That’s Better for the Planet Today’s environmentally conscious shoppers want companies to commit to carrying products made with more sustainable materials — and data shows they’ll support those that do: 78 percent of consumers are more likely to remember a company with a strong purpose, such as those that are reducing their environmental impact, and 66 percent consider a company’s purpose when making purchasing decisions1. What does that mean for grocery retailers? “Sustainable packaging makes an impact on all stages of a product’s life-cycle. Grocery retailers can make an important choice to carry brands that use sustainable packaging. They can then promote that fact, and let their consumers know why those brands are more environmentally responsible than other products on the market today,” says Lisa Huett, Sustainability Coordinator of Alpha Packaging, a leader in sustainable packaging innovation and a sustainable supplier to the grocery industry. A Look at Light-weighting One of the best ways to create a more sustainable package is by using less plastic. Optimizing packaging by reducing weight is called light-weighting — and it can save 30 percent or more plastic from entering the waste stream. “Light-weighting involves redesigning the bottles or containers to reduce the weight without compromising quality,” Huett explains. The Plus of Post-Consumer Resin Post-consumer recycled resin (PCR) is the #1 resin consumers are asking about when it comes to product packaging. What does PCR really mean? Simply put, it is material made from recycled plastic that offers the same quality and stability of virgin plastic resin. “Alpha is one of the only manufacturers that will make plastic bottles and jars from 100% recycled, PCR content, giving a second life to packages and keeping them out of landfills,” Huett says. “We only buy post-consumer resins that follow FDA-approved processes for recovery and reprocessing, so that packaging is safe for food, pharmaceuticals, beverages and supplements.” Alpha Packaging more than doubled the amount of PCR packaging produced in 2020, and current projections show PCR usage will only continue to increase in the future, Huett adds.

Compostable, Bioresins, Ocean Bound and More… Many packages make compostable claims, but caution is needed when evaluating them: Some perform very well, some are not what they’re cracked up to be, and most aren’t recyclable. “If your end-consumer doesn’t recycle your package the way you intended, it’s not providing any value. For example, many people don’t have access to industrial composting, so compostable packages often end up in a landfill,” Huett says. “Grocers can help educate consumers about what different resins really are — and what they are not.” Instead of compostable, consider a recyclable bioresin. Alpha Packaging relies on polyethylene terephthalate (PET) bioresin, which uses renewable plant sources to replace the monoethylene glycol (MEG) component of PET, and HDPE bioresin that’s made entirely from sugarcane. “Both of these resins are chemically identical to conventional HDPE & PET, providing the same quality and performance. Best of all, they can be recycled at end of life. This is a critical part of claiming a package is sustainable,” Huett explains. “The more we can reuse materials and keep them in the economy longer the better for the environment.” Alpha also recently launched an HDPE ocean-bound PCR jar and a PET ocean-bound PCR bottle made from post-consumer plastics collected from beaches, waterways and coastal areas. “We have partnerships with certified ocean-bound PCR processors who guarantee chain of custody of ocean-diverted resin, and we’re the first manufacturer in the US to launch a PET Ocean Cycle Certified PCR bottle into the nutritional space,” Lisa adds. As more consumers embrace sustainability, they’ll seek out retailers who carry products that are better for the planet. What grocers carry on their store shelves matters a great deal. “It’s a win for everyone,” Huett says. “Alpha Packaging, CPG companies and grocery retailers working together can build loyalty with environmentally conscious consumers, highlight their companies’ commitment to sustainability, help preserve the environment, and boost sales in the process.” 1

Purpose Perception: Porter Novelli’s Implicit Association Study, 2/17/2


Retail Innovation


stablished in Buffalo, N.Y., 50 years ago, Lexington Co-op opened its first store on the city’s avenue of the same name, with the motto “Food for People, Not for Profit.” In the beginning, all of the work was done by member-owners of the cooperative grocer, who had to work shifts at the store stocking, cashing and even cutting cheese. Some things may have changed since then, but not the co-op’s commitment to its principles: In 1987, it restructured to become a representative democracy, with owners investing $80 for a share, and in 2015, the board of directors unveiled Lexington’s BIG Direction initiative to bring its values to life by fostering a thriving co-op in every community that wants one. This passion for aiding the local community has endured into the present, as Progressive Grocer discovered when it connected with Tim Bartlett, general manager for the Lexington Co-op, which currently consists of two Buffalo locations — ironically, neither of them located at its eponymous first address — on Elmwood and Hertel Avenues. Progressive Grocer: What are the origins of the co-op, and why did it get started? Tim Bartlett: The co-op was founded by 31 community members in 1971. They were looking for access to fresh, organic and locally sourced foods. By combining their buying power, prices were lower, and producers could drop off in one central location. PG: What sorts of benefits do members receive? TB: The co-op is owned by 20,000 owners. Most owners join the co-op to be a part of the co-op community and support local business. Outside of the pride of ownership, co-op owners receive owner discounts on products and classes, the right to run for and vote for the board of directors, access to the curbside pickup program, and patronage dividends, distributed in years when the co-op is profitable. PG: How has the co-op weathered the pandemic? Please provide specific examples of how you had to pivot operations to keep serving your customers and community, and what the results were, financially and otherwise.


TB: In March, demand for groceries doubled overnight and crippled our national supply chain. In western New York and beyond, grocery shelves were bare. But amid the empty shelves at the co-op were full complements of items from local producers and suppliers: BreadHive bread, Upstate Farms milk, Freebird chicken, and produce from Desiderios. Most grocery chains create efficiency by having everything shipped through a single warehouse, but in a time of crisis, it was the co-op’s diverse and local network that helped to keep our community fed. Our customers responded, driving $3.9 million in purchases from local producers in 2020, a 10% increase over 2019 in spite of reduced sales. A customer favorite and co-op mainstay was our hot bar and salad bar. Here, customers could self-serve a range of items, build their own meals and salads, and purchase hot soups. When the pandemic hit, we were forced to pivot our selection to pre-wrapped and -portioned items. In June [2020], we launched our hot sandwich program out of those same hot bar areas. To date, we have sold 35,896 hot sandwiches and wraps for over $320,000. Similarly, we began to offer fish fries every Friday. These pre-made dinners could be ordered ahead and picked up in our stores. To date, we have sold 3,294. As customers opted to stock up and stay home, the co-op launched a curbside pickup program. It was a “down the road” project until the pandemic and the needs of our customers pushed it to the forefront. PG: How do you interact with your local community? TB: Whether it’s sharing our favorite crafts, skills and recipes, or partnering with the many booming businesses in our neighborhoods, we’re invested in bringing the best of western New York to our owners and shoppers. In January 2020, the co-op launched a Double Up Food Bucks program. With the help of a regional grant, the co-op offers fresh fruits and vegetables at 50% off to customers who use EBT/SNAP benefits. To date, 1,031 people have enrolled and saved nearly $70,000 on their fresh produce purchases. Growing out of customers’ requests to give back to our community, the co-op launched a Change for Change donation program. After each register transaction, customers are asked whether they would like to round up their purchase for the selected organization of the month. Through this program, co-op customers have raised more than $68,000 for local Buffalo organizations. Monthly Change for Change recipients are nominated by and voted on by staff. Since its inception, the Change for Change program has benefited every corner of our community, including food access, social justice, health and wellness, and many other causes. The co-op proudly carries prod-

“The pandemic was such a learning moment for us. We realized the true importance of having a strong local food system.” —Tim Bartlett, Lexington Co-op

One of Lexington Co-op's two locations in Buffalo, N.Y., is on Hertel Avenue.

ucts from more than 124 local vendors, including 40 farms. Local is defined as being less than 250 miles from our stores. Last year, for every dollar a customer spent at the co-op, 58 cents went right back to our local economy. Our customers purchased $3.9 million in local products in fiscal year 2020 (July 2019-July 2020). The pandemic helped to boost local purchases by more than $300,000. As national distributors were out of stock or struggled to make delivery times, our local producers were still showing up to keep our shelves stocked. In previous years, we have held in-person classes to teach canning and pie making. The pandemic forced us to host these classes virtually, and they became more popular than ever. We have added a number of classes, virtual farm tours and short how-to videos to our social platforms. This allowed us to share our passion for food with the community from a safe distance. PG: What is your strategy for growing, and what is your timeline? TB: We believe growth comes with a commitment to our means, including deepening our relationships with the community, improving the customer experience, and building high-performing, diverse teams. We’d like to continue to expand our footprint in the western New York community both by focusing on our younger Hertel store and by continuing to increase our local purchases. We have set the goal of increasing our local purchases to $4.4 million over the next year; they are currently $3.9 million. We are leveraging our national network of co-op grocery stores, National Co-op Grocers, to help select which national brands are best-sellers. By using this network

to craft a portion of our product line, it will allow our internal staff to focus on bringing in more local products and networking with more local farms and producers. PG: What is the outlook for your local co-op, as well as for co-ops across the country, and why? TB: Our outlook is positive. The past three financial quarters, we have seen a profit — the first time since opening our Hertel store in 2017. The pandemic was such a learning moment for us. We realized the true importance of having a strong local food system. As the flood of pandemic shoppers came in, they found bread, milk, eggs and fresh produce because of our connections to local producers. When national brands couldn’t deliver, it was our local vendors who kept food on our community’s table. Sales are starting to stabilize, and customers are coming back out for in-store shopping, which is exciting to see, not only from a business perspective, but as a sign that life is returning — even if just a bit — to normal. Across the country, the pandemic has shown consumers in just about every industry the importance of shopping and supporting local. Investing in your community, spending your dollars locally and raising up small businesses was a recurring theme of 2020, and we expect that homegrown support to continue. Lexington Co-op and the other 140-plus co-op grocers across the country have been growing due to local support since their founding. Without the community’s investment in co-ops, we wouldn’t be around. We are built by the community to serve the community. PROGRESSIVE GROCER July 2021



Retail Innovation

The Power of Purpose in Upstate New York BARGAIN GROCERY OFFERS ACCESS AND AFFORDABILIT Y WITH A CONCEPT THAT ADDRESSES FOOD WASTE. By Mike Duff argain Grocery is a food retailer with a purpose — in fact multiple purposes — and an example of how the idea of sustainability is becoming broader and more interrelated with other social issues. The operation arises from an idea of Mike Servello’s when he was pastor of the Redeemer Church, in Utica, N.Y. With a family connection to the produce distribution business, Servello recognized that he could fund the charitable foundation he was operating, Compassion Coalition, on food sales in a part of the city that was lacking in supermarkets. Small stores selling food were around but expensive for the large lower-income and refugee community in the town. About 30% of Utica’s population lives beneath the poverty line, and major supermarkets tend to be outlying and, so, not necessarily where the people who have the greatest need for inexpensive food live. When he first came up with the idea, Servello didn’t yet know he was in a food desert, or even what a food desert was, but when officials started encouraging him to expand the food operation he launched in the Compassion Coalition distribution center, he managed to get funding and open Bargain Grocery, which is now a model that has gained the interest of municipal and state agencies in New York state, and one that’s soon to be repeated.

Waste Not, Want Not

In its operations, Bargain Grocery acquires food that might otherwise wind up as waste. In that way, it keeps all of the environmental inputs that go into the food, from fertilizer to transportation to refrigeration, from going to waste at a time when more people are becoming aware that something like 30% of food produced is trashed. Although food banks absorb a proportion of food waste in big cities, such operations are rarer and less sophisticated in small cities and rural areas, and often can’t handle perishables consistently, given that these places are generally not open daily, Servello notes. Bargain Grocery, in contrast, is open every day and sells lots of perishables acquired by various means. As it has become a bigger food retailer, Bargain Grocery has had —Mike Servello, Bargain Grocery to scramble to find new sources of inexpensive food products. The company has worked with Bentonville, Ark.-based Walmart and, when it was an independent company, (later a subsidiary of Walmart, and now discontinued), to acquire products that might otherwise have been thrown

“We’ll take damaged pallets that sometimes even food banks don’t want. Every week, we’re striving to keep product on our shelves. We’re always searching for great sources for frozen and grocery items.”


away, selecting and merchandising the best of what remains to sell at low prices. As such, Bargain Grocery is working to sustain the community as well as the environment, which is consistent with the larger sense of wellness that’s emerging in the United States, one that sees the environment, personal health and community well-being as being tightly tied together. As it operates today, Bargain Grocery is a full-blown grocery store operation with attractive produce displays at its core. In addition to other sources, the company gets produce directly from growers, striking the best deals it can and trucking the goods back to Utica from as far away as Arizona and Florida, often in its own truck. With freight rates being what they are today, and the difficulty of arranging mixed loads, it’s an economical way to go, but finding truckers is tough, and Servello’s nephew often takes up long-haul duties. The company works with just about any retail, manufacturing, growing or other source, such as liquidators, to get product, and it will apply a bit of tender loving care to get product that remains good quality, even if a bit dented, in front of shoppers. “We’ll take damaged pallets that sometimes even food banks don’t want,” Servello says. “Every week, we’re striving to keep product on our shelves. We’re always searching for great sources for frozen and grocery items.”

Founded in a food desert in Utica, N.Y., Bargain Grocery is a full-blown grocery store operation with attractive produce displays at its core.

This Just In

At store level, Bargain Grocery is innovative in serving customers. Merchandising and marketing emphasize both quality and nutrition, with consideration given to eating trends and the dietary needs of underserved consumers. For example, the store provides nutritional literature for many products. Bargain Grocery uses social media to promote products arriving in the store. Since the grocer works with various suppliers to get product at prices that allow it to serve the Utica food desert’s residents, what’s available at the store can vary. So, Bargain Grocery makes a virtue of necessity, posting Facebook videos of what’s just arrived. These videos are produced and narrated by Rachel Daughtry, who handles marketing for Bargain Grocery but, given her diverse role, has the official title of director of agency relations. The videos often emphasize newly arrived fruits and vegetables just after they’re unloaded, but include other perishable and grocery items as well. Daughtry offers pricing information, highlighting the advantages that Bargain Grocery offers, and availability, letting consumers know the quantities available and whether the store might run through a given item quickly. “People like the treasure-hunt aspect,” Servello observes. Because Bargain Grocery is able to consistently refresh Chobani products, the brand is often featured in the videos as well. In fact, Chobani, which has operations in the upstate New York city of Norwich, is a major Bargain Grocery backer. CEO Peter McGuinness visited the store and was moved enough to provide product for the operation at cost. Because of this, Bargain Grocery is able to support the wider Compassion Coalition effort, which addresses a range of community needs. For example, the charity, with its warehouse near Bargain Grocery, has a section dedicated to distributing free classroom necessities to teachers, but it also provides everyday needs for low-income Utica residents.

From Humble Beginnings

Before it started its food retailing operation in 2002, Compassion Coalition distributed $20 million a year in food, personal care and household items without any ongoing government aid, according to Servello. He came to recognize that a carefully operated lowcost food store could support the larger charitable effort, and the community in general. To get started, he visited the Walmart perishables distribution center and asked whether he could buy its salvage. He then marked it up just enough to sustain the operation, Servello recounts. The original store operated in 1,200 square feet of the Compassion Coalition warehouse before officials took notice and encouraged Servello to expand. That led to his securing funding to open the 13,000-squarefoot Bargain Grocery store in 2018. Recently, Bargain Grocery moved its storage functions out of the Compassion Coalition warehouse, as Servello had negotiated a deal on a 30,000-square-foot warehouse for $725,000. The facility now houses about $2 million in refrigerated and frozen food storage, and will provide centralized receiving and buying, he says. Local and state officials have watched Bargain Grocery forge ahead and are eager to help. Servello is working with officials and other backers to help set up an independent operation based on Bargain Grocery in Troy, N.Y., near the state capital of Albany, with projects in other New York cities such as Syracuse under consideration. As such, the Bargain Grocery model of minimizing food waste, feeding people and supporting charitable initiatives will sustain more communities in the Empire State. PROGRESSIVE GROCER July 2021



TO THE BOTTOM LINE $150M of food waste eliminated annually Merchandising

IS THE NEW GREEN Speaking With Tim Spencer, President & CEO, Invafresh After 30+ years of success in fresh item management solutions, Invatron revealed a bold new brand and became Invafresh on May 25, 2021—with a strategic focus on fresh. Progressive Grocer asked President and CEO Tim Spencer why now is the right time, and how Invafresh is meeting its redefined purpose: to inspire the world to Think Forward and Think Fresh. PROGRESSIVE GROCER: Can you share some insight on the decision to rebrand? TIM SPENCER: Our brand journey started with a simple question to our customers, the industry, and ourselves: “What is our purpose?” For the answer, we looked at our past and present, with a deliberate eye to the future.

Demand forecasting Recipe management Scale management

Intelligent Fresh Forecasting


Replenishment Fresh ordering In-store production Commissary fulfillment

Compliancy & Sustainability Inventory management Food waste reduction Food traceability Nutrition label printing

Invafresh is committed to lead the future of sustainability with the #1 FreshologyTM AI enhanced platform for fresh food retail management. Think forward. Think fresh.TM 1 (866) 332-3055 · ·

Our purpose had always been there; we just needed to reframe it. Our new name, Invafresh, reflects our newfound purpose: to inspire the world to Think Forward and Think Fresh. PG: That is a noble purpose. You’ve even coined the term Freshology™ to describe the platform you’re using to achieve it. What does it mean for grocery retailers? TS: Changing consumer behaviors are pushing Fresh — which not long ago was a perimeter and marginal business — to center stage. Freshology is fresh-native technology + data specifically designed to help retailers optimize their fresh food operations in this evolving grocery landscape. Fresh is both a pain and an opportunity for grocers. Waste, operational costs, labor, and complexity of the offerings in Fresh are harder to manage than dry goods, but when done well it can replace shrinking

sales and profits of center-store, build differentiation, customer value, and customer loyalty. We know that most problems in Fresh are related to forecasting and data. Solve those and you solve the business. Grocers must acknowledge that Fresh is unique. They can’t rely on the same tools and processes used for other categories to succeed in Fresh. Our platform helps solve the problems that plague Fresh. From processing and managing demand forecasting across fresh food retail in merchandising, replenishment, compliancy and sustainability, it forecasts constant shifts in demand with the capability to optimize and match supply and availability. That’s key, as having the right information at the right time in the right place, and knowing how to operationalize data, makes the difference in profits, performance, and sustainability. Stores that can do that are better positioned to outperform their competitors. PG: What does the Invafresh platform have to do with sustainability? TS: Reducing waste is an integral part of being a sustainable business. To win the fresh food waste battle, grocers must balance demand with accurate data and action it to reduce shrink, lost profits, and ultimately food waste. Our customer Price Chopper has done that well. With the Invafresh platform, Price Chopper is preventing over 20 tons of food from being wasted weekly. We’ve helped streamline their operations and reduce waste and inventory loss by providing the right amount of the freshest products at the right time. We achieved this by

integrating vast amounts of data into ML forecasting algorithms that allow customers to align supply and demand, with accurate merchandising, replenishment, production planning, and inventory control. Over the next 3 years, we are helping Price Chopper to prevent more than 3,000 tons of food waste, reduce their methane emissions from landfills, lessen their carbon footprint, and fuel a more sustainable economy. Price Chopper is one example of how we are working with our customers to eliminate over $150M of food waste annually. This is our ‘green’ dimension to the bottom line. PG: In closing, what thought would you like to leave with our readers? TS: Today’s food-aware, empowered consumers are concerned about the origin, safety, and sustainability of their food choices — this represents an untapped opportunity for grocery retailers who can meet their expectations. Fresh food is the only way to build trust and loyalty giving retailers a competitive edge during this era of digitally driven, experiential grocery shopping. Invafresh is shaping the future of fresh food retail operations by redefining fresh item management. We are freshologists building freshology on a mission to empower food retailers with the #1 platform for fresh food retail operations and accelerate the transition to fresher demand and supply. We’re committed to being the best in Fresh, and to helping global grocery retailers be the best in Fresh, too.

T O L E A R N M O R E V I S I T W W W . I N VA F R E S H . C O M



TO THE BOTTOM LINE $150M of food waste eliminated annually Merchandising

IS THE NEW GREEN Speaking With Tim Spencer, President & CEO, Invafresh After 30+ years of success in fresh item management solutions, Invatron revealed a bold new brand and became Invafresh on May 25, 2021—with a strategic focus on fresh. Progressive Grocer asked President and CEO Tim Spencer why now is the right time, and how Invafresh is meeting its redefined purpose: to inspire the world to Think Forward and Think Fresh. PROGRESSIVE GROCER: Can you share some insight on the decision to rebrand? TIM SPENCER: Our brand journey started with a simple question to our customers, the industry, and ourselves: “What is our purpose?” For the answer, we looked at our past and present, with a deliberate eye to the future.

Demand forecasting Recipe management Scale management

Intelligent Fresh Forecasting


Replenishment Fresh ordering In-store production Commissary fulfillment

Compliancy & Sustainability Inventory management Food waste reduction Food traceability Nutrition label printing

Invafresh is committed to lead the future of sustainability with the #1 FreshologyTM AI enhanced platform for fresh food retail management. Think forward. Think fresh.TM 1 (866) 332-3055 · ·

Our purpose had always been there; we just needed to reframe it. Our new name, Invafresh, reflects our newfound purpose: to inspire the world to Think Forward and Think Fresh. PG: That is a noble purpose. You’ve even coined the term Freshology™ to describe the platform you’re using to achieve it. What does it mean for grocery retailers? TS: Changing consumer behaviors are pushing Fresh — which not long ago was a perimeter and marginal business — to center stage. Freshology is fresh-native technology + data specifically designed to help retailers optimize their fresh food operations in this evolving grocery landscape. Fresh is both a pain and an opportunity for grocers. Waste, operational costs, labor, and complexity of the offerings in Fresh are harder to manage than dry goods, but when done well it can replace shrinking

sales and profits of center-store, build differentiation, customer value, and customer loyalty. We know that most problems in Fresh are related to forecasting and data. Solve those and you solve the business. Grocers must acknowledge that Fresh is unique. They can’t rely on the same tools and processes used for other categories to succeed in Fresh. Our platform helps solve the problems that plague Fresh. From processing and managing demand forecasting across fresh food retail in merchandising, replenishment, compliancy and sustainability, it forecasts constant shifts in demand with the capability to optimize and match supply and availability. That’s key, as having the right information at the right time in the right place, and knowing how to operationalize data, makes the difference in profits, performance, and sustainability. Stores that can do that are better positioned to outperform their competitors. PG: What does the Invafresh platform have to do with sustainability? TS: Reducing waste is an integral part of being a sustainable business. To win the fresh food waste battle, grocers must balance demand with accurate data and action it to reduce shrink, lost profits, and ultimately food waste. Our customer Price Chopper has done that well. With the Invafresh platform, Price Chopper is preventing over 20 tons of food from being wasted weekly. We’ve helped streamline their operations and reduce waste and inventory loss by providing the right amount of the freshest products at the right time. We achieved this by

integrating vast amounts of data into ML forecasting algorithms that allow customers to align supply and demand, with accurate merchandising, replenishment, production planning, and inventory control. Over the next 3 years, we are helping Price Chopper to prevent more than 3,000 tons of food waste, reduce their methane emissions from landfills, lessen their carbon footprint, and fuel a more sustainable economy. Price Chopper is one example of how we are working with our customers to eliminate over $150M of food waste annually. This is our ‘green’ dimension to the bottom line. PG: In closing, what thought would you like to leave with our readers? TS: Today’s food-aware, empowered consumers are concerned about the origin, safety, and sustainability of their food choices — this represents an untapped opportunity for grocery retailers who can meet their expectations. Fresh food is the only way to build trust and loyalty giving retailers a competitive edge during this era of digitally driven, experiential grocery shopping. Invafresh is shaping the future of fresh food retail operations by redefining fresh item management. We are freshologists building freshology on a mission to empower food retailers with the #1 platform for fresh food retail operations and accelerate the transition to fresher demand and supply. We’re committed to being the best in Fresh, and to helping global grocery retailers be the best in Fresh, too.

T O L E A R N M O R E V I S I T W W W . I N VA F R E S H . C O M


Indoor Farming


he future of indoor farming, including vertical farming, has nowhere to go but up. With parallel and perhaps inevitably colliding trends of sustainability, plant-based eating, food safety and labor-saving agricultural practices, produce grown in controlled environments is likely to become much more common in grocery stores. As a testament to the sunny future of the ag tech niche, the U.S. Department of Agriculture started a new Office of Urban Agriculture and Innovative Production last year. More than $3 million in initial grants were made available through the department in 2020. Prognosticators have weighed in on a future of food that includes strategically located indoor farms throughout the country. In a report released late last year, Allied Market Research, whose Americas office is in Portland, Ore., projected that the global vertical-farming industry is expected to reach $1.38 billion by 2027, with a compound annual growth rate (CAGR) of 26.2% from 2021 to 2027. Several grocers are already buying into this type of produce supply. Earlier this year, The Kroger Co., based in Cincinnati, began sourcing fresh produce from Hamilton, Ohio-based indoor grower 80 Acres Farms for the retailer’s stores in Ohio, Indiana and Kentucky. In 2020, Kroger partnered with German startup Infarm to add modular vertical farms to two of its Quality Food Centers in the Seattle area. Also last year, Publix Super Markets said that it would invest more in hydroponic produce and added a new on-site trailer farm from a local hydroponic grower to its GreenWise Market store in the grocer’s hometown of Lakeland, Fla. Boise, Idaho-based Albertsons Cos. has collaborated with South San Francisco, Calif.-based Plenty and with Bowery Farming, based in New York, to provide its shoppers with fresh produce grown indoors. Natural and organic retailer Whole Foods Market, based in Austin, Texas, recently added a mini-farm from New York-based Farm.One to one of its Big Apple stores to provide herbs for prepared pizzas and drinks. In addition to these and other large grocery players, smaller chains and independents have teamed up with various greenhouses and growing operations near their locations. Consumers have expressed their opinions about produce grown indoors. According to the 2021 “Power of Produce” report published by Arlington, Va.-based FMI — The Food Industry Association, and conducted by San Antonio-based 210 Analytics, 43% of shoppers don’t have a preference for produce coming from indoor versus outdoor farms. Those most likely to prefer indoor growing include urbanites, consumers with above-average spend per person, members of the Generation Z age demographic, higher-income households, core value-added shoppers, organic produce buyers, and men. Those more likely to prefer outdoor-grown produce include consumers in rural areas and conventional produce buyers, the report found.


Key Takeaways More grocers have begun sourcing from or partnering with indoor-farming companies to procure fresh local produce. One of the biggest drivers of the move to produce more food in indoor-farming facilities is sustainability. Grocers can merchandise indoorfarmed produce in a creative way to distinguish their offerings and connect with shoppers.

Greener Pastures

One of the biggest drivers of the move to produce more food in indoor-farming facilities is sustainability. From an environmental standpoint, indoor-grown produce may be part choice, part necessity, depending on the area and the circumstances. Necessity is born of conditions wrought by continual weather extremes that are often attributed to a changing climate. Unusual weather patterns resulting in droughts, floods, storm damage and harmful freezes take a toll on traditional farms and on the farmers who grow fresh fruits and vegetables. Weather extremes have always happened, but are becoming more frequent. For example, coming off last summer’s devastating derecho event, a drought that began in late 2020 in Iowa and has continued through early summer is stressing that state’s corn and soybean crops. Earlier this year, rare heavy snow, ice and frigid tempera-

Hydroponic farming company Vertical Roots is growing its footprint with a new indoor lettuce farm in the Atlanta area.

tures in Texas hurt winter wheat and some citrus crops. At the same time, there’s an overall push to produce food in a more sustainable way. More than two-thirds (64%) of American consumers say that they’re willing to pay a premium for environmentally friendly products. “There is a trend — not a fad — of consumers who appreciate the benefit of getting produce soon after it’s harvested,” says David Rosenberg, co-founder and CEO of vertical-farming leader AeroFarms, based in Newark, N.J., “and more and more customers are realizing that they want products with no pesticides, because those are not meant for human beings.” On the business side, sustainability is a central part of many CPGs’ and grocers’ corporate responsibility platforms as they pledge to reduce their use of resources like water and energy. Many manufacturers and retailers have also revealed goals to cut down on or eliminate the use of pesticides in their products. PROGRESSIVE GROCER July 2021


More corrugated packaging is recovered for recycling than any other packaging material1. The recovery rate for old corrugated containers (OCC) has hovered around 90 percent for years. Maybe that’s because 96 percent of Americans have access to community curbside or drop-off corrugated recycling programs2. And nearly all OCC is used to make new paper products. Reusable. Renewable. Extraordinary. Learn more about the renewability, recyclability and responsibility of boxes at

1 2

2013 EPA “Advancing Sustainable Materials Management: 2013 Fact Sheet” 2014 AF&PA Community Access Survey. Louis Berger, February 2015


IT’S IN THE BOX The Sustainable Profile of Recycled Corrugated Containers Speaking with Rachel Kenyon, Senior Vice President, Fibre Box Association (FBA) SUSTAINABILITY IS MORE THAN JUST A BUZZ WORD THESE DAYS; it is a must-embrace approach to business for any company that wants to thrive in today’s increasingly environmentally conscious marketplace. Progressive Grocer asked Rachel Kenyon, senior vice president of FBA, to explain how boxes used by grocers in their stores can play such an important role along the route to a sustainable future. Progressive Grocer: As popular as sustainablilty has become, there’s been somewhat of a backlash on recycling. What is that all about? Rachel Kenyon: There have been so many news reports about the amount of plastic debris in our oceans that consumers, even those who had embraced recycling, have become skeptical. And you can’t blame them! Some data shows that 8 million metric tons of plastics enter our ocean every year1 — it’s no wonder they question whether what they’re putting in their recycling bins is really being recycled. PG: Is corrugated cardboard a different story? RK: Absolutely! Old Corrugated Containers (OCC) are definitely being recycled — it really is a resounding success story. In fact, we’ve been building the infrastructure for recycling since 1970! Corrugated packaging, which is made from a balanced system of new tree fibers and recycled fibers, is the most recycled packaging material in the world with a recycling rate that has hovered around 90 percent for the last decade — that’s more than 32 million total tons each year2! PG: There’s been a lot of talk recently about the circular economy. What does that mean and how does recycled OCC play a role in creating that economy? RK: The goal of a circular economy, which is often called “circularity,” is to eliminate waste and use resources continually. It creates a closed-loop recycling system in which a product or material is used and then turned into a new product without

losing its properties during the recycling process. From a sustainability standpoint, it minimizes the use of resources, and reduces waste, pollution and carbon emissions. That’s why renewable resources and circularity go hand-in-hand. So, here’s what’s so great about OCC: The average corrugated box contains nearly 52 percent recycled content — and every box that’s recycled is transformed into a new corrugated box. How does that happen? The containers travel in a continuous loop: After they’re used, they’re collected and compacted, transported to a paper mill, fed into a repulper, agitated to form a slushy pulp, and cleaned of contaminants. The OCC’s “new life” begins when new corrugated board is formed using three or more pieces of paper, sandwiched together, cut into sheets, and passed through machines that make them into new boxes. PG: Why are grocery retailers such important players in this circular economy? RK: Approximately 40 percent of boxes are used to package food and beverage products, and much of that ends up in grocery stores. That makes it easy to see why grocery retailers have such an important role to play along this road to a sustainable future. Statistics show that shoppers are more concerned than ever about the environment: 76 percent say they’re looking for brands that support recycling3, and they’ll support retailers who show they are, too. Fifty-seven percent of consumers are willing to change their purchasing habits to help reduce negative environmental impact3 — that is an impressive number for retailers who want to attract new shoppers to their stores! Letting customers know your store recycles the corrugated boxes their food is delivered in, and encouraging them to recycle the boxes they receive at home, is one way you can help the industry create new boxes from old ones… and in the process help create a truly circular, sustainable economy. 1

Ocean Conservancy American Forest & Paper Association 3 “Meet the 2020 consumers driving change,” IBM Institute for Business Value and National Retail Federation 2

Visit to find out how boxes can improve your business


Indoor Farming Other Seeds of Change

In addition to the pursuit of sustainable growing practices, other factors are contributing to interest in this method of agriculture. The need to shore up food security in the face of a booming global population and the problem of urban food deserts are notable catalysts. So is consumers’ penchant for eating more fresh plantbased foods, and foods grown in a more sustainable way. Meanwhile, as evidenced by ubiquitous “Now hiring” signs, it can be tough to find workers to plant, care for and harvest crops. Indoor farms run with several automated controls, and tasks are less affected by fluctuations and stresses in the labor market. The global COVID-19 pandemic also contributed to the acceleration of indoor farming. When some retailers faced supply chain issues and had difficulty sourcing fresh products, they turned to new vendor partners that operated indoor farms with more controlled conditions and inventories. Indoor farms typically can be built faster and are also versatile operations that allow for pivots in the event of changing circumstances. There are additional practical reasons for sourcing produce from indoor growers. “Right now, retailers want consistency in price, quality and delivery. At its core, we are delivering consistency,” notes Rosenberg, citing other profit-driven benefits such as reduced shrink and spoilage.

Indoor-Farm Tour

Generally, plants in indoor-farming facilities are grown in cells stacked for space savings and efficiency. In lieu of the sun, LED lights are used to facilitate growth. Watering techniques vary. In hydroponic farms, plant roots are placed in nutrient-rich solutions instead of soil. With aeroponics, exposed roots hang down from the plant and receive nutrients via a system that sprays nutrient-filled water. Indoor farms take different forms in the United States and around the world. Some indoor farms are massive in size and AeroFarms uses aeroponic methods to grow healthy plants, using up to 95% less water and no pesticides.


“There is a trend — not a fad — of consumers who appreciate the benefit of getting produce soon after it’s harvested.” —David Rosenberg, AeroFarms almost industrial in their setup. Others are smaller and hyperlocal, using locations like repurposed shipping containers or greenhouses. Some farms are constructed vertically to minimize the physical footprint or to use existing buildings, while others are more spread out in their design. Farms are being built in urban areas, often in former manufacturing facilities, warehouses or multilevel stores, and in more rural areas, where they are run by longtime family farm owners who are looking for ways to reinvent their businesses in the wake of competition from big farms. One thing is for sure: There are more of these types of growing operations. AeroFarms is one grower on the march, with a l36,000-square-foot aeroponics farm under construction in Virginia, set to be finished sometime in 2022. In June, Vertical Roots, a Charleston, S.C.-based hydroponic container farm that’s part of Amplifed Ag, opened its third indoor farm in Atlanta at a facility run by two large produce suppliers in the Southeast. According to the company, the new farm will eliminate the need for transportation to the distributor and will enable produce to be delivered to local customers the same day that it’s harvested. In mid-June, Morehead, Ky.-based grower AppHarvest revealed that it’s adding two large indoor farms in the Bluegrass State. With a completion time at the end of 2022, the farms will produce non-GMO leafy greens and fruits for shipment to grocers and restaurants. Also in 2021, Irvington, N.Y.-based BrightFarms opened its newest indoor farm, in Hendersonville, N.C., a 6-acre greenhouse that will deliver to retailers in nearby areas in that state, as well as in South Carolina and Georgia. Startup Bowery Farms is opening an R&D hub called Farm X that will help expand product development. The facility includes a new sensory lab and innovation center. In another sign of the health of this sector, there’s major seed money — no pun intended — going toward indoor farming. Berlin-based Infarm, for example, is said to be going public following a reported merger with Kernel Group Holdings Inc., of San Francisco. In May, Bowery Farming revealed a new round of funding to the

Flagstone Foods’ Healthy Bees, Happy Snackers Shines Spotlight on Sustainability SPEAKING WITH ROBERT SCALIA, CEO, Flagstone Foods As the premier North American manufacturer of private label label nuts, trail mixes, and other nut-based snacks, Flagstone Foods takes its responsibility to cultivate a more sustainable almond industry seriously. As a part of its Healthy Bees, Happy Snackers initiative, the company has now committed to sourcing 100 percent of its almonds from bee-friendly farms by 2025, becoming the first private label nut manufacturer to take that important step. Progressive Grocer asked Robert Scalia, CEO of Flagstone Foods, about the role sustainability plays in the company’s overall vision, and why now is the right time for grocery retailers to embrace sustainability, too. Progressive Grocer: Sustainability is such an important issue today. Is it something Flagstone Foods has increased its focus on recently, or has the company always been committed to sustainable business practices? Robert Scalia: Flagstone Foods has a 100+ year history in better-for-you snacking. While the company has evolved in many ways, food safety and quality, operational excellence, innovation, continuous improvement, and superior customer service have remained the hallmarks of our business. Now, we’re adding sustainability to that list; it’s an integral part of our new vision as we enter an exciting new chapter. “Appreciation Grows Goodness” is our brand belief. With our commitment to sustainable and ethical sourcing, we’re putting that belief into practice. PG: Almonds are an important ingredient in Flagstone Foods’ snacks. And almond crops depend on honey bees, which are in ecological distress. Why does honey bee health matter to the almond industry? RS: Honey bees carry the food eco-system on their wings. They pollinate 1 in every 3 bites of food we eat, including almost 100 percent of the almonds in our snack products. In fact, over 80 percent of the nation’s honey bee hives (over 2 million hives) make their way to California each year for almond bloom. Sadly, 40 percent of honey bees die annually due to poor nutrition, pesticides, parasites and pathogens1. It isn’t hard to see how this could threaten the sustainability of the almond industry and the grocery retailers who sell those products if we don’t take steps to promote bee health and bee-friendly farming practices. ADVERTORIAL

PG: How is Flagstone Foods working to help honey bees in ways that also will help the almond industry? RS: While California produces the vast majority of the world’s almonds on over 1.5 million acres2 of almond orchards, only a fraction of that acreage is currently verified as bee-friendly. By setting this goal, we are joining forces with other industry leaders to significantly expand the adoption of bee-friendly farming practices within the almond industry. We are partnering with growers and processors like California’s Pomona Farming that share our commitment to sustainable, bee-friendly farming practices. Pomona, for example, dedicates more than 3,300 of its approximately 40,000 acres to providing forage for bees and other pollinators and has eliminated the use of pesticides that can be harmful to bees and other pollinators. Our goal is to source exclusively from bee-friendly certified farms by 2025. We are also making charitable contributions to Project Apis m. and its Seeds for Bees program, which gives almond growers the seeds and skills they need to create habitat and forage for bees while also improving soil health. PG: Why should grocery retailers carry products made with bee-friendly almonds? RS: Private label has a 40 percent share of the $4.5 billion snack nut industry3 — so it is a very important category for retailers. Offering bee-friendly almonds can give retailers a competitive advantage and help them capture consumers willing to pay more for products from companies and brands committed to ethical and sustainable sourcing. Retailers become more relevant to consumers, build their own brand(s), and achieve the sustainability goals they’ve set for themselves simply by having products made with bee-friendly almonds on store shelves. 2

1 Project Apis m.: News from Project Apis m. California Almond Board: 2019_AcreageReport.pdf; 3 IRI 52WK 4.18.21

To learn more about our Healthy Bees, Happy Snackers initiative and how supermarket chains can benefit from our commitment to sustainable sourcing, visit sustainability/healthy-bees/


Indoor Farming

tune of $300 million that lifted the company’s estimated value to about $2.3 billion. Indoor-farming company Gotham Greens, based in Brooklyn, N.Y., revealed $87 million in new funding in December 2020. While indoor farms are expanding, crops produced in such facilities are expected to grow, too. Most ag tech companies currently produce leafy greens and herbs in hundreds of different varieties. Tomatoes are also grown hydroponically in many places. Better technologies and a greater collective knowledge are spurring innovations in other types of crops grown indoors in an eco-friendlier way. AppHarvest, for its part, is growing strawberries in one of its new locations, and vine crops in another.

Implications for the Retail Produce Section

More and different types of indoor farms are transforming agriculture — and the retail produce department. Since many of these products are packaged on site, supermarket produce sections now feature a greater mix of packaged and bulk items. Offerings like packaged salads and tomatoes also help define and elevate a brand, whether it’s a store brand or a grower brand. Coming off a year in which consumers prepared more foods and experimented with new products and varieties, several new products grown in indoor-farming facilities have hit the marketplace. Medford, Minn.based Revol Greens recently rolled out new varieties of chopped romaine salads made with lettuces grown at its indoor farm in its home state. Revolution Farms, in Caledonia, Mich., is launching four new salad mixes. One of Bowery Farming’s latest products is a new Bowery Crispy Leaf


Modern indoor farms combine technology and agriculture to provide fresh produce in a more sustainable way.

Lettuce, deemed to be a “reinvigorated version” of iceberg lettuce. And that’s just the tip of the iceberg (lettuce). Grocers can merchandise indoor-farmed produce in a creative way to distinguish their offerings and connect with shoppers. “We’ve worked in a process of co-creating with retailers,” observes AeroFarms’ Rosenberg. “It is an opportunity to deliver innovation and excitement for an exciting category.”



*23g protein is based on 4 oz serving.

© 2021 Regal Springs





Scotland has long been a leader in sustainable fishing methods.

Ocean Health is Wealth RE TAILERS AND PRODUCERS CAN CAPITALIZE ON CONSUMERS’ PREFERENCE FOR ECO-FRIENDLY SE AFOOD. By Bridget Goldschmidt s consumers have grown more concerned about the health of the environment in the face of climate change, the issue has extended from how landbased foods are produced to those of the world’s oceans. According to 2020 research from Stockbridge, Mass.based consultancy Changing Tastes, most American consumers are worried about the effect of ocean health on fish and seafood, with a majority now concerned about heavy metals, plastic contamination and radiation in their fish and seafood, as well as the use of forced labor and antibiotics. The research found that these issues are now of greater importance than overfishing, which is still a concern for more than eight out of 10 adults. This year, a substantial 68% of respondents to a survey fielded by The Stop & Shop Supermarket Co. said that they take into consideration where their seafood comes from before making a purchase. In response to these concerns, the Quincy, Mass.-based grocer, a banner of Ahold Delhaize USA, has developed a sustainable seafood program encompassing an annual local seafood initiative that brings in an assortment of fresh catches from well-known area seafood purveyors. “Stop & Shop is committed to sourcing only seafood from fisheries and farms that are well managed to ensure that fish populations remain healthy, Stop & Shop's sustainable seafood program encompasses an annual local seafood initiatiave that brings in an assortment of fresh catches from wellknown area seafood purveyors.

Key Takeaways Ocean health is an increasingly important consideration for consumers when buying seafood. Confusion about terms and processes still lingers for many shoppers, however, and with most food retailers offering sustainable seafood programs, grocers can find it a challenge to differentiate their individual initiatives. To further engage consumers, retailers need to tell the stories of those who supply the seafood, encourage the consumption of a wider variety of species, and offer more education across various media.


and fishing and farming methods have a minimum environmental and social impact,” notes Beth Grant, the chain’s seafood category manager. “All seafood we sell, whether it is fresh, frozen or canned, must meet important sustainability criteria.” Grant adds that Stop & Shop recently joined the Ocean Disclosure Project (ODP), a public platform from the Honolulu-based Sustainable Fisheries Partnership that enables transparency between businesses and their customers regarding seafood origins and sourcing. On the platform, the supermarket voluntarily reports its seafood sources, adding another layer of transparency to its comprehensive seafood policy. “While Stop & Shop’s existing policy ensures that its seafood is only sourced from sustainable and traceable fisheries and farms, working with the ODP makes information on the original sources of Stop & Shop’s private label and wild-caught seafood available to customers,” explains Grant. Stop & Shop also works with the Gulf of Maine Research Institute, a Portland, Maine-based nonprofit that helps to assess whether seafood items entering the grocer’s stores meet the criteria set forth by its seafood policy, among other seafood sustainability moves.

Combating Confusion

Such programs are a major step toward allaying consumers’ fears of purchasing seafood that could be detrimental to ocean health, but confusion still lingers for many, even those who want to do the right thing regarding seafood.

During a recent panel held by Armonk, N.Y.-based IBM on the occasion of World Oceans Day, which occurred on June 8 of this year, consumers’ lack of knowledge about farmed fish, and their subsequent wariness regarding items produced through aquaculture, was among the topics raised. That, of course, is hardly the only seafood issue on which consumers are underinformed. “Labeling, certifications and overall seafood education can be really confusing,” affirms Brett Veerhusen, principal for Ocean Strategies, a Seattle-based public affairs firm specializing in seafood and maritime industries, and a lifelong Alaskan fisherman himself. “U.S. fisheries are some of the most sustainably managed fisheries in the world. Simply put, buying American means buying sustainable. America’s fisheries are managed under the Magnuson-Stevens Act (MSA), which supports science-based management of our ocean resources. Using fishery health as an ocean health benchmark, the U.S. is scoring an A- because 91% of our fisheries are not experiencing overfishing. Retailers who source locally and domestically — and talk about it — are helping our oceans and fishermen, and sharing that commitment with consumers.” To combat this confusion, Veerhusen suggests introducing shoppers to the men and women who provide their seafood. “People want to connect to the PROGRESSIVE GROCER July 2021




“Grocers can highlight American commercial fishermen — in digital, print or at the counter — and let these natural storytellers educate consumers on not only the product’s origin story, but also the company’s sustainability commitments, and what that means for people, the ocean and the fish.” —Brett Veerhusen, Ocean Strategies Brett Veerhusen (far left) encourages grocers to highlight the work of his fellow American commercial fisherman to promote sustainable seafood products.

human story behind the meal, especially if they’re paying a premium,” he observes, “and when it comes to telling the seafood tale, from adventure to stewardship, nothing beats hearing it from the harvester. Grocers can highlight American commercial fishermen — in digital, print or at the counter — and let these natural storytellers educate consumers on not only the product’s origin story, but also the company’s sustainability commitments, and what that means for people, the ocean and the fish. Visible partnerships with regional and national fishing organizations are another great way to demonstrate that commitment, and how harvesters, suppliers and retailers are connecting on good practices.” “As consumers value health and sustainability, they also value supporting their local community,” agrees Jessica Miller, a registered dietitian and nutrition communications manager at the Seafood Nutrition Partnership, an Arlington, Va.-based nonprofit dedicated to building awareness of the health and nutritional benefits of seafood. “Share where the seafood is from and the fishermen who harvested it. Show the faces of local fishermen, fish farmers and seafood-harvesting families, and tell their stories. Engage the marketing team, store-level team and dietitian team to amplify these stories. Don’t let someone else tell your story!” After all, as Miller notes, “Customers want products that align with their personal values and are willing to pay more to support companies, fishermen and farmers that care about their health and follow eco-friendly practices.”

Make Waves in the Seafood Section

But with about 90% of U.S. retailers having seafood sustainability programs in place, according to the Conservation Alliance for Seafood Solutions, how can an individual retailer really drive that message home for shoppers? Miller believes that “the best place to start is to highlight the hard work already done by seafood category managers to bring sustainable seafood to shoppers. “Unfortunately, the amazing progress that has been made with sustainable seafood has not been shared effectively with shoppers,” she points out. “Posting sustainable seafood programs and policies on grocer websites is just the first small step. Retailers should actively


provide education to the public. Grocers have access to social media channels, websites, news segments and even a captive audience in the aisles. Using these methods to provide customer education is important and a good way to reinforce the retailer’s credibility.” In the stores, retailers can use signage in the seafood department to tout their policies, and they should encourage shoppers to ask questions and empower staff to answer questions on seafood sustainability. “Grocers can use in-store registered dietitians (RDs) to help convey key messages,” advises Miller. “RDs are seen as credible food professionals and can be helpful in spreading awareness about the health, nutrition and sustainability information of seafood. Try a Facebook or Instagram Live with the seafood counter; create messaging and signage for the fresh, frozen and shelf-stable Unique value-added products like salmon hot dogs from Kvarøy Arctic can create further interest in sustainably produced seafood.

best sustainable fishery Alaska Alaska Seafood Alaska Fisheries



departments; write informational blogs for your websites; [and] share why seafood is healthy to eat and how to buy sustainable seafood,” among other strategies to boost the visibility of a sustainable seafood department.

Sustainability-Centered Products

New seafood products that take ocean health into account include The Kingfish Co.’s Dutch Yellowtail, which recently made a successful debut at Whole Foods Market stores across the United States. The fish are produced through land-based aquaculture, which has a minimal impact on the ocean. “Land-based aquaculture promotes healthy marine ecosystems and marine wildlife in several ways,” explains Ohad Maiman, CEO and founding partner of The Kingfish Co., which is based in Kats, Zeeland, in The Netherlands. “It stimulates the recovery of marine systems with no bycatch, no bottom/habitat disturbance during harvest, and the monitoring and management of waste. This model allows us to produce a sustainable protein using renewable energy, without disturbing our ocean’s welfare.” “At Kvarøy Arctic, we recognize the fact that we have to be stewards of continuous improvement,” says Jennifer Bushman, strategic development officer at the company, which operates on its namesake Norwegian island and produces the first-ever farmed finfish to be Fair Trade USA certified. “Every decision stems from a deeply rooted commitment to protect the planet for future generations. Outside of the work that we have ongoing to improve on our farm through technology, innovation [and] recyclable packaging, we recognize that we must develop products beyond the center-of-the-plate salmon fillet.” To that end, Kvarøy has developed value-added products that “help us to reach more consumers [and] bring access to salmon products in places that need it most, at a price point that is more affordable,” continues Bushman. “This means utilizing more trim and scrape meat, lowering food waste, and developing more frozen options. The Kvarøy Arctic Hot Dogs and Burgers, along with our frozen retail club packs, make it possible to have fish and seafood on hand while delivering a weekly allowance of omega-3s in every serving.” According to Bushman, the newly released value-added items are already a hit: “Sales have been building, and the demand for the products is growing. The hot dog is the only hot dog made from salmon on the market, and it tastes like a hot dog.” The company’s marketing endeavors include “a huge social media campaign with influencers across the country,” she notes. “We have also partnered with grocers to launch mobile campaigns to their online shoppers, email blasts, and coupon programs to support trial.” “Scotland is an acknowledged global pioneer in sustainable fishing methods, holding more Marine Stewardship Council (MSC)

“Retailers can keep fish stocks healthy by encouraging consumers to eat a wider variety of seafood and buying seasonally from reputable suppliers.” —Clare MacDougall, Seafood From Scotland


The Kingfish Co.'s newly introduced Dutch Yellowtail is produced through land-based aquaculture, which has a minimal impact on the ocean.

accreditations than most other EU countries,” asserts Clare MacDougall, head of trade marketing, U.K. and North America for Seafood From Scotland, based in Newbridge. MSC, a London-based nonprofit, recognizes and rewards efforts to protect oceans, and safeguards seafood supplies for the future. Current efforts to boost the visibility of the country’s seafood include introducing Scottish seafood products to retailers and foodservice buyers via sample boxes of species such as salmon, steelhead, crab and langoustine, the first of which is timed to go out around the July 4th holiday, while a microsite, launching this year, will enable direct access to Scottish seafood products and highlight Scotland’s long-standing reputation as a leading sustainable seafood nation. At the store level, a Seafood From Scotland point-ofsale materials pack is available for refrigerated doors and seafood counters, as well as videos highlighting the quality, provenance and sustainability of Scottish seafood, and various recipe cards and books that retailers can feature on their own websites for download. Additionally, Scotland’s producers have recently ramped up efforts to bring certain species to U.S. consumers in response to higher consumption of seafood in all formats. “Scottish cod, haddock and other whitefish species will be increasingly on retail counters and on menus in 2021, with value-added breaded products seen in frozen cabinets as well as fresh on counters,” predicts MacDougall.

Swimming Forward

As retailers continue offering sustainable seafood, what should they be doing to further improve ocean health and ensure that the issue remains front and center for consumers? “Retailers can keep fish stocks healthy by encouraging consumers to eat a wider variety of seafood and


For Sustainable Seafood, Ask for Alaska Diving into sustainability with Monica George, Head of Retail Marketing, Alaska Seafood Marketing Institute To learn more about consumer preferences in the seafood category, Progressive Grocer reached out to Monica George, head of retail marketing for Alaska Seafood Marketing Institute (ASMI). Here, she takes a deep dive into the category, sharing information about why sustainable seafood from Alaska is a call-to-action that can empower supermarkets that promote it. Progressive Grocer: What is the definition of Sustainable Seafood? Monica George: Understanding seafood sustainability can be a bit confusing. By definition, it’s seafood that is responsibly managed to exist long-term without compromising the survival of the species or the health of the surrounding ecosystem. Truly sustainable seafood is the most environmentally efficient source of protein on the planet.

So, how can retailers counter any confusion and make sure what they’re buying is truly sustainable? Looking for Alaska Seafood is the easiest way to guarantee they’re getting wild and sustainably caught seafood. Here’s why: Wild seafood is one of Alaska’s most precious resources — our state goes to great lengths to ensure its continued abundance.

Sustainable fishing has been the law in Alaska since 1959, when Alaska became the only state with sustainability written into its constitution. In fact, Alaska has never had a species on the endangered species list because we always prioritize the ecosystem’s needs over the harvest.

PG: How do Alaska’s fishermen decide how much fish to catch? MG: Alaska is a pioneer in applying science-based, sustainable, responsible fisheries management practices and catches far less than what’s allowed. The Alaska groundfish fishery is one example of this precautionary approach to setting harvest levels. Scientists calculate the Acceptable Biological Catch (ABC) — the maximum number of fish that can be sustainably caught. Fishery managers then set the Total Allowable Catch (TAC), which is even lower than the ABC. For retailers looking to further verify Alaska seafood’s sustainability, Alaska’s commercial fisheries are independently certified sustainable by the Responsible Fisheries Management (RFM) Certification program — one of the rare certifications with zero logo licensing fees! PG: Why should grocery retailers make sustainable products an important component of their seafood offerings? MG: Consumers’ consumption of seafood and their preference for sustainably sourced products both are rising. Nearly half of all consumers are trying to increase their seafood consumption — a fact that’s having a very positive impact on sales across seafood aisles. In UNPRECEDENTED GROWTH IN 2020 1

2020, the seafood department was a leader in the growth of grocery sales with an increase nearly 30 percent stronger than sales in meat, produce, deli and bakery. Also, 78 percent of consumers said the fact seafood is sustainably sourced and environmentally friendly were “Motivators To Choose Seafood Over Other Proteins When Grocery Shopping.1” Not only are customers more likely to purchase seafood when they see the Alaska Seafood logo; they also have a more positive perception of the grocery store overall because it is a sign it sells high quality seafood2.

76% of consumers believe when a store features the Alaska Seafood logo that store supports SUSTAINABLE FISHERIES2 1

2021 FMI Power of Seafood Report/NielsenIQ 2

Datassential 2021

To find out more about Alaska Seafood, or to find resources to help build successful promotions, call 800-478-2903 or visit



buying seasonally from reputable suppliers,” says MacDougall. “Educating consumers on both diversity of seafood and ways to cook and prepare, and, importantly, encouraging frequency are all ways that oceans remain healthy and diverse.” “The farming of fish, seafood, seaweed and kelp, and even corals, is not only going to provide a nutritious, affordable protein with a lower carbon footprint, but will also help us replenish wild fish and seafood populations, and even contribute to the health of our waters,” notes Kvarøy’s Bushman. “To get there, we need to all work together,” including environmental activists, chefs, culinary leaders, aquaculturists and retailers. According to Ocean Strategies’ Veerhusen: “There are three clear steps for retailers to support ocean health and

responsibly caught seafood: First, the MSA is up for reauthorization, meaning the law that governs our federal fisheries can be amended through a public and transparent process. Retailers should pay attention and weigh in on proposed policies impacting seafood sustainability and access. Second, educate consumers on your sustainability commitments. It’s difficult to unlearn what you’ve learned, and broad education can have a positive ripple effect to the greater population. Finally, partner with commercial fishermen. Waking up to harvest an American public food resource gives us a great sense of pride, and we love to tell that story.”

For Consumers, Ocean Health and Personal Health Are Linked

nearly 50 years to champion what is an imperative in terms of contribution to the global food supply without compromising ocean health. There is always much to learn as the environment changes as a result of human activities. The open-source approach that we take on the farm and with our partners ensures that we are able to move quickly and create impact where we can. This creates a stronger bond between our customers’ health and the care that we must take of the precious waters that surround our home.” Where seafood comes from can also have an effect on its healthfulness, according to Clare MacDougall, head of trade marketing, U.K. and North America for Seafood From Scotland, based in Newbridge. MacDougall notes that “salmon farmed in Scotland has … been found to have increased omega-3 levels compared with other salmon-producing countries, thanks to its optimal nutrient-rich environment.” That connection between human and ocean health may not only affect consumer purchasing habits, however, but also U.S. policy in regard to the seafood industry – both of which should be on savvy food retailers’ radar. In the words of Brett Veerhusen, principal for Ocean Strategies, a Seattle-based public affairs firm specializing in seafood and maritime industries, and a lifelong Alaskan fisherman himself: “Healthy ocean conditions not only provide … healthy, sustainable seafood, they’re part of the healthy-choices story — how Americans are shaping their future. The Biden Administration is increasing federal funding to understand ocean impacts from climate change and other environmental concerns, and understanding what this means for food security. Healthy seafood is a high and rising priority, from the fish counter to Congress.”

RE TAILERS MUST PAY AT TENTION TO THIS GROWING TREND AND ITS REPERCUSSIONS Ocean health is a growing concern for many consumers when it comes to purchasing seafood, but another factor is the connection that consumers make between a better environment and their own health. “There is a strong link between ocean health and consumers’ personal health,” asserts Jessica Miller, a registered dietitian and nutrition communications manager at the Seafood Nutrition Partnership, an Arlington, Va.-based nonprofit dedicated to building awareness of the health and nutritional benefits of seafood. “Choosing sustainable seafood is one of the most effective ways to protect our oceans and the species that depend on the ocean’s fragile ecosystem. From an environmental health standpoint, diets that include seafood have a lower impact on our climate. So, what we eat matters, and consuming sustainable seafood is both good for our health and good for the planet’s health.” “The ocean is integral to feeding the world’s population, and the food we take from the ocean is only as healthy as the water it swims in,” explains Ohad Maiman, CEO and founding partner of The Kingfish Co., a fish farm based in Kats, Zeeland, in The Netherlands. “Therefore, if the ocean contains microplastics or chemicals, there is potential for them to travel up the food chain and become a part of a seafood consumer’s diet.” In fact, aquaculture companies like Kingfish and Kvarøy Arctic are committed to improving the health of the ocean and people through their farming methods. “The oceans and humans are interconnected, so much so that if we do not fight to maintain ocean health, it will affect the health of our species,” observes Jennifer Bushman, strategic development officer at Kvarøy, which operates on its namesake Norwegian island. “The … ocean needs to be healthy and well managed in order to be a healthy source of food. Ocean warming puts human health at risk as we see the growth of pathogenic microbes, pollution and algae toxins in our fish and seafood.” Adds Bushman: “Kvarøy Arctic has been committed for


AUTHENTIC FRESH PASTRIES Shaping a delicious, sustainable future. At Banquet d’Or® by Vandemoortele, our deliciously fresh pastries are the result of our relentless commitment to sustainability. From supply chain processes designed to protect nature, to our promise of Clean Label ingredients, every effort is a part of our quest to shaping a cleaner, tastier future.


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Tackling Food Waste: Good for the Planet, Good for Business

An interview with Johanna Småros, co-founder of RELEX Solutions, a leading supply chain optimization partner for grocery retailers.

Q: Why do you think food waste is one of the biggest problems for today’s grocery retailers? We all know that food waste is a major global concern, and it has a significant impact on grocery retailers’ carbon footprints as well as their profitability. While grocers don’t share a lot of data on food waste, RELEX’s research suggests that North American retailers lose, on average, more than $70 million to waste each year, with the number going up to several hundreds of millions for the biggest retailers. Food retailers are well positioned to make a global impact through their waste reduction efforts while also improving their bottom line. Although some have made great strides toward decreasing the amount of waste sent to landfills, the industry as a whole

can do far more to prevent waste from happening in the first place. Retailers need to get serious about reducing food waste across the entire supply chain, which requires an investment in modern supply chain planning and optimization technologies like RELEX.

Q: What is the most impactful step retailers can take to reduce food waste? The key to food waste reduction is highly accurate demand forecasts that ensure a food retailer will have the right amount of stock in the right place at the right time to meet customer demand. RELEX takes advantage of machine learning to capture the impact of hundreds of demand-influencing factors like seasons, holidays, local events, pricing, promotions, and cannibalization at the store, product, and day level—or even the intra-day level for products replenished several times a day. Retailers using RELEX typically reduce food waste by 10-40% while maintaining, or even improving, on-shelf availability and perishable freshness.

Q: In what other ways does RELEX help reduce food waste? In addition to equipping retailers with highly accurate, granular

demand forecasts, RELEX optimizes each store order to achieve the right balance between high availability and low risk of waste. The system incorporates factors like product shelf life, demand uncertainty, and the availability of substitute products to find the optimal order quantity that maximizes our customers’ profitability. RELEX also helps retailers reduce food waste upstream in their supply chains. Better visibility into consumer demand and store inventory needs makes it possible to increase stock turnover in distribution centers. It also enables retailers to spot the risk of overstock much earlier—before the goods are expiring. This gives them the opportunity to either push stock through their supply chains quicker, often with the aid of markdowns, or make charitable donations while the products still have appropriate shelf life left.

Q: Aside from the positive profitability and sustainability impact of food waste reduction, what other benefits can a grocery retailer gain from their technology investment? Great question! An investment

in improved forecasting and replenishment is truly a gift that keeps on giving. The savings from food waste reduction are so significant that they more than pay for the cost of improving supply chain control. The benefits don’t stop there, though. Improved visibility into demand and supply drives fresher product (a clear competitive advantage), higher operational efficiency (a benefit for retailers whose costs are increasing across the board), and the ability to free up capital from inventory (which enables further investments in sustainability).

For more information about how RELEX can help your retail business reduce food waste, improve your sustainability, and support your bottom line, please visit


Supply Chain

Albertsons has started using battery electric zero-tailpipe-emission trucks from Volvo, paired with electric-powered TRUs, for some of its short-distance deliveries.

Charging Ahead ELECTRIC SEMI-TRUCKS HAVE OFFICIALLY ENTERED THE INDUSTRY’S R ACE TOWARD RE ACHING ZERO EMISSIONS. By Jenny McTaggart oise, Idaho-based Albertsons recently made history by carrying out the country’s first commercial 100% zero-emission refrigerated grocery delivery using a class 8 battery electric truck and refrigerated trailer. This venture is only the beginning of the industry’s exciting journey toward net zero emissions, when no new emissions are being added to the earth’s atmosphere. While the fleet electrification movement is still in its infancy — and COVID-19 slightly slowed the momentum — all signs point to a major change in commercial vehicles coming in the next two decades, especially as logistics and infrastructure improve. A growing number of truck manufacturers, including Volvo, Daimler Trucks and PACCAR, are already rolling out prototypes and ready-to-drive models. Globally, 334 models of electric commercial trucks are expected to launch through 2024, according to data from ACT Research, a Columbus,

Key Takeaways Food and consumables retailers such as Albertsons, Walmart and Amazon see electric trucks as the wave of the future. It’s starting to make economic sense for grocers to “green” their fleets. Companies should consider power upgrades that may be necessary to support the charging of electric trucks.

Ind.-based market data and research firm for the commercial vehicle and transportation markets. Of those 334 models, 281 are battery electric and 53 are fuel cell (the vast majority of electric vehicles in the U.S. market use batteries). In fact, just 10 years from now, more than a third of class 4 through 8 trucks will be battery electric, the firm forecasts. PROGRESSIVE GROCER July 2021




Our 250,000 team members worldwide have

produce food that is both good for people

embraced this commitment, and we plan to

and the planet. Climate change is a threat

share our progress along the way. The road

to the world’s food security, and the way we

ahead will not be easy, but it is the right thing

produce food must be part of the climate

to do for our company, our team members,

solution. As one of the world’s largest food

our suppliers, our customers and the planet.

companies, we have the opportunity, and the obligation, to lead sustainable change toward net zero by empowering producers, suppliers, customers and consumers. LEARN MORE ABOUT OUR Can it actually be done? We think so and we’re taking real actions to achieve our goal. We’re setting time-bound, science-based targets and backing them up with $1 billion in capital over the next decade. By 2030, JBS will invest $1 billion in projects to reduce emissions in our facilities and $100 million in research to support new solutions for regenerative farming practices. By 2040, we will use 100% renewable electricity and achieve climate neutrality across our global family of companies.



Supply Chain “There are already quite a few applications today in commercial vehicles that could be better served by a battery electric vehicle than a diesel.” — Ann L. Rundle, ACT Research

Skeptics may point to Tesla, whose production of the Tesla Semi has been repeatedly pushed back due to the challenge of making or sourcing a new type of battery cell in high volume. During the Palo Alto, Calif.-based company’s April earnings call, CEO Elon Musk said that volume production of 4680 cells is 12 to 18 months away. However, the company has a few prototypes on the market and reportedly plans to start a few deliveries later this year. In the grocery industry, Albertsons is joined by companies like Walmart and Amazon in seeing electric trucks as the wave of the future. Bentonville, Ark.-based Walmart, which reserved 130 Tesla Semis last September, has publicly said that it aims to reach zero emissions by 2040 by gradually replacing its conventional fleet with zero-emission vehicles globally. Putting its money where its mouth is, the retailer has also invested in San Francisco-based Cruise, the only self-driving car company that operates an entire fleet of all-electric vehicles powered by 100% renewable energy (Walmart is doing a contact-free delivery pilot using Cruise vehicles). E-commerce giant Amazon, for its part, has begun using electric vans that it purchased from an Irvine, Calif.-based startup called Rivian (Amazon is also a Rivian investor). The Seattle-based e-tailer aims to have 100,000 of these vehicles on the road making deliveries by 2024, and has said that it hopes to reach net zero carbon emissions by 2040. Further, while plenty of grocery companies have experimented with using hybrid vehicles in recent years to meet their sustainability goals, analysts seem to agree that to truly reach zero emissions, the country needs a large-scale shift to battery and fuel cell electric vehicles. That’s not a matter of if, but when.

however, most people are recognizing that climate change is real, and companies are seeing that there are economic consequences to not addressing carbon neutrality, notes Rundle. Even the major oil companies have come out in support of the movement. Green legislation has been a major factor in the more immediate development of electric vehicles. The California Air Resources Board (CARB) has been particularly aggressive in regulating emissions. Last June, Sacramento-based CARB came out with its Advanced Clean Trucks rule, which is considered to be the world’s first zero-emission commercial truck requirement. The rule mandates that truck manufacturers sell a certain percentage of zero-emission trucks in the state of California beginning in 2024. By 2030, 50% of all commercial vehicles (class 4 through 8) sold by an OEM (original equipment manufacturer) must be zero emission, and by 2035, that number jumps to 75%. Class 7 and 8 tractor trucks follow a less aggressive scale, with a requirement for 30% of zero-emission trucks to be sold by 2030, and 40% by 2032 through 2035. New Jersey and New York have introduced similar legislation following California’s, and 13 other states and the District of Columbia are under a memorandum of understanding that they’ll follow the Golden State’s lead. California has also introduced legislation called the Heavy Duty Omnibus rule, which aims to cut toxic air pollution from new fossil fuel trucks. It will start in 2024 and tighten in 2027. “That will start to make the diesel engine-powered vehicle become significantly more expensive,” says Rundle. ACT Research recently published a study called “Charging Forward” that analyzes the economic case for vehicle electrification. While the initial purchase price for an electric commercial truck is definitely more expensive, fleet managers consider the vehicle’s total cost of ownership, which looks not only at the purchase price, but also the operating costs over the truck’s lifespan. Considering the operating costs of an electric vehicle,

Market Drivers

There are a number of factors driving the development and adoption of electric fleets, observes Ann L. Rundle, VP, electrification and autonomy at ACT Research. These include heightened consumer concerns regarding climate change, as well as companies’ goals concerning environmental, social and governance (ESG) criteria; a push for sustainability from large fund managers in the investment community; legislation requiring lower carbon dioxide emissions; and advancements in battery and charging technology that will contribute to a more favorable total cost of ownership over time. Essentially, it’s starting to make economic sense to “green” your fleet. When the U.S. Environmental Protection Agency launched its SmartWay program with 15 charter partners back in 2004, with the aim of pioneering freight carbon accounting and emissions reduction strategies for carriers and shippers, people were more concerned about the rising costs of fossil fuels. Today,


Although Tesla's rollout of the Tesla Semi has been delayed due to battery supply issues, the company reportedly plans to start a few deliveries later this year. Walmart, Kroger and others have placed orders for the trucks.

E-Commerce Driving Electrification

Volvo's VNR Electric can support an operating range of up to 150 miles, and has the capability to recharge to an 80% level within 70 minutes, according to the company. The Volvo LIGHTS project is promoting electric trucks and new charging infrastructure.

maintenance in many cases can cost 50% less than traditional vehicles, if not more so, and it costs less to recharge your batteries than it does to fill up with diesel, observes Rundle. Meanwhile, regenerative braking results in less wear on the brakes. ACT’s study predicts that by 2040, an electric class 8 regional truck will have a better total cost of ownership than a diesel. Even by 2027, when emission regulations start kicking in, making diesel more expensive, an electric tractor day cab within a certain region will have a better total cost of ownership. “There are already quite a few applications today in commercial vehicles that could be better served by a battery electric vehicle than a diesel,” says Rundle. “Most applications we see today that will take off in the next 10 years are vehicles that return to base daily, are not driven at high speeds and/or on the highway, and have a lot of stops and starts. All of that is really conducive to the strengths of the battery electric vehicle. It can go back to its base at night, and you can charge it.”

Tests Underway

Albertsons is getting a head start on the electrification process with its pilot program. The retailer, which already has a fleet of more than 1,400 class 8 trucks that are certified under the EPA’s SmartWay program, purchased the two new battery electric zero-tailpipe-emission trucks from Swedish vehicle manufacturer Volvo Trucks to work toward its overarching sustainability initiatives that include fleet electrification. In their initial debut on May 28, the trucks were paired with an electric-powered transport refrigeration unit (TRU) from Mesa, Ariz.-based Advance Energy Machines (AEM) to deliver frozen goods from Albertsons’ distribution center in Irvine, Calif., to a local store. The new trucks will be operated as part of a pilot program within Albertsons and will be driven by a small team of trained drivers, according to the company. The results of the program will help the retailer determine how vehicles like this will be used in the future, explains Tim Burke, VP of transportation at Albertsons. “Different variables and inputs will create different scenarios, as we push to determine the range and understand durability and preventative maintenance,” he says. Albertsons procured the Volvo VNR Electric trucks as part of the Volvo LIGHTS (Low Impact Green Heavy Transport Solutions) project, a collaboration between Volvo Trucks North America and 13 other organizations to develop a blueprint to successfully

Greenhouse-gas emissions from transportation account for about 29% of total U.S. greenhousegas emissions, making it the largest contributor, according to the U.S. Environmental Protection Agency.

A new report from global express and logistics company DHL suggests that the rapid growth of e-commerce will help drive electrification, efficiency and eco-friendly materials in supply chains. The white paper, “ECOmmerce: How online retail can build the sustainable supply chain of tomorrow,” discusses how e-commerce development is bringing immediate opportunities to reduce emissions within the supply chain while also challenging retailers, logistics providers and policy makers to collaborate and innovate to address the risks of climate change. The report points to consumers’ growing concern about the environment, citing a recent DHL Morning Consult survey that found 54% of people surveyed said they put more trust in a company based on public commitments to environmental sustainability, with carbon emissions, green energy, waste, alternative fuels and sustainable packaging identified as the five most important factors helping the environment. Looking at specific segments of the supply chain that are most exposed from a sustainability perspective, the report highlights the last mile, first and middle mile, warehousing, packaging, and returns. One of the greatest potential areas of impact, according to DHL’s research, is the electrification of transportation fleets and warehousing operations. DHL, based in Weston, Fla., currently uses some electric vehicles in its last-mile delivery operations.

What if food packaging were carbon-neutral?

Go nature. Go carton. Food packaging plays a critical role in getting food safely to consumers around the world. But it can also cause problems for the planet. What if all food packaging came from plant-based materials and didn’t impact the climate? At Tetra Pak, we already have paper-based carton packages with reduced climate impact. But we won’t stop there. Our aim is to create cartons made solely from plant-based materials that are fully renewable, fully recyclable and carbon-neutral. It’s all part of our journey to deliver the world’s most sustainable food package. Learn more at


Building a low-carbon future: Tetra Pak aims to transform food packaging Tetra Pak is on a journey to deliver the world’s most sustainable food package — and they’re taking ambitious steps to secure this future. We spoke with Jason Pelz, Vice President of Sustainability for Tetra Pak in the Americas, to learn more.

Jason Pelz Progressive Grocer: There’s been a lot of focus lately on which types of

JP: While many equate recycling with sustainability, it’s only part of

PG: Creating the world’s most sustainable food package sounds

packages are recyclable. Could you clarify whether Tetra Pak® cartons are recyclable in the U.S.?

the solution. To make a real impact, we must consider the full lifecycle of the package when evaluating its

like quite the ambition. Could you tell us more about that?

Jason Pelz: Great question! Yes, Tetra Pak® cartons are recyclable in the U.S. and around the world where an efficient recycling infrastructure is in place. There’s a misconception here because just 10 years ago, carton recycling wasn’t as prevalent. To help drive the recycling of our packages, we teamed up with other carton manufacturers in 2009 to form the Carton Council, an industry

sustainability credentials. Comparative studies often show that carton packages like ours have a lower carbon footprint than alternative packages1 because they are made of about 70% paperboard from responsibly managed forests. The sourcing of raw materials plays a big part in the overall climate impact of the package.

JP: At Tetra Pak, we know it’s time to think differently. We’re working to reduce and remove the thin layers of plastic and aluminum contained in our aseptic packages and increase paper-based content. Our goal is to create the world’s most sustainable food package made solely from responsibly sourced, renewable and recycled materials. To do so, we’ll continue making

Manufacturing also plays a role. In 2020, we announced our commitment to reach net-zero GHG emissions in our own operations by 2030, and we hope to reach this goal across the entire value chain by

significant investments to develop more sustainable solutions. In fact, we’re investing approximately $119 million annually over the next 5-10 years on sustainable packaging development.

are landfilled.

2050. We’re making great progress: today, our U.S. operations run solely on renewable energy.

Learn how Tetra Pak is creating

PG: Why is a Tetra Pak® carton

But we know we can do better. That’s why we’re working to

considered a more sustainable packaging alternative?

create the world’s most sustainable

238 %

> 61 %

166 %

Growth of carton recycling access since 2009

Number of U.S. households with access to carton recycling

Increase in recycling rate of cartons since 2009

group committed to building a sustainable infrastructure for carton recycling. There’s still work to do, but our vision is that all carton packages can be collected for recycling — and that zero cartons become litter or


the world’s most sustainable food package at

food package.

For milk and juice in Europe. Source: ifeu 2020, Comparative Life Cycle Assessment of Tetra Pak carton packages and alternative packaging systems for beverages and liquid food on the European market.


Supply Chain “To introduce electric trucks into operation, there needs to be consideration of more than just the truck. Charging infrastructure is crucial to enabling vehicles to enhance uptime.” —Brett Pope, Volvo Trucks North America

infrastructure plan to advance domestic supply chains for electric vehicles, including advanced technologies for batteries, and infrastructure for charging. In late June, a bipartisan proposal was reached to include $15 billion in funding for electric vehicle infrastructure. Meanwhile, there are incentives available to help entice companies to go electric. For instance, California has a voucher program to encourage companies to trade in vehicles for electric versions, and there are credits for zero-emission vehicles linked to current legislation. As Volvo’s Pope observes: “To introduce electric trucks into operation, there needs to be consideration of more than just the truck. Charging infrastructure is crucial to enabling vehicles to enhance uptime. It is important to address this early on, as each site will be different, and lead times will vary to install infrastructure, based on the current needs and future capabilities. As an example, Volvo Trucks has been working with partners like Greenlots through the Volvo LIGHTS project to help build out the necessary charging infrastructure.” He continues, “While the evolution of [electric] products will continue to address the needs of commercial transport solutions, it will take collaboration and partnerships with many key stakeholders to be successful.” In the meantime, Rundle advises companies to consider power upgrades that may be necessary to support the charging of electric trucks. “If you’re ordering a battery electric truck that you’re going to have delivered in the next few years, you’d better start today,” she says. “Also, talk to your local utility about upgrades to the power coming into the facility.” Even though the industry isn’t there yet, Rundle remains bullish on the future of electric long-haul trucks. “Moving forward to 2030 or 2035, if you look at where battery technology is going to go, and also the advancement of charging capabilities, then the idea of an electric long-haul truck starts to become more feasible,” she maintains.

introduce battery electric trucks and equipment into the North American transport industry at scale. Brett Pope, director of electric vehicles at Greensboro, N.C.based Volvo Trucks North America, says that the VNR Electric is available in both tractor and straight truck configurations to meet a variety of demands, including those that grocers face. “A battery electric vehicle works well in distribution segments that operate in fixed geographic areas to help address charging needs and take advantage of recapturing energy through regenerative braking,” he notes. “Supermarkets that make constant deliveries to retail locations, for instance, are a good fit.” Pope adds that the VNR Electric can support an operating range of up to 150 miles based on the truck’s configuration, and also has the capability to recharge to an 80% level of battery energy within 70 minutes. Another grocery company that’s testing the waters with electrification is Providence, R.I.-based wholesaler United Natural Foods (UNFI). The company revealed in May that it’s adding 53 all-electric TRUs to its fleet at the company’s Riverside, Calif., distribution center. UNFI is removing 53 of its diesel-powered TRUs from operation and using AEM to rebuild the units to all-electric specifications. The company will lease the TRUs through Newark, N.J.-based PLM Trailer Leasing for five years while it continues to explore how they integrate into its operations. UNFI anticipates that the electric TRUs will help it save 135,000 gallons of diesel fuel per year. Looking on the supplier side, Rundle points to St. Louis-based Anheuser-Busch as an early mover in using electric trucks. “The application of a truck delivering beer in a city is a perfect case for battery electric, where there are lots Freightliner plans to start production of its eye-catching of stops and starts, and you have to travel at a very eCascadia electric semi-truck in 2022. low speed,” she observes.

Infrastructure Challenges

For now, the industry will likely continue with short-range tests like these as it waits for the infrastructure for electric commercial vehicles to catch up. A recent report from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory and the University of California highlights a lack of current policies regarding adoption incentives, charging infrastructure and electricity pricing that so far have prevented the widespread electrification of commercial trucking fleets. The report argues that policies are needed to jump-start the widespread usage of electric long-haul trucks. On the federal level, the Biden administration had earmarked $174 billion from the president’s


Just Announced!

Debuting this November in Orlando, Florida, the first annual Grocery Industry Week will be a place where grocery leaders converge to learn, network and celebrate the achievements of the grocery community. Grocery Industry week is an Invite Only event that will take place from November 1st through the 4th at the Hyatt Regency Grand Cypress Resort in Orlando, FL. Anchored by the 15th Annual Top Women in Grocery, Progressive Grocer has created the highly curated “Grocery Industry Week” as a way for grocery leaders across the retail grocery spectrum to come together to celebrate, source new ideas, network, collaborate and learn. PG is in the grocery industry’s unique position to be able to bring together leaders and decision makers at every level and category of specialization for 3 high energy days of celebration, collaboration, sharing and learning you won’t want to miss.

Learn more about attending and sponsoring:


A Sustainable Path to Mainstream Clean SPEAKING WITH RAMONA ROOF, Director of Marketing, CleanWell A commitment to environmental responsibility is the cornerstone CleanWell was built on — long before sustainability was the important issue it is today. The company was born 15 years ago when a father realized that harsh household cleaners were making life difficult for a son with an immune system disorder. When he couldn’t find a better option, he started CleanWell. Now, as consumers embrace sustainability in greater and greater numbers, Progressive Grocer reached out to Ramona Roof, director of marketing, to find out how the company’s plant-derived cleaning products are helping consumers, in the words of the company’s motto, “Live Free, CleanWell.”

Progressive Grocer: One of the most important sustainability features of CleanWell’s disinfectant products is that they’re made with thymol. What is that, and how does it differentiate you in the cleaning products category? Ramona Roof: Thymol is a naturally occurring antimicrobial herbal extract that has been recognized as an antiseptic for centuries. It breaks down barriers of certain pathogens to kill the nucleus. In laboratory tests, it killed 99.9 percent of germs and viruses, and the EPA certified it for use against the virus that causes COVID-19. CleanWell was the first to use thymol to make cleaning products for residential applications nearly 15 years ago — we really were pioneers in the space. We don’t use alcohol, bleach, ammonia, phosphates, or quaternary ammonium — all common ingredients in home cleaning products that often require warning labels on the packaging. One of the biggest differentiators of our products is that no warning labels are needed!

Consumers got a crash course in cleaning — what to disinfect, the difference between cleaning and disinfecting, how to read a label, what ingredients make a product work, the benefits and risks of those ingredients, etc. Before COVID, most people didn’t know what an EPA registration number was. Now, we’re all looking for EPA List N. Industry vernacular has become mainstream. CleanWell Botanical Disinfecting Wipes and Sprays are on the EPA’s List N “Disinfectants for Use Against SARS-CoV-2.” We had to meet the same EPA testing criteria as all other disinfectants to receive registration approval.

PG: Why should this matter to grocery retailers who might wonder if there’s value in adding another set of SKUs to their cleaning supplies inventory? And why CleanWell? RR: Recent data presents a pretty clear picture. Disinfecting cleaners are the fastest-growing segment in the household cleaning category1; better-for-you products deliver greater growth in conventional outlets than total products2; and CleanWell is the fastest-growing disinfecting cleaning brand in the natural channel1. Clearly, consumers are embracing sustainability, “clean” sourcing and plant-based products — so having those kinds of supplies on-shelf can boost a store’s overall sustainability profile. Shoppers have started reading labels and seeing the warnings. So, as they move into the new normal, they will be more knowledgeable about what is in cleaning products and how to use them. Consumers became enlightened during the pandemic — they learned there is a sustainable path to a cleaner home. CleanWell is uniquely positioned to help them keep toxins out of their homes and can be an important partner as they embark on that journey. 1

SPINSscan Enhanced Natural [proprietary], Conventional Mutli Outlet [powered by IRI] 52 Weeks Ending 11/29/2020


SPINSscan Enhanced Natural [proprietary] Conventional Mutli Outlet [powered by IRI] 52 Weeks Ending 12/27/2020

PG: Consumers often have questioned if “green” cleaners work as well and provide as much protection as more mainstream products. Has that changed as a result of COVID-19? RR: During the pandemic, supply chain issues and out-ofstocks prompted shoppers to buy brands they’d never tried — and CleanWell became an unintentional brand discovery Consumers saw first-hand how well the products work, and confidence in the efficacy of plant-based products increased.



74th Annual Consumer Expenditures Report

Wild Ride FLUCTUATING CONSUMER E XPENDITURES DEFINE 2020 AND CONTINUE THROUGH 2021. By Lynn Petrak f the proof is in the pudding, it’s also in sparkling adult beverages, flour and cleaning products. Recent consumer expenditures data confirms what many thought about the impact of the global pandemic on shoppers’ spending habits — namely, that people prepared more meals at home, sought permissible indulgence and escapism, and tried to improve their everyday surroundings. Now, with the scales shifting a bit amid a return to mostly normal lifestyles, consumers are likewise changing some of their spending habits.

Recent consumer expenditure data indicates a mixed bag when it comes to shopper spending, both literally and figuratively. People bought a variety of products, for either practical or indulgent purposes, to get them through their frequent time at home. They also spent their money across different channels in a rapidly evolving retail market. Today, purchases reflect another unique set of circumstances, with post-pandemic enthusiasm tempered by concerns about higher prices. Delving into recent data, one can see how consumer expenditures exemplify a market defined by fluctuations.

Personal Consumption Expenditures (PCE) by Month

Consumer spending, or personal consumption expenditures (PCE), is the value of the goods and services purchased by, or on the behalf of, U.S. residents.

May 2021


April 2021


March 2021


February 2021


January 2021


Source: Bureau of Economic Analysis, U.S. Chamber of Commerce

Month-to-Month Change in Consumer Spending Consumer Spending



12 10 8 6 4 2 0 -2 -4




Source: Bureau of Economic Analysis, U.S. Chamber of Commerce





74th Annual Consumer Expenditures Report The Big Picture

Data from the U.S. government reveals continual swings in consumer spending, largely attributable to COVID-19 surges and slowdowns, and, later, concerns about high prices. In short, volatility continues and the perennial factors of consumer confidence, wages and debt are also more up in the air in a tight labor market accompanied by other uncertainties. According to the Bureau of Economic Analysis (BEA) of the U.S. Chamber of Commerce, consumer spending rose 11.3% from the fourth quarter of 2020 to the first quarter of 2021. In that time, spending on nondurable goods, including groceries, increased by 14%, and spending on durable goods, like cars, jumped 25.6%.

U.S. Retail Sales 12



8.8 7.6





2 1.4 0.8







-1.3 -2.9





Source: U.S. Census Bureau




Retail Sales

In the retail sector, sales in the United States have been wavering from month to month. According to a report from the U.S. Census Bureau, retail sales dropped 1.3% in May as the pandemic slowed and consumers returned to dining in restaurants and going out for entertainment. Sales in April, though, were 0.9% higher than in the previous month.

Food Spending During the Pandemic Food At Home

Billion Dollars

Food Away From Home

Total Food Sales

160 144



140 142



138 138 133






137 131

138 131




135 136




80 60 40 20


Ju l Au g Se p Oc t No v De c

Ma r Ap r Ma y Ju n


Ju l Au g Se p Oc t No v De c Ja n Fe b

In food retailing, it has been less about trends and more about reactions that spur month-tomonth changes in expenditures. This spring, for example, there was a readjustment of food expenditures to levels closer to pre-pandemic spending.

Ja n Fe b Ma r Ap r Ma y Ju n

Food Dollars in Flux


Source: Economic Research Service (ERS), U.S. Department of Agriculture (USDA)




74th Annual Consumer Expenditures Report The Price Factor

The Goods on Shoppers’ Spend

Pricing is another wild card in consumer expenditures over the past year, both at grocery and in the overall marketplace, with higher prices for goods in many parts of the country and more recent concerns about inflation.

On a more granular basis, consumers spent their money on a little bit of everything as they contended with major lifestyle changes wrought by the pandemic. As people cooked and prepared more meals at home, pantry staples got the benefit of more sales, as did food and beverages that provided some kind of escapism or indulgence. Not surprisingly during a health crisis emanating from a transmissible virus, the health, self-care and cleaning supply categories received a bump in consumer purchases.

Percent Changes in CPI for All Urban Consumers: U.S. City Average Seasonally adjusted changes from preceding month

Un-adjusted 12-mos. Nov Dec Jan Feb Mar Apr May ended 2020 2020 2021 2021 2021 2021 2021 May 2021

All Items .2 .2 .3 .4 .6 .8 .6 Food .0 .3 .1 .2 .1 .4 .4 Food at Home -.2 .3 -.1 .3 .1 .4 .4 Food Away From Home 1 .1 .4 .3 .1 .1 .3 .6

5.0 2.2 .7 4.0

1: Not seasonally adjusted Source: U.S. Bureau of Labor Statistics

Consumer Spending: Grocery Versus Restaurants

Grocery Restaurants

Year-Over-Year Change 116.3%

120% 100% 80% 60%

63.1% 38.5%

40% 20%




-20% -23.4%




06 /2 1

05 /2 1

04 /2 1

03 /2 1

02 /2 1

01 /2 1

12 /2 0

11 /2 0

10 /2 0

09 /2 0

08 /2 0

07 /2 0

06 /2 0

05 /2 0

04 /2 0

03 /2 0

02 /2 0

01 /2 0


Source: Mastercard SpendingPulse, which measures overall retail sales across all payment types, including cash and check

New and Notable

Grocers with an eye on current and future spending trends can get some actionable insights by looking at the top new products introduced in the past year. Despite many challenges in the marketplace, a spate of new products caught shoppers’ attention — and their dollars. In its recently released “New Product Pacesetters” report, Chicago-based IRI ranked 200 high-performing new items that fit the bill for shoppers in 2020. According to the 26 th annual report, many of these new products resonated with consumers as they spent differently — and typically spent more — on both necessities and items that made them feel better. And spend they did: The latest “New Product Pacesetters” shows


that more than a quarter of the items introduced before the pandemic in late 2019 or early 2020 had big gains and accounted for 51 of the total 200 Pacesetter products. “The top New Product Pacesetters of 2020 accomplished a unique feat by achieving success in circumstances never before seen in the history of Pacesetters,” says Joan Driggs, VP of content and thought leadership for IRI. “Many shoppers made the leap to new products because their go-to brand was unavailable, but many also actively sought out innovation for new experiences, measured not just by dollars earned, but also by the ability to reach the intended audience.”

Top 25 New Product Pacesetters Food and Beverage

Million Dollars USD

Top 25 New Product Pacesetters Nonfoods

Million Dollars USD

1. Bud Light Seltzer, AB InBev


1. Downy Infusions Scents, Procter & Gamble


2. Truly Lemonade, The Boston Beer Co.


2. Brawny Tear-A-Square, Koch Industries


3. Mtn Dew Zero Sugar, PepsiCo


3. Greenies, Mars


4. Starbucks Creamers, Nestlé USA Beverage Division


4. Juul, Juul Labs

$93.3 $76.4

5. Rebel Ice Cream, Rebel Creamery


5. Native, Procter & Gamble

6. Reign, Monster Beverage


6. Duracell Optimum, Berkshire Hathaway


7. Cheetos Popcorn, PepsiCo


7. Viva Multi-Surface Cloth, Kimberly-Clark


8. Kinder Bueno, Ferrero USA


8. Olay Retinol24, Procter & Gamble


9. Reese’s Thins, The Hershey Co.


9. Mucinex Nightshift, Reckitt


10. Beyond Sausage, Beyond Meat


10. Primatene Mist, Amphastar Pharmaceuticals


11. Wonderful No Shells Flavored Pistachios, The Wonderful Co.


11. Pampers Cruisers 360 Fit, Procter & Gamble


12. Talenti Gelato Layers, Unilever


12. Swiffer Pet, Procter & Gamble


13. Coca-Cola Energy, The Coca-Cola Co.


13. Sensodyne Pronamel Intensive Enamel Repair, GlaxoSmithKline


14. Planet Oat, HP Hood


14. Tidy Cats Free & Clean, Nestlé


15. My/Mochi, The Mochi Ice Cream Co.


15. Gain Blissful Breeze, Procter & Gamble


16. Smithfield Prime Fresh Delicatessen, Smithfield Foods


16. Neuriva, Reckitt


17. Spindrift, Spindrift Beverage


17. Hempvana, Bulbhead $32.3

18. Red Bull Peach Edition, Red Bull North America


18. Mr. Clean Clean Freak, Procter & Gamble


19. Siete, Siete Family Foods


19. Gain Scent Blast, Procter & Gamble


20. Corona Refresca, Constellation Brands


20. Persil ProClean Discs, Henkel


21. Starbucks Frappuccino with a Splash of Cold Brew, North American Coffee Partnership


21. Bounce Wrinkleguard, Procter & Gamble


22. Kit Kat Ice Cream, Froneri


23. Kit Kat Duos, The Hershey Co.


24. Monster Energy Ultra Paradise, Monster Beverage


25. Swerve, Swerve


Source: IRI, 2020 New Product Pacesetters

Fun and Functional Successfully Co-Exist

Given that adult beverages were Nos. 1 and 2 on IRI’s list of top new products, it’s clear that consumers were willing to pay for a sense of escapism and comfort. Alcoholic beverages represented eight of the 27 beverage Pacesetters and generated $547 million in 2020, compared with $198 million in 2019.

Balancing Act

Shoppers divided their spend between feel-good and better-foryou products, according to IRI’s 2020 “New Product Pacesetters” report. Indulgent items like Talenti Gelato Layers, Reese’s Thins and Cheetos Popcorn made the top 25, but so did Rebel lowcarb ice cream and Mtn Dew Zero Sugar.

Cleaning Up

Combine more time at home with worries about catching a virus, and you get a consumer base more willing to spend on household cleaning products. Two new paper towel products hit the top 10 list of nonfood Pacesetters. Four laundry products ranked in the top 25 list of Pacesetters. Downy Infusion Scents generated more than $120 million in sales alone.

22. Tide Heavy Duty 10X, Procter & Gamble


23. Maybelline The Falsies Lash Lift, L'Oréal USA


24. L’Oréal Infallible Fresh Wear, L'Oréal USA


25. Nature's Way Sambucus, Schwabe North America


Source: IRI, 2020 New Product Pacesetters

Best Face Forward

Recent sales data shows that beauty items like makeup have bounced back, but the “New Product Pacesetters” report shows that face and skin care items were still in consumers’ baskets in 2020. Such products comprised 29 of the Top 200 Pacesetters, representing $378 million in sales. Moreover, the 17% share of total nonfood Pacesetters in 2020 was nearly double the rate of face and skin products chosen the prior year. IRI’s 2020 New Product Pacesetters also identified enthusiastic buyers.

Income: Most Pacesetter brands skew toward upper income: $70K+ Family Size: Skew toward households with three or more people and with kids Race: Skew toward Hispanic families who speak English Generation: Skew toward Millennials and away from older Boomers and seniors Age: Skew toward males and females ages 25-54 PROGRESSIVE GROCER July 2021



Consumer Expenditures Report IRI defines company size based on U.S. revenues as:

What’s in a Name?

While new products from large companies represented 22% of IRI’s 200 Pacesetters, they saw 50% of the dollars spent in 2020.

BIG More than $6B MEDIUM <$6B to >$1B


to all the Nominees on their archievements

Top 10 Pacesetter Manufacturers Ranked by Number of Launches

SMALL <$1B to >$100M EXTRA SMALL Less than $100M

Including mean launch dollar sales


Number of Launches

Mean Launch Dollar Sales ($ Millions)


Number of Launches

Mean Launch Dollar Sales ($ Millions)









































in B=Big companies M=Medium companies Source: IRI, 2020 New Product Pacesetters

Total U.S. Online Grocery Sales, May 2021 Total spending past 30-day periods Ship to Home




$8.8B $8.3B 8

$7.2B $1.7B

$6.5B 6













$5.3B 4









$1.8B $6.6B


$7.0B $1.7B $5.3B

$2.5B $4.0B


0 1.800.306.1071





Monthly total may not be equal due to rounding. Source: Brick Meets Click/Mercatus






Percent of Deliveries by Weekday

Percent of Deliveries Started by Hour

3rd Week of May

4 Weeks in May












5% 12.5%

10.0% Mon Tue Wed Thur Fri Sat Sun

Source: Instacart

0% 7am 8 9 10 11 12pm 1 2 3 4 5 6 7 8

Source: Instacart

The Great Spending Shift

If what consumers are buying is changing, so is where they’re buying. A lot of research has emerged in the past year on the quick pivot to online buying across a variety of channels and services. One recent survey showed that online sales in May 2021 dropped 16% from May 2020, but are still three and a half times higher than pre-COVID levels. The magic question, of course, is whether the gains will hold against 2019 or early 2020 levels. A new survey from Skaneateles, N.Y.-based behavioral strategy and design firm ChaseDesign indicates that about half of grocery shoppers started doing online ordering and curbside pickup during the pandemic, but that only half of those consumers will continue those habits in the future.

54% of shoppers prefer to pick out items in person. 40% of shoppers want the experience of shopping in a physical store. Nearly half of shoppers who buy online and pick up in stores won’t buy meat or seafood that way, and about 40% avoid buying dairy, produce and frozen products online.


Source: ChaseDesign

Timing It Right


Instacart recently shared insights on its customers’ online buying habits, having found that when it comes to buying, there are some interesting trends in timing (See chart above). For instance, although weekends are still the busiest time for Instacart ordering, there has been a notable increase in weekday orders and purchases earlier in the day. Further, while there are signs that the weekend pattern is re-emerging with the loosening of restrictions, shoppers seem to have retained their propensity for ordering earlier in the day. PROGRESSIVE GROCER July 2021



Hormel Foods

The June 2021 acquisition of Planters adds an iconic brand with annual sales of more than $1 billion to Hormel's portfolio of snacking products.

How Hormel Became a Snack Company ACQUISITIONS, ADJACENCIES AND INNOVATION DEFINE THE GLOBAL BR ANDED FOOD COMPANY’S GROW TH STR ATEGY. By Mike Troy ormel Foods is a company that everyone knows but doesn’t always fully understand, as it’s a unique entity in the consumer products world. Whether it’s the company’s surprisingly broad lineup of brands and presence in diverse categories, blended approach to serving food and foodservice retailers, or acquisition strategy, there are a lot of layers to what Hormel is today. The Austin, Minn.based company has quietly become a major global branded food company whose annual sales this year will easily surpass $10 billion for the first time. Credit for the milestone goes to the June 2021 acquisition of the Planters snacking business from the Kraft Heinz Co. for an effective purchase price of $2.79 billion. Suddenly, a company known for brands such as Skippy, Spam, Hormel, Columbus, Jennie-O, Natural Choice, Applegate, Justin’s and Herdez, among others, has become an even bigger player in snacking with the addition of one of the world’s most iconic brands.


“We think about where consumers have been and where they are continuing to go, and the snacking space is an area that really hasn’t shown any sign of slowing down,” says Jim Snee, Hormel chairman, president and CEO, regarding the Planters acquisition. “We were pretty well developed in snacking, but didn’t have any one significant brand that really stood out. Planters really affords us that opportunity.” Planters is a more than $1 billion brand, but there was more to the logic of doing the deal than simply bolting on additional sales volume. The brand helps Hormel balance its portfolio and provides deeper exposure to the snacking category, consistent with living up to the vision of being a global branded food company. How-

Our thing is, wherever the consumer is going to show up, we need to be there, we need to understand it, and we need to have the expertise.” —Jim Snee, chairman, president and CEO, Hormel Foods

How Hormel Thinks About Acquisitions ever, it’s the ability to turn loose Hormel’s innovation, marketing and consumer insights infrastructure to unlock new possibilities for Planters that has Snee and other senior leaders excited. “We love that we have this balanced portfolio, and Planters really helped us further achieve balance not only in terms of just our general business segments, but also the center-of-the-store portfolio with the non-meat protein aspect of it,” Snee says. “We saw balancing effects, and we saw the scale that we really, really want to get in the snacking space. But then, as we dug in, the marketing and innovation team looked at it and saw opportunities that made it even more compelling and exciting for us.” Retailers should be excited, too, given Hormel’s track record of bringing innovation and growth to its brand portfolio, whether acquired or homegrown, and helping drive growth in the categories in which its brands reside. That gives P.J. Connor, Hormel’s group VP and president, consumer products sales, a powerful message to share with retailers thirsting for innovation from CPG companies. “We’re really good at coming out with a creative innovation when we get our hands on brands,” Connor asserts. “You can see all the things that we’ve done with Skippy, whether it’s Skippy Squeeze, Skippy Protein or Skippy Snacks.” The same could be said of the Columbus brand, with its unique packaging approaches to make charcuterie more accessible and expand usage occasions, or the recently acquired Sadler’s Smokehouse foodservice brand now gaining retail distribution.

What Is 'Snealing?'

Recognizing that snacking has morphed into so many occasions, Hormel invented a word for this trend. Connor and others use “snealing,” an odd-sounding mashup of “snacking” and “meals,” to describe Americans’ noshing behavior, a term that Snee jokes has nothing to do with his name. “Consumers are snacking today more than ever before,” affirms Luis Marconi, group VP, grocery products division. “It is moving across different consumption occasions, and consumer segments are also evolving. You have the good-for-you snacks, and you have indulgence, you have pragmatic snacking, you have entertaining. There are multiple angles for the occasion. So that is a very rich ground for us as marketers to position our brands.” Hormel’s brands are well positioned because of the company’s balance between serving food retailers and foodservice operators. The company can serve customers however they choose to

We’re really good at coming out with a creative innovation when we get our hands on brands.” —P.J. Connor, Group VP and president, consumer products sales, Hormel Foods

“Build versus buy” is a phrase heard in the retail technology world that applies equally well to CPG companies. While there are merits to internal product development, the faster path to solving complex business challenges often involves purchasing a solution. That same philosophy applies to the CPG world, where the arduous process of building a brand from scratch can be greatly shortened via acquisition. Hormel Foods is a good example of this strategy brought to life. The acquisition of Planters for an effective purchase price of $2.79 billion was the largest deal in Hormel’s history and reveals much about how the Austin, Minn.-based company brings a strategy of “natural adjacencies” to life. For example, Hormel had a sizable snacking business prior to Planters, but it also lacked a marquee brand. With Planters in the portfolio, Hormel CEO Jim Snee envisions the brand broadening the company’s scope for future acquisitions in the snacking space. “As we think about our portfolio, we don’t ever want to get too far afield from our core and what we’re good at, but Planters is just one step away,” Snee says. “We know center of the store and we know snacking, but maybe we didn’t specifically know peanuts or cashews. But we know nuts with the Skippy and Justin’s brands, so there was just kind of that natural adjacency.” This philosophy of natural adjacencies creates new opportunities for Hormel as it has become a major player in the snacking space, which then has natural adjacencies to other areas. “The next potential acquisition won’t be a huge leap if we do it in the snacking space, because we’re there,” Snee explains. “We’ll have the experience, the brand, the product, the innovation, and we’ll have the marketing.” Hormel brought those same capabilities to bear in the fall of 2017 when it acquired the premium deli meat and salami company Columbus Manufacturing. The $850 million acquisition also fit the company’s adjacency requirements, given it already had strong deli brands such as Hormel, Jennie-O, Applegate and Di Lusso. Another recent deal involved the Sadler’s Smokehouse brand in early 2020. Although smaller than Planters and Columbus, the foodservice brand is seen as having big potential at retail, as it simplifies at-home barbecue preparation. PROGRESSIVE GROCER July 2021



Hormel Foods engage with Hormel brands. This approach proved effective during the pandemic, because as foodservice demand evaporated, Hormel was able to shift capacity to focus on retail where demand was surging. This also meant that the company didn’t have to tap the brakes on promotional activity the way that some CPGs that were less effective at managing supply chain disruptions had to do. “One of the key things that we did during the pandemic is we kept the advertising going, because we knew that there was going to be an influx of new consumers joining the franchise,” Marconi explains. “Our strategic choice was to say, when these consumers are joining us, we need to give them ideas. We need to give them recipes. We need to try to keep them as much as possible within the franchise, because those are going to be the consumers that are going to stay with the franchise in the future.” Consumers gained during the pandemic have stuck with Hormel brands, according to Marconi, especially more diverse consumer segments and Millennials. One example that jumps out for Marconi is the Herdez brand, which he says is the No. 1 salsa brand in Mexico and is becoming the Spam, one of Hormel's most fastest-growing salsa brand iconic brands, continues to generate record sales as in the United States consumers discover new uses “We just introduced Herdez for the versatile product. brand avocado hot sauce, and it’s been a tremendous success in terms of gaining distribution,” Marconi says. “When consumers in America want to have a truly authentic experience, they don’t want to go and look for imposter type of concepts. They really want to pick the real one. And Herdez is delivering against that promise.”

The Foodservice Connection

Just as retailers take an omnichannel approach to serving shoppers, Hormel has an “omni-eating” approach, due to its balanced retail and foodservice operations. The go-to-market strategy has been in place for decades, but it really paid dividends during the pandemic. “As our foodservice businesses were declining, our retail businesses were expanding, and we were able to make those decisions

about where we could pivot, and how to pivot both from a plant and labor standpoint, and meet consumers where they wanted food,” notes Deanna Brady, EVP of Hormel’s refrigerated foods group. In addition to diversifying Hormel’s exposure to how people eat, having a foodservice operation is a great source of menu trend insights as well as operational insights, because items developed for foodservice with an ease-of-preparation mindset can have application in the home, where convenience is also highly valued. “One of the toughest items to cook, and to do it right, and to do it consistently, is bacon,” Brady says. So Hormel launched Bacon One in foodservice in 2014 to solve a major back-of-house challenge for foodservice operators, but at-home cooks have the same problem. “As we’ve continued to build that business at foodservice, we’ve been thinking, when and how can we bring this [ease-of-bacon-preparation] proposition into retail?” she muses. The same philosophy is being applied to the Sadler’s Smokehouse brand, acquired in 2020. Barbecuing may be a national pastime, but the at-home process can be time-consuming, and its results inconsistent. “Sadler’s was another one of those items where we know people are tired of cooking at home, and that barbecue is one of the hardest and longest things to cook,” Brady observes. “We felt like with where the consumer is at, it would be a really valuable time to launch some restaurant-style craft barbecue items at retail and help solve the dinner dilemma.”

Winning in a Blurry World

It’s all about everything in moderation, and you need to teach people how to eat bacon one day, and how to eat a salad with lean protein the next.” —Deanna Brady, EVP, refrigerated foods, Hormel Foods


Hormel is most often associated with various meats, but the company’s innovation engine, powered by consumer insights and a full-time anthropologist, means that it’s also focused on plant-based and flexitarian options. For example, the company’s pizza topping plants now manufacture plant-based pepperoni and are exploring other options, including sausage. There’s also activity under brands such as Natural Choice and Applegate — the latter a brand whose tagline is “changing the meat we eat” — to introduce animal and plant-based protein blends.

Leadership Longevity Is a Hormel Hallmark

Consumers' quest for authentic products has made Hormel's Herdez brand the fastest-growing salsa brand in the United States. Hormel's Bacon One brand, a foodservice favorite, is bringing preparation simplicity and consistency to retail.

“Most recently, Applegate introduced Well-Carved, lean protein combined with vegetables,” says Brady, noting that Hormel also offers plant-based options under the Jennie-O brand. “There’s a lot of opportunity there to look for healthier options, but as a dietitian, I’ve always said, ‘It’s all about everything in moderation, and you need to teach people how to eat bacon one day, and how to eat a salad with lean protein the next.’” The concept of blurring, whether it’s in the protein categories or the way Americans shop for and consume food, is a trend that continues to gather momentum. Snee contends that the company’s brand portfolio and food retail and foodservice approach ensure that it’s positioned to win in a world where the consumption of food is the only constant. “This whole blurring of the channels is only going to continue to happen, from our perspective,” he says. “We’re channel agnostic because we have different organizations aligned against different parts of the business. What we’re really focused on is the expertise, whether it is our refrigerated retail marketing team, in-store, in the deli for that prepared food section, or the foodservice segment. Our thing is, wherever the consumer is going to show up, we need to be there, we need to understand it, and we need to have the expertise. We feel really good about how we’re positioned.”

Consumers are snacking today more than ever before. It is moving across different consumption occasions, and consumer segments are also evolving. ” —Luis Marconi, Group VP, grocery products division

Top executives at Hormel Foods tend to be homegrown, but the company did recently supplement its senior leadership ranks with a key external hire. Hormel’s leadership longevity is evident in Jim Snee, chairman, president and CEO. He has been with the Austin, Minn.-based company for 32 years and is only the 10th president and CEO in the company’s 130-year history. He was named president and COO in October 2015, became CEO in October 2016, and then received the title of chairman in October 2017. Not far behind Snee are senior leaders Scott Aakre and Richard Carlson. Aakre is VP of corporate innovation and new product development, and Carlson is VP of quality management. Both have been with the company for 31 years. Deanna Brady, EVP, refrigerated foods, and P.J. Connor, group VP and president, consumer products sales, have each been with Hormel for 25 years. Brady began her career as a foodservice territory manager in 1996 after earning a degree in dietetics and food administration at California Polytechnic State University. She advanced through a variety of foodservice roles; was named president, consumer products sales in 2015; and assumed her current role in October 2019. Connor began the same year as Brady as a grocery sales rep and led several key account customer teams before becoming SVP, consumer products sales in 2011. He assumed his current role in 2019. Luis Marconi, group VP, grocery products division, is the relative newcomer to the group, with 21 years of experience at Hormel. After nine years with The Quaker Oats Co., Marconi joined Hormel in 2000 in an international sales role. In 2006, he was named manager of international joint ventures for the grocery products division. In 2009, when the MegaMex Foods joint venture was formed, Marconi was appointed managing director. He was named VP, grocery products marketing in 2012, and assumed his current role in 2016. More recently, Hormel went outside the company to fill the key role of group VP, corporate strategy. Jacinth Smiley joined Hormel in April 2021 after a previous stint as VP and chief accounting officer at chemical refiner LyondellBassell and, prior to that, spending 20 years with General Electric. She is responsible for leading the development and execution of Hormel’s growth and investment strategies. PROGRESSIVE GROCER July 2021



Candy & Snacks


Key Takeaways As we emerge from the pandemic, “better-for-you” snacks are now mainstream. To capitalize on this movement, retailers and manufacturers should recalibrate their offerings. Post-pandemic sustainability concerns will drive the popularity of some snacks.

At Fresh Thyme Farmers Market, healthy snacks are showcased near the front end. The assortment includes items such as meat sticks, meat jerky and other products spanning animal proteins such as beef, turkey, venison, buffalo, chicken and pork. Trendy vegan jerky also has a place in this end cap.

eet the new American grocery shoppers. After more than a year of extreme fear and stress due to the COVID-19 pandemic, these consumers are prioritizing health and safety more than ever before. At the grocery store, whether they’re shopping on their mobile phones or cruising the center store in person, they’re looking for better-for-you nourishment by scanning labels; zeroing in on unfamiliar ingredients; skipping items loaded with sodium, sugar and fat (which they may have overindulged in during the pandemic); and looking


for as many health benefits as possible in every snack or meal. Health and wellness were surging trends in retail and consumer packaged goods before the pandemic, but for shoppers, the buzzwords have gone from “trendy” to “must have” when it comes to food, and especially sweet or savory snacks. “Better for you” is now mainstream as post-pandemic consumers redefine what it means to lead a happier, healthier and more productive lifestyle during chaotic, unbalanced times. “Coming out of the pandemic, I think we’ve all realized there really is nothing more important than our health,” affirms Mark Mastern, CEO of Joolies, a grower of organic California Medjool dates in Southern California’s Coachella Valley. “Maintaining a healthy lifestyle is top of mind for consumers, yet at the same time, there are so many stresses people are facing as we continue to face unknowns and transition back to ‘normal’ times.” Joolies is perfectly positioned to capture the post-pandemic shopper looking for better-for-you snack solutions. Consumers are snacking more than ever before, and they expect their snacks to offer nutrition, portability and wellness. Joolies’ Medjool dates are a good example of a snack that offers consumers a healthy option, a sugar swap and a superfruit ingredient while at the same time satisfying cravings for comfort food, according to Mastern. Medjool dates are known to be high in antioxidants, and a good source of fiber and potassium. Many retailers and suppliers looking to leverage the opportunity in healthy snacks used to hang their hats on glu-

ten-free and organic labels, and left the “superfood” products to natural food stores. However, more shoppers than ever, spanning a wide range of socioeconomic and cultural backgrounds, are looking for low-sugar chocolate bars, sour-cream-and-onion protein puffs and ketogenic malted milk balls. To capitalize on this post-pandemic health-and-wellness movement and reach the right customers, retailers and manufacturers should recalibrate their offerings and get in front of these trends now. “In both candy and snacks, I think you’ll see solid growth after the pandemic,” says John Downs, president and CEO of the Washington, D.C.-based National Confectioners Association. “I think, given lifestyle preferences in this country, and given our demographics, and as we come out of the pandemic, these two categories will continue to be solid.”

Coming out of the pandemic, I think we’ve all realized there really is nothing more important than our health. Maintaining a healthy lifestyle is top of mind for consumers, yet at the same time, there are so many stresses people are facing as we continue to face unknowns and transition back to ‘normal’ times.” —Mark Mastern, Joolies

A Not-Too-Sweet Strategy

According to New York-based global consulting firm Mckinsey & Co., wellness became the primary public concern during the pandemic, with 68% of consumers saying they were very or extremely concerned about their health. A new survey by U.K.-based market research firm FMCG Gurus shows that 56% of consumers, many of whom turned to sugar as a stress reliever during the pandemic, said they plan to prioritize their post-pandemic health by reducing their sugar intake. Meanwhile, the Washington, D.C.-based International Food Information Council’s 2021 Food & Health Survey, released in May, reported that 72% of U.S. consumers said they’re limiting or avoiding sugar in 2021. To capture more consumers looking for better-for-you sweets, companies are investing in low-sugar innovation, and there’s no better example of this than The Hershey Co., which is strategizing to grow the better-for-you chocolate category with new and differentiated capabilities. Earlier this year, Pennsylvania-based Hershey introduced Organic Reese’s Peanut Butter Cups and Kit Kat Thins as part of its goal to provide better-for-you options. In June, the company completed its acquisition of better-for-you chocolatier Lily’s for $425 million. Consumers are clamoring for fruit and nut snacks made with simple ingredients. Have A Ball's energy snacks check all the boxes: raw, Certified Organic, non-GMO, Certified Vegan, kosher, gluten-free and dairy-free. The line's flavors are Fig and Walnut, Cherry and Hazelnut, and Apricot, Cacao Nibs and Hazelnut.

“Lily’s popular low-sugar products are a great strategic fit with our multipronged better-for-you snacking strategy and will perfectly complement our existing iconic Hershey’s better-for-you offerings,” notes Chuck Raup, Hershey’s president U.S. Hershey is implementing a multipronged strategy to expand its portfolio to deliver more reduced-sugar, organic and plant-based alternatives. The strategy includes continuing to offer portion-controlled treats in a variety of pack types, extending core brands to better-for-you offerings and renovating existing products, focusing internal efforts and external investments to develop future sugar reduction capabilities, and teaming with top better-for-you brand partners to co-develop and launch new offerings. “Expanding our expertise, building new capabilities and delivering more choices in better-for-you confection is the next big category opportunity for us to lead,” says Kristen Riggs, chief growth officer at Hershey. As part of its better-for-you confection strategy, the company has also partnered with West Palm Beach, Fla.-based ASR Group, a leading sweetener company, to co-lead an equity investment in Bonumose Inc., a Charlottesville, Va.-based startup with breakthrough innovations in plant-based food ingredients, including rare and natural sugars.

Savory Snacking to Stick

The pandemic didn’t just give sweet snacks a boost. Consumers also turned to salty snacks to cope with the new realities, increased screen time and more at-home entertainment activities, according to The NPD Group’s “The Future of Snacking” report. Savory snack foods, specifically, benefited from a pandemic lift. According to Port Washington, N.Y.based NPD, these behaviors will have staying power, with a strong outlook for savory items, especially those that are healthier options. Ready-to-eat popcorn, seen as a better-for-you savory choice, was among the top-growing snack foods in terms of consumption in 2020, and its surge PROGRESSIVE GROCER July 2021



Candy & Snacks is expected to continue. The category is forecast to grow 8.3% in 2023 versus 2020 levels, making it the fastest-growing snack food, NPD’s snacking research finds. As more consumers leave their homes for work, education and social gatherings, betterfor-you snacks that are plant-based, low in sodium and full of functional benefits will gain momentum. Snacks such as Shrewd Food’s Sriracha Cheddar Protein Puffs (14 grams of protein, 2 grams of carbs and no artificial ingredients); Papa’s Skinless Popcorn (non-GMO); Kibo Chickpea Chips (150 milligrams of sodium and 7 grams of protein); and Root Smarts Green Plantain Chips (“Farm to bag in 24 hours!”) are growing in popularity. There will also be growth opportunities for keto bars, refrigerated snack solutions, and ready-to-eat meat (sticks, jerky, and bacon to go) as the line between meals and snacks continues to blur and a growing number of keto eaters seek out portable protein. Post-pandemic sustainability concerns will also be motivating factors driving the popularity of some snack solutions. The pandemic raised consumer awareness about global epidemics, animal welfare, packaging and ethical sourcing. “There was a little bit of a pause on sustainability, because everybody was dealing with the pandemic,” Downs admits. “As we come out of the pandemic, I think sustainability gets back up on the agenda and everybody will be focused on those things that they were focusing on, in terms of what their values were and their commitments were and their targets were and all the progress

At the Sweets & Snacks Expo in Indianapolis, Michigan-based Kubisch Sausage Co.'s Long John Snacks showed off its range of on-trend meat snacks. The company said that consumers are looking for the spicy flavors and portable protein found in meat snacks in a variety of portion and pack sizes.

they were trying to make against the things that mattered in terms of their operations, whether that’s carbon emissions or whether that’s water conservation, or whether that’s recycling and packaging.”

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Bring It Home AS CONSUMERS TR ANSITION FROM COOKING FOR THEMSELVES AT HOME TO WELCOMING GUESTS ONCE MORE, THE HOUSE WARES CATEGORY SHOWS NO SIGN OF SLOWING DOWN. By Barbara Sax ith nowhere to go but home during the pandemic, consumers turned to cooking for entertainment. At-home baking, grilling and cocktail mixing fueled a 25% spike in housewares sales in 2020, according to data from The NPD Group. “The housewares industry has been super hot,” affirms Joe Derochowski, home industry advisor at Port Washington, N.Y.-based NPD. “Consumers turned pandemic-driven boredom into an opportunity to experiment with cooking. We’re starting to see a bit of a decline versus a year ago, but sales are still up significantly versus 2019.” IRI data shows that across all channels, dollar sales of non-electric kitchen tools for the 52-week period ended May 16, 2021, grew 21%, drinkware surged 20% and kitchen storage was ahead 12%. “Throughout the pandemic, OXO saw an increased appetite for many of our tools, new and classic,” says Rebecca Simkins, national sales manager for El Paso, Texas-based Helen of Troy’s OXO brand. “Consumer habits throughout the year focused on cleanliness, storage, coffee and baking, which have made new products in these spaces more approachable and in demand.” According to Simkins, consumers are discovering gadgets and tools through social media, specifically video, enabling them to see the products in action and sparking sales. “We expect consumers to continue refining skills that they started building during the pandemic, including baking, home organizing, cooking, coffee brewing and deep cleaning,” she notes. As consumers continue to be more adventurous with food prep at home, specific housewares segments are likely to see continued upside. Sales of bakeware were particularly strong during the pandemic — NPD data shows the segment with 44% year-over-year growth in

Key Takeaways As post-pandemic consumers continue to be more adventurous with food prep at home, specific housewares segments like bakeware are likely to see continued upside. Retailers should stay tuned to subtle changes in how consumers are preparing and serving foods, and adapt their housewares assortments to reflect those new trends. The continuing popularity of outdoor entertaining and mixed drinks will present opportunities for retailers to capture even more housewares sales.

the three months ending August 2020 — and consumers have shown a continued interest in baking at home. In a 2019 podcast on cookware and bakeware trends, Erika Sirimanne, head of home and garden at London-based Euromonitor International, observed that consumers are focused on enjoying time spent at home, and are also craving simplicity, health and wellness there. “This back-tobasics approach has stoked a demand for home baking,” said Sirimanne.




Housewares High-margin, impulse-driven housewares have seen a spike in sales during the pandemic, and experts say upside still exists.

While the pandemic shaped the kinds of foods people served — for instance, sales of mini Bundt cake pans soared when sharing foods became taboo — as restrictions on gatherings ease, Derochowski advises retailers to stay tuned to subtle changes in how consumers are preparing and serving foods, and adapt their assortments to reflect those new trends. While consumers will continue to be creative with their cooking, Leana Salamah, VP of marketing at the Chicago-based International Housewares Association (IHA), sees the biggest opportunity in the return of at-home entertaining. “After 15 months of honing new cooking skills, consumers are ready to put them to use in gathering their families and friends back at their homes after this protracted separation,” says Salamah. “That represents an enormous opportunity for tableware, barware, textiles and prep-to-table items. In addition, it represents a major opportunity for kitchen electrics that facilitate gatherings — think raclettes and fast-cook pizza ovens.”

Grilling Goes Big

Consumers took grilling to the next level during the pandemic, and experts predict that there’s no going back. Camping vacations, Friday-night pizza gatherings and Thanksgiving turkey recipes that required smoking all helped fuel growth beyond core gas and charcoal grill options, according to NPD. With more consumers reducing their meat consumption, retailers can expect more focus on grilled vegetables and tools to help consumers grill them. A recent report from Euromonitor found that the heightened awareness of health during the pandemic meant that consumers were not only cooking more at home, they were also making an effort to cook healthier meals. Grilled veggies check that box. Award-winning cookbook author Steven Raichlen calls 2021 “the year of the grilled vegetable,” and predicts that consumers will be grilling such items as “okra, snap peas, and brussels sprouts on the stalk.” NPD data indicates that specialized grilling products with lower price tags contributed significantly to housewares sales, and items such as portable grills, pizza ovens and turkey fryers were among the


fastest-growing segments in the category in terms of unit sales. That trend buoyed sales of grill accessories, which saw a dollar sales increase of 23% for the 52 weeks ending May 29, 2021, according to NPD. “Outdoor living in general is huge right now, and consumers have gotten really creative with ways to extend the use of their outdoor space beyond the traditional seasons,” says Salamah. “I’ve seen a lot of new grilling products coming out that make cleanup much easier and that facilitate nighttime grilling, lots of grill lights, and even utensils that light up.” Consumers are also looking for higher-performance grilling tools as they experiment with new grilling techniques and flavors. OXO recently introduced OXO Outdoor, a line of high-quality functional cooking tools designed for the outdoors. While that line will initially be sold exclusively at Kent, Wash.-based sporting goods specialty retailer REI, it’s an indication that consumers are willing to pay more for better-quality products. “We worked with the REI team to identify a capsule collection of tools from our catalog that make activities in the great outdoors even better, from coffee brewing to campsite cleanup,” notes Simkins. “We are currently researching potential new innovations for the outdoor space, which we will announce as we get closer to their launch.” NPD’s Derochowski predicts that as people continue to entertain outdoors, housewares segments related to outdoor entertaining will present opportunities for retailers to capture even more housewares sales. “All the things related to outdoor entertaining, from décor to tabletop, are on the rise dramatically,” he says. Supermarkets are seizing the opportunity for incremental high-margin impulse sales as consumers head outdoors. Rochester, N.Y.-based Wegmans Food Markets recently featured melamine serveware and outdoor lanterns, retailing from $59.99 to $89.99,

After 15 months of honing new cooking skills, consumers are ready to put them to use in gathering their families and friends back at their homes after this protracted separation. That represents an enormous opportunity for tableware, barware, textiles and prep-to-table items.” —Leana Salamah, International Housewares Association










Housewares Retailers are elevating their in-line assortments and layering in opportunistic displays in other parts of the store to spark impulse purchases of housewares.

on an end cap at the back of the store. The display featured an outdoor table and chairs set with coordinating dishware and table linens. It’s a clear declaration that summer is here, and that the chain has all of the bases covered for outdoor entertaining. Other chains have found different ways to send that message. Store-entrance displays at a ShopRite store, operated by a member of the Keasbey, N.J.based Wakefern Food Corp. retailer cooperative, recently featured portable gills, skewers and plasticware, in addition to condiments and snacks.

Mixing It Up

Home mixology is also on the rise. A recent consumer survey by Drizly, a Boston-based alcohol e-commerce platform, reveals that more than half of those polled said that they made more cocktails at home during the pandemic, and among those who did so, more than half plan to continue doing so in the future. Drizly’s data indicates that sales of mixers, bitters and other cocktail ingredients have spiked dramatically on the platform since March 2020. The category presents an additional opportunity for retailers.

Over 80 Base Sizes 98

NPD data shows that beverageware blossomed during the pandemic, with sales of margarita glasses, martini glasses and pilsner/pub glasses up 191%, 59% and 29%, respectively, in the three months ending August 2020 versus the prior year. “Barware and cocktails grew, especially things that allowed you to experiment.” says Derochowski. “Highball tumblers and margarita glasses did tremendously well.” Wegmans devotes 4 feet of inline space and an additional in-aisle roller display to barware. From barware and glassware from True Brands to wine


Retail Display Solutions

accessories from Rabbit, both based in Seattle, the supermarket chain has an extensive assortment of products for at-home mixologists. In time for the outdoor entertaining season, The grocer recently featured acrylic martini and margarita glasses and metal Moscow mule mugs in an end cap at the back of a store. Even space-challenged chains can layer in an end cap or aisle display of plastic drinkware or wine accessories near their liquor or mixer sections.

Sustainability Top of Mind

With people eating so many meals at home, the food storage category naturally took off during the pandemic. “Food storage has been a bright spot in the category, but as we start to go back to work and school, you will need to carry food, so the category should stay strong,” says Derochowski. A recent NPD survey indicates that reducing food waste is top of mind for consumers, and interest in sustainable food storage products aimed at helping to reduce waste has been growing. Sales of vacuum sealers, for example, more than doubled in the three months ending August 2020, according to NPD. IHA’s Salamah is seeing more food storage options that are dishwasher- and microwave-safe, and that extend the life of fruits and vegetables. “Some even track expiration dates and include reheating instructions,” she marvels. “We are in for a great second half of 2021.”

“We’re continuing to innovate in food storage, with a new collection of purpose-driven leakproof containers and accessories to market, OXO Prep & Go,” says Simkins. The line, which will include a wide range of reusable container solutions for everything from snacks and lunches to full meals, will launch this summer with nine leakproof and dishwasher-safe containers. Designed for stacking in the fridge or taking on the go, the containers will be available as sets and as individual open-stock units. Accessories include a lunch tote, an ice pack, a condiment keeper, a squeeze bottle set, and full-sized stainless steel utensils with a case to provide everything consumers will need to bring their meals with them. Late last year, Atlanta-based Rubbermaid introduced EasyFindLids Food Storage Containers with SilverShield for Antimicrobial Product Protection, a new variety of durable food storage containers with built-in antimicrobial properties that help prevent the growth of odor-causing bacteria on the stored products. In another innovation for the segment, Orlando, Fla.based Tupperware Brands Corp. recently expanded its ECO+ product portfolio with Lunch-It Containers and Sandwich Keepers, products made with an environmentally friendly sustainable material.


Parking Lots


he purpose and value that parking lots provide retailers had been evolving gradually, but then, as with other aspects of retailing affected by the pandemic, things changed suddenly. Today, parking lots are interactive areas with amenities that generate profits, lure consumers into stores and/or increase the duration of visits. Parking lot perks can include everything from dedicated pickup areas for online orders to electric carcharging stations, WiFi, outdoor seating and dog walk areas. Retailers also use lots for community events and seasonal merchandising events. “It’s about thinking outside the four walls about how to generate additional sales inside, and retailers are pushing the envelope,” says Gary Fields, VP operations, West Coast at Jacksonville, Fla.-based Regency Centers, an owner of 406 shopping centers, 80% of which are anchored by grocers. The biggest impact on parking lot activities occurred as a result of the pandemic. There was exponential growth of grocery pickup services as shoppers avoided entering physical stores. In early 2020, only 6.6% of major retailers offered grocery pickup, but by early 2021, that figure had risen to 50.7%, according


Surging digital demand has made retailers' parking lots, such as this Hy-Vee location, a hub of commerce.

Key Takeaways Parking lots are interactive areas with amenities that generate profits, lure consumers into stores and/or increase the duration of visits. The biggest impact on parking lot activities occurred as a result of the pandemic, due to the exponential growth of grocery pickup services. With consumers spending more time in parking lots, retailers are paying more attention to how lots look from a maintenance, cleanliness and aesthetic perspective.

to Chicago-based Digital Commerce 360. Among shoppers, 75% have used curbside pickup over the past six months. Hy-Vee’s online transactions quadrupled during the pandemic’s first few weeks, making parking lots a destination, according to Dawn E. Buzynski, director, strategic communications at the West Des Moines, Iowa-based grocer. “Parking areas became a vital part of business as many customers ordered groceries online.”


Parking Lots

Publix employs a unique spring-mounted bollard design from FlexPost that can withstand occasional impacts from vehicles.

At Boise, Idaho-based Albertsons Cos., digital sales increased 258% during its most recent fiscal year, and its service, branded as Drive Up & Go, was the “fastest-growing segment and highlighted the importance of parking lots,” says a company representative.

Signage Solutions

Rapid expansion of curbside pickup and other “extras” has created navigational challenges. If not organized and managed properly, these multi-use areas can generate confusion, congestion and dangerous scenarios. “It used to be that you could go to the grocery store and know the traffic pattern,” notes Bill Yankek, CEO of facilities management trade organization ConnexFM, based in Irving, Texas. “But it’s changed. You have a line of cars at curbside pickup and hundreds of people walking across the lot. If the parking lot isn’t functional and signage isn’t clear, you can have a mess. It’s never been more important for lots to be safe, clean and accessible.” In addition to identifying pickup areas, signage can help shoppers quickly navigate the entire digital transaction. “Signage is especially important to ensure customers can clearly identify Drive Up & Go areas and corresponding phone number signage for store pickups,” says the Albertsons rep. Erecting more signage can be time-consuming and expensive, and further disrupt traffic flow. Some communities require permits. Also, signs are frequently damaged by careless drivers. FlexPost Inc. solves those challenges with a product that uses crash-proof bollards to support customized signs. Installation involves affixing a steel base to the parking lot with four bolts. A heavy-duty concealed spring attaches the base to the pole. When hit by clumsy drivers, the sturdy product simply pops back up. “We’re not doing serious drilling, so there’s little resistance from property owners,” says John DeYoung, FlexPost’s general manager. The Farmington Hills, Mich.-based company also offers a version with a portable base for temporary use. An interactive design tool allows retail executives to meet online to collaborate on signs’ custom graphics, colors and other elements. Three years ago, Lakeland, Fla.-based Publix Super Markets began using FlexPost’s products in curbside pickup areas. When COVID-19 hit, FlexPost’s ability to install signs quickly made business explode. “Grocery became a question mark for many,” recounts DeYoung. “The ability to pick groceries up was very real during the pandemic. People needed to find curbside pickup. Signposts can be installed within a half hour. Within eight hours,

A parking lot is the first thing anyone sees. Individually, trash cans and planters are no big deal, but all together, everything is a big deal. Now they’re more important.” —Gary Fields, Regency Centers


we set three stores for one retailer.” For some chains, expanding online pickup areas has required more than new signage. Hy-Vee moved the pickup space from curbside to an area where it would interfere less with traffic. The grocer erected storage structures in these areas that hold orders awaiting pickup. Stores have eight to 12 pickup lanes, and capacity can be expanded as needed. “We needed a better way for customers to pick up groceries that increased capacity, enhanced delivery, and was convenient and safe for customers and employees,” explains Buzynski. “This has boosted efficiency and ensures a smooth pickup experience.” Some retailers lease or purchase adjacent space to expand pickup areas or maintain traffic flow. “This isn’t uncommon,” says the Albertsons rep. “We design pickup areas that sit seamlessly alongside traditional in-store shoppers without interruption.” Big Lots! uses repositionable signage at one of its newest stores, near Nashville, Tenn.

More Electric Cars

While electric vehicles (EVs) aren’t yet cramming highways, they’re becoming a reality. According to Danville, Calif.-based EVAdoption, EVs will represent about 3.4% of new car sales in 2021 and grow to 29.5% by 2030. A key sales driver has been the growing number of EV-charging stations. In 2018, there were 64,000 nationwide, according to the Alternative Fuels Data Center, in Washington, D.C., and Miami-based consulting firm InsideEVs. By 2020, there were about 90,000. Many major food retailers are offering this service in parking lots. It creates a double revenue stream: The customer pays for the charge and usually shops during the process. Regency Centers offered EV charging at 50 of its centers in 2019, but that figure has grown to 82, and plans call for further expansion. “It’s not just for a niche subset,” says Fields. “A retailer may say, ‘That’s not my customer.’ Well, there’s growth in EV.” Hy-Vee, Walmart, Sam’s Club, Target, Albertsons, Kroger, Publix, Whole Foods Market and Trader Joe’s are among the food and consumables retailers offering EV charging. Despite the benefits, charging stations and online pickup areas can reduce the number of parking spaces available to shoppers. This can be problematic in small or very busy lots, particularly if employees aren’t parking in allocated areas, or “poachers” from neighboring businesses are using the spaces. Glide PARCS, a digital tracking system from New Orleansbased Premium Parking, uses a handheld device that automatically scans license plates while an employee strolls the parking lot. A second product, Glide Eye LPR, scans plates at lot entrances and exits. Results allow retailers to identify cars that have overstayed their welcome or are repeatedly parking illegally. The retailer can then enact a corrective action, be it a friendly warning or a less friendly boot or tow. License plate data can even be searched for stolen cars or during Amber Alerts. “Retailers can identify problems,” asserts Ben Montgomery, president of Premium Parking and board director of the Washington, D.C.-based National Parking Association. “People rarely park in handicapped or pregnant-mother parking. The biggest problem is poaching.” Business, he adds, is growing 50% annually. Target is among the retailers using the service.

The Whole Picture

Not all parking lot perks directly generate revenue, but they drive traffic. Albertsons established COVID-19 vaccination centers in some lots. For its part, Walmart has long used parking lots for health fairs, festivals and other events. Last summer, when most movie theaters were shuttered due to the pandemic, it partnered with the Tribeca Film Festival to show free drive-in movies in the lots of 160 stores. The family-friendly film lineup included “Friday Night Lights,” “The Karate Kid” and “E.T.” With consumers spending more time in parking lots, retailers are paying more attention to how lots look from a maintenance, cleanliness and aesthetic perspective. “A parking lot is the first thing anyone sees,” notes Fields. “Individually, trash cans and planters are no big deal, but all together, everything is a big deal. Now they’re more important.” Grocers are bullish about finding additional opportunities just outside their box. “As the digital experience continues evolving, we anticipate increased parking lot opportunities that will enhance shoppers’ overall experience,” says the Albertsons rep.

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Food, Beverage & Nonfood Products

The Perfect Way to Snack

Perfect Snacks, maker of the No. 1 refrigerated bar in the United States across all retail channels, has shrunk some its most popular offerings for its latest product line, Perfect Bar Snack Size.The first two flavors, Peanut Butter and Dark Chocolate Chip Peanut Butter, are made with organic peanut butter, organic honey and 20-plus organic superfoods, and each contains 6 grams of whole food protein. With 120-130 calories per bar, Perfect Bar Snack Size is a satiating grab-and-go option with premium nutrition and clean-food attributes such as being USDA Organic, Project Verified Non-GMO, gluten-free and low-GI. Eight-bar boxes of either variety, retailing for $6.99 each, will hit supermarkets’ refrigerated sections over the next few months.

Hot Sauce, Italian Style

A suitable addition to pizza, eggs, pasta and more, Casa Firelli hot sauce is handcrafted in Parma, Italy, and made with such iconic ingredients from that country as Calabrian chili peppers, Balsamic vinegar from Modena, Porcini mushrooms, roasted red peppers, and a touch of Italian sea salt. The medium-heat sauce offers a rich and rounded spicy flavor. Casa Firelli is the latest venture from Biggar & Leith, an importer of fine wines, spirits and fancy goods from family-owned producers. A 5-ounce coneshaped, blue-capped bottle that evokes an antique Italian fire extinguisher retails for a suggested $6.99.;

Deliciously Sustainable

Time to Waffle Around

In an effort to bring decadence to gluten-free and low-carb consumers, Julian’s Recipe, an authentic European waffle and artisan bread company, has come up with Cauli-Wafels in two indulgent varieties, Maple & Brown Butter and Original Classic. Created by European-trained chef Alex Dzieduszycki, a co-founder of Terra Chips and the founder of Alexia Foods, and named for his son, the Belgian waffle-inspired frozen product line offers a better-for-you breakfast option containing 5 grams of protein, cage-free eggs and no grain. The brand also offers two protein-packed Cauli-Wafel Sandwich varieties, Egg White & Smoked Gouda and Turkey Sausage & Cheddar, which have the same low-carb, high-protein profile as Cauli-Wafels. A 2-count package of Cauli-Wafel Sandwiches or an 8-count box of Cauli-Wafels retails for a suggested $3.99.

Premium dessert company Pots & Co is expanding its reach in the United States on the heels of a recent $20 million investment by 301 Inc., the venture capital arm of General Mills, marking its first investment in a U.K. company. The indulgent desserts are made with clean, all-natural, high-quality ingredients, including sustainable Colombian cocoa sourced by Pots & Co’s founder, chef Julian Dyer. All of the company’s desserts are developed by Michelin star chefs and handcrafted in London before being baked in ceramic pots from Spain. According to the company, baking the desserts in these pots not only ensures that they’re baked evenly and possess an unparalleled depth of flavor and texture, but also provides a table-ready, reusable format for the product line. Three Pots & Co flavors are available in the refrigerated section of grocery stores: Chocolate Fudge Lava Cake (3.52 ounces), consisting of chocolate cake with a molten fudge center; Salted Caramel & Chocolate Pot de Crème (3.17 ounces), featuring heavy cream, sea salt and cacao; and Lemon Cheesecake (3.35 ounces), layered with lemon curd and topped with a crunchy cookie crumble. The suggested retail price for any of the three varieties is $4.99.;;



By Gina Acosta

The Future of Impulse IN THE DIGITAL ERA, FOOD RETAILERS MUST GET MORE CREATIVE WITH MERCHANDISING. bout three months before the first full-size U.S. grocery store with checkoutless technology opened in June, a new survey of U.S. consumers showed just how much the grocery front end is changing due to e-commerce and automation. The PowerReviews grocery shopper study, published in March, showed that 73% of consumers had purchased groceries online within the past three months, and the top reasons for online shopping included time savings (59%), personal safety (49%) and avoiding impulse purchases (31%). Consumers shopping at the new Amazon Fresh store, in Bellevue, Wash., can now skip checkout lanes through a combination of computer vision, sensor fusion and deep learning. Customers are prompted at the store’s entry gates to choose whether they want to use “Just Walk Out” shopping and bypass the front end, or use the traditional checkout lanes. The opening of Amazon’s Just Walk Out grocery store is poised to reset shoppers’ expectations regarding the definition of a truly frictionless grocery experience. But for retailers and suppliers, the more pressing challenge is what it means for front end sales and impulse purchases. The proliferation of online grocery delivery and pickup, mobile checkout, self-checkout, and the soon-to-be-everywhere Just Walk Out technology from Amazon is suppressing the impulse, or unplanned, buys that happen at the front end, and retailers and CPG companies are worried. At the Sweets & Snacks Expo (SSE) in Indianapolis last month, The Hershey Co. said that it “sees a growth opportunity for retailers” in front end redesign that includes evolving pay points, queueing strategies and cashierless checkout. Changes in these areas are important in meeting consumer expectations, while also helping create engagement and drive bigger baskets, the company said. Mars Wrigley went even further, unveiling a platform for “the new era of impulse shopping.” The new Accelerating Impulse Moments (AIM) insights platform consists of conversion strategies for retailers across all channels in stores and online, with Snacks Aisle Optimization, Secondary Display Growth, Transaction Zone

The rise of e-commerce calls for redefining merchandising strategies across all platforms.

Reinvention and Digital Solutions Execution. These strategies aim to “help retailers shape impulse throughout the shopper journey” to create an effective and engaging omnichannel experience, according to Mars Wrigley. Retailers and suppliers attending SSE got a chance to view new, impulse-driving merchandising strategies for mobile checkout and self-checkout areas at the front end, including digital displays, LED lighting, expanded better-for-you snack assortments, and new queuing configurations. Grocers are already leveraging some of these new methods to drive awareness and convert impulse buys among the increasing number of shoppers who are skipping traditional checkouts. But the rise of e-commerce calls for redefining merchandising strategies across all platforms. How do retailers create a sensory experience online that matches the physical-store sensory experience that converts impulse buys? Does your e-commerce platform feature product ingredient lists, product expiration dates and product reviews? According to the PowerReviews grocery shopper study, 78% of online grocery shoppers are more likely to purchase a new grocery item if customer reviews exist for that product. What about offering flash deals, recipes, or exclusive and limited-time promotions to drive impulse on everything from gummy bears to housewares to gourmet burger toppings? Chinese behemoth Alibaba’s newest grocery platform offers personalized food recommendations and bar codes showing product provenance and sourcing information. What are the ways to build bigger baskets with the shopper who orders groceries online, picks them up and walks into the store anyway? There’s a big opportunity for retailers to think much more outside the box with merchandising in the digital grocery era. The new era of impulse will require multifaceted merchandising solutions to convert unplanned buys throughout the shopper journey, whether it’s at curbside pickup, online or in-store. Gina Acosta Executive Editor PROGRESSIVE GROCER July 2021



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