PG-0723

HOW GROCERY RETAILERS CAN GET A BETTER HANDLE ON SHRINK SOMETHING IN THE WATER Category offerings stress flavor, functionality, eco-friendliness MEET THE NEW MEATS Cultivated, plant-based options compete with animal proteins FIGHTING FOOD WASTE Stakeholders strive for greater sustainability

THE WAY

FORWARD

July 2023

Volume 102, Number 7 www.progressivegrocer.com

Albertsons aims to drive growth with retail media and private brands

Contents 07.23

Features

22 SPECIAL REPORT

The Story Behind Shrink

13

What are today’s retailers dealing with in terms of theft, product loss and associate safety?

COVER STORY

The Way Forward

How Albertsons aims to drive growth with retail media and private brands.

22

Departments

10 NIELSEN’S SHELF STOPPERS

6 EDITOR’S NOTE

Pass Swipe Fee Reform 8 IN-STORE EVENTS CALENDAR

September 2023

Volume 102 Issue 7

Breakfast Foods 11 MINTEL GLOBAL NEW PRODUCTS

Still and Sparkling Waters

29 SOLUTIONS

Consider the Alternatives Exciting advances in this space will lead to innovative products at retail.

56 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS 58 AHEAD OF WHAT’S NEXT

Training Day

12 ALL’S WELLNESS

Building a Healthy School Lunchbox PROGRESSIVE GROCER July 2023

3

Contents 07.23

Volume 102 Issue 7

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

www.ensembleiq.com

32 REFRIGERATED & FROZEN FOODS

BRAND MANAGEMENT VICE PRESIDENT & GROUP BRAND DIRECTOR Paula Lashinsky 917-446-4117 plashinsky@ensembleiq.com

Dairy Disruptors

The milk industry focuses on innovation and messaging to compete against the tide of alternative products.

EDITORIAL EDITOR-IN-CHIEF Gina Acosta gacosta@ensembleiq.com MANAGING EDITOR Bridget Goldschmidt bgoldschmidt@ensembleiq.com SENIOR DIGITAL & TECHNOLOGY EDITOR Marian Zboraj mzboraj@ensembleiq.com

36 SOLUTIONS

SENIOR EDITOR Lynn Petrak lpetrak@ensembleiq.com

Bread of Life

32

Major brands are answering the call for more health-focused offerings in the bread aisle and bakery, with keto-friendly and functional items leading the way.

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

42 BEVERAGES

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

Water World

REGIONAL SALES MANAGER (EAST COAST) Dave Cappelli 312-505-3385 dcappelli@ensembleiq.com

Flavor, functionality and sustainability are driving this convenient beverage category to new heights.

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

46 SOLUTIONS

Winning the Food Waste Battle

36

Today’s grocers have plenty of strategic options to help keep food out of landfills.

CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com PROJECT MANAGEMENT/PRODUCTION/ART SENIOR CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com MARKETING MANAGER Rebecca Welsby rwelsby@ensembleiq.com SUBSCRIPTION SERVICES LIST RENTAL mbriganti@anteriad.com SUBSCRIPTION QUESTIONS contact@progressivegrocer.com

50 NONFOODS/PERIMETER

Greeting Card and Floral Roundup

Recent news includes Kroger’s partnership with Uber Eats to deliver Bloom Haus bouquets, and eGrowcery’s integration of personalized Card Isle products.

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF OPERATING OFFICER Derek Estey CHIEF PEOPLE OFFICER Ann Jadown CHIEF STRATEGY OFFICER Joe Territo

42

52 TECHNOLOGY

Strange Bedfellows Will grocers and CPGs help banks ride the $100 billion retail media wave?

46 4 progressivegrocer.com

PROGRESSIVE GROCER (ISSN 0033-0787, USPS 920-600) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Single copy price $14, except selected special issues. Foreign single copy price $16, except selected special issues. Subscription: $125 a year; $230 for a two year supscription; Canada/Mexico $150 for a one year supscription; $270 for a two year supscription (Canada Post Publications Mail Agreement No. 40031729. Foreign $170 a one year supscrption; $325 for a two year supscription (call for air mail rates). Digital Subscription: $87 one year supscription; $161 two year supscription. Periodicals postage paid at Chicago, IL 60631 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to brand, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631. Copyright ©2023 EnsembleIQ All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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EDITOR’S NOTE

By Gina Acosta

Pass Swipe Fee Reform IT’S TIME TO TACKLE POLICIES HURTING RE TAILERS’ BOT TOM LINES. hether you’re walking the halls of Capitol Hill or the aisles of the grocery industry’s biggest trade shows, the one topic of conversation that frequently bubbles up this year — after labor shortages and omnichannel optimization — is that of credit card swipe fees.

Grocery retailers, trade groups and politicians have lobbied for credit card swipe fee reform for decades, but now it seems as though there might be enough bipartisan political will to get it done.

In June, Congress reintroduced the bipartisan Credit Card Competition Act, reform first drafted last year that would require more than one network to be enabled on credit cards, giving food retailers choice in payment routing and fostering competitive innovations in services such as fraud protection for merchants and consumers alike.

“Due to a lack of competition, credit card companies have been able to exponentially increase hidden processing fees that grocers are forced to pay for accepting credit cards as payment. Card-processing fees in the U.S. are some of the highest in the world, totaling $160.7 billion in 2022, according to Nilson Report,” said FMI Chief Public Policy Officer and SVP, Government Relations Jennifer Hatcher.

“Excessively high credit swipe fees that exceed grocers’ profit margins force grocers to have to increase prices. These fee increases disproportionately impact lower-income Americans, those who rely on cash and those who do not have access to high credit card rewards.”

The reason for higher grocery prices is extremely complex, but certainly one factor is large increases in credit card swipe fees.

Healthy Competition

Under current practices, Visa and Mastercard — which control 80% of the market — centrally price-fix the swipe fees charged by banks that issue their credit cards rather than the banks competing to offer merchants the lowest rates, according to the National Retail Federation (NRF). They also block competition by restricting the processing of transactions to their own networks. Visa and Mastercard imposed a $1.2 billion increase in credit card swipe fees in 2022.

The new legislation would require that the nation’s largest banks enable credit cards to be processed over at least two unaffiliated networks so that 6 progressivegrocer.com

networks would have to compete over fees, service and security, with payments consulting firm CMSPI estimating that retailers and their customers would save at least $11 billion a year.

By making networks compete, NRF said, the legislation “will make a huge difference in bringing these fees under control and will strengthen the security and reliability of the credit card system at the same time.”

These days, with inflation easing but still high, grocers get a lot of bad press.

A recent article in Bon Appetit magazine asked, “Why are grocery prices so high in 2023?” and attempted to blame it on a toxic concoction of inflation, corporate greed and climate change. The article even described a new phenomenon — “The Supermarket Scaries” — in which consumers are back to being afraid of going to the grocery store. This time, though, it’s not fear of catching a deadly virus, but of being unable to afford higher grocery prices.

The reason for higher grocery prices is extremely complex, but certainly one factor is large increases in credit card swipe fees. According to the Merchants Payments Coalition, credit and debit card swipe fees cost the average household an estimated $1,024 in higher prices in 2022, the first time the number has topped the $1,000 mark. Now that’s something to be scared about, especially if you’re a grocer.

That’s why Congress should act swiftly to pass credit card swipe fee reform.

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

EVOLVING YOUR SUPPLY CHAIN INTO A

VALUE CHAIN The time to transform supply chains into strategic, value-driven ecosystems is now.

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IN-STORE EVENTS

Calendar S

09.23

M

National Chicken Month National Ethnic Foods Month National Food Safety Month National Honey Month

All-American Breakfast Month California Wine Month National Apple Month National Biscuit Month

T

W

T

F

1

2

8

9

Bring Your Manners to Work Day. Emphasize the importance of treating customers and colleagues with respect at all times.

3

National Skyscraper Day. Those stores located in tall buildings can highlight the histories of the impressive edifices they call home.

4

Labor Day

5

International Day of Charity. Spotlight your support of various worthy causes.

6

Global Talent Acquisition Day. Take a look at how you’re recruiting associates, and make any necessary improvements.

7

National New Hampshire Day National Salami Day

S

Star Trek Day. Enable fans of this venerable franchise to celebrate with a range of out-of-this-word snack and meal ideas.

International Bacon Day. In some people’s opinion, everything tastes better with bacon – even ice cream.

Emergency Services Day Steak Au Poivre Day

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Swap Ideas Day. Brainstorm with your associates on how to improve various store processes.

National Pet Bird Day. Showcase your offerings for shoppers’ winged companions.

World Day of the Deaf. Publicize your efforts to make shopping easier for this population.

Patriot Day. On this somber occasion, we pay tribute to those who perished on Sept. 11, 2001.

Global Company Culture Day. Share with current and prospective associates all of the things that make your business such a wonderful place to work.

Yom Kippur. Make sure that observant Jews know they can break their fast with tasty kosher products from your store(s).

8 progressivegrocer.com

National Police Woman Day. Provide a special discount for female law enforcement officers who help keep the community safe.

Take a Loved One to the Doctor Day. Help shoppers understand the importance of encouraging those closest to us to get serious about their health.

Better Breakfast Day. Instruct shoppers on how to optimize their first meal of the day.

National Peanut Day. Whether as a recipe ingredient or a snack, this versatile legume is always in demand.

National Queso Day. Post a recipe for a killer chili con queso dip, or have a readymade version ready for non-cooks.

National Women’s Health and Fitness Day. Organize online classes for attendees to establish exercise and eating habits to last a lifetime.

National Sober Day. This is the perfect time to promote your nonalcoholic beers and cocktail mixers, as well as other sober-curious beverages.

National Opioid Awareness Day. Publish information to guide people struggling with substance misuse issues and on safe disposal of medications.

International Poké Day. Show off what you’ve got in this burgeoning prepared food segment.

World Afro Day. Offer products to keep this iconic hairstyle healthy.

National Girls’ Night In Day. Have on hand plenty of food and beauty items to help groups of besties celebrate their enduring bond.

National Starbucks Day. Direct customers to your in-store coffee shop operated by this iconic brand.

National Stepfamily Day. Highlight the blended households among your associates and regular customers with photos posted on your social media channels.

First Day of Autumn. OK, now all of those people still wearing shorts in public have to stop.

International Translation Day. Make shoppers aware of the various languages your associates speak, as well as pharmacy services available in a range of tongues.

FRONT END

Shelf Stoppers

Breakfast Foods

Basket Facts

Total Department Performance Breakfast Foods

Latest 52 Wks W/E 06/03/23

Latest 52 Wks YA W/E 06/04/22

Latest 52 Wks 2YA W/E 06/05/21

$7,361,899,431

$6,758,214,683

$6,185,398,132

Top Healthy and Beauty Care Categories by Dollar Sales Breakfast Sausage

Breakfast Sandwiches

Breakfast Meals/Combos

Breakfast Syrups

Breakfast Meats

3,000,000,000

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

2,500,000,000

2,000,000,000

$8.15

1,500,000,000

on all breakfast food items, up 11.0% compared with a year ago

1,000,000,000

500,000,000

0

Latest 52 Wks 2YA W/E 06/05/21

Latest 52 Wks YA W/E 06/04/22

Latest 52 Wks - W/E 06/03/23

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 June 3, 2023

$10.27

on breakfast sandwiches, up 14.2% compared with a year ago

Cross-Merch Candidates Sweet Snacks

Toaster Pastries

Desserts

Home Air Fresheners

Fully Cooked Meats

Beverages

Sour Cream Products

Deodorants

Beverage Enhancers

Feminine Care

$7.66

on breakfast meals/ combos, up 5.4% compared with a year ago

Generational Snapshot Which cohort is spending, on average, the most per trip on breakfast sandwiches?

$6.65

on breakfast sausage, up 10.0% compared with a year ago Millennials

Gen Xers

Boomers

The Greatest Generation

$10.63

$10.50

$9.95

$10.06

Source: Nielsen Homescan, Total U.S., 52 weeks ending May 27, 2023

10 progressivegrocer.com

Source: Nielsen Homescan, Total U.S., 52 weeks ending May 27, 2023

MINTEL CATEGORY INSIGHTS

Global New Products Database

Still and Sparkling Waters Market Insights

Bottled water demand hasn’t declined with rising levels of economic uncertainty, as consumers generally view the category as a household necessity.

The bottled water category’s growth has been primarily concentrated on either end of the price spectrum.

Key Issues

Financially insecure consumers are generally bottled water category loyalists.

Booming sales of luxury goods signal increased interest in statussymbol products such as premium aspirational bottled water brands that provide consumers with a feeling of affordable indulgence.

Young consumers’ interest in sustainability indicates an ongoing need for brands to tackle bottled water’s environmental stigma.

Total packaged water sales increased an estimated 12.8% in 2022, with sales reaching $27.5 billion, driven by both rising prices and organic growth.

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

What Consumers Want, and Why A focus on holistic wellness can position functional waters as everyday beverages that allow consumers to achieve their health goals.

Premium bottled water provides consumers – regardless of economic status – a sense of luxury, and consumers are willing to purchase affordable luxury experiences even during periods of economic uncertainty.

Consumers associate premium water with being environmentally friendly, reflecting the overlap between luxury and sustainability within the bottled water category.

PROGRESSIVE GROCER July 2023

11

ALL’S WELLNESS

By Diane Quagliani, MBA, RDN, LDN

Building a Healthy School Lunchbox RE TAILERS CAN OFFER RE AL-LIFE SOLUTIONS TO PARENTS’ LUNCH-PACKING CHALLENGES. he start of another school year is on the horizon. That means many parents are feeling that familiar dread about the daily task of packing nutritious lunches their kids will actually eat. The pressure of seeing bento box-perfect lunches on social media only adds fuel to the fire.

But research reveals insights that retailers and retail dietitians can use to provide real-life solutions to parents’ challenges.

A Look at the Attitudes and Practices of Lunch-Packing Parents

Parents of elementary school-age children identified several barriers to packing lunches, as well as factors that smooth the process along, according to a 2018 study published in the Canadian Journal of Dietetic Practice and Research.

Parents said that barriers to packing lunches included their child’s food preferences, time constraints, finances, allergy policies and food safety.

Nutrition resources, observing other children’s lunches, getting their child’s input and planning ahead made the process easier.

Almost all parents (95.9%) said that packing a healthy lunch was important to at least some degree (ranging from “important” to “of the utmost importance”), and that their nutrition knowledge was at least adequate (97.5%, ranging from “adequate” to “very good”).

Something didn’t add up, however, when researchers compared what parents said they packed to the actual lunch provided. The lunches

contained significantly higher portions of sugar-sweetened drinks and snacks, and significantly lower portions of fruits/fruit juice, vegetables, milk/alternatives and meat/alternatives than parents reported.

Retailers and Retail Dietitians Can Help

Providing harried parents with solutions to the lunchbox dilemma can help solidify loyalty and increase basket size. Retail dietitians are experts at designing programs that address parents’ challenges and capitalize on what works.

Web content, newsletters, tipsheets and in-store classes can combine several solutions. For instance, content can teach parents about the elements of a healthy lunch, accompanied by easy and nutritious make-ahead ideas that coincide with stock-up sales. Involve the kids to increase the likelihood that they’ll eat their lunches. Consider parent/child events such as lunch-packing tours and hands-on classes.

Educate parents to identify common allergens on food labels, and offer appealing lunch alternatives for kids with allergies or who attend a school with an allergy policy that includes a food restriction such as “nut free” or “nut aware” (definitions can vary from school to school, which can make it tricky for parents). Offer tips for packing allergy-safe lunches that avoid cross-contamination with problematic ingredients.

Help parents brush up on food safety.

Refresh them on basics like handwashing, avoiding cross-contamination and keeping packed foods in the safe temperature zone. Suggest using insulated lunchboxes, Thermoses and cold packs, and including individually packaged hand wipes or small bottles of hand sanitizer in lunchboxes. Provide convenient displays with these items, as well as thermometers and different-colored cutting boards (to keep meat and poultry separate from fruits, vegetables and other ready-to-eat foods). Include tipsheets on lunch-packing safety.

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.

12 progressivegrocer.com

COVER STORY

Retailer Deep Dive Customers for Life

How Albertsons aims to drive growth with retail media and private brands.

By Gina Acosta ill it close?

That’s the question on the minds of everyone in the grocery industry these days when it comes to Albertsons Cos. and its pending, increasingly controversial merger with The Kroger Co. that is scheduled to close early next year but is contingent on regulatory approval, among other factors.

No one can predict the future, but Albertsons thinks it can keep driving sustained sales growth no matter what happens in January. The retailer has made several announcements recently regarding private label and retail media that strengthen its positioning on creating value for shoppers and shareholders.

When Albertsons reported fourth-quarter and full-year earnings in April, the company gave an update on its Customers for Life transformation strategy, which it launched in 2022. The operator of more than 2,000 stores in the United States embarked on a five-pronged strategy designed to place the customer at the center of everything that it does, with the ultimate goal of supporting customers every day, every week and for a lifetime.

The multifaceted strategy includes digitally connecting and engaging customers through the mobile app and website so that they can enjoy curated experiences in e-commerce, the community, loyalty, health and media; differentiating the store experience by deepening engagement using technology, and removing associate pain points to allow employees to focus on customer service versus just tasks; elevating the retailer’s distinctiveness in fresh by expanding private-brand products and services, and enhancing product offerings in center store to address customers’ changing needs and preferences; modernizing capabilities through an improved supply chain, enhanced data and data analytics, and ongoing productivity, all built on the foundation of being locally great and nationally strong; and further embedding environmental, social and governance (ESG) throughout operations.

PROGRESSIVE GROCER July 2023

13

COVER STORY

Retailer Deep Dive

As inflation-battered shoppers increasingly choose private brands over national brands, Albertsons has consolidated its Own Brands lines under one master brand, Signature SELECT, and redesigned the logo and packaging.

CEO Vivek Sankaran credited the strategy for the retailer’s strong financial report for its fourth quarter and fiscal 2022.

For the fourth quarter, Albertsons’ net sales and other revenue was $18.3 billion, compared with $17.4 billion year over year.

The increase was driven by a 5.6% increase in identical sales, spurred on by retail price inflation, growth in pharmacy and increasing digital penetration. Also in Q4, digital sales increased 16%; loyalty members increased 15% to more than 34 million; net income was $311 million, or 54 cents per share; and

adjusted EBITDA came to $1,050 million. Gross margin rate decreased year over year to 27.8% from 28.7%, with the pharmacy business and decrease in COVID-19 vaccinations driving approximately half of the rate decrease.

In fiscal 2022, Albertsons saw same-store sales increase 6.9%, digital sales increase 28% and an adjusted EBITDA of $4,677 million. Net income was $1,514 million, or $2.27 per share, and adjusted net income was $1,965 million, or $3.37 per share.

The company reported capital expenditures of $2,153.9 million in fiscal 2022, including investments in digital and technology platforms, 173 store remodels, and the opening of five new stores.

While Sankaran believes that the grocer is well positioned for top-line growth in fiscal 2023, he’s anticipating an uncertain, and possibly challenging, economic backdrop.

“We have prepared our business for a more difficult consumer environment, and are expecting significant labor investments and inflationary cost increases,” Sankaran said. “Additionally, we expect further declines in COVID-19 vaccination and at-home test kit revenue. These headwinds are expected to be partially offset by the ongoing growth in our core business and the benefits from the next phase of our productivity initiatives.”

Meanwhile, Albertsons has been busy reimagining its private-brand portfolio as inflation-battered consumers increasingly switch to private brands.

Private-Brand Consolidation

In May, Albertsons said it would consolidate three of its Signature private brands under a single master brand, Signature SELECT, which will feature a new logo and packaging design. The transition from Signature Farms, Signature Care and Signature Café is currently underway at Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s and more, and is expected to be complete in early 2024.

The transition was apparent during a recent visit to an Acme Supermarket in Hopewell Junction, N.Y. New signage with the updated logo design

“We have prepared our business for a more difficult consumer environment, and are expecting significant labor investments and inflationary cost increases. Additionally, we expect further declines in COVID-19 vaccination and at-home test kit revenue. These headwinds are expected to be partially offset by the ongoing growth in our core business and the benefits from the next phase of our productivity initiatives.” —Vivek Sankaran, CEO, Albertsons Cos.

14 progressivegrocer.com

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COVER STORY

Retailer Deep Dive was all over the perimeter and center store, with a particular emphasis in the produce department.

“Signature SELECT is our flagship brand offering shoppers an incomparable assortment of quality products at an incredible value,” said Jennifer Saenz, EVP and chief merchandising officer at Albertsons Cos., at the time that the brand consolidation was made public. “We are incredibly proud of our Signature family of brands, and by bringing these sub-brands together under one name, we are building greater brand recognition, driving brand loyalty and creating customers for life.”

Signature SELECT is already the largest brand in the company’s Own Brands portfolio boasting more than 8,000 products, including packaged salads, ice cream, frozen pizza, coffee, paper goods, pasta, snacks, and canned vegetables and fruit, as well as ground beef, pork and chicken.

Following the consolidation of Signature Farms’ fresh poultry and produce, Signature Café’s deli items, and Signature Care’s line of personal and baby products, the master brand will feature the modern Signature SELECT logo with a unified package design across a broad assortment of product categories so shoppers can easily identify the brand throughout the store.

To reinforce the quality associated with every item, Signature SELECT guarantees 100% customer satisfaction or they can receive a full refund of the purchase price.

The Signature family of brands was introduced to Albertsons’ portfolio of stores in 2016, following the merger of

16 progressivegrocer.com

Albertsons and Safeway. However, the ‘S’ branding dates back as far as the 1960s, when Safeway sold various products under the ‘S’ brand, among them milk, bread, ice cream, coffee, jellies, soft drinks, lunch meat, canned fruits and vegetables, frozen foods, and paper products. The ‘S’ brand remained a key private label for Safeway until 2012, when the company retired its namesake brand and merged its products under the Safeway Kitchens, Safeway Farms, Safeway Home and Safeway Care brands, which ultimately became the Signature family of brands.

The Signature SELECT consolidation and rebranding follow recent updates to the company’s Own Brands portfolio, including the evolution of the O Organics brand and the redesign of Open Nature. A recent survey commissioned by Albertsons Cos. revealed that consumer demand for private labels continues to grow, with 93% of Americans embracing and expanding their purchases of store brands. Respondents cited price, Albertsons' Customers for Life strategy includes a focus on differentiating the store experience by removing associate pain points to allow employees to focus on customer service versus just tasks.

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COVER STORY

Retailer Deep Dive

O Organics, which got a redesign in March, is the leading organic brand sold at Albertsons Cos. banners, boasting more than 1,500 products in its assortment, from organic fresh fruits and vegetables to organic dairy and meats, organic cage-free certified eggs, organic snacks, organic baby food, and more.

quality and availability as the main drivers of these purchases, with a large number writing in that better taste was a factor when choosing a private brand.

To celebrate Signature SELECT, the company debuted a new summer campaign appearing now in print, social, online and streaming channels. From family cookouts, backyard brunches and summer treats to countless other occasions, the creative highlights in-the-moment imagery of how Signature SELECT elevates everyday life with convenient, affordable alternatives to national brands in every aisle — without sacrificing taste or quality.

“When developing the marketing campaign to accompany our expanded Signature SELECT flagship brand, we knew we wanted to celebrate the brand’s virtues of quality, taste, value and convenience,” said Brandon Brown, SVP of Own Brands at Albertsons Cos. “Our Signature creative showcases warm, welcoming scenes that put the Signature SELECT brand at the center of life’s moments. We’re creating an emotional connection with our customer and showing her how everyday occasions can have their own signature flavor and style.”

Retail Media Framework

In addition to private brands, another major focus for Albertsons going forward will be retail media, a business that 20 progressivegrocer.com

the company says is a priority for growth.

When Albertsons launched its retail media network (RMN) in 2021 — the Albertsons Media Collective — it was clear that growing the business was a top priority for the company. Retail media networks are slated to bring in $106 billion in U.S. ad spending by 2027, according to eMarketer estimates. That’s more than double the $45 billion expected in 2023.

Since 2021, the Albertsons Media Collective has teamed up with Omnicom Media Group, a partnership that aims to allow marketers to improve targeting and measuring based on ROI in connected TV environments. This past June, the Albertsons Media Collective unveiled a new initiative to establish common standards and best practices when it comes to retail media, publishing a whitepaper detailing why this is crucial to the growth of retail media.

“There is one substantial shortcoming that runs across the hundreds of companies that offer RMNs: There are no universal best practices,” the whitepaper noted. “Without standards to follow, each RMN has its own requirements and processes in areas such as ad formats and measurement protocols. In addition, retailers’ closed ecosystems (known as ‘walled gardens’) and lack of transparency in measurement methodologies further exacerbate the situation. The result is an unnecessarily inefficient, costly and frustrating ecosystem for ad buyers. … It’s critical for RMNs to meet marketer needs to truly capitalize on the potential for growth. During these uncertain economic times, companies are scrutinizing ad spending and deciding where to make cuts. In addition, many marketers and ad buying agencies have reduced staff, further fueling the need for effective, efficient systems.”

To remedy these issues, the Albertsons Media Collective has spearheaded the creation of a framework to drive standardization across the retail media landscape. These standards aim to enable competitive differentiation among RMNs while creating a common baseline to foster greater synergy, efficiency and growth for all.

“One of the things we’re hearing loud and clear from our clients is that it’s too complicated for every one of us to have our own little walled garden and our own unique platform that they have to go to in order to transact,” said Kristi Argyilan, Albertsons’ SVP of retail media. Argyilan and her team have put forth a call to action for retail media stakeholders to join their initiative.

The Retail Media Standardization Framework concentrates on four high-priority areas: product characteristics, performance measurement, third-party verification and capabilities. The

overarching goal is to standardize specifications, methodologies, terminology and disclosures across RMNs. The framework draft incorporates insights from advertisers, agencies and other RMNs, and will evolve based on feedback and continued innovation in the marketplace. Every aspect will be pressure-tested for feasibility and adjusted as necessary.

“To ensure the survival of this industry, we must come together toward a greater goal,” Argyilan added. “We believe this framework will serve as a starting point for creating a unified approach to retail media standardization. Setting a new gold standard is the first steppingstone to revolutionizing how advertisers, agencies and retail media networks work together.”

It’s clear that Albertsons is trying to build a strong retail media business, something that was likely extremely appealing to Kroger when it revealed its impending acquisition of Albertsons last year. No matter what happens with the merger in January, however, Albertsons’ work on retail media and private brands will offer a profit accelerator for the company for years to come.

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SPECIAL REPORT

Asset Protection

The Story Behind Shrink WHAT ARE TODAY’S RE TAILERS DE ALING WITH IN TERMS OF THEF T, PRODUCT LOSS AND ASSOCIATE SAFE T Y? By Emily Crowe sk any food retail executive about their most pressing operational concerns, and shrink will undoubtedly be near the top of their list. While shrink is nothing new within the industry, it has become a more pressing issue in recent years, encompassing everything from organized retail crime and theft to food waste and cybersecurity.

According to the National Retail Federation’s (NRF) 2022 National Retail Security Survey, overall retail shrink, when taken as a percentage of total retail sales in 2021, accounted for $94.5 billion in losses, up from $90.8 billion in 2020. The association found that employee and external theft, including organized retail crime, accounted for about two-thirds of those losses.

22 progressivegrocer.com

It’s estimated that shrink at food retail specifically accounts for as much as 3% of total sales annually, although that number is known to vary widely and has likely increased for many grocers as a result of inflation and shifting consumer trends. McKinsey found that shrink has risen to between 5% and 15% of revenues for ready-to-eat and ready-to-heat products, with other super-

Key Takeaways Shrink has become a more pressing issue in recent years, encompassing everything from organized retail crime and theft to food waste and cybersecurity.

Technology has been a critical factor in the fight against organized retail crime.

Retailers are seeking solutions that prioritize the safety and well-being of both customers and employees.

market categories seeing similar numbers.

So, what exactly does retail shrink look like today, and what are leading organizations doing to not only bolster their bottom lines, but also ensure the safety of their associates and customers?

Grappling With the Fallout of Theft

Theft accounts for a vast majority of retail shrink, ranging from self-checkout scams to blatant shoplifting and everything in between. During Target’s first-quarter earnings report, CEO Brian Cornell didn’t shy away from discussing the retailer’s current predicament and outlook on the issue. Cornell expects overall shrink — driven mainly by theft and organized retail crime — to reduce the company’s profitability by more than $500 million this year when compared with last year.

“While there are many potential sources of inventory shrink, theft and organized retail crime are increasingly important drivers of the issue,” Cornell said. “We are making significant investments in strategies to prevent this from happening in our stores and protect our guests and our team.

We’re also focused on managing the financial impact on our business so we can continue to keep our stores open, knowing they create local jobs and offer convenient access to essentials.”

According to Cornell, Minneapolis-based Target is investing in team and guest protection, as well as installing fixtures to protect merchandise and adjusting product assortment in affected locations in an effort to ease the effects of shrink within its stores.

Landover, Md.-based Giant Food is also working to mitigate shrink issues caused by retail theft before it’s forced to close its most affected supermarkets. It was reported that the grocer plans to limit the number of entrances to stores to create more obstacles Target CEO Brian Cornell says that overall shrink is likely to reduce the company's profitability by more than $500 million this year versus last year.

According to Walmart CEO Doug McMillon, rates of theft are higher now than ever before at the company's stores.

for shoplifters, and also hire security guards — some of them armed — depending on the history of violence in a given store. The retailer additionally intends to keep fewer high-cost items on its shelves, limit the number of items allowed to be taken to self-checkout stands, and put secured items, such as razor blades, in wall dispensers that make noise when items are removed.

“To say [theft has] risen tenfold in the last five years would not be an understatement,” said Giant Food President Ira Kress, noting that violence has also “increased exponentially.”

Walmart CEO Doug McMillon echoed that sentiment late last year, telling CNBC that rates of theft are higher now than ever before. He explained that Bentonville, Ark.-based Walmart has put safety and security measures in place based on store location, and is actively working with local law enforcement to mitigate potential issues. McMillon also asserted that a lax approach from prosecutors regarding retail theft could eventually lead to higher prices and even store closures.

Austin, Texas-based Whole Foods Market, another victim of rampant retail theft, was forced to temporarily close its Trinity Place location in downtown San Francisco earlier this year. According to local media reports, safety concerns led the grocer to shorten the store’s hours last fall, and prior to its closure, shoppers reported that the store had also tightened up liquor purchases due to regular theft issues.

The Growing Threat of Organized Retail Crime

NRF defines organized retail crime as “the large-scale theft of retail merchandise, with the intent to resell the items for financial gain.” According to the Washington, D.C.-based association, this type of theft typically PROGRESSIVE GROCER July 2023

23

Protection. Visibility. Style.

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ADVERTORIAL

Reducing Theft is One of the Most Daunting Challenges Facing Retailers.

Speaking with David F. Dunigan, President at Modern Store Equipment Over the last few years, the retail landscape has faced a cascade of challenges to profitability. Supply chain disrup�on, the pandemic, infla�on, and the shi�ing priori�es of American workers are just a few. In addi�on, organized smash-and-grab robberies, shopli�ing, employee-related the�, and other forms of slippage have been on the rise.

Nearly $69 billion worth of products were stolen from retailers in 2019.1 In 2021, retail the� cost retailers $95 billion.2 While security guards and cameras may help, the highly-mo�vated thief tends to find a way. Which is why the product development team at Modern Store Equipment focused their thinking on solu�ons to retail the�.

To learn more, Progressive Grocer spoke with David F. Dunigan, President, and chief product innovator, and Will Steinmann, Vice President of Sales and the driving force behind Secure Display, the company’s newest high-security, an�-the� display case.

Progressive Grocer: You have over 65 years’ experience developing fixtures, displays, shelving, and more for retail stores. Was there any one incident that spurred you to focus on loss preven�on?

David Dunigan: One of our long-�me clients is a na�onal chain of liquor stores. That market has been hit incredibly hard by the�. There are spirits – tequila is one that comes to mind – priced at several thousand dollars a bo�le, making them a big target for organized the�. Suddenly, locked cases alone were not enough. Keeping product in the back of the store didn’t make sense. It’s cri�cal to keep product in view for customers to know they are available.

So we approached the challenge with three goals: - Iden�fy a technology we can employ today to create a more secure case.

- Increase product visibility to drive sales.

- Eliminate the need for keys that we know are frequently lost.

1. Loss Preven�on Magazine, July 28, 2022 2. Insider Intelligence, March 17, 2023

Progressive Grocer: It almost seems like adding visibility would detract from adding security but I can see why you made both your goals. How did you start the product development process for Secure Display?

David Dunigan: Our team iden�fied several technologies we hadn’t been using previously and combined them for a powerful result.

The first is electromagne�c locks that withstand up to 600 lbs. of force per door and have a fast auto relock system with ba�ery back-up in case of a power failure.

Another technology is keyless access and monitoring. The stores love it. Staff can open the case more easily, even remotely. They can delete access in seconds. They can even provide temporary access to a trusted customer.

Management can monitor all ac�vity from an app on a smartphone, tablet, or computer.

And we added another security feature. If the keypad is damaged, the doors remain securely locked. This is an important benefit in these days of smash-and-grab robberies.

Progressive Grocer: Having seen photos of the case, it’s impressive how discreet all the security is. The design is very streamlined, actually elegant. What are the specific ways you addressed the goal to increase visibility of product in the case?

David Dunigan: First, the use of distor�on-free acrylic doors. We chose half-inch thick acrylic which is 17 �mes stronger than tempered glass but half the weight. They are French swing on heavy duty hinges. Sliding doors o�en get bumped off the track to gain access. Not these. And they open and relock independently as an added safeguard.

And we added LED to flood the case with cool-burning light from the top, sides, and most importantly, from the back.

The backligh�ng really makes product pop. I don't care if the case holds thousand dollar tequila or cans of baby formula, whatever high the� item you need to secure, it’s going to look great inside Secure Display.

Learn more about protecting your high-theft merchandise at modernstoreonline.com/secure

SPECIAL REPORT

Asset Protection

New technology applications are quickly becoming one of the main ways for food retailers to combat shrink.

involves a criminal enterprise employing individuals who steal large quantities of merchandise from a number of stores, and a fencing operation that converts the stolen goods into cash. Criminal groups have become more brazen and are using new channels to resell

stolen goods, which are often everyday consumer products that are easier to resell, as opposed to more expensive luxury items.

Many large retailers cite organized retail crime as one of the biggest drivers of shrink in recent years. What’s more, a recent NRF survey found that 53% of consumers believe that retail crimes have increased in their communities since the pandemic began, with 79% believing that retail theft affects the price of the goods they buy.

Target’s Cornell shared that he believes organized retail crime is an urgent issue, not just for his company, but across the entire retail industry. “And unfortunately, what I’m most concerned with is it puts our team and our guests in harm’s way,” he noted.

Continued Cornell: “[W]e’re actively collaborating with legislators, law enforcement and retail industry partners to advocate for public-policy solutions to combat organized retail crime. As we communicate with those partners, we emphasize that we’re focused on keeping our stores open in the markets where problems are occurring. Our stores create jobs, serve local shoppers and act as critical hubs in communities across the country, and we’ll continue to do everything in our power to keep our doors open.”

E-Commerce, Your Way Whichever way your customers want to shop, we’ve got you covered.

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Technology has been a critical factor in The Kroger Co.’s fight against organized retail crime, especially because the company can use it to help law enforcement build a case, explained Chris Harris, director of asset protection at Cincinnati-based Kroger, at the recent Retail Industry Leaders Association (RILA) Retail Asset Protection Conference, in Aurora, Colo. “[W]e’re using technology to stop these folks at the door, whether it’s cart containments, to identify them through facial AI, through lot security cameras and license plate recognition, and provide that information to the team, go into a case management database, and help say, ‘This person was at this store, this store, this store, here’s what they’re doing, here’s the associated loss,’ and bundle that up for this team to really work big cases,” Harris said.

The Food Waste Fight

A perennial problem for food retailers is attempting to combat shrink caused by food and product waste. According to a report from Mentor, Ohio-based Avery Dennison, global organizations estimate that, on average, 8% of their stock goes bad or is discarded annually, which amounts to approximately $163 billion worth of inventory. (To find out more about food waste, see the article on page 46.)

More specifically, nonprofit ReFed estimates that 5 million tons of surplus food is generated by grocers each year, totaling about $29 billion in losses. More than three-quarters of those losses come from perishable products, including fruits and vegetables, meats, prepared deli items, seafood, milk and dairy, and some bread and bakery items. Long Island City, N.Y.-based ReFed also reports that high customer standards for freshness can lead to the disposal of safe, edible food, while date label concerns account for more than 50% of food waste at retail.

New technology applications, including demand forecasting, as well as innovative programs, have helped retailers decrease shrink caused by product waste in recent years, both in the fresh perimeter and in the center store.

For instance, Stillwater, Minn.-based Cub Foods has implemented Upshop’s Expiration Date Management product across 55 stores, which is expected to deliver more than $1.5 million in annual shrink savings to Cub. Tampa, Fla.-based Upshop’s technology offers targeted notifications and workflow guidance to ensure that soon-to-expire products are properly rotated and, if necessary, removed from shelves before expiring.

In its inaugural “Impact Report: The State of Food Waste,” the fast-growing app-based platform Flashfood, which is based in Toronto, shared that it has teamed with more than 1,700 stores across North America to help shoppers save up to 50% off items nearing their best-by date, including meat, dairy, seafood, fresh produce and baked goods — a win-win for retailers looking to save perfectly safe and edible food from the landfill.

Online grocer FreshDirect, meanwhile, is taking action to reduce food waste at all points along the supply chain through unique new programs. The company’s first outlet for food that’s nearing its expiration date or has cosmetic imperfections is its employee store, which Annemiek de Graaf, lead for health and sustainability at Bronx, N.Y.-based FreshDirect, says is a great way to save food from going to waste, and a great perk for em-

Grocers are putting several safeguards in place within their stores in an effort to stop retail theft.

ployees. In its kitchen, the grocer looks for opportunities to use all of the food it brings in, including using brown bananas to make banana bread, and turning the stems of broccoli and cauliflower into “rice.”

masonways.com | 800-837-2881 PROGRESSIVE GROCER July 2023

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SPECIAL REPORT

Asset Protection A piece of older technology could be poised to breathe new life into the food waste fight, says John Harmon, senior retail and technology analyst at New York-based Coresight Research. Radio frequency identification, or RFID, uses radio waves to identify objects and has been used at retail in myriad applications, including stock-taking, transactions, inventory levels and individual customer purchase order history. According to Harmon, some manufacturers believe that the technology could soon be increasingly used to combat food waste.

“It could help a lot in the food waste problem,” he affirms.

“You know what you’ve got, where it is and when it’s going to expire, and you can deal with it a lot better.”

The Growing Role of Asset Protection in Decreasing Shrink With shrink becoming an increasingly pervasive problem at food retail, the asset protection function has become more vital than ever. While asset protection has always focused on a limited range of threats including loss prevention, theft and certain aspects of shrink, today it encompasses credit card fraud, emergency preparedness, payment security and privacy, shoplifting, cybersecurity, violence prevention, employee safety, and so much more.

FMI — the Food Industry Association found in its 2023 “Asset Protection in Food Retail” report that asset protection now touches virtually every part of the food retail business, and that its practitioners are embracing their new roles as risk management partners within their organizations. Among the top areas of responsibility for today’s asset protection function are security, people safety, shrink, distribution and pharmacy, respectively.

Arlington, Va.-based FMI also found that the most significant asset protection concerns are violence prevention, active assailants, in-store associate safety and emergency preparedness.

For its part, FMI is supporting preparedness through training and facilitating peer-to-peer conversations, and the association’s board of directors established the Violence Preparedness Committee last year, which is co-chaired by the chief executives of The Kroger Co. and PepsiCo. In speaking with an audience at this year’s RILA Retail Asset Protection Conference, in Aurora, Colo., Joshua Ridgeway, senior director of asset protection at Bentonville, Ark.-based Walmart, encouraged retailers to focus on putting the customer first and figuring out how asset protection can fulfill their needs first and foremost.

Ridgeway also implored retailers to work with their suppliers, service providers and other partners to address common issues within asset protection.

“Right now, we have entered a time where how we protect our customers, our employees and our assets is going to become a competitive advantage,” Ridgeway asserted.

Finding Solutions While Putting People First

As retailers continue to reckon with these pressing issues, many are initiating unique programs, and also working with local law enforcement agencies, third-party businesses and trade organizations to help them get a handle on solutions that prioritize the safety and well-being of both customers and employees.

During the RILA conference, Paul Jaeckle, VP of asset protection for Grand Rapids, Mich.-based Meijer, noted that the retailer recently sent out a shopper survey in an effort to better understand customer expectations when they’re on retail property, how they view security and what they value most. What Meijer found was that parking lot safety and security, as well as weapons on the property, were among shoppers’ greatest concerns.

According to Jaeckle, this data and information has helped Meijer build a road map to guide its asset protection and safety decisions across its operations.

“Your risk starts before the customer comes into the store, starts at your property line, starts virtually, starts online, starts on your digital platform,” Jaeckle said. “For us, we really began to take this particular approach of understanding our parking lots and saying, ‘What do I have the ability to … start to control in the parking lot before that risk enters into the building, where it becomes more and more serious?’”

RILA itself is also looking to drill down on the root drivers of habitual theft, violence and other unlawful activity in and around retail establishments with its Vibrant Communities Initiative. Under the initiative, retailers will collaborate with district attorneys, police departments, social service organizations, local policymakers, civic and business groups, and others, with the aim of enhancing information sharing, prosecuting habitual and violent offenders, proposing second-chance opportunities, and also exploring technology solutions that prevent retail crime and deter violence against employees.

For Kroger’s Harris, being able to discuss asset protection and retail violence with other retailers at an event like RILA’s conference is the silver lining to dealing with today’s major issues. “[T]here is no competition, there are no trade secrets when it comes to keeping employees and customers safe,” he said.

“Your risk starts before the customer comes into the store, starts at your property line, starts virtually, starts online, starts on your digital platform.”

—Paul Jaeckle, Meijer

28 progressivegrocer.com

SOLUTIONS

Alternative Proteins Upside Foods is among the first cultivated chicken producers to receive USDA approval to sell its products in the United States.

Marketing Cultivated Meat

Consider the Alternatives E XCITING ADVANCES IN THIS SPACE WILL LE AD TO INNOVATIVE PRODUCTS AT RE TAIL.

By Bridget Goldschmidt

ast month, Upside Foods and Good Meat received grants of inspection from the U.S. Department of Agriculture, enabling the companies to sell cultivated chicken products in the United States.

This move has brought such proteins — described

by The Good Food Institute (GFI) as “real meat made with a fraction of the resources required for conventionally produced meat” — even further into the spotlight, as well as more likely to be sold at grocery stores in the near future.

The USDA’s action “marks a pivotal moment in food and agriculture,” asserts Bruce Friedrich, president of Washington, D.C.-based GFI, a nonprofit think tank working to advance cultivated meat and alternative protein innovation worldwide. “Consumers are now one giant step closer to enjoying the meat they love without compromise. Global demand for meat is projected to double by 2050. Breakthroughs like cultivated meat enable the world to diversify protein production while slashing emissions, increasing food security, reducing risks to public health, and freeing up lands and waters for restoration and recovery. Given the stakes, a transition toward cultivated meat and other alternative proteins is as essential as the global transition to renewable energy.

And just like renewable energy, massive public investment is key to ensuring these new sustainable foods can scale, create future-focused jobs and benefit everyone.”

Berkeley, Calif.-based Upside Foods, which grows meat, poultry and seafood directly from animal cells, has also launched a contest that consumers can enter via social media for a chance to be among the first in the United States to eat its cultivated chicken. Both Upside and Alameda, Calif.-based Good Meat, which first launched its product in Singapore in 2020, have disclosed plans to offer their cultivated chicken initially at select restaurants in the United States.

“Consumer reaction to these cultivated meat products will likely be a mix of curiosity, excitement and perhaps initial hesitation,” notes Justin Dranschak, a cell line development expert and the director of biopharma at San Jose, Calif.-based Molecular Devices, which develops the synthetic biology technology to create lab-grown meat. “The concept of labgrown meat is still new and may require a period of adjustment for many consumers. However, the underlying trends towards healthier, more sustainable and ethically sourced food products are strong indicators that many consumers will be open to trying these products.”

Key Takeaways Two cultivated chicken companies recently became the first to receive USDA approval to sell their products in the United States, with more cultivated meat producers likely to follow.

At the same time, plant-based protein innovation continues apace across the fresh and frozen departments.

Both plant-based and cultivated proteins are poised for growth as consumer demand for such products grows, fueled by health and environmental concerns.

PROGRESSIVE GROCER July 2023

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SOLUTIONS

Alternative Proteins When asked how suppliers and retailers can best encourage consumers to try cultivated meat, Dranschak suggests the following: “Transparency is critical in addressing potential concerns and encouraging trial. Suppliers and retailers can provide detailed yet accessible information about how the meat is grown, the rigorous safety measures in place, and the benefits in terms of sustainability and animal welfare. Clear labeling, interactive displays, informative websites and open dialogues on social media platforms can all be tools for education and engagement.

“Tasting sessions or promotional events are another great strategy to encourage trial. If consumers can taste the product and find that it matches or surpasses the quality of traditional meat, this could greatly influence their perception and willingness to purchase.

“Additionally, consumers’ questions often revolve around taste, texture, safety and nutritional content. Suppliers and retailers should be prepared to answer these questions confidently. They can share that the taste and texture of cultivated meat is designed to closely mimic that of conventional meat. As for safety and nutrition, they can explain that these products go through rigorous testing and regulatory oversight to ensure they meet or exceed the standards set for traditional meat.

“Storytelling also plays a crucial role. Highlighting the stories of the scientists, farmers and innovators behind these products can help build a stronger emotional connection with consumers. By emphasizing the care, dedication and innovation that goes into each product, suppliers and retailers can frame cultivated meat as not just an alternative, but as a thoughtful choice for consumers who care about health, animals and the planet.”

“The key here is education,” advises Ali Khademhosseini, founder and CEO of Omeat, a Los Angeles-based cultivated ground beef startup that also plans to debut in U.S. restaurants once it receives government approval. “The best and only way to encourage repeat purchases in-store is through education. Retailers should message the benefits of cultivated meat as it pertains to nutritional benefits and increased food safety, and how its process is better for the future of our planet compared to conventional options.”

Backed by $40 million in funding, Omeat recently emerged from stealth mode with a patent-pending technological process that it describes as far more sustainable and humane than conventional methods of meat production. The company is also building a pilot plant slated to go live later this year.

Before the Butcher offers a line of Uncut plant-based burgers and breakfast sausage mimicking the flavors of various animal proteins.

30 progressivegrocer.com

Upcoming products from Future Farm include a plant-based Tuna offering.

Plant-Based Innovation Continues

Beyond the recent flurry of interest in cultivated meat, plant-based protein innovation continues apace.

“At Future Farm, we use a tri-protein blend and true texture technology to ensure our consumers are getting the most texturally accurate representation of traditional protein,” explains Alexandre Ruberti, CEO of the Rio de Janeiro-based company, whose U.S. headquarters is in Santa Monica, Calif. “We mimic the juiciness and taste to deliver quality, non-GMO, clean ingredients and gluten-free products. Technology is constantly evolving, and so we are constantly adapting to meet consumer demand. R&D processes need to be rigorous, and products need to be tested thoroughly to ensure we offer the best-tasting products on the market.”

Future Farm’s latest products include Oat Milk, Chicken, Tuna and Honey, which are set to launch within the next year, along with a new and improved 4.0 version of the Future Burger. All were developed in response to consumer demand. According to Ruberti, “We’ve evolved into becoming a one-stop shop and the farm of the future where consumers can find everything they need on a regular farm, but plant-based.”

When it comes to promoting Future Farm items in stores, Ruberti says: “We believe that success here lies in always working together with retailers to market effectively. Retail partners need the commercial and marketing team from the brand side to understand our product and offer the best brand experience in-store. Our focus always lies within making the customer and consumer have a sense of belonging to the brand, creating a real connection.” The three

“The concept of labgrown meat is still new and may require a period of adjustment for many consumers. However, the underlying trends towards healthier, more sustainable and ethically sourced food products are strong indicators that many consumers will be open to trying these products.”

words he emphasizes in this effort are “stimulating,” to convey innovation and fun, including flavor; “inspiring,” to bond with consumers over values like protecting the environment; and “engaging,” to create an inclusive community.

“Plant-based protein alternatives have —Justin Dranschak, infiltrated most conventional grocery stores Molecular Devices — just like natural retailers — in the frozen foods department,” observes Danny O’Malley, founder and president of San Diego-based Before the Butcher. “There was a big push from manufacturers and retailers in the past year to offer alternatives in most frozen categories, including pizzas, bowls, meals, burritos and most other ‘further processed’ foods in the frozen foods section of most retailers.”

Agreeing with Ruberti that development of such products is driven by consumer demand, O’Malley believes in “placing these plant-based products directly next to their ‘like’ animal-based protein. Incentives like on-the-shelf discounts, coupons or BOGOs help to drive trial, along with product demos.

Repeat purchase is most often driven by taste and affordability.”

Alternative Futures

Asked what he expects to occur in the alternative protein space in the near term, O’Malley replies, “I think we will start to see more ‘whole muscle’ plantbased meat products by the end of 2023, [such as] chicken filets, steaks, maybe even pork loins.”

“There’s so much more in store for the market as a whole,” predicts Ruberti, taking a wider view. “Plant-based is continuously growing, and Gen Z consumers are more mindful of their bodies and the environment than ever before.”

“A key hurdle is regulatory approval,” notes Omeat’s Khademhosseini, speaking of cultivated meat offerings. “FDA and USDA review and approval is on a company-by-company basis. Once approval is granted, companies will scale up production and get product on shelves.”

“In the next few years, we expect to see an even wider range of cultivated meat products, from different types of meat to seafood and perhaps even unique combinations of proteins,” says Dranschak, of Molecular Devices. “I do believe they will achieve mainstream acceptance. Why? Because they offer a viable solution to the ethical, environmental and public-health issues associated with traditional meat production. As awareness and understanding grow, so will acceptance.”

Cultivated ground-beef startup Omeat is touting a patent-pending technological process that the company says is far more sustainable and humane than conventional methods of meat production.

REFRIGERATED AND FROZEN FOODS

Milk

Dairy Disruptors THE MILK INDUSTRY FOCUSES ON INNOVATION AND MESSAGING TO COMPE TE AGAINST THE TIDE OF ALTERNATIVE PRODUCTS. By Lynn Petrak oday’s milk market may be a tough nut to crack — stiff competition from nut “milks” notwithstanding — but the traditional cow’s milk industry is ramping up efforts to reclaim or maintain its market share. Processors and industry groups are focusing on attention-getting marketing campaigns and product innovations, among other efforts, in the wake of shifts in beverage preferences.

In a widely shared article earlier this year, The New York Times underlined market challenges, pointing out that younger Gen Z consumers have been dubbed the “not milk” generation for buying 20% less cow’s milk than average consumers in 2022. Among other reasons, the story cited this demographic’s lactose intolerance rates, their concerns about the dairy industry’s impact on climate change, and the taste of the low-fat and skim milk that they were served in schools. Despite these and other issues, the article noted that the fact that milk is a naturally derived and nutritionally rich product can be an enticing proposition among all age groups.

Certainly, many in the milk industry are emphasizing those and other attributes of cow’s milk to maintain core consumers and reach younger drinkers. They aren’t doing it quietly, either.

Take, for example, one recent ad from the Washington, D.C.-based Milk Processor Education Program (MilkPEP). The group, known for its popular and longstanding “Got Milk?” campaigns, aired a commercial parodying alternative milks, in this case a fictitious “wood milk.” In the spot, actress Aubrey Plaza satirizes some of

32 progressivegrocer.com

the hyperbole behind plant-based and other nondairy alternatives and touches on dairy producers’ real concern about the term “milk,” asking at the end, “Is wood milk real?

Absolutely not. Only real milk is real.”

It’s a hot topic, to be sure. In February, dairy industry groups expressed their views after the U.S. Food and Drug Administration (FDA) issued draft guidance that non-animal products can use the word “milk” as a descriptor, with a suggestion that manufacturers add a voluntary nutrition statement to share how those products stack up against traditional milk. In response to that guidance, a bipartisan group of lawmakers introduced the Dairy Pride Act in Congress to prevent the mislabeling of nondairy products by using common dairy terms.

“As FDA’s consumer research demonstrates, consumers lack clarity as to the nutritional differences of plant-based alternatives versus traditional dairy counterparts, and the agency must promulgate guidance that not only adheres to its own standards of ‘truthful and not misleading,’ but also advances the nutrition security of Americans,” said Joseph Scimeca, SVP of regulatory and scientific affairs for the Washington, D.C.-based International Dairy Foods Association (IDFA).

Added Jim Mulhern, president and CEO of the Arlington, Va.-based National Milk Producers Federation: “By acknowledging both the utter lack of nutritional standards prevalent in plant-based beverages and the confusion over nutritional value that’s prevailed in the marketplace because of the unlawful use

Key Takeaways The milk industry is emphasizing that the beverage is naturally derived and nutritionally rich, among other attributes, to maintain core consumers and reach younger drinkers.

Industry groups, brands and grocers are finding new ways to promote traditional fluid milk, including nutritional incentive programs, innovative products and updated messaging.

Brands are also differentiating their fluid-milk products through packaging and processing.

The a2 Milk Co. of dairy terms, FDA’s proposed guidance will provide greater transparoffers grass-fed ency that’s sorely needed for consumers to make informed choices. whole and 2% Still, the decision to permit such beverages to continue inappropriately reduced-fat milk using dairy terminology violates FDA’s own standards of identity, which varieties that don't contain the A1 milk clearly define dairy terms as animal-based products.” protein linked to The FDA is taking more into consideration for its final guidance. lactose intolerance.

In April, the agency said that it was extending the comment period on labels for plant-based alternatives to cow’s milk.

As dairy groups and producers fend off competition from nondairy products, they can take heart in the fact that milk remains a staple in the American diet. Although U.S. Department of Agriculture (USDA) Milk producers and brands are keeping the fresh data shows that per capita consumption of milk as a beverage fell to milk category fresh with new products and updated 16 gallons in 2021 from a high of 29 gallons in 1975, shoppers are still messaging. For instance, the Dairy Farmers of Amerreaching for the product in the retail dairy case. ica (DFA) cooperative, of Kansas City, Kan., recently Milk isn’t the only beverage that’s been affected by consumers’ teamed up with Irvine, Calif.-based Good Culture to taste for other beverage types. Consumers are also drinking less develop the first lactose-free fluid milk with probiotics, juice, with per capita consumption of that beverage type down to available in whole and 2% varieties.

18 liters in 2021 from 21 liters in 2014. Value-added water and en“With the continued growth and consumer interest in ergy drink consumption were both down in 2022, as bottled water probiotics and gut health, we’re really excited to bring remained the most consumed type of beverage. this great-tasting milk with probiotics to store shelves in Some data even shows recent stabilization in fluid-milk sales. partnership with the Good Culture brand, which is so According to a 2022 report on the milk and nondairy milk market well known for producing on-trend cultured dairy prodfrom Chicago-based market research firm Mintel, the total milk ucts,” says Rachel Kyllo, SVP of marketing for DFA dairy consumer base rose 4% from June 2021 to April 2022. Mintel also brands. “We think Good Culture Probiotic Milk will help found that nearly half of U.S. adults think that a healthy diet should meet consumer desires for more functional nutrition include both animal and plant proteins. benefits and drive excitement in the dairy case.”

On that note, Mintel’s report observed that the products can Other producers are offering different types of milk flourish separately. “Putting some distance between dairy milk for lactose-intolerant consumers. The a2 Milk Co., with in terms of actual name, store placement, usage and more can U.S. offices in Boulder, Colo., has introduced a milk lead consumers to see nondairy milk products as product that contains the A2 protein entirely new beverages, helping to put an end to but not the A1 milk protein linked to milk “Inflation is putting the comparison game,” the researchers contended. allergies and sensitivities. The brand the holistic value Milk manufacturers and retail dairy departments recently expanded the line with two looking to bolster milk sales can also tout the fact grass-fed products in whole and 2% of dairy milk on a that milk packs a lot of nutrition for its price. During pedestal, while calling reduced-fat varieties. the recent inflationary period, private label products Also aiming for lactose-intolerant greater attention drove 65% of the growth in the white dairy milk catconsumers, Clover Sonoma, of Sonoma to nondairy’s egory, according to IRI data from Chicago-based County, Calif., recently added a line of shortcomings in Circana. The fact that there’s an overabundance of Clover the Rainbow Milk with a Splash taste, nutrition and milk in certain markets right now might also drive of Flavor. Marketed to kids and “kids at versatile usage.” prices down in the short term. heart,” the organic 2% lactose-free milk —Sydney Olson, Mintel “Inflation is putting the holistic value of dairy milk on comes with a “splash” of chocolate, a pedestal, while calling greater attention to nondairy’s strawberry and vanilla. One cup contains shortcomings in taste, nutrition and versatile usage,” 8 grams of protein, 20% of the daily value noted Mintel Food and Drink Analyst Sydney Olson in the 2022 report (DV) of calcium and 140 calories. cited above. “As economic conditions improve and discretionary income Brands are differentiating their fluid-milk products in returns, the playing field will once again level off. Dairy and nondairy milk other ways, too. HP Hood, of Lynnfield, Mass., touts the brands can play a role in delivering on consumers’ refreshed perspecfact that its milk comes in a LightBlock Bottle, which tive and priorities, and should do so with positioning that is inherent and prevents more than 97% of light from penetrating the unique to the individual milk type.” bottle to help retain the fresh taste of milk that could otherwise be affected by light-induced oxidation.

Meanwhile, the Fairlife brand from The Coca-Cola Co., A Fluid Situation Industry groups, brands and grocers are finding new ways to in Atlanta, promotes its ultra-filtered milk with 50% more promote traditional fluid milk. IDFA, for its part, recently expanded a protein, processed with special filters that concentrate nutritional incentive program called Add Milk! that assists low-inthe protein and calcium and filter out most of the sugar. come families in buying healthy fluid milk through the Supplemental Coca-Cola is investing in the future of the brand by building Nutritional Assistance Program (SNAP). a new production facility for Fairlife in Webster, N.Y. PROGRESSIVE GROCER July 2023

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ONLY 5% OF ALL SPORTS COVERAGE GOES TO WOMEN. MILK IS WORKING TO MAKE A CHANGE Milk is the OG fuel for marathon runners, providing 13 essential nutrients in every 8 oz. glass. But Milk does more than fuel women runners— Milk sponsors them, offering support before, during and after the race. And for every woman who that signs up for #TeamMilk, Milk will make a donation to Girls on the Run, up to $1 million.

ADVERTORIAL

THE POWER OF DISRUPTION. MilkPEP CEO Yin Woon Rani talks about leveraging disruption to cut through the clutter.

As CEO of Washington, D.C.-based MilkPEP, Yin Woon Rani is responsible for helping milk suppliers and retailers sell more milk. Rani talked to Progressive Grocer about MilkPEP marketing campaigns and how the organization is harnessing the power of disruption to connect with today’s consumer.

Can you tell us a bit about MilkPEP and your role?

MilkPEP is a marketing and education group funded by U.S. dairy milk companies. Our goal at MilkPEP is to help support dairy milk sales through strategic marketing efforts that connect with consumers and shoppers to help highlight the value and benefit of real milk. I became CEO of MilkPEP in 2019 seeking to be a catalyst for change — with a goal of both propelling the dairy community forward while driving reconsideration of milk through strategic and meaningful marketing.

How are you a disruptor?

As an Asian leader, mother and marketer with over 25 years of agency and CPG experience, I have never been one to shy away from a challenge and am excited by the opportunity to push boundaries, test new marketing technologies and change perceptions around the category every day. Milk is an amazing product, an all-natural, affordable superfood, and deserves to be celebrated.

Why do you have to be disruptive today?

It takes a lot to capture the attention of today’s modern family; they are inudated with constant and conflicting messaging — only the most creative, relevant and compelling information sticks. In order to break through the clutter, it is crucial to embrace disruptive marketing strategies.

Consumer preferences, especially among millennials and Gen Z, are changing rapidly, and what worked last year, last month and sometimes even yesterday doesn’t work today. By remaining nimble, challenging conventional methods, adapting to emerging trends and leveraging ever-changing digital practices and platforms, we can showcase the benefits of milk on modern channels, through a modern lens, and capture the attention of today’s families and shoppers.

Can you tell us about MilkPEP’s Gonna Need Milk campaign? Why the introduction of this new platform?

You cannot have disruption without change. We introduced @GonnaNeedMilk with a specific intention — to drive reconsideration of milk as the OG performance beverage and reintroduce milk to today’s families.

How is @GONNANEEDMILK driving disruption outside of introducing a new tagline?

Last fall we launched 26.2, a program dedicated to sponsoring all women running the marathon in NYC while simultaneously supporting the next generation of runners, in partnership with Girls on the Run, an organization dedicated to empowering young girls through running.

We were excited to shake up what a traditional “sponsorship” looks like and sponsor the woman runner — the mother, the daughter, the sister, the athlete — vs. the race.

While milk is a powerful performance beverage for all athletes and endurance runners, our focus is women because we recognized that while a marathon is the same distance for anyone running, women often face significant disparities in terms of sponsorship, support and visibility.

In 2023, on International Women’s Day, we extended this program to sponsor all women running any marathon and pledged to only feature women in 100% of our campaigns.

The campaign is disrupting the marathon space — a space primarily held by sports drinks, bottled waters and protein supplements. But when you look at dairy milk’s nutritional package, it naturally has electrolytes, the same ones that are added to commercial sports drinks, and the right 3:1 carb-to-protein ratio for ideal muscle refuel and recovery. Milk keeps you hydrated (even better than water) and helps runners fuel and recover effectively — it’s an important part of marathon training.

What are other areas of disruption from MilkPEP? It’s important to meet the consumer and the shopper where they are. That means remaining flexible and nimble with where and how we show up. We know that over 80% of Gen Z, which is a critical milk target, play video games, so we knew we had to be a part of the gaming space and are actively listening to them, partnering with influential names and organizations, and creating new content in the space.

And it’s working?

The @GonnaNeedMilk campaign is proving that milk matters in modern lives and diets — it is an important source of support, both in terms of nutrients and performance for the modern family.

And we can see the disruptive strategies working! The number of young adults 1824 who agree that milk helps them stay hydrated and lead an active lifestyle rose by 10 percentage points in 2022, [1] and 76% of Gen Z teens who were aware of MilkPEP campaigns drank milk yesterday vs. 53% of teens who were not aware.

SOURCES: 1. MilkPEP’s Attitudes and Consumption Trackers conducted by Radius. Based on N=2,400 interviews among Gen Z teens and N=803 Gen Z 18-24 (Calendar year 2022)

SOLUTIONS

Packaged Bread and Bakery Flowers Foods' Nature's Own brand launched a keto-specific product earlier this year after seeing the success of its Nature's Own Life Honey Wheat bread.

Bread of Life MAJOR BR ANDS ARE ANSWERING THE CALL FOR MORE HE ALTH-FOCUSED OFFERINGS IN THE BRE AD AISLE AND BAKERY, WITH KE TO-FRIENDLY AND FUNCTIONAL ITEMS LE ADING THE WAY.

and Oroweat Breads brands have launched a new superfoods line called Grains Almighty, and retailers have joined the effort with own-brand versions, including Kroger’s Simple Truth Seeded Multigrain Bread and Multigrain Quinoa Bread.

These introductions come as a growing number of consumers are reading product labels in an effort to address various health concerns for themselves and their families – a trend that was highlighted at the 2023 International Dairy Deli Bakery Association (IDDBA) Show held in Anaheim, Calif. last month.

During a presentation about five guiding trends that grocers should be focused on now, Heather Prach, VP of education at Madison, Wis.-based IDDBA, spoke about one that’s directly related to the bread category: whole health, whole heart.

“Consumers are more educated about nutrition and physical health than ever before, and they want to know what they’re putting in their bodies,” she noted.

At the same time, there’s not one definition for healthy, Prach emphasized, observing that it “can vary based on viewpoints that are generational or regional.

It can vary based on food allergies or results-based diets, but there’s a wide range of these physical callouts that each individual is looking for. So, if you’re trading up for ingredients, make sure that you’re making those callouts on your labels and

By Jenny McTaggart

Key Takeaways eading brands are bringing new life to packaged bread and bakery with a slew of keto-friendly, functional, plant-based and portion-controlled offerings that speak to consumers’ growing concerns about diet and health.

In the first half of 2023 alone, new products designed to fit into a ketogenic (keto) diet have included Nature’s Own Keto Net One Loaf, Thomas Keto Bagel Thins, and a reformulation of Sola bread, buns and bagels, just to name a few.

Meanwhile, on the better-for-you ingredients side, Bimbo Bakeries USA’s Arnold, Brownberry

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Retailers need to emphasize health and well-being in the packaged bread and bakery sections of the store.

One of the biggest trends in recent years has been products that fit into low-carb and keto diets.

Another growing area in the better-for-you bread segment is the use of “superfoods” as ingredients, along with other functional food benefits.

ADVERTORIAL

CELEBRATING 125 YEARS OF ALUMINUM MANUFACTURING:

Portfolio of products enhances merchandising in-store SPEAKING WITH…GARY REHWINKEL, PRESIDENT & CEO, D&W FINE PACK

D&W Fine Pack, a leading source for food packaging products, was created in 2010 through the combination of four nationally recognized packaging companies: CM Packaging Group, Dispoz-o Products, C&M Fine Pack and Wilkinson Industries. As the company prepares to celebrate 125 years of Aluminum Manufacturing via CM Packaging, Progressive Grocer asked Gary Rehwinkel, President and CEO of D&W Fine Pack, to discuss how D&W’s history, including acquisitions it has made, exemplifies its commitment to the high-quality packaging solutions and outstanding customer service it offers grocery retailers today.

Progressive Grocer: D&W has been described as a small company with a large portfolio. How has the way you’ve grown given you the ability to offer such a variety of packaging products?

Gary Rehwinkel: CM Packaging, which we acquired in 2011, traces its history back to Chicago Metallic, a company founded in 1898 in Chicago to make baking packaging for the food processor and foodservice industries. 1958, Chicago Metallic relocated to a 34-acre site in suburban Lake Zurich, Illinois.

In 2011, D&W (owned by Mid Oaks Investments) acquired CM Packaging Group, a subsidiary of Chicago Metallic Products, which manufactured rigid plastic and aluminum containers for the grocery industry.

The product lines the acquisition added to our portfolio complemented our existing offerings and advanced our strategy to be a national supplier of foodservice containers and other packaging products. Today, D&W has offices in Circa 1933, Lake Zurich Plant

seven locations throughout the US and manufactures over 1600 aluminum and plastic thermoformed products in our Lake Zurich location. Outside of Lake Zurich, we manufacture plastic thermoformed and injection molded packaging as well as cutlery, kits, and straws, giving us one of the most extensive product offerings in the industry.

PG: What are some of the products especially pertinent to grocery retailers?

GR: Our wide array of grocery containers can accommodate a wide variety of food products — salads, produce, meats, hot and cold prepared foods, baked goods, or specialty items. That means stores can merchandise their bakery, deli, prepared foods and produce in a way that keeps contents fresh and secure from the store to customers’ tables. Features including easy-close lids, a stackable design, and divided compartments make prep work easier and consolidate critical shelf space, too.

With our packaging, stores can showcase any product, promote their signature brands, and generate impulse sales.

One example is our extensive line of pie pans with over 150 different sizes ranging from 6 inches to 12 inches in diameter.

PG: Can you customize options for grocers interested in proprietary packaging?

GR: Engineering capabilities are unparalleled in the industry.

Each customer has the opportunity to sit with our team of engineers to design custom products that meet their specific needs. We can help customize their packages to include embossed branding — and we don’t require huge minimum order quantities. For example, we can customize our tooling and equipment to produce pie pans to fit a customer’s specific carrier plate dimensions for their automated filling lines. We pride ourselves on our ability to deliver high quality products with below industry standard lead times. ➤TO EXPERIENCE THE DIFFERENCE OUR PACKAGING CAN MAKE IN YOUR STORE, VISIT dwfinepack.com.

SOLUTIONS

Packaged Bread and Bakery highest one is whole grains, 31%.”

Stein emphasized that retailers “need to be speaking about health and well-being in the bakery.”

The Keto Craze

Sola is in the midst of a brand refresh to position itself as "the only non-GMO, low-carb brand in the commercial bread aisle."

Additionally, its full portfolio will now be Keto Certified.

on your packaging. This is also true with clean ingredients. Any and all attributes should be clearly called out. Labels matter, and shoppers have become label readers.”

Also during the IDDBA Show, Rick Stein, VP of fresh foods at Arlington, Va.-based FMI – the Food Industry Association, shared some key data from the group’s annual bakery report that finds there’s no one-size-fits-all definition for how Americans are eating nowadays.

“We asked customers about their eating approaches, and most customers said they don’t like using the term ‘diet,’” Stein noted.

“Sixty-five percent of customers are trying to follow some type of eating behavior, and health-mindedness is very much on their mind. About 70% of customers say they’re looking for callouts.

They’re looking for information when they’re shopping in the department so they can understand what resonates with them. The

Thomas' new Keto Bagel Thins Bagels offer a "bagel alternative" for dieters, with just 2 net carbs per serving.

Fortunately for grocers, plenty of brands are working diligently to address these concerns in the bread aisle and bakery. One of the biggest trends in recent years has been products that fit into low-carb and keto diets.

The team behind Thomasville, Ga.based Flowers Foods’ Nature’s Own brand decided to launch a keto-specific product earlier this year after seeing the success of its Nature’s Own Life Honey Wheat bread, which has 7 net carbs per slice, according to Brent Bradshaw, SVP, core brands at Flowers Foods.

“We wanted to push the envelope even further and develop a product with even fewer net carbs,” he notes. “Our Nature’s Own Keto Net One loaf is great for consumers with a keto lifestyle. The carbs minus the fiber yield a very low net carb count. The bread also has 6 grams of protein per slice, which will be a great addition for a keto-friendly meal.”

The keto trend is extending to breakfast breads, too. Thomas, the brand known for its English muffins and bagels, launched its first-ever keto product, Thomas Keto 2 Net Carb Bagel Thins, in April. This product was developed specifically for those following a keto diet, notes John Lee, VP and general manager - breakfast at Bimbo Bakeries USA, the Horsham, Pa.-based company that owns the Thomas brand.

“These are a perfect choice for consumers looking for a low-carb, high-fiber breakfast option,” he says.

Recognizing that a growing number of consumers are taking more time to read product labels, the company

81%

In its recently released annual bakery report, FMI – the Food Industry Association asked consumers how they’d like the supermarket bakery to be laid out. Nearly 81% of those surveyed said that they want to see the commercial bread aisle close to the bakery.

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“Labels matter, and shoppers have become label readers.”

put “keto” in simple, bold typeface on its package design, notes Lee. Sola, a line of chef-created products that were designed as low-carb options to help —Heather Prach, IDDBA the estimated 123 million Americans with diabetes and pre-diabetes, recently unveiled a brand refresh that will position the company’s bread, buns and bagels as “the only national non-GMO, low-carb brand in the commercial bread aisle,” according to the Houston-based company. The refresh includes a new logo, updated packaging and ingredient reformulation.

In addition, the full product portfolio will now be Keto Certified.

Ashley Findlay, senior marketing director for Sola, shares that more than 160 million Americans are counting carbs these days, so, in her view, “low-carb is no longer a niche.” In fact, low-carb bakery has grown 26% in the past year, she observes, citing data from Chicago-based SPINS. Consumers are now looking for this type of product in the commercial bread aisle, emphasizes Findlay, adding that Sola’s “30-day ambient shelf life supports this placement.”

Findlay suggests that retailers that are looking to grow sales leverage brand blocking with top-selling bread and bagel items and add more innovative products to meet all of their customers’ need states. She also advises that retailers promote bread during high seasonality periods, including the new year and back-to-school time.

Bread With Benefits

Another growing area in the betterfor-you bread segment is the use of “superfoods” as ingredients, along with other functional food benefits.

In April, Bimbo Bakeries USA’s Arnold, Brownberry and Oroweat Breads launched Grains Almighty, a small-sliced line initially featuring Grains Almighty Gut Balance, made with prebiotics, and Grains Almighty Plant Protein, which features more protein and is made with a balance of chickpea flour and whole grains. The line debuted in the Northeast market and is expanding nationally this fall.

These offerings tap into a “functional foods market that’s still in its infancy,” notes Lorraine Hale, VP and general manager – bread, buns/rolls at Bimbo Bakeries USA. “The functional foods space is not just a passing trend,” she adds. “The focus on gut health and interest in plant-based foods is going to continue to increase.”

One of the health-focused varieties offered by Bimbo Bakeries USA's small-sliced Grains Almighty line is Plant Protein, made with a balance of chickpea flour and whole grains.

‘Everything’ is new again As the saying goes, everything old is new again. In the case of bakery products, however, “everything” is apparently one of the latest crazes. Thomas, a brand owned by Horsham, Pa.-based Bimbo Bakeries USA, recently introduced Everything Mini Bagels – and while these products are labeled as “everything,” they’re actually lower in calories and carbs than traditional bagels, especially since they come in a controlled-portion size.

Nature’s Own, meanwhile, recently launched its Perfectly Crafted Artisan Style Everything Bun that has “an ideal blend of everything seasoning,” according to Thomasville, Ga.-based Flowers Foods.

Another example is Wholesome Harvest Everything Bread, launched in 2021 by Bimbo Bakehouse, a division of Bimbo Bakeries USA. The “everything” fl avor in the instore bakery bread and rolls category has grown 12% in unit sales over the 52-week period that ended Jan. 22, according to IRI data cited by Bimbo Bakehouse.

Hale points out that the new breads’ key ingredients are clearly marked and easy to find on the packaging to serve health-conscious consumers.

The Kroger Co. certainly had health-conscious shoppers in mind when it developed two new betterfor-you bread offerings under its Simple Truth private brand. In April, the Cincinnati-based retailer introduced Seeded Multigrain Bread and Multigrain Quinoa Bread, both of which are Upcycled Certified by the Denver-based Upcycled Food Association. The designed-from-scratch bread is blended with upcycled barley, wheat and rye grains, with each variety topped with nutrient-dense ingredients like sunflower, flax, black sesame and pumpkin seeds and quinoa.

As 2023 progresses, it seems likely that more retailers will follow suit by developing new betterfor-you breads and other products under their own brands or, at the very least, adding other suppliers’ items to their merchandising plans. By doing so, they’ll address their shoppers’ growing appetite for healthier choices, whether those products are tied to specifi c diets or just general health concerns.

PROGRESSIVE GROCER July 2023

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BEVERAGES

Packaged Water

Lemon Perfect recently launched a limited-edition watermelon variety (last bottle on the right), a fan-favorite category flavor.

Water World FL AVOR, FUNCTIONALIT Y AND SUSTAINABILIT Y ARE DRIVING THIS CONVENIENT BE VER AGE CATEGORY TO NE W HEIGHTS. By Barbara Sax mericans remain devoted to bottled water. Last year, packaged water sales increased an estimated 12.8%, according to Mintel research.

“Water’s ultimate health halo, along with increased interest in small personal indulgences, signals new opportunities for premium, functional, sustainable packaged water products,” notes Caleb Bryant, associate director of food and drink reports at Chicago-based Mintel.

Bryant adds that category growth is concentrated on both ends of the price spectrum, with sales of private label bottled water showing a nearly 30% increase last year. At the same time, premium bottled water brands also experienced increased sales as consumers gravitated to lifestyle water brands. (For more of Mintel’s water category insights, see page 11.)

New Flavors A Key Driver

Some brands in the sparkling water category were challenged by supply chain issues last year, but the category is expected to expand as new flavors and brands enter the category and consumers increasingly seek out flavorful, low-calorie alternatives to alcoholic beverages.

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One of the fastest-growing independent sparkling water brands, Waterloo, wasn’t immune to supply chain issues, but according to Kathy Maurella, chief marketing officer at Austin, Texas-based Waterloo Sparkling Water, the brand has continued to grow through distribution, launching nationally in Albertsons/Safeway, Sprouts and BJ’s, as well as expanding shelf presence in core retailers such as Publix and Kroger.

The brand recently added two new flavors to its lineup, Orange Vanilla and Ginger Citrus Twist, along with a limit-

Key Takeaways Bottled water growth is concentrated on both ends of the price spectrum.

Some brands in the sparkling water category were challenged by supply chain issues last year, but the category is expected to expand, particularly in the flavored segment.

Functionality and sustainability are increasingly important to consumers of bottled water.

Earth’s Finest Water is also Earth-Friendly FIJI Water is committed to sustainability and is proud to have launched its 330mL and 500mL bottles made from 100% recycled plastic* in 2022. This change replaces nearly 70% of FIJI Water’s plastic bottles.** FIJI Water is available direct. Contact your FIJI Water representative at 888.426.3454 or at FIJIWater.com.

100% RECYCLED PLASTIC*

*Bottle only, 330mL and 500mL sizes **Projected total bottle volume per 2023 sales forecast © 2023 FIJI Water Company LLC. All Rights Reserved. FIJI, EARTH’S FINEST, EARTH’S FINEST WATER, the Trade Dress, and accompanying logos are trademarks of FIJI Water Company LLC or its affiliates. FW230523-13

BEVERAGES

Packaged Water ed-time-only Tropical Fruit sparkling water offering for summer, and is planning more new flavors for fall.

“Flavor innovation drives incremental growth for our brand and the category,” says Maurella. “Limited-time offers also play an important role, delivering a seasonal connection for additional consumer interest.”

Other brands are vying for shelf space with new flavors. The Coca-Cola Co.’s Topo Chico recently launched Topo Chico Sabores, a new sub-brand collection of sparkling water flavored with fruit juice and herbal extracts. The line consists of three flavors: Blueberry, with a hint of hibiscus extract; Tangerine, with a hint of ginger extract; and Lime, with a hint of mint extract.

“The mass popularity of the Topo Chico Twist of Grapefruit and Twist of Lime flavors pointed toward an opportunity to double down on flavor,” observes Fred Mitchell, marketing director for the Plano, Texas-based brand. “We selected the new flavors based on consumer interest and demand. There is a rise in consumer interest for more citrus-forward flavors and fusions.”

The Topo Chico Sabores line is packaged in aluminum cans, a departure from Topo Chico’s signature glass bottle. Mitchell notes that the packaging is suited to summertime occasions in locations where glass may not be allowed, such as parks, concerts, beaches and skate parks.

The Clearly Food & Beverage Co., based in Gormley, Ontario, recently launched Clearly Canadian Essence in two flavors, Grape-

Nirvana Super beverages support the development of lean muscle mass while also improving recovery time after physical activity.

“Flavor innovation drives incremental growth for our brand and the category. Limitedtime offers also play an important role, delivering a seasonal connection for additional consumer interest.”

—Kathy Maurella, Waterloo Sparkling Water

fruit and Limon. The new line contains only sparkling Canadian spring water and natural vegan flavors, with no added sweeteners and only natural ingredients.

Watermelon has emerged as a favorite flavor among still water brands this year, with both the Boxed Water and Lemon Perfect brands adding limited-edition watermelon flavors to their lineups.

“We decided to add watermelon as a summer splash, since we felt there was critical mass for water hydration with subtle, natural flavors that pair with different seasons or varying times or occasions in the day,” explains Kavita Shah, VP of marketing at Holland, Mich.-based Boxed Water.

Functional Attributes Gain Favor

Premium water brands, such as those with functional attributes, have been on the rise, and Mintel sees more opportunity for growth in that segment.

“Brands such as Waiakea Water and ZenWTR have successfully hit the intersection of luxury and sustainability by combining unique, environmentally friendly claims with alkalinity and purity claims,” notes Mintel’s report.

Alkaline water brands, traditionally targeted to athletes and fitness enthusiasts, are gaining a wider audience. Alkaline water, which has a higher pH (from 8.0 to 10.0) than normal tap water (around 7.0) and is believed to benefit digestion and the immune system, is growing increasingly popular with consumers.

Wintersville, Ohio-based Beverage Marketing Corp. estimates that by the end of 2024, alkaline water will comprise about 20% of the value-added water market. While Mintel’s research shows that Millennials are the most frequent users of functional beverages, Gen Zs and Gen Xers are demonstrating strong interest and current use of these beverages.

Sensing increased opportunity, Atlanta-based Coca-Cola recently reintroduced its smartwater alkaline offering to boost the brand’s presence in this fast-growing category. The product contains a higher pH level than smartwater’s original offering and

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Boxed Water continues to push the envelope on sustainable packaging, an issue that's increasingly important to consumers.

now includes selenium and a unique electrolyte blend.

The beverage giant is putting plenty of marketing muscle behind the product with an Elevate How You Hydrate marketing campaign that includes new brand ambassadors: actor and comedian Pete Davidson, Peloton instructor Alex Toussaint, track star Bianca Williams, and BMX biker Nigel Sylvester.

“With enormous growth potential in the $1 billion alkaline space, we’re putting the full weight of our brand behind this differentiated offering,” said Ulises Ramírez, group director, hydration portfolio, Coca‑Cola Co. North America, at the time of the launch. Ramírez added that the new product “hits the sweet spot between sports drinks and lifestyle waters,” and is expected to bring new drinkers into the smartwater fold and accelerate the brand’s overall growth.

The brand enters an already crowded category. Perfect Hydration Alkaline Water is another brand strategically partnering with athletes across an array of disciplines. The brand offers several packaging sizes but has been particularly successful with its gallon jug size.

“We’re the industry’s only gallon of premium alkaline water in a 100% recycled and recyclable vessel,” points out Louisa Lawless, chief strategy officer for Vernon, Calif.-based Perfect Hydration Alkaline Water. “Some of our consumers drink straight from the gallon; others use it to fill their own reusable bottles.”

The Alkaline Water Co.’s Alkaline 88 brand has been making a splash in the segment, having distribution of its brand increase to 11,000 new stores across the country last year. In the past 12 months, the Scottsdale, Ariz.-based company also added new SKUs in more than 33,000 existing locations.

Heart Water, an alkaline product made with purified rainwater, is also expanding its distribution beyond an initial launch in the Southwest with a Northeast rollout this year. The Buda, Texas-based brand is positioned as an eco-friendly option from both a production and packaging standpoint. Heart Water avoids a water-wasting reverse-osmosis process and packages its water in bottles made of recyclable aluminum.

Greater Focus on Sustainability

Heart Water’s sustainability claims are a valuable differentiator in a category increasingly focused on sustainability. “Companies must focus on the development of sustainable water products in order to retain eco-conscious younger consumers,” notes Mintel’s most recent report.

According to Dana Barba, SVP of marketing at Atlanta-based Lemon Perfect, 68% of the brand’s consumers express concerns about the environment and view being environmentally friendly as important. Barba adds that the brand, which boasts immune-boosting vitamin C and antioxidant benefits, is certified plastic neutral.

Mintel’s research reveals that no single claim defines sustainable bottled water. “The entire product must communicate sustainability, from the packaging materials used, to charitable donations, to the responsible sourcing of the water itself,” the market research firm’s report observes.

Manufacturers are concentrating more efforts on making their packaging and production sustainable and communicating that information to consumers.

Last year, Coca‑Cola rolled out Dasani bottles made from 100% recycled PET plastic (excluding caps and labels). Coca-Cola is working with communities to boost PET recycling and collection, collaborating with recycling partners, and securing recycled PET to help ensure the material for its bottles is used again and again. To drive awareness, Dasani bottles feature onpack “100% Recycled Bottle*” and “Recycle Me Again” calls to action, and the messaging is used on retail signage and other communications.

Boxed Water, for one, is continuing to push the envelope of renewability. “Following our independent ISO-certified lifecycle analysis, we moved to plantbased caps made from tree pulp waste,” notes Shah.

“We are working with the Carton Council to increase curbside recycling across the U.S.” The company also recently teamed up with Shelburne, Vt.-based nonprofit One Tree Planted to help urban communities achieve tree equity. “With the National Forest Foundation, we’ve planted 1.4 million trees in our national forests, and we’re expanding that effort to do more in specific cities in the U.S.,” says Shah. “We’re always looking to do better.”

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SOLUTIONS

Sustainability

Winning the Food Waste Battle TODAY’S GROCERS HAVE PLENT Y OF STR ATEGIC OPTIONS TO HELP KEEP FOOD OUT OF L ANDFILLS.

By Marian Zboraj

ddressing the food waste crisis is more important than ever. Sixty-three million pounds of food is thrown away annually in the United States alone, reaching landfills and contributing up to 10% of greenhouse-gas emissions globally, according to impact technology company Divert Inc. More than 40% of food loss occurs at the retail and consumer level, and the average grocery store loses $40,000 in profit a month on wasted food.

“Food retailers sit in a unique position within the food supply chain and have a critical role to play in mitigating wasted food,” says Ryan Begin, co-founder and CEO of Concord, Mass.-based Divert. “In doing so, they can see significant cost savings, provide food to communities in need, meet their social and environmental goals, and help to ensure the future of our planet.”

While many food retailers already take part in food donation programs, there are plenty of sustainability partners that can help grocers explore other business-savvy strategies to divert food waste from landfills. Here are just a few suggestions.

Put to Good Use

Specialty waste and environmental services company Denali works with retailers to build a food waste recycling strategy that delivers the most impact against their shrink and diverts unsold and inedible food from landfills.

“For example, Denali’s technology can efficiently separate food from packaging so items like potato chips or bread can be converted into valuable animal

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feed,” explains Todd Mathes, CEO of Russellville, Ark.-based Denali, which “also has a process to extract oil from semi-liquid products like salad dressing and mayonnaise to make biodiesel. From there, what can’t go to animals or fuel, we make into compost.”

Annually, the company recycles hundreds of thousands of tons of food waste from more than 10,000 grocery stores into materials such as animal feed, fertilizer and renewable fuels, enabling grocers to support the circular economy.

Denali experienced great success with retailers last year. “First, we successfully expanded the types of food waste we can accept from one of the largest grocers in the U.S.,” says Mathes. “We worked closely with the grocer to apply a new process so that deli waste, which requires special handling because it contains meats, could be combined with other types of food waste to produce renewable natural gas.

This innovation helped them reduce their food waste footprint across dozens of locations and prevented a large amount of food from going to landfills.”

Denali is also providing more data to its grocery partners so they can address food waste at the source. “This data is helping retailers to look across their internal processes for opportunities to optimize purchasing, reducing both shrink and food waste,” says Mathes. “For example, the data has empowered a grocer in the southwest U.S. to change procurement and instore strategies. As a result, we’re handling less food waste from their stores because the retailer is creating less food waste.”

Key Takeaways There are plenty of sustainability partners that can help grocers explore other business-savvy strategies besides donation programs to divert food waste from landfills.

Actionable data can be an incredibly powerful tool to prevent wasted food.

Wasted food can also be processed into alternative energy resources or recycled.

Actionable Data

Divert is also a big believer that actionable data can be an incredibly powerful tool to prevent wasted food.

“Retailers need to know what food is going to waste, how much and why it’s happening,” explains Begin. “Collecting actionable information, such as time on shelf and the temperature food is kept at, is important in order to build awareness and make changes to prevent wasted food long term. Understanding how often and why food goes to waste can inform future purchase orders and unlock new supply chain efficiencies.”

Further, did you know that grocers waste more food during the summer? New data from Divert found that wasted food from grocery stores increases by an average of nearly 20% during the summer versus the winter (see the chart below).

“Summer marks peak growing season across the U.S.,” notes Begin.

“While this is a time to celebrate an abundance of fresh produce and gather with our family and friends, our data indicates that the summer is also a period when a significant amount of that produce goes to waste.”

The company looked at wasted food processed at its facilities across the nation in 2020-22 during July through September compared with January through March. In its analysis of what’s contributing to the drastic increase, the company identified such key factors as:

At Denali's Phoenix compost facility, a trommel screen sorts finished compost made with food waste from grocers.

Peak Produce Season: An increased abundance of produce during the summer translates to a greater volume coming into grocery stores. In addition to a greater selection, more fresh food can go to waste if it’s not moved and sold quickly enough. Technologies like artificial intelligence and Internet of Things solutions can be used to identify trends or issues in stores, and uncover insights that can inform food retailers’ future processes to prevent unnecessary waste.

Heat and Human Error: When produce is exposed to greater temperature fluctuations like those seen during the summer, the percentage of wasted food increases for retailers. In the heat of the summer, produce left on a retailer’s loading dock for too long before being moved into a cooler can cause it to lose freshness more quickly. When that food goes home with the consumer, it then lasts for fewer days in the fridge. Divert suggests that increased awareness and appropriate training of retail employees led by data-driven insights could help to address this.

Tons of Wasted Food

In addition, Divert can process wasted food into alternative energy resources. “One of the most sustainable solutions is a process called anaerobic digestion, which turns wasted food into renewable energy,” says Begin. “In doing so, retailers can help recoup some of the value that went into producing that 20% Increase food — from the water and energy that went Summer vs. Winter (3-year average) into producing it, to the people and transportation that went into bringing it to a store shelf.

In the case of Divert, our anaerobic digestion process produces renewable energy considered to be carbon negative. It can be used to supply homes and businesses, or utilized by retailers at their own facilities, like in the case of our Freetown, Mass., facility, where it powers up Winter Spring to 40% of Stop & Shop’s distribution center.”

Source: Divert

Organics Recycling

When it comes to organics recycling, many people assume that it simply means organics composting, according to Cameron Funk, chief sustainability officer at Dallas-based CheckSammy, a waste removal, recycling and sustainability services company. While composting is one possible part of the equation, it’s not the whole story.

“CheckSammy’s nationwide network of 25,000 haulers and sustainability-focused facilities includes places such as anaerobic digestion facilities that enable us to take organic materials and dispose or redirect them sustainably,” says Funk. “We serve as a one-call solution to provide collection, sorting and recycling services.

“Whether you have a one-time need or require regularly scheduled pickup services and an on-site container, CheckSammy provides detailed analytics quantifying the complete chain of custody for your sustainability and ESG compliance. It’s a full-circle sustainability solution in one place,” he continues.

Further, the scale of CheckSammy’s sustainability network — its facilities are spread across North America — allows the company to minimize the distance traveled from grocers’ locations to an end-of-life facility.

In January, the company broadened its sustainability offerings with the CheckSammy Carbon Offset Marketplace to help companies efficiently implement short- and long-term carbon offset strategies. Carbon credits, also known as carbon offsets, are permits that allow the owner to emit a certain amount of carbon dioxide or other greenhouse gases. As brands work on their long-term decarbonization initiatives, they can now purchase carbon credits online to accelerate their positive climate impact.

The Carbon Offset Marketplace launched in partnership with South Pole, a global provider of climate financing and developer of verified emission-reduction projects.

CheckSammy’s marketplace supports global carbon reduction across biodiversity- and nature-based solutions like wind and waste-to-energy projects.

This drives measurable emission reductions and results in critical Summer Fall socio-economic co-benefits.

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ADVERTORIAL

Fresh Retail Platform Helps Retailers Meet Sustainability Goals SPEAKING WITH SARAH SANDBERG, Chief Customer Officer, Invafresh Progressive Grocer spoke with Sarah Sandberg, Chief Customer Officer at Invafresh, to learn how the company’s Fresh Retail Platform can help grocers incorporate sustainable business practices in ways that will help them meet the many challenges they’re facing today.

Progressive Grocer: Now that we are halfway through the year, what are some challenges you are observing with grocery retailers?

Sarah Sandberg: There are three key issues we’re seeing: • Labor. This is a continuing issue — and not just the challenge of getting the talent in the door, but also getting them trained as quickly as possible.

• The ever-evolving technology landscape and technical priorities. Grocery retailers are looking at ways to leverage Cloud solutions to become more efficient.

• A focus on end-of-life products and how they can eliminate food waste

PG: Are there any success stories you can share?

SS: We’ve been able to leverage our long-standing successes in scale management with premiere retailers like The North West Company to expand into our best-inclass Fresh Retail Platform. These products will help them better allocate labor resources, reduce shrink, and drive increased efficiencies.

With our Fresh Retail Platform deployed across all 159 stores, The Fresh Market has streamlined ordering and production decisions for every department, empowering team members and ensuring seamless product availability.

The accuracy of Invafresh’s forecasting capabilities has significantly reduced shrink and improved store margins.

This success has attracted new clients like Strack & Van Til and has fostered collaboration through our Customer Advisory Board, enabling our customers to provide us with feedback, as well as share best practices with each other.

PG: For a few years, polls of consumers and retailers have shown significant support for food waste reduction. Does this reflect what you are seeing with your customers?

SS: Sustainability is a massive priority for grocery retailers and for consumers. Reducing food waste is a big part of that. Most of our customers have sustainability goals such as achieving zero carbon emissions, eliminating plastic bags in store, reducing single-use plastic by changing to plant-based packaging, moving to EV vehicles, and eliminating any landfill contributions. We work with our customers to show (through our analytics solutions) the positive impact our solutions are having on their sustainability goals.

PG: How would you respond if a retailer asked, “How can Invafresh help achieve our food waste initiatives?

SS: Reducing food waste is one of the biggest value drivers our solutions can provide. Our CGO (Computer Generated Ordering) solution uses AI and machine learning to guide you on how much product to order into the store so you aren’t over-ordering and causing food waste. Our Production Planning solution takes it to the store-level and instructs you how much food should be prepared in-store.

Our solutions are designed to take the guess work out of ordering and production (we find the guesses are usually incorrect!) and makes the process of ordering and producing food data-driven, which in turn lessens the amount of food that will end up as waste.

PG: You and your team help retailers reach their business goals. Are there recent experiences you can share?

SS: We’ve been partnering with a key customer in the Midwest region to get the most out of our Production Planning tool by increasing their in-store use of best practices and daily habits, and we are proud to share that after only a few months they have seen a significant reduction in shrink (food waste). These types of achievements are what we are here for.

While there are a lot of commonalities in the types of challenges our customers approach us with, the reality is that success looks slightly different for each retailer.

Our role is to be closely partnered with them on their operational and strategic goals and be clear on how we can support those goals. Then we set out on a mutually agreed upon path that will get them there.

To learn more about our Fresh Retail Platform, visit invafresh.com/solutions.

NONFOODS/PERIMETER

Greeting Cards & Floral In May, Kroger introduced the delivery of sushi and Bloom Haus flowers from its stores via Uber Eats.

growing reach of digital commerce.

“Finding the freshest, highest-value treats — even for delivery — can be time-consuming,” remarked Freese. “This new curated collaboration with Kroger across floral and sushi makes it easier than ever for people to treat themselves and others on-demand.”

To kick off the delivery service, Kroger offered special promotions to eligible customers through June 30. The bouquets and sushi selections are available on UberOne, Uber Eats’ membership program, where discounted delivery and service fees are applied at checkout.

Trends in Greeting Cards and Floral RECENT NE WS INCLUDES KROGER’S PARTNERSHIP WITH UBER E ATS TO DELIVER BLOOM HAUS BOUQUE TS, AND EGROWCERY’S INTEGR ATION OF PERSONALIZED CARD ISLE PRODUCTS. By PG Staff nderscoring shopper interest in fresh products that can be delivered to a destination of their choice, The Kroger Co. has widened its delivery options from the Uber Eats Marketplace to include flowers and sushi. Just ahead of Mother’s Day, Cincinnati-based Kroger introduced the delivery of premium Bloom Haus floral bouquets from its stores around the country. Shoppers can also now order sushi from Kroger locations through the Uber Eats app and website.

According to Kroger, bouquets and sushi items can be delivered in a matter of minutes. Customers can choose from a variety of floral options or order up lunch, dinner or a snack with sushi offerings such as rolls and combos, dumplings, poké bowls, bottled sauces and more. Orders for all items are prepared and packed at Kroger’s family of stores.

“Kroger continues to bring customers additional ways to enjoy their favorite fresh products with zero compromise on convenience or value,” said Stuart Aitken, SVP chief merchant and marketing officer for Kroger, in May, when the delivery options debuted. “Now with Uber Eats, our customers have more options to quickly and easily order a California Crunch Roll for dinner tonight or send a fresh, premium floral bouquet just to say, ‘I’m thinking about you.’”

According to Christian Freese, head of grocery and retail for the United States and Canada at San Francisco-based Uber, the new service reflects the

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Cards on Demand

Earlier this year, white-label e-commerce platform eGrowcery integrated Card Isle’s personalized greeting card solution into the eGrowcery digital shopping service to increase overall shopper engagement. “eGrowcery is in the business of helping our retail customers differentiate themselves from larger chains,” noted Patrick Hughes, CEO of Bloomfield Hills, Mich.based eGrowcery, in April, when the news was made public. “By partnering with Card Isle and similar services that grow the retailer’s market footprint, we’re making it easier for that operator’s customers to do even more shopping at their stores.”

The partnership added a curated range of greeting cards to retailers’ e-commerce sites. Printed on demand at stores, the cards offer convenience and customization. The printed cards can be picked up at the stores or delivered.

“Both Card Isle and eGrowcery are designed to truly engage consumers by enabling them to shop the way they want to shop,” said David Henry, COO and co-founder of Blacksburg, Va.-based Card Isle, which has brought to market such internet-connected greeting card technologies as kiosks, printers and e-commerce products.

“Integrating our cards into the eGrowcery platform will help both companies and their mutual retail customers flourish.”

The physical greeting card market in the United States is estimated to reach $13.4 billion in the next five years, according to New York-based Reportlinker.com.

Scan for more info:

Your Leading Greeting Card Company for the Grocery Channel 800.654 . 6 9 6 DSN 0 | -JUNE w w w.d es i gn e r g re e ti n g s . c o m | @ D e s i g n e r G re e t i n g s Use Code:

TECHNOLOGY

Retail Media

Strange Bedfellows WILL GROCERS AND CPGS HELP BANKS RIDE THE $100 BILLION RE TAIL MEDIA WAVE?

By Mark Bees he digital advertising waters are shifting toward retail media, dramatically affecting how brands and retailers market to consumers. Countless articles have already been penned about the rising impact of retail media on the ad tech landscape, and for good reason: WPP’s GroupM estimates that retail media will be a $110.7 billion industry by the end of 2022, up from $88 billion in 2021. This represents 18% of all global digital advertising and 11% of all advertising, with estimates of that number climbing to 60% in 2027.

In digital media, money follows performance, and retail media is no exception. In one example cited by retail media solutions platform Criteo, it was able to increase sales for an art materials brand sold at Michael’s Crafts by 412%, with an increase in ROAS of 926%, using two creative ad formats: on-site display ads and sponsored products. This level of performance and

Image courtesy of Mark Bees Marketing

Grocery consumers will soon be able to use bank cards enrolled in payments media networks to purchase products and receive cash-back rewards directly deposited to their credit or debit cards.

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measurability is unprecedented, with traditional online advertising leading brands to divert budget toward retail media at a rapid pace.

So, what’s the secret to retail media success?

Brands are finally able to unlock retailers’ first-party data to target shoppers based on the actual purchases made online and in-store. This triangulation of granular retail purchase data and scaled audiences, combined with brands’ demand for better targeting and consumers’ desire for relevant advertising, has created a near-perfect situation up and down the value chain.

Consumer Banks Keep an Eye on the Prize

It’s no surprise that other industries with high-volume consumer interaction are investigating similar models. Banks are examining the value of their advertising assets, allowing third-party businesses to purchase advertising on their websites and mobile apps. Across significant geographic footprints, banks have first-party shopping data from large and engaged consumer audiences. They have many of the same attributes that retailers have, but with audiences hovering around 200 million and high visits — 66% of consumer banking customers open their banking apps at least once a week.

They’re not just checking their balances, though; they’re visiting their rewards programs that feature merchant-funded cash-back rewards programs.

These programs drive high engagement for banks with deals from brick-and-mortar and online retailers like The Gap, Panera and Ross Simmons — all designed to drive card spending and maintain loyalty for the banks, with one significant limitation. The thing they all have in common is that the rewards are funded exclusively by the merchant, never by a vendor brand or offered on individual items at the SKU level. Also, these deals don’t include items in everyday spend categories like grocery, primarily because up to now, banks haven’t been able to track item-level spending, limiting the type of available offer to a percentage off the entire basket. The net result: No item-level deals equal no brand funding equals no retail media opportunity.

Bankers’ SKU Dilemma and Technology’s Solution

Right now, new technology is being designed to solve the item-level dilemma for banks, opening new marketing opportunities for brands and more savings for consumers who want deals on items that they buy in grocery and drug stores. It’s called a payments media network (PMN).

A PMN works like this. The cardholder’s bank offers cash-back discounts on brand-funded items at a nearby grocer:

Source: Mark Bees Marketing

Buy X product and get Y cash back. Consumers use bank cards enrolled in PMNs to purchase products and receive cash-back rewards directly deposited to their credit or debit cards. As they walk through the store, consumers add the promoted products to their shopping baskets. At the cash register, they pay with the PMN-enabled credit or debit card. The PMN platform automatically tracks the rest. Consumers enjoy a seamless experience.

How a PMN Integrates With A Retail Media Network

The benefi ts are clear: Brands reach incremental shoppers beyond their retailer’s digital assets. Banks deliver more relevant value to their customers’ increasing share and spend. Retail-

Right now, new technology is being designed to solve the item-level dilemma for banks, opening new marketing opportunities for brands and more savings for consumers who want deals on items that they buy in grocery and drug stores. It’s called a payments media network (PMN).

ers extend the reach of their retail media to off-site banking apps. Sound unbelievable? It’s coming to market soon.

Who Are the Players?

There’s a land grab on to make this a reality, and the competition is fierce, including legacy card-linked offer companies like Cardlytics, bank rewards platforms like Triple and even CPG loyalty platforms like Snipp that have long-standing CPG brand relationships to bring vendor offers into the mix.

Will payments media be the next wave of retail media? Only time will tell; however, considering consumer banking’s massive consumer audience reach, and precise targeting capabilities that will drive brands’ media investment, plus a simple redemption experience on personalized items in frequent-spend categories, it’s a technology that every grocery retailer and CPG brand should stay close to as it reaches its inevitable commercial launch.

Mark Bees is an expert in CPG and retail digital and product marketing. He specializes in spotting shifts in marketing technology, consumer behavior and how it affects advertising, consumer promotions, and shopper marketing. He can be reached at mark@markbees.com.

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Harnessing the In-Store Media Megatrend Speaking with…Dilini Fernando, Vice President of Marketing, Freeosk Andrew Lipsman of Insider Intelligence and eMarketer recently identified the digitization of the physical store as one of retail’s next megatrends. Insider Intelligence, in fact, calls it a significant media opportunity for brands, and predicts that in-store retail media spending in the US will reach $19 billion in 2023 — up from $8.4 billion in 2018.1 Yet only 9% of retailers offer in-store digital media, representing a large opportunity for expansion and brand impact.2 Here, Dilini Fernando VP, Marketing of the multisensory instore retail media company Freeosk, explains how their offering differs from most retail media solutions and describes how the company can help Brands attract new-to-brand customers for incremental growth.

Progressive Grocer: What makes in-store media unique?

Dilini Fernando: There are seven key differentiators: ➊ REACH. In-store audiences are 70% larger than online audiences.3 While many shoppers migrated to online shopping during the pandemic, that trend has slowed as 73% of shoppers say they still prefer to purchase a product in-store.4 Given more than 85% of all US retail sales happen in physical stores,5 it is critical to promote along the path to purchase to reach this large base of shoppers where and when they are shopping.

➋ CONTEXT + CONTENT. Brands already know the power of the right message at the right time, and in store video has been a popular tactic to educate and inspire consumers. Freeosk kiosks takes this opportunity to the next level. Not only does the in-store digital kiosk create a consistent and brand-safe environment it also can seamlessly load an offer via retailer loyalty cards to influence shopper behavior as the message is communicated. ➌ MERCHANDISING. Merchandising can expand a brand’s footprint beyond the category aisle. Each Freeosk unit acts as secondary display/merchandising location to reach shoppers in high traffic areas early in the trip when they are most likely to convert.

effect to increase revenues. While the intention of the trip influences planned items on a shopping list, timely in-store brand exposure can lead to impulse sales and larger baskets from the simple act of discovering an unplanned, yet desirable items.

➎ TRIAL. Getting brands in hands remains a powerful tactic to help risk-averse shoppers get to know a brand or product category. The Freeosk sampling activations become a critical touchpoint (and often a moment of truth) that lowers barriers to entry for shoppers, on their terms, through on-demand automation. (This is not your parent’s sampling method).

➏ INCREMENTALITY. One of the most remarkable impacts of effective in-store retail media is the ability to drive incremental shoppers to new categories. Freeosk’s opt-in experience is focused on bringing the product aisle to the shopper. This simple and approachable interaction has a proven track record of driving new to brand and new to category households.

➐ SAMPLING & MULTISENSORY BRAND ENGAGEMENT. Studies have shown that multisensory engagement leads to more memorable experiences and more successful, longerlasting, brand engagement. US shoppers were most likely to frequently notice brand displays on shelves (43%), followed by video ads on TV screens (37%).7 Freeosk’s discovery platform activates sight, sound, taste, and touch for a shopper in one simple solution, designed for the next evolution of retail media.

PG: How does Freeosk help retailers tap in-store retail media’s potential?

DF: We enable brands to activate identifiable shopper discovery at scale across our nationwide network of media kiosks. The freeto-shopper kiosk experience offers in-store shelf merchandising, video ads on kiosk screens, automated sampling, and content.

Those things combined attract new customers to products and categories. By harnessing first-party data and consumer intent signals, Freeosk translates in-store moments into privacy-protected data brands can use to build engagement, increase sales, and drive ROI. Results show our campaigns are delivering 70% new-to-brand shoppers, driving incremental sales!

1 Insider Intelligence. (2021, June 29). In-Store Retail Media 2023. https://www.insiderintelligence.com/content/in-store-retail-media-2023 2

Merkle’s 2022 Retail Media Research Report

3

Placer.ai and Comscore Media Metrix Multi-Platform data

4

blog.hubspot.com/marketing/shopping-trends

5

US Census Bureau, 1st Quarter 2023 Report

6

marketingdive.com/spons/the-impact-of-in-store-signage-on- consumerpurchase-decisions/605794 7

➍ IMPULSE SALES. The fact is, 82% of shoppers make purchasing decisions in-store.6 In-Store retail media — that includes digital, merchandising, and offers — can have a compounding

July 2022 Path to Purchase Institute study

TO ACTIVATE NATIONWIDE FREEOSK CAMPAIGNS, CONTACT Dilini Fernando, 401-862-4906 or Dilini.Fernando@thefreeosk. com. Follow Freeosk on LinkedIn or visit www.freeoskinc.com.

EDITORS’ PICKS

Food, Beverage & Nonfood Products

Allergen-Free Indulgence

This fall, Free2b Foods will launch two additional chocolate cup flavors, with the aim of expanding snack inclusivity for people with food allergies and sensitivities who avoid buying products containing one of the top nine food allergens. Cool, fresh Dark Chocolate Mint Cups and sticky, sweet Dark Chocolate Sea Salt Caramel Cups are the latest treats from the brand, already known for its Sunflower Butter Sun Cups. The Mint and Sea Salt Caramel chocolate cups are both made with simple, recognizable plantbased ingredients in an allergy-friendly dedicated manufacturing facility. They come in two sizes: a 1.05-ounce Two Cup pack for impulse-purchase shelving, with a suggested retail price of $2.49, and 3.5-ounce Mini Cups in a resealable pouch for indulgent snacking, with a suggested retail price of $6.29. Retailers can order these products through Dot Foods, UNFI or KeHE. https://free2bfoods.com/

Cheese on the Grill

Long known for its portfolio of spreadable cheeses, Brie and Crème de Brie, Alouette has now debuted Brie for Grilling. The innovative cheese was crafted by French cheesemakers to be creamy and melty, yet strong enough to hold its iconic shape even when cooked at high heat on the grill. A wheel fits perfectly on standard burger buns and can be sliced widthwise to melt on burger patties, according to the brand, which has also released chef-curated recipes and drink pairings for the product. A 4.5-ounce package of Alouette Brie for Grilling retails for a suggested $5.99. Savencia Cheese USA, a family-owned subsidiary of specialty cheese producer Savencia Fromage & Dairy, offers high-end cheeses under the Alouette, Supreme, Chavrie, Dorothy’s and Smithfield brands, as well as Hope Foods, a plant-based dip and spread brand. Additionally, the company imports fine cheeses from France. https:// www.savenciacheeseusa.com/; https://www.alouettecheese.com/

Upcycled English Muffins

Stone & Skillet LLC and Upcycled Foods Inc. have teamed on a premium product, Super Grains English Muffins. The Upcycled Certified and non-GMO item is made from a dough featuring ReGrained SuperGrain+, created from the nutritious grain left over from beer brewing and offering plenty of plant protein, dietary fiber and prebiotics. Boasting a toasty flavor, with a crispy texture on the outside and a soft, doughy inside, the English muffins are ideal for consumers who want to do their part in reducing food waste. Stone & Skillet Super Grains English Muffins retail for $5.99 per 4-count 12-ounce bakery pack at Imperfect Foods/Misfits Market, with distribution set to expand more broadly into brick-and-mortar retailers and e-commerce. https://www.stoneandskillet.com/; https://upcycledfoods.com/

Begone, Bug Spray Smell

Hot Shot Ant, Roach & Spider Killer has just been reformulated with innovative complex fragrances created to mask the unmistakable odor of bug spray. Developed in response to feedback from customers, the enhanced scents – Crisp Linen, Fresh Floral and Lemon – provide a superior sensory experience alongside the same results consumers have come to expect from Hot Shot insecticides. These retooled formulas blend complementary scent notes to create household-friendly fragrance profiles that leave behind no harsh chemical smell. Meanwhile, the powerful formula kills ants, roaches, spiders and other listed insects on contact, and keeps killing for up to three months. The spray dries quickly to leave no oily, sticky residue behind, and can be used indoors as a spot treatment along baseboards, in cracks and crevices, and around pipes and plumbing, or outdoors around doors, windows, patios or other areas where insects may enter. The suggested retail price for Hot Shot Ant, Roach & Spider Aerosol is $5.49 per 17.5-ounce can. Hot Shot is part of home essentials company Spectrum Brands Holdings. https://www.hotshot.com/; https://spectrumbrands.com/

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Single-Serve Dairy Snack

Dairy brand Hood has launched Hood Cottage Cheese Medleys, a single-serve snack suitable for on-the-go lifestyles.

The convenient protein-packed snack offers satisfying fl avor combinations and crunchy mix-ins in three varieties: Pineapple with Honey Roasted Almonds, Strawberry with Graham Crackers and Chocolate Chips, and Blueberry with Crunchy Oat Granola. To eat, consumers just fl ip, stir and go. To celebrate the launch, Hood sponsored free exercise classes in Boston and New York. A 5-ounce container of any variety of Hood Cottage Cheese Medleys retails for a suggested $1.99. https://hood.com/

Restaurant Coffee at Home

Kraft Heinz has now introduced indulgent IHOP Coffee to homes across the country, inspired by the java served at the iconic restaurant chain. Made with 100% premium arabica beans, the coffee is available in three unique roasts: Signature Blend, with a rich and smooth medium finish; Buttery Syrup, evoking a meal of syrupy pancakes; and top-selling pancake flavor Chocolate Chocolate Chip, imparting decadent flavor. In honor of the launch, the brand offered consumers a limited-edition IHOP Coffee Mug Diffuser with the aroma of Buttery Syrup pancakes. Available on Amazon for $19.99 while supplies lasted, the rechargeable diffuser resembled the famous IHOP mug and was pre-filled with a Buttery Syrup-scented oil. IHOP Coffee comes in boxes of 10 K-Cup pods and 11- to 12-ounce bags of grounds at retailers nationwide, starting at a suggested $7.99 https://www.ihop.com/en; https://www.kraftheinzcompany.com/

In the Spirit

In anticipation of summer outings and barbecues, SweetWater Brewing Co., the ninth-largest craft brewer in the United States and a subsidiary of Tilray Brands Inc., has launched SweetWater Spirits, a collection of ready-to-drink mixed cocktails in a can featuring two spirits-based cocktails: Vodka Soda Citrus, offering a refreshing blend of orange and lime, and Vodka Soda Punch, an indulgent combination of strawberry and lime. Both varieties feature premium vodka and real fruit juices, and they each contain 105 calories per serving. Besides being available at select grocery and liquor stores, as well as bars and restaurants, SweetWater Spirits can be found at recently established branded bars within Atlanta’s Mercedes-Benz Stadium, home to the NFL’s Atlanta Falcons and Atlanta United of Major League Soccer. A 4-pack of 12-ounce cans of either variety retails for a suggested $12.99. https://www.sweetwaterbrew.com/; https://www.tilray.com/

Authentic Flavor at Hand

In a bid to expand and generate sales beyond the ethnic aisle of the supermarket, Goya Foods, America’s largest Hispanic-owned food company, has introduced Goya Enchilada Red Sauce, a unique ready-to-use product made with sea salt. Consumers can keep it on hand in the pantry to easily make authentic enchiladas or add Mexican flavor to favorite dishes. Its mild flavor guarantees wide appeal. The item comes in two sizes: A 8-ounce can retailing for 99 cents and a 1-pound, 12-ounce can retailing for $3.39. https://www.goya.com/en/

PROGRESSIVE GROCER July 2023

57

AHEAD OF WHAT’S NEXT

By Bridget Goldschmidt

Training Day AT NGA’S SECOND FLY-IN FOR FAIR COMPE TITION, INDIES PREPARED FOR CONGRESSIONAL MEE TINGS WITH SOME LESSONS IN ADVOCACY. hen I was invited to last year’s First Fly-In for Fair Competition by the National Grocers Association, I got to be a fly on the wall during meetings in Congress members’ offices, where independent grocers passionately laid out their arguments for why the lawmakers should support the issues most important to the industry. This year, I got to experience a little bit of the preparation that goes into those meetings: an advocacy training session hosted by Brad Fitch, president and CEO of the Washington, D.C.-based Congressional Management Foundation.

Hugging the Porcupine

During the engaging session, Fitch admitted that it could be difficult to engage with lawmakers — he joked that an alternative title for the session could be “How to Hug a Porcupine” — but he also stressed that most representatives and senators are “decent public servants” who “want to make a difference in the world.” The key is for independent grocers to get their attention by relaying the specific impact of a piece of legislation on them and their business in the Congress member’s district: “Only you can tell your story.”

Fitch noted that while in-person visits have the most influence on legislators, remote meetings are here to stay and should be added to the constituent arsenal. In fact, he likened their importance to that of email as an indispensable tool.

He also advised that grocers build respectful relationships with the young staffers who often serve as gatekeepers to their bosses, suggesting such means as sending thank-you notes on nights or weekends, when the continuous stream of emails these employees get isn’t as heavy. Other tactics that an independent grocer could adopt are inviting a lawmaker to one of its stores, providing flexibility with regard to the date and time and as much advance information about the visit as possible; setting up in-state meetings at the Congress member’s district office three or four weeks ahead of time, when the schedule is being determined; actively taking part in telephone town halls; and penning letters to the editor for a local newspaper, taking care to mention the Congress member’s name.

Only Connect

Ending his presentation with a meaningful quote from Thomas Jefferson — “We do not have a government of the majority; we have a government of the majority who participate” — Fitch made it plain that connecting with Congress members, although not without challenges, was the best way to get important points across 58 progressivegrocer.com

Brad Fitch, president and CEO of the Congressional Management Foundation, led an advocacy training session for National Grocers Association members.

and gain support for issues of the utmost significance to independents, such as enforcing the Robinson-Patman Act so as to level the playing field for smaller operators competing with industry giants.

Additionally, attendees heard from Jonathan Kanter, assistant attorney general of the Antitrust Division at the Department of Justice, on that all-important subject of competition; James Glueck, of the Torrey Advisory Group, and Barbara Hiden, of the American Beverage Association, on how to navigate lobbying in relation to such potential Farm Bill provisions as SNAP Choice, which would place no restrictions on what program recipients could purchase; and political analyst, commentator and best-selling author Chris Stirewalt, on 2024 presidential politics and what its impact is likely to be in the nation’s capital.

Following these information-packed sessions, I came away with a much greater appreciation for all that goes into making the NGA Fly-In such a success. Educated independent grocers make the best advocates for positive change.

Bridget Goldschmidt Managing Editor bgoldschmidt@ensemleiq.com

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