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IN DEPTH: GROCERY WHOLESALERS ADVANCE INDEPENDENT CAUSE HOLIDAY ENTERTAINING Top trends forecast CANDY & SNACKS Winning the season SUPPLY CHAIN Last-mile mania EXCLUSIVE FIRST LOOK Inside a Kroger CFC

Ryan Redner, president and CEO

How These Third-Generation Grocers Are

Gary Redner, COO

REINVENTING REDNER’S August 2021

Volume 100, Number 8 www.progressivegrocer.com


Contents 08. 21

Volume 100 Issue 8

24 Features COVER STORY

30 WHOLESALER DEEP DIVE

38 ECONOMIC IMPACT

Trusted Allies

Independent Grocers at the Heart of the Community

22 Reinventing Redner’s

A key reason for the ongoing success of independent grocers, wholesalers are working on key initiatives this year to strengthen that bond.

Departments

14 NIELSEN’S SHELF STOPPERS

18 ALL’S WELLNESS

Meat

Composition of a Balanced Meal

A family-owned indie grocer aims to beat the behemoths.

8 EDITOR’S NOTE

Big Grocery Under Attack 10 IN-STORE EVENTS CALENDAR

October 2021 Simple Summertime Favorites

20 NEW HORIZONS

The Myth of the Critical Female Boss

82 AHEAD OF WHAT’S NEXT

12 progressivegrocer.com

Vegetables

80 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS

12 MENU TRENDS

4

16 MINTEL GLOBAL NEW PRODUCTS

A rebranded National Grocers Association goes to bat for its members, who are more essential than ever.

The New Pandemic Panic


Contents 08. 21

Volume 100 Issue 8

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

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

40 SOLUTIONS

GROCERY GROUP EDITORIAL DIRECTOR Mike Troy 813-857-6512 mtroy@ensembleiq.com

’Tis the Season

EDITORIAL EXECUTIVE EDITOR Gina Acosta 813-417-4149 gacosta@ensembleiq.com

Grocers planning for the holidays must weigh a growing number of factors.

MANAGING EDITOR Bridget Goldschmidt 347-962-9395 bgoldschmidt@ensembleiq.com SENIOR DIGITAL & TECHNOLOGY EDITOR Marian Zboraj 773-992-4405 mzboraj@ensembleiq.com

52 CENTER STORE

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

A Sweeter Hallowthanksmas

40

How to get the candy assortment right for the hottest holiday candy season ever. 56 CENTER STORE

Making Sense of the Cereal Aisle

Sales drivers evolve to include a mix of health, taste, indulgence and sentimentality.

CONTRIBUTING EDITORS Greg Ferrara, D. Gail Fleenor, Mark Landini and Barbara Sax ADVERTISING SALES & BUSINESS SENIOR SALES MANAGER Bob Baker (NEW ENGLAND, MID-ATLANTIC SOUTHEAST US, EASTERN CANADA) 732-429-2080 rbaker@ensembleiq.com SENIOR SALES MANAGER Theresa Kossack (MIDWEST, GA, FL) 214-226-6468 tkossack@ensembleiq.com SENIOR SALES MANAGER Tammy Rokowski (INTERNATIONAL, SOUTHWEST, MI) 248-514-9500 trokowski@ensembleiq.com

58 FRESH FOOD

A Cut Above

Value-added produce can help retailers get customers to try produce items that they otherwise wouldn’t purchase.

JUNIOR ACCOUNT MANAGER-GROCERY GROUP Natalie Meehan p 773-992-4410 m 619 823-4926 nmeehan@ensembleiq.com ACCOUNT EXECUTIVE/CLASSIFIED ADVERTISING Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@ensembleiq.com CLASSIFIED PRODUCTION MANAGER Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com EVENTS VICE PRESIDENT, EVENTS Michael Cronin mcronin@ensembleiq.com

60 SUPPLY CHAIN

70 STORE OPERATIONS

Kroger’s Robotic Supply Chain Ready to Accelerate

Retail’s Radically Different Future

An innovative approach to last-mile fulfillment is poised to reset shoppers’ expectations of home delivery.

EVENTS DIRECTOR Karen Mahoney 952-467-8592 kmahoney@ensembleiq.com MARKETING BRAND MARKETING MANAGER Rebecca Martin 773-992-4407 rmartin@ensembleiq.com

Amazon’s Just Walk Out technology will transform the store experience in ways that are only limited by the imagination.

62 SUPPLY CHAIN

SpartanNash Fast-Tracks Omnichannel Effort A new micro-fulfillment center offers speed and efficiency improvements.

Amazon Sellers Are Selling Out

Last-Mile Mania

76 SUSTAINABILITY

Food Retailing’s Digital Future Is Filled With Hybrid Shoppers An even greater transformation awaits, following a pandemicdriven e-commerce surge.

progressivegrocer.com

PROJECT MANAGEMENT/PRODUCTION/ART VICE PRESIDENT OF PRODUCTION Derek Estey destey@ensembleiq.com

ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com

64 SUPPLY CHAIN

68 TECHNOLOGY

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

CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com

With billions in funding and similar value propositions, new types of brand builders are scouring Amazon for products to bring to grocers’ shelves.

A race for market dominance is underway among grocery delivery providers intent on redefining speed and convenience.

6

74 CPG INNOVATION

AUDIENCE LIST RENTAL MeritDirect Marie Briganti 914-309-3378

The Journey to Eliminate Plastic Pollution In an age of environmental consciousness, food retail is committing to reduce packaging waste wherever possible.

76

ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com REPRINTS, PERMISSIONS AND LICENSING Wright’s Media ensembleiq@wrightsmedia.com 877-652-5295

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several SENIOR VICE PRESIDENT, CONTENT Joe Territo

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


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EDITOR’S NOTE By Mike Troy

Big Grocery Under Attack INDEPENDENT GROCERS HAVE PICKED A FIGHT TO RESHAPE THE FUTURE OF FOOD RE TAILING, BUT CAN THE Y WIN, AND WHO IS THE RE AL ENEMY? s the grocery industry fair? Every industry has winners and losers, but there are those who believe food retailing has become uncompetitive and that smaller retailers are disadvantaged by larger chains that abuse their power. There is some truth to this, and it’s a great time to make such an argument, as the election of Joe Biden as president shifted the political winds, the regulatory climate and the view of big business in the nation’s capital. Recognizing this, in March, the National Grocers Association (NGA) launched a scathing attack on Big Grocery by publishing a white paper asserting that big-box stores and e-commerce giants have used their dominance in the grocery market to gain special treatment and disadvantage independent competitors. Independent grocers have been feeling the financial squeeze of the anticompetitive and illegal tactics of Big Grocery for years, NGA President and CEO Greg Ferrara noted at the time. However, as the rhetoric has been ratcheted up in the long-running battle, the questions become whether independent grocery can win, what would winning look like, and who is the real enemy? So far, winning looks like getting the message out and finding a receptive ear among progressive politicians. That’s what happened on July 9, when President Biden signed the “Executive Order on Promoting Competition in the American Economy.” One of the ways it purports to do so, and another win for NGA, is to include the food retailing sector among the 72 areas to be explored for antitrust violations. Under the auspices of improving farmers’ and smaller food processors’ access to retail markets, the order calls for the creation of a report no later than 300 days after the signing of the order. The report will look at “the effect of retail concentration and retailers’ practices on the conditions of competition in the food industries, including any practices that may violate the Federal Trade Commission Act, the Robinson-Patman Act, or other relevant laws.” NGA scored another win on July 28, when David Smith, president and CEO of NGA member company Associated Wholesale Grocers, testified during a Senate Judiciary Committee hearing, “Beefing up Competition: Examining America’s Food Supply Chain.” Again, the recurring narrative was that Big Grocery employs anticompetitive tactics to demand unfair terms from suppliers, which in turn disadvantages independent grocers. So now what happens? It seems likely that the food retailing industry could soon see the spectacle of a Big Grocery hearing. 8

progressivegrocer.com

Picture top executives from chains such as Walmart, Kroger, Dollar General, Albertsons and Costco seated in a row similar to top executives from Big Tech, Big Tobacco and Big Pharma. Hostile lawmakers would land some solid blows at such a hearing, because leverage with suppliers is an undisputed advantage of scale. However, a victory for independent grocery wouldn’t be clear-cut, because Big Grocery also has a good story to tell about access to affordable food, job creation and career opportunities, social justice initiatives, and sustainability. The fairness of the grocery industry can be debated from many angles, and independent grocers have their share of size-related advantages. However, if there’s one thing that should concern grocers large and small, it’s the introduction of new business models from upstart competitors that aren’t concerned about irregularities in the playing field. These food retailing alternatives have made the industry more competitive and more fragmented than ever, assuming one looks at competition more broadly than Big Grocery versus independent grocery.

If there’s one thing that should concern grocers large and small, it’s the introduction of new business models from upstart competitors that aren’t concerned about irregularities in the playing field.

Mike Troy Editorial Director, Grocery Group mtroy@ensembleIQ.com


loomis.us/CashRecycling © 2021 Loomis Armored US, LLC. All rights reserved.


IN-STORE EVENTS

Calendar

10.21

Eat Better, Eat Together Month German-American Heritage Month Italian-American Heritage Month National Apple Month

National Bake and Decorate Month National Chili Month National Cookie Month National Fair Trade Month

S M T W T F S

1

National Homemade Cookies Day

2

National Produce Misting Day National Fried Scallops Day

3

National Boyfriend Day. Those who bring their significant other shopping should get a discount.

10

National Cake Decorating Day. Hold a contest for the talented amateurs among your customers.

4

National Cinnamon Bun Day National Taco Day

11

Native American Day Columbus Day

5

6

7

8

9

12

13

14

15

16

National Rhode Island Day. Highlight all of the culinary offerings of the smallest state.

National Gumbo Day. Run a store magazine article on the many variations of this classic dish.

National Noodle Day

National Take Your Parents to Lunch Day. Promote your instore restaurant or dining area for the occasion.

National ChocolateCovered Pretzel Day

National Dessert Day. Ask shoppers how they plan to celebrate.

National Fluffernutter Day. Years since you’ve eaten one? Same for us.

National Shawarma Day

John Lennon’s Birthday (1940). Create a store playlist of his bestloved songs.

National Sweetest Day

National Cheese Curd Day

17

18

19

20

21

22

23

24

25

26

27

28

29

30

National Pasta Day. In a just world, this would be every day.

National Bologna Day

National No Beard Day. This is just the time to highlight your shaving products.

National Greasy Foods Day. Suggest how customers can make this fare better for them with healthier oil choices.

31

Halloween

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National Pharmacy Technician Day. Sing the praises of your associates in this crucial department.

National Pumpkin Day. Release a video demonstrating how to carve the scariest Jack O’Lantern on the block.

National Youth Confidence Day. Encourage your associates to mentor their school-age colleagues with career and life advice.

Navy Day National American Beer Day

Get to Know Your Customers Day. Take plenty of photos of an informal mixer featuring coffee and cake for associates and shoppers.

National Chocolate Day

National Make a Dog’s Day. Who’s a good boy?

National Oatmeal Day National Breadstick Day

National Make a Difference Day. Urge customers and employees alike to volunteer for a cause of their choice.

National Trick or Treat Day. Enable some of your youngest shoppers to rehearse their candy-begging skills.


MENU TRENDS

Research & Analysis

Simple Summertime Favorites Plant-based items have surged on menus in recent years, and it’s no surprise that exotic fruits are along for the ride. For example, monk fruit, originating in China, is used as an alternative sweetener in growing lifestyles like keto and Whole30. While exotic fruits aren’t widely available in grocery stores, more retailers have begun to broaden their selections with unique options like red bananas, rambutan and lychee as seasons change. When looking to add innovation to menus, swapping typical fruit for a unique spin can add excitement to a menu. Calamansi MAC stage: Inception – International markets, global independents and fine dining. Trends start here and exemplify originality in flavor, preparation, and presentation. This citrus fruit with a sour and sweet flavor is often used for marmalades and sauces, as well as incorporated into savory dishes like namnam and pho. Calamansi, a hybrid between an orange and a lime, is packed with vitamin C, antioxidants and electrolytes. It has similar qualities to a lemon or a lime, but with a unique sourness.

Guava MAC stage: Adoption – Globalfood aisle at supermarkets, casual independents, fast casual. Adoption-stage trends grow their base via lower price points and simpler prep methods. Still differentiated, these trends often feature premium and/or generally authentic ingredients. This lesser-known fruit hails from Central American countries and Mexico, and is a staple in those countries’ cuisines. Often described as having a strawberry-meets-pear flavor, guavas can range from sweet to sour, depending on their ripeness. They are served raw, blended into smoothies, added to cocktails or made into jam, but can also be used in savory preparations like barbecue sauce. In Cuban culture, guavas are combined with cream cheese (pastelito de guayaba).

Watermelon MAC stage: Proliferation – Proliferation-stage trends are adjusted for mainstream appeal. Often combined with popular applications (on a burger, pasta, etc.). The perfect summertime fruit, as it’s not only tasty, but also hydrating, watermelon contains about 92% water and is acclaimed for its health benefits. Aside from the fruit’s use in food applications, the beauty industry has taken a liking to watermelon in sleep masks, toners and lip balms. The WTR MLN brand sells bottled cold-pressed watermelon juice, as it offers benefits for postworkout muscle recovery, and immunity through high amounts of vitamin C and electrolytes. On 13.5% of U.S. restaurant menus Up 31% over the past four year

On <1% of U.S. restaurant menus

On 6.1% of U.S. restaurant menus

Up 167% over the past four years

Up 43% over the past year

14% of consumers know it/ 7% have tried it/ 3% love or like it

76% of consumers know it/45% have tried it/31% love or like it

Menu Example Pabu Hawaiian Kampachi Calamansi vinaigrette, pickled Asian pear and Fresno preserved Meyer lemon oil

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Menu Example Bonifacio Guava Stuffed French Toast French toast filled with guava cream cheese, topped with ube whipped cream and fruit compote

98% of consumers know it/93% have tried it/82% love or like it Menu Example Karl Strauss Breweries Blackened Mahi Tacos Guajilo salsa, shredded cabbage, cheddar, cotija, chipotle sour cream, pico de gallo, corn flour tortillas, cilantro, chili lime watermelon crudo

Pineapple MAC stage: Ubiquity – Ubiquity-stage trends have reached maturity and can be found across all sectors of the food industry. Though often diluted by this point, their Inception-stage roots are still recognizable. This sweet and tart fruit has a wide variety of applications, from juice to desserts to marinades. And let’s not get started on how beneficial pineapple is for health, because it’s a long list. We all know pineapple for its classic yellow look, but in 2020, Del Monte introduced the PinkGlow Pineapple, an Instagrammable fruit with the perfect pink hue. Growing on select farms in Costa Rica, the PinkGlow gets its color from a high amount of lycopene, which is also found in tomatoes and watermelon. On 61.9% of U.S. restaurant menus Up 4% over the past four years 97% of consumers know it/93% have tried it/81% love or like it Menu Example Kani House Pineapple Upside Down Cake Martini Stoli vanilla vodka, pineapple juice and a splash of grenadine


Untouched water Unmatched profits FIJI Water’s bold new look is hitting shelves now, supported by a $30MM integrated campaign that brings the unique story of Earth’s Finest Water to life. TV, print, point-of-sale, social, and PR efforts will make FIJI Water and its bold new packaging unmissable. Stock up today. FIJI Water is available direct. Contact your FIJI Water representative at 888.426.3454 or at FIJIWater.com

© 2021 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. FW210624-19


FRONT END

Shelf Stoppers

Meat

Basket Facts

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

Meat

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

$80,904,747,540

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

$76,608,355,993

$69.584,941,980

Top Meat Categories by Dollar Sales Beef

Chicken

Pork

Bacon

Packaged Lunchmeat

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

$35,000,000,000

30,000,000,000

25,000,000,000

$9.09

20,000,000,000

on all meat products, up 7.2% compared with a year ago

15,000,000,000

10,000,000,000

5,000,000,000

0

Latest 52 Wks W/E 5/29/21

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

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

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

“Meat sales remained elevated over the latest 52 weeks; however, overall growth is slowing as consumers stray from their kitchens and back into food and beverage establishments. The pandemic-inflicted homebody economy caused shoppers to begin preparing almost the entirety of their meals at home, but this is going to change as COVID-19 restrictions continue to lift across the country and shoppers eagerly return to restaurants and attend and host social gatherings. As consumers leave their homes in search of experiences, don’t forget about the importance of meat in socializing — indoor and outdoor — and how it contributes to holiday and seasonal celebrations, which will be back on the list for many consumers.”

$7.35

on chicken products, up 8.7% compared with a year ago

$6.07

on dinner sausage, up 5.2% compared with a year ago

—Carman Allison, VP of Consumer Insights, NielsenIQ

Generational Snapshot

$5.46

Which cohort is spending, on average, the most per trip on bacon?

Millennials

Gen Xers

Boomers

The Greatest Generation

$7.54

$7.88

$7.92

$7.36

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

14

on packaged lunchmeat, up 5.2% compared with a year ago

progressivegrocer.com

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


We cranked up the heat to make our spiciest and most flavorful instant noodle meal ever! Each microwavable bowl comes with a fire sauce packet to challenge your taste buds.


MINTEL CATEGORY INSIGHTS

Global New Products Database

Vegetables Market Overview

Vegetable sales enjoyed a pandemicrelated surge to $58 billion in 2020, but will begin to revert to form in 2021 as the category realigns with its prepandemic trajectory. By 2023-24, vegetable sales should return to the steady but slow growth that the category has seen for much of the past decade, buoyed by consumer interest in nutrition, and aspirations of eating healthier.

Key Issues

49% of 18- to 34-year-olds consider protein alternatives — e.g., Beyond Beef, Chik’n Strips — a good source of protein, compared with 35- to 54-year-olds (43%) and those age 55-plus (19%). Younger adults may need or want more detailed support from brands and retailers to help them align vegetables with their specific nutritional goals and diets. Younger adults fall notably short of older consumers in category engagement, yet well-being and nutrition remain top of mind for these young consumers, indicating shifts in the meaning of “better for you.”

What Consumers Want, and Why As consumers’ routines adjust to more out-ofhome activities, they will seek convenient solutions that speak to their renewed interest in nutrition and wellbeing. This bodes well for vegetables, especially those that are convenient timesavers, including items that are pre-cut, seasoned or in ready-to-cook packaging. People may generally associate health with freshness, but the proliferation of plantbased meat alternatives demonstrates that consumers will accept healthy food in a processed form, a notion that packaged vegetable brands can tap into. Personal health is, without question, the significant driver for the vegetable category, but there’s a role in the category’s messaging for environmental awareness and the health of the planet, particularly in connecting with younger consumers and parents.

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L EF T O N T H E PL A NT L O N GER F O R TH E P ERF EC T BA LA NC E O F C O L O R AN D TASTE! H A N DPI C KE D AN D D EL IV ERED AT TH E PE A K O F RIP EN ESS!

LEARN MORE! FRESHDELMONTE.COM | HONEYGLOWPINEAPPLE.COM 1-800-950-3683 | @DELMONTEFRESH | @DELMONTEFRESHPRODUCE DEL MONTE and the Shield Logo are registered trademarks of Del Monte Foods Inc. used under license. HONEYGLOW and WHEN WE SAY SWEET, WE MEAN SWEET are trademarks of Del Monte International GmbH © 2021 All rights reserved.


ALL’S WELLNESS By Molly Hembree

Composition of a Balanced Meal AS THE PANDEMIC E VOLVES, IT’S TIME TO GE T SHOPPERS TO RECOMMIT TO HE ALTHY E ATING. any of us are seeking balance in our lives, particularly as more opportunities for balance exist with global COVID-19 pandemic rates declining and vaccination rates climbing. Several parts of our lifestyle may have screamed “imbalance” during the pandemic, including more regular food indulgences, less physical activity and limitations to our social lives. Now is a terrific time to create new habits, including balanced choices made at the grocery store. A balanced meal has a thoughtful ratio of food groups, nutrients, colors, portions and nontraditional proteins. The U.S. Dietary Guidelines for Americans 2020-2025 establishes widespread guidance for balanced, healthy eating patterns. The 164-page document has been translated into a user-friendly format called MyPlate. The MyPlate tool simplifies this evidence-based nutrition information A balanced meal has into a customizable format to consida thoughtful ratio of er unique food preferences, cultures, traditions and budgets. It’s applicable for food groups, nutrients, individuals, families and communities to colors, portions and build healthy food and beverage choices. nontraditional proteins. Key parts of MyPlate include focusing on whole fruits, varying one’s vegetables, making half of one’s grains whole grains, varying one’s protein routine, and moving to low-fat or fat-free dairy or fortified soy. Balance here also means striving for less added sugars, saturated fat and sodium.

It’s important that retailers offer proper portions to champion customers’ health, while still selling a diverse set of product sizes. This can be accomplished by ensuring accuracy in nutrition labeling, particularly if the label is created in-house; clearly stating the intended yield of servings from recipes in store publications; and offering many one- or two-person meal ideas throughout key grocery departments.

Consider the Alternatives

Balanced meals also mean rethinking traditionally recognized foods in the protein category. Often, protein has been synonymous with meat, poultry, fish and eggs. However, more and more alternative plant proteins are continuing to hit shelves and restaurants as Americans are seeking more sustainable, animal-free versions of foods and beverages. Retailers can accommodate these requests by setting up a summertime barbecue black bean burger-making station, adding tofu scramble to the hot-brunch rotation on Sundays, including a mock chicken or chickpea salad in the delicatessen salad case, or simply designating a nearby section within the regular meat case for savory plant-based alternatives. Balanced meal options for customers can be easily created through small changes storewide and through a strong focus on food groups, nutrients, colors, portions and nontraditional proteins.

Colorful Solutions

Next, balance includes an array of colors for snacks and meals. Various colors of the rainbow, from red to violet, indicate different plant nutrients, or phytonutrients, that protect our health, including potentially reduced cancer risk, improved blood pressure and cognition, and better eye health. Dark-green and red/orange nonstarchy vegetables are specifically mentioned as foods to include regularly to improve the status of our diets. A retailer can start to mimic these recommendations by throwing bok choy into a stir-fry at the hot counter, offering conveniently pre-stuffed red or orange bell peppers in the produce area, or even adding a Bloody Mary-syle mocktail made with 100% tomato juice at the in-store bar.

The Right Size

We can’t discuss balanced eating without addressing the importance of portions. It’s often said that “there aren’t wrong foods, just wrong portions,” and dietitians couldn’t agree more with this phrase. Grocery products from wall to wall can all be enjoyed, but in the right proportions to one another.

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Molly Hembree, MS, RD, LD, is a registered dietitian for Kroger Health.


Meal solution Essentials

Presented by America’s #1 Soy Sauce*

*Based on U.S. sales data during the 52-week period ending 06/19/21


NEW HORIZONS By Sarah Alter

The Myth of the Critical Female Boss BANISHING THE IDE A THAT WOMEN AREN’T SUITED TO LE ADERSHIP ROLES CAN HELP TALENTED CANDIDATES ADVANCE.

he Fortune 500 for 2021 has yet again broken a record of more female CEOs than ever, carrying on last year’s trend in the same direction. Yet women still make up only 8.1% of Fortune 500 CEOs, and one has to wonder what old biases might be continuing to contribute to this disparity. We’ve all heard workplace myths, truths universally acknowledged about working in the corporate world. Based on feelings rather than facts, they nestle deeply into workplace cultures, and can be difficult to uproot. Take the myth that remote employees are less productive, for example. Clearly disproven by research time and time again, put to the ultimate test last year, this myth has no basis in fact. It still has yet to be completely let go of in the wake of the pandemic, however.

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Another deeply ingrained myth — that women make toxic bosses — is also unfortunately still alive and well in our workplaces. Banishing it is a key step to advancing women to leadership roles.

Overcoming the Stereotype

When critiqued by a woman in management, I sincerely hope your first reaction isn’t to lump her in with this problematic stereotype. It’s true that your boss may have poor management skills, or be unable to offer truly constructive criticism. That’s one possibility. Another is that you expect a woman to manage in a softer way. According to a recent study by the Bonn, Germany-based IZA Institute of Labor Economics, both men and women react more negatively to criticism when it comes from a woman. Knowing how many women we lost from the workplace due to 2020’s “she-cession” makes demolishing bias more important than ever. It can be insidious, affecting our opinions of others even when we think we’re doing everything we can to be good and supportive allies — and it can affect both women and men.


For us all to push the cause of women forward, we must look inward, and let go of the preconceptions that limit the potential for women to shine as leaders. Fighting Bias

First, take your temperature on the feedback itself. Examine how you would feel about it if it came from a male co-worker at the same level as the woman who offered it. How would you feel? Would it seem less harsh? More “par for the course”? This isn’t to say that all workplace behavior is appropriate, of course. True toxicity is poison to any workplace, and it’s

worth analyzing whether the workplace around you is toxic in itself. Self-reflection doesn’t mean you should let bad behavior go unchecked, it just means a gut check is in order. Your strong reaction to criticism could be rooted, if unconsciously, in old ideas about how women should use their voices. For us all to push the cause of women forward, we must look inward, and let go of the preconceptions that limit the potential for women to shine as leaders.

Sarah Alter is president and CEO of the Network of Executive Women (NEW), a nonprofit learning, leadership and gender equality advocacy organization of 13,500-plus members representing nearly 900 organizations, 300-plus national and regional corporate partners, and 22 regional groups in the United States and Canada. NEW advances gender equality and diversity in the retail, consumer goods, financial services and technology industries. Alter joined NEW in 2017 and has wide-ranging experience in the markets that NEW represents.

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RETAILER PROFILE

Redner's Markets Inc.

REINVENTING REDNER’S A family-owned indie grocer aims to beat the behemoths. By Gina Acosta or grocers who want to know how to leverage innovation in their foodservice operations, a look at what “Chef Tim” is doing in the heart of the Pennsylvania Dutch country might offer some clues. Chef Tim, aka Tim Twiford, directs the impressive foodservice offering at Reading, Pa.-based Redner’s Markets Inc., an operator of 44 grocery stores and 12 convenience stores in eastern Pennsylvania, Maryland and Delaware, with annual sales of about $850 million. “These are Henny Penny fryers,” says Twiford as he leads a tour of the company’s new 20,000-squarefoot Central Kitchen. “Everything in here is state of the art. What happens is after, say, 12 times of frying a batch of fried chicken, it will say ‘filter the oil.’ So it won’t let you fry anything else. And this ensures all of our fried chicken is excellent.” As it turns out, fried chicken isn’t the only thing that the third generation of Redners leading Redner’s Markets takes seriously. If you’re looking for a case study of how a 50-year-old family-owned independent grocer can reinvent itself to win over new shoppers and create sustained growth, Redner’s is it.

Key Takeaways A recent company rebrand incorporating elements that more and more shoppers are seeking has led to the formation of the Redner’s Fresh Market banner. The new fresh strategy at Redner's focuses on prepared meals and in-store dining. The grocer will add features from the well-received new banner to spruce up some of its existing stores.

Family Focus on Fresh

In 2019, a year before the company turned 50, Redner’s embarked on a mission to reimagine its business model. Since its founding in 1970, the grocery chain had always been known for offering a no-frills, warehouse-style store experience. “We were almost Walmart before Walmart,” says Redner’s Markets COO Gary Redner. “Our grandfather was a visionary, certainly ahead of his time. Take all the frills out of everything. Bare bones, bare pricing. Very plain Jane, drive everything into the cost.” Fast-forward decades after Walmart came along, and the Redners knew something had to change. “Because there’s so much competition, so much competition,” explains Redner’s Markets President and CEO Ryan Redner, who along with Gary, is a grandson At left, Chef Tim Twiford, at the new Redner's Central Kitchen in West Lawn, Pa., shows off some chicken breasts. Redner’s opened its 20,000-square-foot foodservice commissary in April in a former Rite Aid space next to one of its Quick Shoppes.

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Redner's Markets Inc. CEO Ryan Redner, left, and COO Gary Redner lead a tour of the company's 45,000-square-foot Redner's Fresh Market format in Wyomissing, Pa., where the aroma of the company’s famous and beloved fried chicken, made from a 20-year-old recipe, tempts shoppers.


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RETAILER PROFILE

Redner's Markets Inc.

At the new Redner's Fresh Market format in Wyomissing, Pa., features found in traditional Redner's Markets, such as the Great Wall of Values, at top, and a wide variety of flavored popcorn, above, are included to remind shoppers that the store, though new, still celebrates the company's brand identity. Customers are attracted to the fresh popcorn stand near the produce department.

of company founder Earl Redner. The Redner’s trading area, some of the most beautiful rolling hills and countryside in the mid-Atlantic, is strewn with a “Who’s Who” of successful grocery and c-store operators: Wegmans Food Markets, Wawa, The Giant Co., Sheetz, Lidl, Rutter’s, Weis Markets and Royal Farms, and that list doesn’t even include the bigger national food retail players like Walmart. “Our competitors do a really nice job, and in order to compete, we had to add the bells and whistles to compete at the same level, really,” Ryan Redner notes. After extensive research and trips to grocery stores in California, the company came up with a plan to rebrand and focus on incorporating the kinds of elements that more and more shoppers are looking for: expanded foodservice, inno26

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vative meal solutions (a pre-made dinner for four for $30!), gathering spaces and knockout produce departments. “We had a plan to do the exterior, interior, complete renovations,” Ryan Redner says. “While we were closed outside, we said, ‘What the heck — Let’s just close inside and totally rebrand.’” The rebranding effort led the company to launch a new banner, Redner’s Fresh Market. The concept joins the company’s other banners: a traditional grocery format, Redner’s Markets, and c-store formats Quick Shoppe and Quick Stop. When you walk into the 45,000-squarefoot Redner’s Fresh Market in Wyomissing, Pa., it smells like the company’s famous fried chicken, made from a 20-year-old recipe. “It is crazy what people say about our fried chicken,” said Gary Redner, who is Ryan’s cousin. “They ask, ‘What do you put in it that makes it so different?’ It is unbelievable. It is really, really good.” Aside from fried chicken, the aroma of freshpopped popcorn also fills the air, thanks to a popcorn station near the produce department (upgraded with fancy LED lighting) that makes all manner of seasoned and flavored popcorn from scratch. Meandering into the center store, a shopper will find traditional Redner’s Market features such as the Great Wall of Values, seasonal merchandise, a candy destination and aisles of product in boxes that harken back to the company’s brand identity of value and no frills, emphasized by a timeline and photo gallery of the company’s history and the Redner family adorning the walls. But Redner’s Fresh Market mixes the old with a lot of new, offering features such as self-checkout, kombucha on tap, a wine/beer bar, a fruit and parfait station, fresh-smoked meats, sushi, fresh-squeezed juices, and fresh guacamole and salsa. There’s a full-service meat/seafood depart-

We were almost Walmart before Walmart. Our grandfather was a visionary, certainly ahead of his time. Take all the frills out of everything. Bare bones, bare pricing. Very plain Jane, drive everything into the cost.” —Gary Redner, COO, Redner’s Markets Inc.


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RETAILER PROFILE

Redner's Markets Inc. ment called Surf & Turf with custom cuts and an impressive smoked meat assortment. Also, an extensive bakery department showcases custom cakes and items such as exquisitely decorated peanut butter eggs. There used to be a salad bar, too, but with the pandemic, that’s been sidelined. “I think they will be back in our Fresh Markets,” Ryan Redner says, “but we’re already moving them from some of our other stores, because they weren’t making a ton of money, so we’re taking a lot of the salad bars out.” The crown jewel of the new Redner’s fresh strategy is Chef Tim’s prepared meals and dining room. “The biggest focus area in this store, which is prepared foods, we put in the center of the store, and it’s all grab-andgo type of items,” Ryan Redner says. Chef Tim, who has decades of foodservice experience in the region, joined Redner’s in 2018 after a stint as executive chef at a hotel. Redner’s opened its commissary in April in a former Rite Aid space next to one of its Quick Shoppes in West Lawn, Pa., and the company has been making many of its foodservice items there ever since. “The commissary is allowing us to be able to sell all of these products across the chain,” Ryan Redner observes. “It will allow us to improve shelf life. When you go from one store to the next, the consistency of how it looks, the ingredients that go into it, must remain the same. For example, cheese: What kind of shredded cheese is put on top? And if you go from one store to the next, does it look the same? Does it taste the same?” According to Twiford, his team is aiming to make every single meal, from Shepherd’s Pie to Chicken Caprese to Crab-Stuffed Flounder to Eggplant Parmesan — all made fresh in the commissary — 100% perfect. “In that island of meal solutions in-store, that is what we are striving for,” Twiford adds. “Every single one has to look perfect, every single one has to look tantalizing. We’ve gone above and beyond in training our staff. And to be honest with you, we continue to keep making it better. And we’ll break it and rebuild it to make it even better. That’s our goal.” At the Wyomissing store, Chef Tim also has “Chef Tim’s Table,” a dining room/cooking school where Twiford prepares multicourse meals for customers. Some are even done for charity auctions. “With COVID, we had to make adjustments with the number of people and tables,” Ryan Redner says. “It just creates a unique feel.”

Redner Ready

Currently, the company has two Redner’s Fresh Markets operating in Pennsylvania, and the reception from longtime Redner’s shoppers has been overwhelmingly positive (sales are up 25%). “We haven’t lost as many as we’ve picked up,” notes Gary Redner. “We really tried to do loud and proud by the fact that we did not change prices.” 28

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At upper left, the Surf & Turf meat department offers a plethora of custom cuts. At lower left, Redner's Markets Inc. has been remodeling its c-stores, such as this Quick Stop in Reading, Pa. At top, at the Wyomissing, Pa., Redner's Fresh Market, Chef Tim's Table serves shoppers multicourse meals in a space that is elegant yet family-oriented, as evidenced by the Redner family photos on the wall. Above left, Redner's Fresh Market offers traditional checkouts, but the company has been busy installing self-checkout across the chain. Above right, Redner's Ready is the grocer's new convenient pickup service. Shoppers can order online and get their groceries brought right to their car. Prices are the same as in stores. There is a $30 minimum for each order, with no service fees on the first order ($4.99 fee for all other orders). Redner’s Ready is also being rolled out across the chain.

Eric White, director of marketing and communications at Redner’s Markets, says that the company plans to take elements from Fresh Market to “refresh some existing stores, really enhance the look of it with things that we found worked in the Fresh Market that we can translate over. Again, spruce up the store and make it look a little more modernized.” The company, which operates two distribution centers in

Reading, about 63 miles northwest of Philadelphia, and has 4,500 employees, is planning to open a 49,000-square-foot Redner’s Fresh Market in Lewes, Del., in 2022. Gary Redner anticipates keeping the stores around that same size going forward. “Originally, we wanted to roll out the Redner’s Fresh Market rebrand to a bunch of stores, but we realized that the physical upgrades to the store are more than what we traditionally spend, and it takes a lot of labor to pull off these things, too,” observes Ryan Redner. The current national labor crunch is weighing heavily on operations, Gary Redner admits. “The entire industry is affected by labor shortages,” he continues. “As a result, product inbound is challenged with shorts, late trucks. Our workforce is tired, as they are forced to work extra hours and days in order to help compensate for the labor shortages.” To alleviate some of those challenges, Ryan Redner says that the company is focused on front end conversions to self-checkout to help mitigate the effect that the labor shortages and minimum-wage increases are having on operations. Even though the company partners with Birmingham, Ala.-based Shipt on online grocery pickup, Redner’s has also launched its own Redner's Ready pickup program, which will be rolled out to a different store every week until it’s available at every store in the chain. But again, Redner’s focus on foodservice innovation can’t be underestimated. Back at the commissary, Chef Tim is showing off his combi steam oven and blast chiller. As he explains the intricacies of crispy chicken skin, humidity and oven temperatures, he ruminates on what’s unique about Redner’s foodservice operation. “You know what?” he says. “It’s not just one person. Always remember that. I mean, we have a phenomenal team, starting with the family, and the leadership, especially in the marketing department, those guys are the best. But this grill right over here ...” PROGRESSIVE GROCER August 2021

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WHOLESALER DEEP DIVE

Looking to the Future

Trusted Allies A KE Y RE ASON FOR THE ONGOING SUCCESS OF INDEPENDENT GROCERS, WHOLESALERS ARE WORKING ON KE Y INITIATIVES THIS YE AR TO STRENGTHEN THAT BOND. By Bridget Goldschmidt

holesalers serving independent food retailers are part of a vibrant ecosystem whose recent activities attest to the overall robust health of the independent grocery industry. Guided by the National Grocers Association (NGA) — recently relocated to Washington, D.C., from Arlington, Va., for greater access to the nation’s power brokers — indies are armed with a bold new agenda that includes calling on Congress and federal regulators to launch investigations into what it views as the illegal and anticompetitive business practices of the nation’s largest food retailers, particularly when it comes to rural and urban consumers, producers and businesses. “Economic discrimination hurts customers and communities — and it’s already illegal,” NGA noted in “Buyer Power and Economic Discrimination in the Grocery Aisle: Kitchen Table Issues for American Consumers,” a document released this past March. “The antitrust laws written to prevent this conduct can no longer be ignored and must be enforced to protect local stores, consumers’ choices and Americans’ health.” “It’s been a challenging time for the independent grocery sector, and that didn’t start with the pandemic,” points out Gus Lebiak, president of White Plains, N.Y.-based Krasdale Foods. “For years, independent grocers had to compete with large chains and mass retailers, but when COVID hit, we started having to compete just to get product into stores. Usually, when there is enough supply, you’re competing for things like labor and logistics, but with COVID, we had to fight just to get our hands on products. When you look at the situation, you need to ask, were vendors being fair, or were they playing favorites with the big chains and outlets?” Save A Lot is Other priorities for independents, unveiled at the dawn of currently in the Biden era, include employee tax relief, liability protection, the midst of transitioning assistance with accepting Supplemental Nutrition Assistance to a wholesale Program (SNAP) benefits for online purchases, credit card business model, fees and the minimum wage. which it expects This framework for action has rolled out as the sector asserts its to complete by the integral role in the U.S. economy, according to NGA’s most recent end of this year.

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WHOLESALER DEEP DIVE

Looking to the Future economic impact study (see NGA President and CEO Greg Ferrara’s column beginning on page 38), in a clear indication that indies will remain resourceful in their quest for ever-greater success. For his part, David Smith, president and CEO of Kansas City, Kan.-based Associated Wholesale Grocers (AWG), marvels that despite such issues as significantly higher operating costs over the past 18 months and finding suitable staffers, “something I’ve always admired about the independent grocer is their ability to improvise, overcome obstacles and adjust on the fly. Since their employees, their livelihood, and their family depend on them to run a successful business, they always find a way. While they are great at many things, it’s this incredible drive that sets the drumbeat of their business, and it’s powered by remarkable persistence and resilience.” Following are profiles of several wholesalers that are, in their various ways, helping independents to keep winning on a challenging playing field viewed by many as uneven.

ASSOCIATED WHOLESALE GROCERS (AWG) Headquarters: Kansas City, Kan. Estimated Revenue: $10.6 Billion President and CEO: David Smith

There are seven key initiatives that AWG has undertaken this year, which Smith describes as “the most transformational and exciting improvements in our company’s 95-year history”: 1. A fully automated all-in-one (AIO) distribution hub in Hernando, Miss., that aims to significantly expand assortment offerings to all members’ stores while reducing operating costs and providing a company-wide supply chain buffer. 2. Multidivision investments in distribution network improvements, leveraging technology and automation for efficiency, sustainability and operating cost reduction. 3. A digital sales and fulfillment strategy, focused on reducing e-commerce cost to serve, improving customer experience, and connecting disparate e-commerce platforms for efficiency and effectiveness, along with the launch of single- and multimember consortium-operated micro-fulfillment centers to support members’ growing needs. 4. A best-in-class store brands program, building upon AWG’s comprehensive store-brand program with expansions in high-growth and -demand products in all departments while investing to become even more competitive on known value store-brand items, and initiating enterprise-wide distribution and marketing of store brands. 5. Building and implementing a technology platform to buy and perform as a $22 billion retailer to better aggregate AWG member stores into a cohesive retail group with scale and improved efficiencies, better tracking, and managed promotional spending for retail competitiveness. 6. Leadership development and succession readiness to build and develop a solid future leadership team with strengths in the areas of omnichannel digital integration of the entire store,

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technology use, fresh department expertise and local market individualization. 7. Building and opening AWG’s Upper Midwest division to serve member retailers in the high-growth region encompassing North Dakota, South Dakota, Minnesota, Iowa and Wisconsin, including new retail partner Coborn’s, based in St. Cloud, Minn. As for coming innovations, Smith notes: “There are fascinating and promising technologies, especially in the distribution and logistics areas, that will allow us to serve stores better, faster and cheaper. Vetting and testing these technologies are a daily part of our lives today. To the extent that we have the capital to implement them, and there is an acceptable return for our members (at wholesale and at retail), we adopt them and will be doing so at an accelerated pace. Some will be implemented entirely in our new facilities, and some levels retrofitted to our existing operations.” He adds: “There are equally, if not more compelling, innovations in the realm of merchant tools such as unique consumer marketing, highly refined location-specific assortment planning, and enhancing the omnichannel experience through a simplified technology interface with consumers and their store of choice. The prioritization of these innovations will be unique to each of our member retailers.” As far as the wholesaler’s business is concerned, Smith notes that the company is actively pursuing what he calls “Convergence, or connecting AWG and all of our 3,100-plus stores for retail success. This will require us to find meaningful process commonality among the membership to become more efficient and effective, to connect substantive performance and buying activities to achieve scale, all while continually preserving and building upon unique and local offerings and characteristics.” The three-year process kicked off this year, and, according to Smith: “We already see some big wins on the scoreboard, and we are just starting. Our board of directors and members are very excited about this transformational journey to connect our members for success.”

Something I’ve always admired about the independent grocer is their ability to improvise, overcome obstacles and adjust on the fly.” —David Smith, President and CEO, Associated Wholesale Grocers


WHOLESALER DEEP DIVE

Looking to the Future C&S WHOLESALE GROCERS Headquarters: Keene, N.H. Estimated Revenue: $31.5 Billion CEO: Bob Palmer

In a major move, C&S revealed last month that it was purchasing Sheboygan, Wis.-based Piggly Wiggly Midwest, which operates corporate stores and services independent franchisees under a chain-style program. As part of the acquisition, the wholesaler will operate 11 Piggly Wiggly Midwest corporate stores and service 14 Butera Market stores in the Chicagoland region, as well as 84 Wisconsin franchisees under the Piggly Wiggly banner. Under the deal, Piggly Wiggly’s current distribution centers and offices will continue to operate, and C&S will remain the primary supplier for Butera Market stores. “With more than 102 years in the rapidly changing grocery industry, the foundation of C&S’ success has been our ability to adapt and innovate ahead of market trends to better serve our customers,” said C&S Executive Chairman Rick Cohen at the time that the acquisition was made public. “It’s this legacy that drives our unrelenting focus on innovative go-to-market strategies and customer service. We consistently review opportunities to grow and expand into new geographies, segments and services to ensure the company’s long-term success.” In the area of operations, the company has upgraded to the next generation of RingCentral MVP, which includes RingCentral Video, to ensure seamless operations for its thousands of employees across nearly every state. RingCentral Video is a replacement for the earlier-generation RingCentral Meetings, a solution from Belmont, Calif.-based RingCentral Inc. enabling a fast, unified, open and trusted video meeting experience. “RingCentral MVP seamlessly enabled C&S to continue our business operations throughout the pandemic,” noted VP of Infrastructure Philippe Bourdon in July. “Our employees were able to effectively communicate with each other and our customers to ensure that we helped feed our communities during this challenging time. We are very pleased with the RingCentral platform, especially with its ability to use any device, in any mode, from anywhere. Now with the MVP upgrade, which includes RingCentral Video, we’re able to give our employees a more integrated approach to team messaging, video meetings and cloud phone system experience in a single application.”

KEHE DISTRIBUTORS LLC Headquarters: Naperville, Ill. Estimated Revenue: $4.6 Billion CEO: Brandon Barnholt

For KeHE, being able to showcase innovative products and insights by creating a strong item portfolio and providing fact-based solutions allow the company to help retailers win in the aisles. From a retailer support standpoint, the company has rolled out several key initiatives for independent retailers, tailored to the specific needs in their respective regions. “In July, we launched the Independent Regional Sprints program, a four-week ordering event designed to bring the hottest products in each independent marketplace from five-

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10 brands through KeHE’s Digital Marketing Platform,” notes Westly Weaver, director of growth solutions. “Each of the featured brands will have educational videos and sell sheets to provide more insight about their products, alongside placement deals and continued promotional support. We also have a regionally focused program that supports both our natural and grocery independent customers, called the Regional Spotlight program. This program is designed to provide deep discounts on the top-selling items in KeHE’s product portfolio. Both initiatives are exclusive for our independent retail partners and will help serve their unique customer needs.” Weaver also points to an emerging-brands initiative, KeHE elevate. “Less than 200 suppliers are hand-selected by KeHE’s category management team, based on ingredients, innovation, saleability, taste, purpose, and time in the market,” he explains. “This program not only helps emerging brands attempting to break through in the marketplace, but also brings innovation to our retail partners, most of which are looking to be first to market and stand out from their competition with new products.” The reason for this focus on innovative products is to help indies stand apart from the crowd, according to Weaver. “Independent grocery continues to be a disrupter in the marketplace,” he observes. “With consistent growth since 2010, independents are looking to differentiate themselves with a broad range of product assortment while focusing on key trends that boost sales and in-store traction. Being able to take advantage of more natural and specialty products allows independent grocers to directly connect to the needs of their local communities and provide an experience that their customers are looking for.” Meanwhile, the company is also busy streamlining its customers’ supply chain experience. “By

Independent grocery continues to be a disrupter in the marketplace. With consistent growth since 2010, independents are looking to differentiate themselves with a broad range of product assortment while focusing on key trends that boost sales and in-store traction.” —Westly Weaver, Director of Growth Solutions, KeHE Distributors LLC


predicting promotional lift, using historical promotional sales and attributes, along with advanced statistical models such as artificial intelligence (AI) and machine learning (ML), distributors can forecast retail demand better and reduce out-of-stocks at the store level,” says Senior Director of Supply Chain Raj Govindarajan. “Building better capabilities to reserve and allocate inventory intelligently during manufacturing constraint situations is key for increasing customer service levels. That can be done by implementing features around order orchestration and order allocation through distributed order management.” In fact, the four key breakthrough innovations Govindarajan sees on the horizon for wholesalers are assortment optimization, digital supply chain transformation, automation, and AI and ML.

KRASDALE FOODS INC. Headquarters: White Plains, N.Y. Estimated Revenue: $1.6 Billion President: Gus Lebiak

Krasdale collaborates with its independent retail partners to create unique grocery destinations. “Two important strategies for independent grocers are stores that provide an experience and those that cater to the local

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There will always be a place for independents. If online becomes more prevalent, larger stores and chains will be unable to service their large footprints, and that will create an opportunity for independents.” —Gus Lebiak, President, Krasdale Foods

market,” notes Lebiak. “We work with store owners to help them meet their goal — whether it’s helping them remodel to provide more of an in-store experience, or sourcing specific ethnic foods and other products that their customers request. If we can’t find a product ourselves, we always allow store owners to buy from outside suppliers, because we’re in a better position when stores can

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WHOLESALER DEEP DIVE

Looking to the Future give their customers what they want.” Asked what innovations he thinks will transform the industry, Lebiak replies: “Because of labor shortages and other related problems, many store owners are focused on reducing payroll. We’re seeing more of our inner-city stores putting in self-checkout lanes. Some stores are moving to pre-packaged meats. There is a general drive to be more efficient. Ultimately, I think we’ll work out the supply chain issues. What’s more of an unknown is what the world will look like economically post-COVID. Are people going to continue working remotely? That will obviously affect not just buying habits, but [also] the labor market and who is willing to work in industries where you can’t work from home.” Still, he believes that “[t]here will always be a place for independents. If online becomes more prevalent, larger stores and chains will be unable to service their large footprints, and that will create an opportunity for independents.”

SAVE A LOT/MORAN FOODS Headquarters: St. Louis Estimated Revenue: $4.2 Billion CEO: Kenneth McGrath* (Leaving to Become Deputy Chairman of Lidl International on Oct. 1)

Moran Foods, parent company of Save A Lot, is developing a line of private label offerings, with the aim of helping the company expand its reach beyond the Save A Lot network.

Over the past year and a half, Moran Foods, parent company of Save A Lot, has focused on transitioning to a wholesale business model, relicensing all of its Save A Lot corporate stores — with the exception of 21 stores in its hometown of St. Louis — to local ownership. “This transition has allowed us to focus on our core mission of our first priorities in our own technology journey has providing our retail partners and their customers the high-quality, been to make upgrades within our 13 distribution low-priced groceries they look for,” says McGrath, who in late July centers, updating the facilities’ technology infrastrucrevealed that he would return to former employer Lidl in October as ture and improving operational efficiencies. That deputy chairman of Lidl International in Europe, with no successor includes the deployment of a new transportation named at presstime. “We are confident we will complete this initiamanagement system to optimize trucking and fuel tive by the end of the year.” costs. We’re also working to roll out more robust Within the Save A Lot platform, Moran is continuing to automation that will reshape how we plan, buy and modernize, with plans to further accelerate its investment in move inventory throughout our network. Our diverse its stores. The company has been working closely with its retail partners on a new store design, which, according to McGrath, “features We live in an a contemporary evolution of the brand, inspired by both employee and customer incredibly diverse feedback. We have always been commitage, where individual ted to our local communities, providing communities and value, quality products and neighborhood neighborhoods have their support, and our rebrand reflects that continued mission and commitment.” own identities and cultures, Moran is also developing a line of private and retailers must adapt to label offerings, with the aim of helping the serve them.” company expand its reach beyond the —Kenneth McGrath, Save A Lot network. “There are hundreds of CEO, Moran Foods/Save A Lot independent operators across the country who can benefit from a value-driven private label offering and the ability to leverage the buying power of a major retailer,” notes McGrath. In the area of upcoming innovations, “[w]e’ve seen a real acceleration of automation and digital integration into the supply chain across the industry in the last 12 to 18 months, and the pace of adoption is only increasing,” asserts McGrath. “One of

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network that includes both corporate and retail partner-owned locations requires a disciplined approach, remaining nimble enough to work with multiple stakeholders.” As far as Moran’s chief executive is concerned, independents must stay nimble to survive. “We live in an incredibly diverse age, where individual communities and neighborhoods have their own identities and cultures,” he observes, “and retailers must adapt to serve them.”

SPARTANNASH

Headquarters: Grand Rapids, Mich. Estimated Revenue: $9.3 Billion CEO: Tony Sarsam In a bid to be an even better wholesale partner, SpartanNash is launching a supply chain improvement initiative in its second quarter as the company continues to lap pandemic sales gains. During a first-quarter earnings call this past June, Sarsam said that the initiative will focus on executing sustained improvements to supply chain operations across the company’s network. “We’re just on the brink of making some of those investments,” he noted. “They are primarily around process. There will be some investments in IT upgrades, but a lot of the emphasis is going to be on strengthening our process and the way we go about that work. It will cover transportation, it will cover the way we think about our network, it will cover the way we think about inventory, and we’re creating a sales- and operations-planning process that’s strengthening the way we manage our warehouses overall, and thinking about how we make our warehouse labor more efficient and more effective in that space.” According to Sarsam, the effort will “be a multiyear endeavor, but it’s absolutely critical to what we do to have a strong business as being both efficient and effective in our overall supply chain.” Additionally, SpartanNash has opened its inaugural micro-fulfillment center, in Caledonia, Mich., near the company’s Grand Rapids headquarters. The 55,000-square-foot facility can store up to 16,000 products and will be used to fulfill orders for several of the retailer’s banners throughout west Michigan. According to SpartanNash, the new micro-fulfillment center will be able to support more than 1,000 daily orders from the retailer’s Fast Lane online grocery shopping solution. Orders will be picked and packed at the center and delivered either to the shopper’s home or to a store for curbside pickup. As well as expediting orders for customers, the facility will free up space in stores, leading to greater all-around efficiencies.

UNFI

Headquarters: Providence, R.I. Estimated Revenue: $6.7 Billion (Independent Sales Only) Chairman and CEO: J. Alexander “Sandy” Miller Douglas (Effective Aug. 9) High on UNFI’s to-do list is a new growth strategy, revealed at the company’s virtual Investor Day event last June. The strategy, known as “Fuel the Future,” aims to increase market share through network optimization, stronger innovation and an enhanced customer experience. “UNFI has built a tremendous customer base, we have amazing

associates, and we’re truly excited by our Fuel the Future strategy, which will help guide the next chapter of our growth,” said now-former CEO Steven Spinner at the event. “I’m proud of all the work and success we’ve had under our prior Build-out-the-Store strategy, which widely expanded our offerings and strengthened our core business. Our new plan builds off that work, elevating us to the next level and focusing our efforts on making our customers stronger, our supply chain better and our food solutions more inspired.” Fuel the Future’s six pillars are: Fulfill Power in Scale: optimizing the distribution network, maximizing capacity and simplifying operations with higher levels of standardization, and making investments in technology. Unlock Customer Experience: expanding the company’s portfolio of brands, products and services while offering more tailored solutions to help customers grow. Taste the Future: investing in existing, high-margin growth platforms such as Brands+, as well as developing new sources of revenue that further complement the core wholesale business. UNFI Pride: focusing on people to deliver on the company’s core value of safety in the workplace, as well as enhancing the overall associate experience; embracing and growing diversity of background, thought and approach; and commitments toward climate change and food insecurity and injustice, among other priorities. Retail Optimization: advancing the retail business through greater investment in store upgrades, e-commerce and digital platforms, combined with new sites that will contribute to growth. Earn Results: driving sustainable growth and stakeholder value, with Fuel the Future helping to deliver fiscal 2024 financial results that are expected to include sales of more than $30 billion, adjusted EBITDA of more than $900 million, and earnings per share (EPS) of more than $5.25. On the succession front, last year Spinner revealed that he would step down on July 31, 2021. During the Investor Day event in June, he noted that he was “extremely confident the next CEO will be fully aligned to UNFI’s culture,” and promised that the company would “have a successor named by late summer or early fall.” Just before Spinner’s departure, Sandy Douglas, former CEO of Framingham, Mass.-based Staples and a high-ranking executive at the Atlanta-based Coca-Cola Co. for 30 years, was named to the top spot. PROGRESSIVE GROCER August 2021

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ECONOMIC IMPACT

Independent Grocers

Independent Grocers at the Heart of the Community A REBR ANDED NATIONAL GROCERS ASSOCIATION GOES TO BAT FOR ITS MEMBERS, WHO ARE MORE ESSENTIAL THAN E VER. By Greg Ferrara

hat comes to mind when you hear the term “independent grocer”? Is it a local grocery store, maybe a momand-pop, where the checkers know your name because you’ve been shopping there for years, and the name of the store is painted on the fence at the Little League field? Is it the local chain that sells local produce, has the best fried chicken in town, and handed out free bottled water and supplies when the power went out after the big storm last year? Is it a vibrant, dynamic industry that generates billions in revenue and employs more than 1 million people from the communities in which it operates? Truth be told, independent community grocers are all of these things. Independent community grocers are the true entrepreneurs of the grocery industry, passionately committed to their customers, their associates and the markets they serve. Privately owned by families or by employees, these retailers operate a variety of retail formats based on the needs of the local community.

Choice, Convenience and Value

The National Grocers Association (NGA) represents independent community grocers in every congressional district across the country, where they’re at the heart of local communities, providing jobs and boosting tax revenue while bringing choice, convenience and value to hard-working Americans. In fact, that tagline — “At the heart of the community” — is the messaging at the core of NGA’s comprehensive rebranding, rolled out earlier this year. This motto, plus a new logo and imagery, reinforces our mission: to ensure independent, community-focused retailers and wholesalers have the opportunity to succeed and better serve consumers through our policies, advocacy, programs and services.

Further reinforcement is provided by NGA’s latest economic impact study, available at www.grocersimpactamerica.com, which demonstrates how independent community grocers are crucial to feeding the nation’s pocketbooks as well as its bellies. How crucial? Independent grocers contribute more than $255 billion to the economy, or about 1.2% of the U.S. gross domestic product. They’re responsible for more than 1.1 million jobs earning wages approaching $39 billion. Wholesalers serving independent grocers provide more than 44,000 jobs that earn wages of nearly $3.3 billion. Independent grocers generate federal, state and local tax revenues surpassing $36 billion. Independent grocery sales rose from $131 billion to $253.6 billion between 2012 and 2020. (During that same period, overall U.S. grocery store sales rose from $524 billion to $772 billion.) Independent grocery sales account for 33% of total U.S. grocery sales, up from 25% a decade ago.

Competitive Disadvantages The amount independent grocers contribute to the economy. Source: National Grocers Association

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To be sure, within this industry beats a healthy heart. Yet despite the gains made in the nearly a decade since the


Independent community grocers not only touch people’s hearts, they are the nexus of daily life and the lifeblood of local and regional economies.

Demonstrating to our nation’s policymakers how important independent grocers are to its communities will be a crucial part of this advocacy, a mantle the NGA team is honored to carry. Along with the association’s move from suburban Virginia to Washington, D.C., the strength of the industry as an economic driver and the clarity of NGA’s new branding should provide excellent support for these efforts. The late economist John Kenneth Galbraith once said, “A person buying ordinary products in a supermarket is in touch with his deepest emotions.” Independent community grocers not only touch people’s hearts, they are the nexus of daily life and the lifeblood of local and regional economies. In giving voice to our members, NGA will consistently strive to advocate and advance independent community grocers, who serve as cornerstones to Main Street and are at the heart of the community.

previous economic impact study, independent grocers have lost ground in many rural and urban areas where food deserts exist, in large part due to competitive disadvantages in the marketplace that favor big-box retailers and dollar stores. Independent community grocers are facing increased economic pressure from power buyers such as big-box chains and dollar stores, which have replaced small local grocers as the main source of food in many of these markets, usually with a far lesser selection of fresh food. In such cases, the next closest source of fresh food like produce and meat could be many miles away. Exacerbating the problem is nonenforcement of decades-old antitrust laws. NGA is working to reverse this trend through a comprehensive antitrust advocacy approach that would rein in growing power-buyer influence and encourage grocery investment in disadvantaged communities.

Greg Ferrara is president and CEO of the Washington, D.C.-based National Grocers Association.

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SOLUTIONS

2021 Holiday Entertaining Guide

’Tis the Season

Grocers planning for the holidays must weigh a growing number of factors. By Lynn Petrak rocers are heading into a holiday season filled with ongoing uncertainty on many fronts. As the events of the past two years have shown, one of the only constants in the current marketplace is the need to adapt to changing circumstances. From the rise of new variants in the ongoing COVID-19 pandemic, to concerns about higher food costs, to pervasive labor shortages and ongoing supply challenges, several simultaneous issues are facing food retailers that need to create programs tied to the holiday season. Some retail experts are projecting an earlier-than-usual start to the holidays, which places an even greater emphasis on timely planning. Forging through these challenges requires a balance of pragmatism and innovative thinking, as well as close collaboration with partners such as CPGs, distributors and others whose successful holiday seasons are linked with grocers’ efforts. Together, grocers and their various partners can ascertain and respond to what consumers will be looking for as they gear up for the holiday season. As of late summer, it’s looking like a veritable grab-bag of options, all of which can be addressed with some well-laid plans — and contingency strategies. Notes Melanie Zanoza Bartelme, global food analyst for Chicago-based research firm Mintel: “It really feels like that will be the critical approach throughout — be prepared to pivot.”

To Grandmother’s House We Go?

Following a decidedly low-key 2020, when consumers in many parts of the country were under travel restrictions and sticking close to home amid a COVID-19 surge, it was expected that 2021 would be marked by large-scale celebrations in both size and scale. Given difficulties in totally quashing the coronavirus and the range in consumers’ personal comfort levels, it may wind up being a holiday season that’s somewhere between a bust and a blowout. Early research affirms that possibility. “While consumers are eager about the upcoming holiday celebrations, 49% of consumers are still anticipating that COVID-19 will impact their plans in some way,” notes Sarah Hughes, senior product marketing manager at Winston-Salem, N.C.-based Inmar Intelligence, which conducted a holiday consumer survey in June 2021. “It’s still very fluid,” agrees Dave Anderko, supervisor, consumer insights and innovation at Hormel Foods, in Austin, Minn. “Some consumers are likely to go back to the big holiday parties and meals, as they’ve missed them. Others will continue with smaller gatherings that are less stressful [and] easier to manage, and keep gatherings more intimate with their family and friends. Some may continue to have very small gatherings and be cautious.” Bartelme envisions a similar splintering of occasions. “I can see things getting broken out,” she says. “Out of caution, even if you’re vaxxed, you might not want to risk

Key Takeaways Difficulties in totally quashing COVID-19 and consumers’ varying comfort levels may lead to a holiday season that’s somewhere between a bust and a blowout. In this fluid environment, grocers should offer a mix of products and portions catering to different levels and kinds of celebrations. In addition to spotlighting sale prices for budget-conscious consumers, retailers can get creative with assortments and promotions.

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SECTION NAME

Admin Page Header

PROGRESSIVE GROCER August 2021

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SOLUTIONS

2021 Holiday Entertaining Guide What Item Do You Bring When You’re the Guest of a Gathering?

having a celebration with an older family member, but you may feel comfortable with a Friendsgiving.” Even if they aren’t seeing everyone 75% bring a dessert this holiday season at big parties, people or sweet treat definitely want to connect in person. “We do see interest overall from consum63% bring a snack, ers who want to spend more time with starter or appetizer friends and family, and some people will be looking to the holidays as a reason 60% bring alcoholic to get together,” Bartelme predicts. Acbeverages cording to Mintel’s latest research, 69% of U.S. consumers won’t miss a chance Only 28% just bring to celebrate with others, and, underscorthemselves ing the power of sentiment, the same percentage say that they now realize the Source: Inmar Intelligence importance of holiday celebrations. Rick Stein, VP of fresh foods for Arlington, Va.-based FMI — the Food Industry Association, agrees. “I think consumers will want to gather, they will want to travel more than they did last year, and they will want to celebrate the fact that they are gathering,” he asserts. As for gatherings, there will probably be more of them, kicking off right after Halloween and running through the New Year, with people ready to look ahead to a brighter 2022. “Don’t just immediately think about the 25 th of December and Thanksgiving — there will be things like Friendsgiving, neighborhood-giving and even just gifting for the holidays with food,” says Jonna Parker, principal at IRI’s Fresh Center of Excellence, in Chicago. “I don’t think we’ve capitalized on mini-occasions to make fresh food turnkey.” The upshot for grocers in this fluid environment is to offer a mix of products and portions that cater to different levels and kinds of celebrations. Some shoppers will want the biggest turkey and an extra-large bag of potatoes, while others will stick

to everyday sizes. In addition to providing options for a range of occasions, retailers should let their customers know that they have multiple solutions based on their unique needs, an approach that aligns with shoppers’ growing desire for personalization and customization. Sally Lyons Wyatt, EVP and practice leader, client services for IRI, offers some advice: “Occasion-based assortment, with occasion-based messaging. Make it easier on your shoppers — make them want to come into the store and engage, and find those same options online.” Making it easy for consumers is a goal that cuts across all types of festivities, agrees Stein. “I go back to the macro-trend of convenience — you need to have items and programs prepared for that type of customer and that type of convenience they are looking for,” he notes.

This holiday season, people will definitely want to connect in person, industry experts agree.

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SOLUTIONS

2021 Holiday Entertaining Guide Among Companion Baking's holidayappropriate offerings is a new banana chocolate chip bread pudding with honey.

Homemade for the Holidays — Sort of

Providing more (and convenient) options extends to the mix of ready-tocook and -use offerings that will be in demand. Coming out of the pandemic, shoppers have different cooking habits and preferences. On the one hand, people have had plenty of time to bone up on their cooking skills. On the other, shoppers like a little help in the kitchen when they can get it, and for different reasons. According to Mintel, 60% of consumers say that they’ve been cooking from scratch more often during the pandemic. Bartelme points out, however, that “cooking” isn’t the same for everyone. “One thing I always say is that ‘from scratch’ means so many different things, depending on how you look,” she explains. “Assembling a bunch of foods is one definition for people.” Here, too, it’s about meeting consumers in the middle, with a combination of ingredients for from-scratch and almost-from-scratch meal prep, and shortcuts that allow people to take ownership of a meal without too much hassle. While retailers have long offered a range of supplies and prepared/semi-prepared items for the holidays, making these solutions readily available and highly visible in 2021 will be crucial.

Beware Grinch-like Economic Factors

If further virus-related restrictions — self-imposed or otherwise — put any kind of damper on the holidays, rising food costs may also preclude this from being a Roaring ’20s kind of extended event. Inflation, of course, has been rearing its ugly head across many sectors. Food shortages, tied to the labor crunch and sourcing problems, are a twin concern. In this environment, retailers will find themselves having to meet the needs of some

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pandemic-weary consumers who want to splurge for their holiday celebrations, along with price-conscious shoppers weighing their purchases more carefully. Of course, this occurs against a backdrop of grocers’ own labor situations and bottom-line mindfulness. “I think we will see meal budgets grow this year, because more people will be gathering, but the increase likely won’t be astronomical,” forecasts Hughes, of Inmar. “Consumers will likely [hold] potluck holiday gatherings to reduce the financial impact on the host — expect party attendees to bring their own booze or provide desserts and appetizers to ease the stress of the holiday host.” Still, despite the once-again unusual circumstances in which they’re operating a business, retailers are in a better position than some competitors for the proverbial share of stomach. “Prices are increasing 400% to 500% on food away from home,” points out grocery industry observer Burt Flickinger, managing director of New York-based Strategic Resource Group. With potential shortages and higher prices looming, Flickinger suggests that retailers emphasize their private label selections and larger portion sizes for stock-ups as the costs of feeding families, even at quick-service restaurants, continue to climb. “Retail is the last major area where people can save meaningful money,” he observes. Grocers can address consumers’ economic concerns in many ways, offering solutions that meet their budgets as well as their party plans and palates. In addition to spotlighting sale prices, retailers can get creative with assortments and promotions. “I think there is an opportunity like we saw in 2008 during the Great Recession to take products that consumers think are important and right-size them,” says Bartelme. “It’s about, ‘You want to have this at your holiday table, but maybe you just have a bit of it instead of the whole thing.’ People want to be able to have that indulgence and the premium experience of it without feeling that they have to make that compromise.” E-commerce company Rosie recently developed an app called Cater that enables shoppers to order meals online.


Perimeter Favorites

An attractively arranged charcuterie board lends a festive touch to the holidays.

As grocers plan for what’s shaping up to be another unusual holiday season — at least in comparison with 2018 or 2019 — they’re focusing on all areas of their stores, including brick-and- mortar and e-commerce operations. For instance, with consumers seeking convenience and fresh gourmet products during the runup to the holidays, the perimeter will be paramount. Grocers can tout their prepared foods as a solution for shoppers who either want to cut corners or have complete take-home meals made for them. “All of these prepared options, like gravy or side dishes, take away some of the pressure,” notes Bartelme. “In a way, I think the prepared component could be more useful and impactful this year than last year, because it allows consumers to concentrate on the parts of the meal that someone else can take on for them.” To Bartelme’s point, having an array of prepared foods puts the retailer in a key role as a solution provider. A refrigerated case of grab-and-go staples like containers of gravy, mashed potatoes, cranberries or gelatin salad can be appealing to in-person shoppers and at-home browsers. At the same time, a prepared food area or deli can offer fully prepared meals for two, four, six or more people for order and pickup. Depending on its digital infrastructure, a grocer can set up delivery of complete holiday meals with heat-andeat and ready-to-eat items. Such capabilities are a true point of differentiation, according to Jenna Irish, marketing manager for e-commerce company Rosie, in Ithaca, N.Y. “We saw a lot of restaurants bundling meals last year, and grocers can compete with that, with meal solutions,” says Irish. “If I am going to a local grocer, and they are able to do a nice Thanksgiving turkey and sides, I’m totally open to buying that.” Rosie recently developed a merchandising solution called Cater that enables shoppers to order meals online; the app also provides participating retailers with ample lead time for preparation and generates production data reports.

Cheese, Bakery, Charcuterie

In addition to prepared food solutions, grocers can promote the bakery section as a destination for making spirits bright in a less time-consuming way. In-store bakeries have long been go-to spots for things like pumpkin pie, holiday pastries and cakes, and breads. Offering baked goods in bundles for in-store pickup or buy online, pick up in store (BOPIS) is an option that can appeal to convenience-oriented holiday shoppers. Adding new or interesting varieties of bakery items can pique shoppers’ attention, too, especially items that are indulgent yet simple to serve. For example, Companion Baking, a St. Louis-based manufacturer of specialty breads and pastries, has expanded its line of bread puddings, including a new banana chocolate chip variety with honey that was created with the Longmont, Colo.-based National Honey Board. “Consumers also want interesting specialty products — we sell a lot of petite loaves and demi baguettes,” notes Companion Baking founder Josh Allen. With labor stretched thin this year, in-store bakeries should be planning now to meet demand with the staff and products that they have. According to Allen, Companion Baking will be working to provide its grocery customers with the basics and other products that help them at a time when bakery operations are lean at best. “They are asking for more thaw-and-sell items and take-and-bake items — things that are really retail-ready,” he remarks. Specialty food cases are also likely to be an attraction as the holidays approach. If last year’s viral social media posts about charcuterie “houses” (akin to gingerbread houses) are any harbinger, charcuterie offerings are likely to ring up sales for holidays like Thanksgiving and Christmas. “Charcuterie is on trend and for those that want something more celebratory, while still versatile enough for casual or more formal gatherings,” observes Heather Vossler, director of consumer insights and innovation at Hormel, which produces the Columbus line of charcuterie products.

Of consumers say that promotions, rebates and coupons are important when deciding what products to stock their pantries with in the fall. Source: Inmar Intelligence PROGRESSIVE GROCER August 2021

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RECLAIMING THE ROAST FOR RETAIL A Q&A with DAVID O’DIAM, Vice President, Retail, Certified Angus Beef PROGRESSIVE GROCER: Are shoppers embracing the idea of serving roasts for dinner? DAVID O’DIAM: We know shoppers love roasts, but some can feel a bit intimidated. In a consumer survey we conducted last year, 54% of respondents admitted they aren’t confident preparing a beef roast without help. So it’s essential that today’s grocers have the knowledge and tools available to educate customers on the purchase and preparation of roasts. At Certified Angus Beef, we have always provided expert retail support to go with our top-quality beef. In your effort to bring customers back to the meat counter, we are here for you. PG: How is Certified Angus Beef helping retailers and consumers master the roasting process? DO: We’ve come up with a fantastic easy-to-use free app we call Roast Perfect™. It’s truly like having a butcher in your pocket. At a touch of your smartphone screen, you can provide the ideal help for your customers looking to buy a roast. Roast Perfect™ offers beef buying tips depending on the number of people being served; it calculates the proper size of the roast, how long to cook it and at what temperature; it has a timer to ensure perfect doneness; and it even contains recipes to suit any occasion. Customers can download

the app and discover that roasting is actually as simple as 1-2-3. PG: How about the challenges of providing roasts to consumers in the age of ecommerce? DO: Our retail partners know they can rely on the high quality of Certified Angus Beef ® offerings, which is essential in the growing ecommerce landscape. Online customers expect to receive the finest cuts — as if they selected them at the meat counter themselves. We offer a variety of cuts that can satisfy every customer’s ideal price point, whether they’re purchasing in-person or online. We’re proud that our roasts and steaks consistently satisfy customers and retailers. PG: Do you foresee a surge in roast purchases as the holidays approach? DO: Definitely. Coming out of the pandemic, this year we expect to see holiday shoppers return to their roasting traditions. And we all know that roast sales bring significant returns to retailers. Still, our consumer survey last year found that more than half of the respondents didn’t know which cuts of beef would be best for their holiday meal. With this in mind, it becomes crucial that your meat department has the tools it needs to help customers with their purchases and recipes. This starts with letting customers know you have the highest quality beef — an important first step in guaranteeing great taste at the

end. We spend a lot of time helping our retail partners do this through point-of-sale, digital marketing and meeting their customers where they are. Then we layer on resources to arm shoppers with tools to be successful in the kitchen. The Roast Perfect™ app is a perfect example. PG: What else can Certified Angus Beef offer retailers in the effort to lure roast-craving customers? DO: Beyond our ability to supply quality cuts of beef, we also recognize the convenience and popularity of prepared items. To this end, Certified Angus Beef now offers a pre-packaged fully cooked prime rib and other roasts that can really take the anxiety out of holiday dinners and family gatherings. These items offer more variety and shelf life in the case. For hesitant roast shoppers, this is an even simpler solution than the Roast Perfect™ app. FOR MORE INFORMATION, call the Certified Angus Beef sales team at 1-330-345-0809 dodiam@certifiedangusbeef.com


SOLUTIONS

2021 Holiday Entertaining Guide For both side dishes and entrées, the produce section is another time-tested destination during the holidays. Beyond classics like potatoes, green beans, celery, carrots and salad mixes, grocers can point shoppers to different varieties of vegetables and fruits. Social media platforms like Instagram and Facebook are particularly good avenues for spotlighting vibrant produce and sharing recipes and serving ideas.

Fresh Meat and Seafood

As the typical centerpieces of holiday meals, meat, poultry and seafood hold an important spot in retailers’ holiday plans. Given simultaneous and seemingly colliding issues of higher protein costs and large gatherings, grocery stores may have to do a bit of a tightrope walk when planning for meat, poultry and seafood programs this holiday season, however. Buyers wanting custom cuts will appreciate being able to talk to and order from meat department staff, while other shoppers will pick up case-ready cuts in store or online. Likewise, some will indulge in prime rib or crown roast of pork, while others may pull back from more expensive cuts. “Food retailers will need to be prepared this holiday season for a myriad of situations, as the pandemic seems to be ever-changing,” agrees Michael Uetz, principal at Chicago-based Midan Marketing, which regularly assesses the meat marketplace and consumer behaviors. “The one area we know consumers will be looking for is options. Curbside, delivery, in store — all options need to be available and clearly marketed to customers.” According to Bartelme, protein may be a category in which shoppers will spend, even if prices are higher. “Things like meat and seafood and all of these premium sorts of things — people want to treat themselves to the main component of the meal, especially on a holiday,” she notes. “I can see people saying, ‘I’m not going to a restaurant anyway, so I will do it up.’” Uetz also points to the fact that consumers learned to cook meat more during the pandemic, and are looking for some culinary inspiration and support. “We anticipate they will take that confidence into planning and serving holiday meals for family and friends,” he says.

56% Of U.S. consumers say that the pandemic has made them want to spend more time with family. 41% of U.S. consumers say that the pandemic has made them want to spend more time with friends. Source: Mintel, “COVID-19’s Impact on U.S. Consumers,” Summer 2021

“Retailers have an opportunity to provide several resources, including recipes and meal solution displays that will help consumers find ideas and creativity this season. Another option retailers should look at for the holiday season is cross-merchandising products to help consumers find new ideas for meals in an easy-to-shop format when they visit the store either online or in person.” While beef and pork are often served at holiday feasts, consumers have become pretty adept at cooking seafood since the pandemic began, and may opt for that kind of center-of-the-plate food. According to FMI’s latest “Power of Seafood” report, the seafood department saw a 28.4% jump in sales in 2020, outpacing growth in the produce, meat and deli sections.

Beer, Wine, Liquor and Mixers

For holiday presents and entertaining, adult beverages often bring shoppers into a store. As in past years, grocers that offer beer, wine, liquor and mixers can capitalize on the fact that they’re one-stop shops for those items and other holiday supplies. Wine is big business during the holiday season, with sales typically hitting a peak between Thanksgiving and New Year’s. As shoppers continue to seek out locally made products and items that meet their interest in different or more intense flavors, craft beers represent a solid opportunity, especially among younger and often male shoppers, who have shown a penchant for craft brews. 2020 was a big year for batched cocktails, usually sold by restaurants that couldn’t offer inside dining. That trend is still going strong in 2021, and grocers can entice shoppers by highlighting ready-to-drink cocktails and mixers, including seasonal or limited-time products rolled out by brands.

As the typical centerpieces of holiday meals, meat, poultry and seafood hold an important spot in retailers' holiday plans.

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A popular advent calendar put out last year by Aldi featured 24 flavors of canned spiked seltzer.

Although seltzers and fizzy drinks garner the most attention during spring and summer, many shoppers have a taste for those kinds of products year-round. Rather than summer-specific flavors, seltzers in varieties such as cranberry or black cherry can provide a light and refreshing counterpoint to the heavy meals frequently consumed during holidays. Last year, one of the popular advent calendars put out by the Aldi chain included 24 flavors of canned spiked seltzer.

Center Store Favorites

As consumers seek supplies for holiday fare, they’ll home in on the center store, both online and in person. This is where people will find flour for their new hobby of baking, or perhaps discover some interesting new ingredients for making meals, desserts or other dishes. Accordingly, assortment and merchandising efforts can not only showcase the return of beloved items like canned pumpkin, cranberries, crispy fried onions, and basic supplies for cooking and baking, but also spotlight some products that provide a bump of flavor or color to a dish. “For some people, it will be about tradition — the idea of what Grandma made — that gives a certain sense of comfort,” asserts Bartelme. “Depending on where we are and whether or not we are back hibernating in lockdown, there is also interest in breaking out of what we’ve been doing in the past. If we turned to traditional foods last year, this year we may want to eat a chipotleflavored turkey, or maybe not do turkey at all.” The mantra of making it easier for shoppers applies here, too. For example, while Mintel’s research shows that nearly a third of U.S. consumers describe themselves as confident home bakers, they appreciate some assistance. In a recent survey, 67% of people who bake say that they’d be interested in kits that include all of the necessary ingredients. With consumers continuing the snacking habits they started well before the pandemic, the center store can also be positioned as snacking central during a season typically defined by eating occasions and busy schedules. “We continue to see snacking as a growth area, especially in protein, or what we call ‘substantial snacking,’” observes Hormel’s Vossler, pointing to Planters nut products that work for both holiday snacks and casual gatherings.

Floral, General Merchandise, Gift Cards If the grocery store is about holiday food stock-ups, it can also be positioned as a destination for gifts. As gift cards have become a present of choice for Christmas and other gift-giving holidays, retailers have increasingly put those items front and center. Last year, customers reported spending about 17% more on gift cards than they did in 2019, according to research from Austin, Texas-based InMarket. Another study, from Pleasanton, Calif.-based Blackhawk Network, showed that 52% of consumers were more likely to buy a gift card in 2020 than in other years. Floral departments also ramp up during the holidays to provide shoppers with centerpieces, gifts for party hosts, and festive home décor. Grocers can add the floral section to the rotation of departments featured in social media content and other communications, both in and beyond the physical store. Here, too, floral teams can get creative, with offerings that include fresh-cut arrangements, seasonal plants like poinsettias and evergreens, and succulents. Depending on COVID-19 restrictions in the area, in-person classes on DIY centerpieces or plant gifts can be a draw for customers.

Expect party attendees to bring their own booze or provide desserts and appetizers to ease the stress of the holiday host.” —Sarah Hughes, Inmar Intelligence

Make the List, Check it Twice

While they make plans for each department during their own version of holiday prep, grocers can keep in mind other macro-trends and capabilities that can affect the upcoming season. Given the rise of plant-based eating, retailers can bring plant-based alternatives into the traditional assortment of holiday products. In some recipes, vegan alternatives can be used as substitutes for traditional animal-based products. Holiday hosts may also seek out plant-based options for their guests and family members who are following plant-based diets. In the meantime, if time and labor allow, the holiday season can be a good time of the year to deploy and evaluate technologies such as workforce scheduling apps, AI-powered insights, or other platforms that help retailers connect with customers and streamline in-store and e-commerce operations. A period of higher traffic and customer demand provides opportunities to determine the effectiveness of tools and technologies, the implementation and use of which are only going to increase in the coming years. PROGRESSIVE GROCER August 2021

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CENTER STORE

Seasonal Candy Some of our customers are selling 10,000 of these a week in their stores. Some of the fans and talkers have organic Jelly Belly jelly beans because we know this younger parent consumer is not only looking for the Baby Shark license, but also a betterfor-you organic candy.” —Clark Taylor, CandyRific

A Sweeter Hallowthanksmas HOW TO GE T THE CANDY ASSORTMENT RIGHT FOR THE HOT TEST HOLIDAY CANDY SE ASON E VER. By Gina Acosta or food retailers looking to drive maximum sales and profits in candy during the fall and winter holidays, two words should be at the forefront of buying decisions: Baby Shark. Well, maybe eight words: Baby Shark, doo, doo, doo, doo, doo, doo. Those are the addictive, dopamine-stimulating lyrics to the viral hit song “Baby Shark,” which took the internet by storm back in 2016 yet is still capturing the attention of American families, especially in the candy category. During an interview at the Sweets & Snacks Expo, held in Indianapolis in June, Clark Taylor, SVP sales and marketing of Louisville, Ky.-based CandyRific, said that his company can’t make enough Baby Shark novelties and candy products.

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"Some of our customers are selling 10,000 of these a week in their stores,” said Taylor, whose Baby Shark novelties come in a variety of flavors, styles and betterfor-you options for the younger consumer. “Some of the fans and talkers have organic Jelly Belly jelly beans because we know this younger parent consumer is not only looking for the Baby Shark license, but also a better-for-you organic candy.” Baby Shark remains the most watched YouTube video ever, with more than 9 billion views. The animated television series has also been a hit, and now there’s an original animated film coming from Nickelodeon and set for release possibly in 2023. The Baby Shark trend is just one reason that Halloween, Christmas and the spring holidays may bring food retailers sweeter candy sales than ever. After more than a year of lockdowns and restrictions, the American consumer is ready to celebrate, and candy is poised to be a major part of what are predicted to be supersized gatherings. In addition, the U.S. economy has reopened, shoppers still

Key Takeaways Get your holiday candy assortment on the shelf early. The major holidays fall on weekends, so shoppers will be planning big gatherings. If all else fails, remember to order more Baby Shark candy.


have stimulus money and savings from the pandemic to spend, and store traffic has rebounded, restoring some unplanned purchasing opportunities. Even though food retailers are navigating a storm of challenges this fall — a COVID resurgence, higher costs, product shortages and trucking delays – they have a sweet sales opportunity in candy. But buyers need to focus on two key areas: remembering that the major holidays fall on weekends this year, virtually guaranteeing big traffic numbers, and getting the assortment right for each holiday early (think Baby Shark, unicorns and Marvel superheroes). How early? Thirty-four percent of consumers intend to start holiday shopping by Labor Day, according to a survey by San Francisco-based digital experience management software company Sitecore. In addition, two in three consumers (64%) expect the upcoming holiday season to be more meaningful than in years prior, making Americans 56% more likely to be emotionally invested in the 2021 holidays. And nearly two in three (62%) Americans plan to spend more than they had before the pandemic, according to a survey on 2021 holiday shopping behaviors from Colorado Springs, Colo.-based product design firm Quantum Metric. Looking immediately ahead, Halloween promises to be a blockbuster selling occasion, not that last year was bad. In fact, candy sales were up last year during Halloween, according to Todd Scott, manager, corporate brand and editorial at the Pennsylvania-based Hershey Co. “We started to see trends that people were going to celebrate Halloween, whether or not it was a traditional trick-or-treat experience,” Scott recounts, “and we went to our retail partners and said, ‘Look, you don’t want to pull back on Halloween just yet, because what we’re seeing is that people are going to want to preserve their traditions. They may look a little bit different than they did before, but they’re still going to do it.’ It ended up being a good Halloween.” Scott notes that the company has adapted its Halloween strategy when it comes to marketing and supply chain to meet the needs of the

CandyRific also teamed up with Mars this year to offer four seasonal Movie Night Snack Kits created to appeal to consumers choosing to Netflix and chill at home. The buckets come in Halloween, Christmas, Valentine’s Day and Easter themes.

CandyRific has rolled out new items for Christmas, including The Elf on the Shelf Gift Hunt bag (SRP, $7.99), which includes 12 plastic presents with removable lids. Each present comes with a bag of assorted fruit-flavored dextrose candies with natural flavors and colors.

post-pandemic consumer. One method that Hershey employed last year was placing Halloween candy offerings on shelves weeks in advance of the occasion, which the company is doing again this year. “We don’t treat Halloween as a one-day holiday; Halloween is a 10-week season because people shop early, they go out, they get their Halloween candy, they bring it home, they eat it, they have to go get more,” Scott explains. “So we understood where consumers were last year and how they were feeling about the holiday itself; getting out a little bit early, and then treating it as this longer season, I think, was what really helped.” Another Hershey strategy was to update product mixes and sell smaller-sized bags to meet increased demand for both at-home and out-of-home occasions. This year, Scott says, Hershey is expecting a “really positive” Halloween. “One, we had success last year, and two, Halloween falls on a weekend this year, so it’s going to be a weekend of celebration rather than a single night around the country,” he observes. “So I think you’re going to see more people party.” Manufacturers such as Hackettstown, N.J.-based Mars Wrigley have also embraced omnichannel initiatives to build bigger baskets as consumers navigate a shifting pandemic environment where they might feel like shopping in-store one day because the pandemic is “over,” but may want to avoid the store the next day due to news about another COVID surge. “Last year, there was a lot of ambiguity about Halloween, so we launched our Treat Town app, which was the No. 2 app last Halloween,” says Matthew Tice, category leadership director, Mars Wrigley U.S. The free Treat Town app allows users to connect with friends and family and visit U.S. attractions, all from the comfort of their own homes. Users can also purchase virtual candy credits for their favorite Mars Wrigley brands to give out to trick-or-treaters in their network via their virtual doors. Trick-or-treaters can then go “door to door” visiting friends and family across the PROGRESSIVE GROCER August 2021

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Seasonal Candy

The Sweets & Snacks Expo, held in Indianapolis this past June, featured a Destination Retail showcase offering retailers ideas for how to drive seasonal candy category incrementality. New displays of large- and small-format front end solutions showed retailers how to merchandise for the fall, holiday, winter and spring candy seasons.

country, and collecting Mars Wrigley candy credits that can be exchanged for real candy online or in store at national retailers. “People are ready to get ready to get back to their gatherings, and for us, Halloween is about connecting and celebrating the date,” Tice says. Manufacturers also see opportunities in the Christmas and spring 2022 holidays for candy-focused celebrations. “Oh, we’re forecasting growth,” asserts Marcus Combs, director of grocery and value channels at Des Plaines, Ill.-based Haribo of America Inc. “At the largest grocery retailer right now, we’re up 30% this year for Halloween alone, and that’s a sharing holiday. We did really well last Valentine’s Day, which is usually a chocolate holiday. We are attaching our brand to certain occasions, and it’s translating. We are growing double digits on every season, so now we have the challenge of what do we come up with next? The revenue is really big; we’re excited.” Hershey, Mars Wrigley, Haribo and CandyRific have all been busy during the pandemic, launching innovative products designed to appeal to the holiday candy shopper. For instance, CandyRific teamed up with Mars to offer four seasonal Movie Night Snack Kits created to appeal to pandemic-wary consumers choosing to Netflix and chill at home instead of going out. Retailing for a suggested $10.99, each bucket holds one M&M’s Milk Chocolate Theater Box of candy, one M&M’s Peanut Choc-

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olate Theater Box of candy, and three bags of gourmet popcorn. The buckets come in Halloween, Christmas, Valentine’s Day and Easter themes. CandyRific has also rolled out new items for Christmas, including The Elf on the Shelf Gift Hunt bag, retailing for a suggested $7.99, featuring 12 plastic presents with removable lids. Each present comes with a bag of assorted fruit-flavored candies with natural flavors and colors. The small presents are designed to add surprise and delight to the fun of hunting and seeking The Elf on the Shelf Scout Elves each day. The company will also offer The Elf on the Shelf candy dishes, snow globes and candy fans. As for spring holiday opportunities, suppliers at the Sweets & Snacks Expo exhibited unicorn- and Marvel superheroes-adorned heart-shaped boxes of chocolate for Valentine’s Day and Easter baskets. But CandyRific’s Taylor predicted that Baby Shark will likely still rule into 2022, if he can get enough computer chips to manufacture enough product. “We are 150 days out on orders, due to shipping delays and shortages — those are our biggest challenges,” he said.


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Breakfast Food

Making Sense of the Cereal Aisle SALES DRIVERS E VOLVE TO INCLUDE A MIX OF HE ALTH, TASTE, INDULGENCE AND SENTIMENTALIT Y. By Barbara Sax hile the cereal category continues to face increased competition from other breakfast options, new products, particularly better-for-you items, are expected to provide upside for the mature category in 2022. “Consumers are eating cereal more than pre-pandemic, but not as much as 2020,” says Sally Lyons Wyatt, EVP and practice leader, client insights atChicago-based IRI. According to Wyatt, while growth of other breakfast categories, such as frozen breakfast food, refrigerated breakfast entrées, bagels and pastry/doughnuts, are outpacing the growth of cereal, the cost effectiveness of the cereal category could fuel growth during an economically challenged year. To provide true category growth, “cereal manufacturers and retailers will need to leverage digital and social media to discuss the positive points about their products, including fun and exciting experiences,” says

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Wyatt. They will also “need to continue to innovate, renovate and move quickly to capitalize on trends and opportunities that meet consumers’ ever-evolving wants and needs,” says Tom Dixon, chief growth officer at Lakeville, Minn.-based Post Consumer Brands. Experts believe that the more healthful side of the category will be a primary driver going forward. “The hot cereal segment experienced stronger yearover-year percent growth in dollar sales in 2021 than the cold cereal segment,” says Kaitlin Kamp, U.S. food and drink reports analyst at Chicago-based market research firm Mintel. “As consumers emerge from the pandemic, health will be on their minds, and products with health improvements will stand out.” Kamp adds that healthful innovation is more likely to spark trial. Mintel’s research shows that consumers are more motivated to try a new cereal with claims of reduced sugar, added protein or added fiber than by products boasting indulgent mix-ins, co-branded flavors or limited-time flavors. A number of new launches focus on nutrient-dense ingredients and less sugar, including Clif’s recently launched ready-to-eat cereal and Kashi’s new Simply Raisin product launch, the first in the brand’s portfolio to exclude added sugars. Purely Elizabeth is including 7 grams of plant protein in its 5 Grain & Seed oatmeal products, and Good to Go, maker of keto-friendly snack bars, recently introduced vegan Grain-Free Granola, which is low in net carbs and sugar. “We’re seeing demand from consumers wanting functional benefits beyond just good taste,” says Alexandria Mottley,

Key Takeaways Consumers want better-for-you options that are still yummy — think functional indulgence. Grocers can capitalize on flavor and collabation opportunities by showcasing product mashups. Positioning smaller packs as snacks will help offset migration to other breakfast options.


brand manager at Vaughan, Ontario-based Good to Go. “Consumers are actively seeking better-for-you and clean-label options that support their diet/lifestyle choices,​placing the bar higher for companies to not just deliver on health, but taste as well.” Good to Go’s grain-free granola has no added sugar, low net carbs and organic ingredients, and is gluten-free, keto certified, and packaged in a resealable, recyclable pouch. While healthier products are having a moment, there’s also still room for permissible indulgence in the category. “Product launches such as the Little Debbie Cosmic Brownies cereal and Post’s Dunkin-inspired cereals have generated strong sales in 2021,” says Kamp. Minneapolis-based General Mills added a number of indulgent cereals, including Dunkaroos Cereal, Chocolate Strawberry Cheerios and Cinnamon Toast Crunch Chocolate Churros, to its lineup at the end of 2020, and Battle Creek, Mich.-based Kellogg Co. recently launched Kellogg’s Special K Dipped Chocolatey Almond. Familiarity is a strong flavor driver for the category. Mintel research shows that 58% of consumers say that cereal flavors they enjoyed as children are still their favorites. “We’re seeing that consumers are drawn to tastes that remind them of their childhood and help elicit feelings of nostalgia and comfort,” says Post's Dixon. In honor of Pebbles cereal’s 50 th birthday this year, Post launched a limited-time Birthday Cake Pebbles variety. “We’re also collaborating with other brands to give fans new ways to enjoy Pebbles outside of the bowl,” notes Dixon. Post has extended the Pebbles brand into other categories through collaborations with International Delight coffee creamers, Duncan Hines cake mixes and Frankford candy bars. Dixon expects product collaborations to be an opportunity for growth moving forward. To capitalize on the appeal of fan faves, product mashups have become a new trend in the category. Kellogg’s Mashups Cereal, launched last year, added a new combo this past May: Kellogg’s Frosted Flakes and Apple Jacks. Licensing tie-ins are also a key factor in the indulgence segment. Ahead of the theatrical release of MGM’s animated sequel “The Addams Family 2” in October, Kellogg will launch a limited-edition spooky cereal collection that will transform Froot Loops, Chocolate Frosted Flakes and Apple Jacks for Halloween with marshmallow-shaped monsters, ghosts and bats. Fruit combinations are perennial flavor favorites, and IRI’s Wyatt sees increased interest in maple, chocolate combinations and cinnamon combinations.

Smaller packages actually calling out snack size is a difference in current positioning. Since indulgent snacking continues to see strong growth, snack positioning for cereal could be a growth driver.” Sally Lyons Wyatt, IRI

snacking, to communicate the versatility of cereal. “Knowing that people are increasingly eating more small snacks throughout the day, including cereal, we saw an opportunity to create more snackable and packable versions of two of our iconic cereals,” says Dixon. “We knew that portability would be key. Our new Honeycomb Big Bites and Pebbles Crisps come in larger, more snackable, no-mess forms, and in portable packages to provide flexibility.” Post Pebbles Crisps and Post Honeycomb Big Bites cereal snacks are designed to be ideal for dipping, dunking, popping and packing. Meanwhile, Kellogg’s recently extended its Froot Loops and Frosted Flakes brands into grab-and-go cereal bars, and General Mills has debuted Remix Snacking Mixes, which blend different cereals in one package.

Focus on Snackability

As consumers begin to learn, work and eat away from home once again, positioning cereal as a snack will help brands offset some migration to other breakfast options. Resealable stand-up packages and snack-size packages are helping to spark all-day snacking. “Smaller packages actually calling out snack size is a difference in current positioning,” says IRI’s Wyatt. “Since indulgent snacking continues to see strong growth, snack positioning for cereal could be a growth driver.” Mintel data shows that 35% of cereal consumers eat cereal as a morning snack, and 33% consume it as an evening snack. But brands will need to adjust packaging to make snacking on cereal more convenient as well as target specific snacking occasions, such as evening

General Mills is among the U.S. cereal manufacturers relying on fun, familiar brands to spur sales in the mature category. PROGRESSIVE GROCER August 2021

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FRESH FOOD

Produce

A Cut Above VALUE-ADDED PRODUCE CAN HELP RE TAILERS GE T CUSTOMERS TO TRY PRODUCE ITEMS THAT THE Y OTHERWISE WOULDN’T PURCHASE. By D. Gail Fleenor s customers descend on produce aisles again or scan supermarket web pages, many are looking for easy meal ideas. What about a multi-item salad, or soup or stew? Or maybe enjoying a delicious butternut squash without the hassle of peeling or cutting it? Or a luau featuring fresh pineapple bites, without a pineapple that bites back? Customers bought more value-added produce during the height of the pandemic, and they show no sign of going back to peeling and slicing now. Produce department sales reached $69.6 billion, with an increase of 11.4% in dollars versus a year ago for the 52 weeks ending Dec. 27, 2020, as noted in the 2021 “Power of Produce” report from Arlington, Va.-based FMI — The Food Industry Association. The survey, conducted for FMI by San Antonio-based 210 Analytics LLC, found that 40% of customers purchase more fresh fruit now than pre-pandemic, and 35% purchase more vegetables. According to the 2021 “Power of Produce” report, sales of value-added produce came to $15.5 billion, including value-added lettuce, or 22.3% of total produce sales. Without lettuce, value-added produce still increased by a strong 12.4%. However, while value-added produce experienced strong gains in 2020 for value-added vegetables, at 11.4%, sales of value-added fruit were flat, at 0.3%. The pandemic exerted its influence on loyal shoppers in overall produce as well as in the value-added segment. The share of core value-added vegetable customers, purchasing on either a frequent or “whenever available” basis, increased from 31% in 2019 to 37% in 2020, while fruit didn’t change significantly. According to the survey, more than three in 10 shoppers believe they will purchase more value-added produce in the upcoming year — the highest share in four years. According to FMI’s survey, core value-added shoppers

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Key Takeaways Value-added produce is here to stay. Promotions can help counter the high-price image of valueadded produce. Consumers are more likely to try new fruits and vegetables when they can see inside them.

should be catered to by retailers, because their spending is above average and they shop weekly. These shoppers also indicated that they intend to purchase more value-added produce in the future.

The Value-Added Opportunity

What holds other customers back from buying more? Price. While the retailer needs a higher price on value-added produce to compensate for labor and possible equipment costs, rotating promotions can pull in more sales. As produce managers know, the average retail price for value-added produce is usually twice that of conventional or unprepared produce. Shoppers who understand that pre-cut, prewashed produce can save time and increase convenience will come back to taste and purchase more value-added items. Value-added produce provides another opportunity for shoppers. Some customers have seen only the outside of a jackfruit, butternut squash or rambutan. Based on just their outward appearance, these and other vegetables and fruits might not


Equipment Can Aid the Value-Added Produce Bottom Line

Preparing value-added private label produce adds increased labor costs to the bottom line.

make it into the shopper’s bag. However, encountering value-added offerings with the bright orange of the butternut squash or other fruits’ luscious “insides” showing may prompt more customers to purchase these otherwise slightly strange-looking items to take home. Also, cutting up certain vegetables and fruits can be extremely difficult, so some customers skip these opportunities for healthy food. Value-added fruits and vegetables can be displayed in the store in different ways from conventional produce. Photos of the prepped produce can be appealing, or a display of recipes can sell more value-added items. Recipes using value-added fruits and vegetables can persuade shoppers to grab a card or download the cooking directions from a website. Value-added produce can become a new part of Thanksgiving, Hanukkah, Christmas, a family reunion — any special get-together. Or encourage customers to add this convenience to any nightly meal. Butternut squash, for example, is microwaveable. Pre-cut melons and apple slices are good for a simple but tasty dessert. Charcuterie is big now, and value-added produce can bring a healthy dimension to the board.

Who is the Value-Added Shopper?

FMI’s survey found that shoppers were seeking good nutrition and health when buying fruits and vegetables during the pandemic. The core value-added produce shopper has some characteristics that differ from the average produce customer. Most value-added vegetable shoppers are more focused on healthy eating and may live in urban areas; they also exhibit above-average produce consumption and trip frequency to the supermarket. They may be older Millennials; they have kids at home, usually ages 7-12; they may have high-income households; and they shop online. Surprisingly, there are differences among value-added fruit shoppers. They may have kids living at home, and they live in cities, have high incomes, and are male and above-average fruit consumers. Their households may be larger, they may visit the supermarket more often, they may be Millennials, and they shop online.

Name Brand or Store Brand?

A wide array of name-brand value-added produce is available. Take Charlotte, N.C.-based Dole Food Co., for example. In addition to numerous salads, Dole offers value-added vegetables, from arugula to a vegetable medley, and even microwaveable asparagus. The company’s list of fruits in various packaging is even

Bucky Slagle, director of produce and floral for Food City, aka K-VA-T Food Stores Inc., based in Abingdon, Va., isn’t the only supermarket director considering equipment that will help with labor costs for private label value-added produce. While sales of prewashed, pre-cut produce are soaring, costs for those who do the slicing and dicing are also going up. Consequently, many supermarkets are looking at available equipment to slice off labor costs. There are several companies that offer equipment to not only help labor costs, but also to preserve more of the product. One example is Astra Inc., a Japanese manufacturer with its U.S. headquarters in Torrance, Calif. The company sells its Peel-A-Ton and other equipment for processing produce in stores, delis and commissaries. According to Astra, its equipment peels off only the rind, so there’s less waste. Oslo-based Tomra Food has regional and manufacturing offices around the world. While much of the company’s equipment is aimed at manufacturers, there are items for supermarkets, too, including a brusher, a dry-peel separator and a washer.

longer, and includes rambutan and jackfruit. Food City, aka K-VA-T Food Stores Inc., based in Abingdon, Va., carries the top brands. The store chain, with more than 130 locations in Virginia, Tennessee, Kentucky and Georgia, also has private label value-added items in its produce departments. Bucky Slagle, director, produce and floral, expects value-added produce to keep growing in sales. There was a slight drop in sales when prices nationwide increased recently, but Slagle expects convenience produce items to increase in sales. He promotes value-added produce items in Food City’s weekly circular, in which two pre-cut items are highlighted in a section of the ad called “Shortcuts.” Preparing value-added private label produce adds increased labor costs to the bottom line. Slagle says that he’s considering having some manufacturers bring in samples of equipment to see which ones might help with labor costs on value-added private label produce at his busiest stores. Value-added produce requires little to no preparation for consumers, and has many uses. It can replace snacks, at least some of the time, since it’s so much easier to reach into the refrigerator, pull out a bag of pre-cut pineapple, and snatch a piece or two. In some homes, new habits may have been learned during the pandemic and are now enjoyed on a regular basis. Home chefs who prepared more elaborate, hearty meals for families rather than visit restaurants still plan to use convenient meal solutions featuring items such as pre-cut produce, according to survey findings. PROGRESSIVE GROCER August 2021

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SUPPLY CHAIN

Fulfillment Technology

Kroger’s Robotic Supply Chain Ready to Accelerate AN INNOVATIVE APPROACH TO L AST-MILE FULFILLMENT IS POISED TO RESE T SHOPPERS’ E XPECTATIONS OF HOME DELIVERY. By Mike Troy ver the course of the next 18 months, The Kroger Co. is set to open seven of its robotic customer fulfillment centers powered by technology from leading online U.K. grocer Ocado. Two of the facilities, known as sheds, are already open in Monroe, Ohio, near Kroger’s hometown of Cincinnati, and Groveland, Fla., northwest of Orlando. Since the facilities first began rolling out five months ago, the initial sales, repeat business and net promoter scores have given Kroger’s top executive confidence that the company can double its 2020 online sales of $10 billion by 2023. To do so, Kroger is relying on a supply chain approach so unique that it had to be built from scratch. The technology, the infrastructure, the workflows inside the shed, and even the vehicles used for deliveries are purpose-built for Kroger’s approach, which involves a facility so complex that it took two years to construct and make operational. This complexity is immediately

apparent upon stepping inside the newest facility, in Groveland. “Supply chain in the future is going to be so much different than supply chain in the past: Every facility will end up becoming a distribution point, and it will be significantly more complicated,” Kroger chairman and CEO Rodney McMullen tells Progressive Grocer during an interview at the structure. “The thing you have to remember about Kroger is half of our volume is fresh, and fresh is a lot more complicated to be able to pull that off. I think complicated is fun. It is fun to be part of a team doing something that hasn’t been done before. No one wants to just keep doing what’s been done.” What Kroger is doing appears to be working. McMullen doesn’t share specific sales or productivity figures, but does indicate that the facility is exceeding the company’s expectations, generating high net promoter scores and repeat purchase rates. The positive performance is notable, considering that prior to the opening of the Groveland shed, Kroger didn’t have a meaningful presence in Florida. At full capacity, the Groveland shed, located at 7925 American Way, will generate sales revenues equivalent to 20 to 25 stores, according to McMullen. The service area currently extends through the center of Florida to the greater Tampa Bay area in the west, all the way to the east coast from Jacksonville to Daytona. Prior to the shed’s opening, Kroger’s physical presence in Florida was limited to a single store in the far northeastern corner of the state.

A robot swarm operating in the hive at Kroger's newest fulfillment center, in Groveland, Fla., is capable of picking a 50-item order in roughly five minutes.

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“For years and years, we’ve tried to figure out ways to come to Florida,” McMullen notes. “One of the things that is an advantage for us is about half of the people that live in Florida are from somewhere that Kroger serves. The comment that we would always get is ‘When are you coming to Florida?’” Now that Kroger is in Florida, Gabrielle Arreaga, Kroger’s SVP of supply chain, affirms McMullen’s earlier comment about the Groveland shed’s performance, when he spoke during the grand-opening ceremony on July 29: “This facility is outpacing our expectations.” The shed sits at the center of a hub-and-spoke model, with distribution nodes present in the Tampa and Jacksonville markets, which Arreaga says are performing very well. “We’ll keep expanding and eventually reach all the way to south Florida,” she adds. “What’s so exciting about this is that this is the future,” Stuart Aitken, Kroger’s chief merchant and marketing officer, said at the same grand-opening gathering of roughly 100 local dignitaries. “When Floridians think about food, we want them to think Kroger, and this is truly a unique way to deliver the freshest food to our customers. When that van shows up at your doorstep, it is an incredible experience. We are providing a solution that you haven’t seen before.”

Fulfillment center workers open cases of products during a process called decanting to load individual items into the hive.

How it Works

Kroger’s new facility is a three-level marvel of e-commerce and supply chain sophistication, powered by technology from Kroger’s U.K. partner Ocado. The ground floor contains receiving and sortation processes specially created for robotic picking. For example, merchandise arrives at 21 inbound receiving bays, half of which are dedicated to ambient products, and the other half for chilled. Pallets of products then flow to work stations along a wide and long conveyor belt for a process called decanting. Cases of products have to be opened by workers in a currently manual process, with individual products, known as eaches, placed into totes, which are then placed in a large vertical and horizontal storage area called the hive. The shed contains multiple modules with multiple pick stations per module, which are located on the second level. Once the hive is populated with products, the robotic retrieval devices, which move swiftly within 5 millimeters of one another on a grid located on the third level, fetch individual items to place in totes that can hold three orders apiece. The robots move remarkably quickly and act as a swarm in the hive to pull an order with 50 items in about five minutes. A system of color-coded totes helps keep everything organized throughout the facility. The totes holding products in the hive are

Supply chain in the future is going to be so much different than supply chain in the past: Every facility will end up becoming a distribution point, and it will be significantly more complicated.” —Rodney McMullen, Chairman and CEO, The Kroger Co.

white and are washed daily. Red totes capable of holding three bags sit inside of white totes that robots transport throughout the hive to retrieve orders. Other totes are colored green for produce, yellow for meat and blue for frozen products. Once orders are filled, they’re loaded onto specially designed delivery vans with three zones for ambient, frozen and chilled products. The shed has 15 bays for delivery vans, and drivers are aided by a proprietary system that helps optimize order delivery routes. Orders destined for west coast or east coast markets are loaded on trailers at one of 12 bays. Those shipments are then offloaded at the spoke facilities in Tampa and Jacksonville, and placed on delivery vans. As Kroger looks to extend operations into heavily populated areas in south Florida, it will require hub facilities in those markets as well, but the timing of such a move hasn’t been disclosed. “You have to earn your right to expand,” McMullen says. “Right now, we’re focused on the Orlando area, Jacksonville and Tampa. Over time, we have a facility here that has the capacity to do a lot more.” Kroger will be expanding its sheds to other markets in the next 18 months, with Atlanta the most likely next location, followed by Dallas, according to McMullen. “Between late this year and next year, there are seven facilities that should open,” he says. Atlanta is a well-established market for Kroger, so the approach to operations and marketing there will be more similar to the approach taken when the grocer opened its shed in Cincinnati a few weeks before the Florida opening. “One of the things we are learning in Cincinnati is how do you leverage both the shed and the stores, because we do find a meaningful number of customers who find pickup just as handy as delivery,” McMullen says. Ultimately, Kroger is agnostic about the fulfillment method as it builds a new type of grocery supply chain to execute a seamless customer experience. PROGRESSIVE GROCER August 2021

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SUPPLY CHAIN

Centralized Fulfillment

SpartanNash Fast-Tracks Omnichannel Effort A NE W MICRO-FULFILLMENT CENTER OFFERS SPEED AND EFFICIENCY IMPROVEMENTS. By Lynn Petrak o meet consumers’ needs as they shop in different ways, SpartanNash continues to adapt its online services and infrastructure. This summer, the Grand Rapids, Mich.-based grocery retailer and distributor expanded benefits for its Fast Lane curbside pickup and home delivery customers and opened a new mini-warehouse to expedite order fulfillment. Aligning with the four-year anniversary of the Fast Lane online shopping program, the new 55,000-square-foot micro-fulfillment center opened in late July in Caledonia, Mich., and serves Fast Lane customers in west Michigan, who pay $49 for an annual subscription. As the company’s curbside pickup and delivery business increased during the pandemic, plans for the new facility also sped along. Buildout of the existing structure began in late 2020, and the project was finished by midsummer. “Centralized fulfillment was on our radar, and COVID just accelerated that,” says Matt Van Gilder, director of e-commerce and digital marketing for SpartanNash, noting that the total cost of the micro-fulfillment center was about $5.3 million,

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including technology investments. According to President and CEO Tony Sarsam, the facility represents a wave of the future that may require continual adjusting as consumers shift their habits and preferences. “Ten years ago, people thought the model of the future was how to deliver food to consumers at home. I think it was a surprise this past year how much enthusiasm there was for click-and-collect versus delivery at home,” Sarsam tells Progressive Grocer, noting that this will be an insightful experience for shoppers as well as for the retailer. “We will learn a ton of stuff just like that. As customers figure out what makes sense for them, we will work with them and adjust our model.” The fulfillment center holds 16,000 shelf-stable, fresh, refrigerated and frozen

Efficiency is important for us, and this building will allow for greater effectiveness in fulfilling orders.” —Tony Sarsam, President and CEO, SpartanNash


Products in totes (far left) and in warehouse racking are picked manually at SpartanNash's new Caledonia, Mich., micro-fulfillment center, where President and CEO Tony Sarsam cut the ribbon in late July.

products, and is set up to handle up to 1,000 orders a day. By mid-August, customers of 24 company-owned stores in the Grand Rapids and Holland areas of Michigan can have their Fast Lane orders fulfilled by the new facility. SpartanNash currently operates 149 stores around the United States. While automation may be in the future of this fulfillment center, orders are currently picked and packed by hand by SpartanNash team members. In the center of the warehouse, items are organized by velocity instead of by category, with high-volume

Totes filled with orders are loaded into a truck for transport to local stores to fulfill orders placed through SpartanNash's Fast Lane program.

products in the center, and other items on the top and bottom rows. Heavy or bulk items like cases of soda will be picked first to anchor orders, while delicate fresh items like eggs are picked last to protect against breakage. Thanks to the micro-fulfillment center’s meat-cutting and deli-slicing machines, Fast Lane customers can have fresh proteins portioned to their specifications and packaged on-site. SpartanNash’s personal shoppers communicate directly with shoppers via text messaging to determine their preferences, such as the thickness of steak cuts or deli meat slices. Customization is a point of differentiation with the online service, according to Sarsam. “It’s that personal touch – we want to be known as providing a higher level of service,” he notes. For each customer’s order, products are packed into insulated or shelf-stable totes and brought to a centralized area near the shopping dock. Completed orders are then taken out via a truck bay at the back of the building and delivered either directly to a store for curbside pickup or to the shopper’s home. As one might expect, technologies have been put in place to ensure real-time order information and communications with shoppers. “We have an IT team that is very connected to make sure this works, and technology has pushed forth this experience,” Sarsam remarks. While the setup is shopper-centric, the new capability will also streamline SpartanNash’s operations. “Efficiency is important for us, and this building will allow for greater effectiveness in fulfilling orders,” Sarsam adds. The Fast Lane program continues to be a bright spot for SpartanNash. Transactions have increased 32% since January 2020, with the number of unique customers up by 45%. In June, the company added new benefits for Fast Lane subscribers, including monthly bonus savings from different areas of the store, free unlimited curbside pickup, and half-off delivery. In addition to west Michigan, dozens of SpartanNash locations in Michigan, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin offer Fast Lane services. Participating banners include Family Fare, D&W Fresh Market, Family Fresh Market, VG’s Grocery, Dan’s Supermarket, Forest Hills Foods, and Ada Fresh Market. Are other micro-fulfillment centers in the plans for those areas? “We certainly hope that as we learn from this one [facility] here, we will learn things that will allow us to expand,” Sarsam says. PROGRESSIVE GROCER August 2021

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SUPPLY CHAIN

Delivery Solutions Jokr is a hot new vertically integrated entrant in the delivered products space.

Last-Mile Mania A R ACE FOR MARKE T DOMINANCE IS UNDERWAY AMONG GROCERY DELIVERY PROVIDERS INTENT ON REDEFINING SPEED AND CONVENIENCE. By Mike Troy he future of food retailing has little to do with how attractively perimeter departments are merchandised or the elimination of friction from the store experience. That’s a reasonable conclusion, judging from the billions in funding, deal activity and key personnel moves involving companies focused on lastmile delivery solutions. Activity in the grocery delivery world was already fast and furious prior to the pandemic, but it intensified over the past 18 months, and more change is ahead as speed and convenience continue to take precedence as drivers of shopper behavior. For example, several key developments involving Uber, Instacart, goPuff, newer entrant Jokr and Grubhub highlight intense interest and an accelerating pace of change when it comes to the delivery of food. Consider the following recent developments: Uber doubled the availability of its on-demand and scheduled grocery delivery service to customers in more than 400 markets and entered into a 1,200-store partnership with Albertsons Cos. Instacart and robotics solution provider Fabric revealed on July 22 a major fulfillment initiative involving the development of new processes within dedicated warehouses and existing retailer locations. Pilot projects with Fabric and grocers are expected to begin this year. GoPuff is rumored to be raising another $1 billion, after a $1.15 billion funding raise in March. Investors are buying into the com-

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pany’s vision of fast deliveries of essential products from a growing network of more than 250 micro-fulfilment centers. After beginning operations in April, the grocery and retail delivery platform Jokr raised $170 million in Series A funding to expand its global network of hyper-local delivery hubs that let it promise deliveries in 15 minutes or less. A year after it was first announced, Grubhub’s acquisition by Amsterdam-based Just Eat Takeaway was completed, opening up new possibilities for the companies to expand service offerings to potentially include grocery delivery. While all of these developments are notable, the situation with Uber stands out because the company wasn’t even in the grocery delivery space a year ago. Now it’s sharing stunning growth and engagement numbers and hinting at a future in which its grocery delivery surpasses its restaurant delivery business, and both of those businesses combined exceeded the ride-sharing operation on which Uber was founded.

Uber Eats has become a major player in grocery delivery and is posting impressive growth figures.


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SUPPLY CHAIN

Delivery Solutions Today, nearly 3 million consumers order groceries and other essentials each month through Uber, and we’re just getting started.” —Raj Beri, Uber “This past year has been one of incredible growth for grocery delivery,” said Raj Beri, global head of grocery and new verticals at San Francisco-based Uber, when the Albertsons deal and national expansion were unveiled in July. “Today, nearly 3 million consumers order groceries and other essentials each month through Uber, and we’re just getting started. By adding thousands of beloved grocers to our selection this year, we are fast-tracking our efforts to help Americans get everything they need from their favorite supermarket, delivered to their doorsteps.” Uber’s entry into grocery delivery began in October 2019, when it acquired a majority stake in Cornershop just five months after going public. Then, last July, it acquired Postmates in an all-stock deal valued at $2.65 billion, and launched grocery delivery in the United States. This past February, Uber acquired the online alcohol delivery marketplace Drizly for $1.1 billion in stock and cash. Then in May, Uber partnered with GoPuff, a Philadelphia-based operator of hyper-local small fulfillment centers that provide an assortment of everyday essential products. GoPuff is also a player in alcohol delivery, as it had acquired the BevMo! chain of 161 liquor stores on the West Coast, and, more recently, the Liquor Barn chain of 23 stores in Kentucky. All of this deal activity, coupled with organic growth, has transformed Uber’s business model in the middle of a pandemic. Uber the ride-sharing company is now Uber the food delivery company, rapidly scaling its grocery capabilities. Uber’s delivery business, which includes deliveries from foodservice operators and grocers, surged past the company’s mobility segment last year. The pandemic played a huge role in the shift, destroying demand for rides and increasing demand for delivery amid quarantines and social distancing, but still, the shift has been profound. In 2020, Uber’s revenues from its mobility segment fell 50% to $6.8 billion, while revenues from delivery grew 130% to slightly more than $10 billion. That trend intensified during the first quarter as mobility revenue fell 65% to $853 million, while delivery revenue surged 230% to more than $1.7 billion. “Our delivery business continues to grow faster than anyone could have predicted,” Uber CEO Dara Khosrowshahi said this past May, when first-quarter results were released. Similar comments seem likely in the months ahead as the effects of recent actions show up in sales results later this year and beyond. Khosrowshahi has said that grocery is potentially a significantly larger total addressable market than food delivery and that he “expects grocery delivery to be a pretty significant percentage of our business.”

Instacart Innovation and an IPO?

Uber is focused on a dual purpose of helping people get where they want to go or have products they want delivered, whereas Instacart’s purpose is singular. The company has established itself as the leading online grocery platform in North America by working with 600 retailers, 200 of which were added in 2020, that operate roughly 55,000 stores in more than 5,500 cities throughout North America. The torrid pace of growth continues to attract investors that in

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March sank another $265 million into Instacart, giving the San Francisco-based company a valuation of $39 billion. Another recent development and several key personnel moves suggest that Instacart may finally be drawing near to a public stock offering and access to even more capital. In late July, just two weeks after naming former top Facebook executive Fidji Simo as CEO, Instacart revealed a fulfillment initiative that represents a dramatic shift in capabilities and a potential new driver of growth. The company unveiled what it called the first phase of a next-generation fulfillment initiative in partnership with New York-based robotic solutions provider Fabric. The key element of the deal involves pairing Fabric software and robotics with Instacart technology and shoppers to power a new fulfillment process within dedicated warehouses and existing retailer locations. The solution addresses a key shortcoming of manual pick processes by independent contractors picking orders in retailers’ stores where merchandise layouts aren’t optimized for order picking. “Our next-gen fulfillment work will also help reduce some of the things that make in-store shopping cumbersome for Instacart Shoppers, like crowded store aisles, out-of-stock items and long checkout lines,” said Mark Schaaf, Instacart’s chief technology officer, last month. Elram Goren, CEO and co-founder of Fabric, believes software-led robotics and modular solutions give grocery retailers the flexibility to build the fulfillment solution that best fits the needs of their business. “With Instacart as a partner, we see an enormous opportunity to integrate our product and services into Instacart’s e-commerce solutions to provide a compelling service offering for grocers,” Goren said. If investors share that belief, it could bode well for the company’s long-awaited IPO, which appears increas-

Instacart continues to move closer to an IPO, as evidenced by several key personnel moves.


ingly likely following the appointment of Simo as CEO and the addition of several recent board appointments. Simo spent more than a decade at Facebook, and according to Instacart founder and Executive Chairman Apporva Mehta, was part of every big moment at that company. “Fidji was also at Facebook during its transition from a private company to the public market, and understands what it takes to lead and scale a transformational company like Instacart,” Mehta said. In addition to Simo’s public-company experience, Instacart added Barry McCarthy, the former CFO of Spotify and Netflix, to its board in February. More recently, Frank Slotman, CEO of Broomfield, Colo.-based cloud-computing provider Snowflake, which went public in September 2020, joined the Instacart board.

GoPuff and Jokr Attract Interest

While Uber and Instacart jockey for dominance of grocery delivery, other companies looking to solve the last-mile riddle are taking a different approach and attracting massive funding. GoPuff is reportedly close to securing an estimated $1 billion in new funding after raising $1.15 billion in March. Investors are buying into the company’s vision for ultra-fast delivery, flat-rate pricing and expanding product assortment. Unlike the Uber and Instacart platforms, which deliver products on behalf of other retailers, GoPuff’s approach is to vertically integrate and operate as a retailer with a growing network of 250 micro-fulfillment centers that service 650 U.S. cities. The company doesn’t disclose sales, but it occasionally offers a nugget that hints at order volume. For example, in late June, GoPuff said that it had made its 5 millionth delivery in Chicago after operating there for five years. In addition, GoPuff has expanded a foodservice offering called Gopuff Kitchen that offers a limited assortment of made-to-order food. The kitchen facilities are located within or adjacent to micro-fulfillment centers, enabling customers to order food for any daypart and include the products with other items for the flat-rate delivery fee of $1.95. “Gopuff is launching a completely new category and raising the bar on how technology is making our lives more convenient,” said Daniel Folkman, Gopuff’s SVP of business, at the time that the expansion rolled out. “Nowhere else can you order your everyday essentials while also taking care of dinner for the family or getting a quick coffee, all from one platform.” According to the company, it has already delivered hundreds of thousands of orders across more than 20 micro-fulfillment centers during a pilot program in Austin, Texas; San Antonio; Miami; Nashville, Tenn.; Philadelphia; and the Phoenix area. Operating with a model similar to GoPuff is e-commerce upstart Jokr. Launched in April, the company bills itself as a “next-generation grocery and retail delivery platform,” and in July, it secured $170 million in funding. Jokr operates 100 delivery hubs globally, including 10 in New York that were launched in June. The platform is currently available in nine global cities and plans to use the new capital to expand in the United States, Latin America and Europe. Ralf Wenzel, founder and CEO of New York-based Jokr, said

GoPuff has secured another $1 billion in funding to expand its delivery infrastructure.

in July that the latest investment will fund an unprecedented rate of expansion and enable the company to build “the premier platform for a new generation of online shopping, with instant delivery, a focus on local product offerings, and more sustainable delivery and supply chains.” The company’s rate of expansion is aided by its simple real estate requirements: It needs only about 2,500 to 5,000 square feet of ground-floor space, with double-door access in dense commercial areas.

But Wait, There’s More

Adding further turmoil to the U.S. market, and the way that Americans order food, from whom and how orders are fulfilled, is the recently completed acquisition of Chicago-based Grubhub by Just Eat Takeaway.com. Although the deal was announced in June 2020, it wasn’t approved by Grubhub shareholders until this past June 15. Both companies are focused on food delivery from restaurants, but so was Uber until it decided to pursue grocery delivery. The combined Grubhub and Just Eat Takeaway may also find grocery delivery appealing and follow the Uber and DoorDash blueprint. Like Uber, San Francisco-based DoorDash began as a delivery platform for prepared foods and became the market leader in that segment. However, when the company went public last December, it talked about unlocking the power of its logistics platform to serve other types of merchants beyond restaurants. It made good on that promise with a delivery deal involving Camp Hill, Pa.-based Rite Aid in May, followed by Phoenix-based Petsmart in June, and then its first major grocery deal with Albertsons Cos. The partnership between DoorDash and Boise, Idaho-based Albertsons involves delivery from roughly 2,000 stores within an hour. Products can be purchased through the DoorDash app or directly from Albertsons’ website. “Consumers’ desire to get everything in their neighborhood on demand has increased dramatically,” noted Fuad Hannon, head of new verticals at DoorDash, at the time of the Albertsons deal. “Leveraging our extensive logistics network and Albertsons’ wide selection of fresh groceries, we are creating a one-stop shop for customers to access any of the essentials they need, delivered to their doorstep within an hour.” The good news for grocers — those that choose to work with third-party platforms — is that there’s a lot more choice, and even vertically integrated operators like GoPuff and Jokr have shown a willingness to form alliances. PROGRESSIVE GROCER August 2021

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TECHNOLOGY

Retail Innovation

Food Retailing’s Digital Future Is Filled With Hybrid Shoppers AN E VEN GRE ATER TR ANSFORMATION AWAITS, FOLLOWING A PANDEMIC-DRIVEN E-COMMERCE SURGE. By Mike Troy he great unsettled question facing food retailers amid a lingering pandemic is, what lies beyond? The next normal has proved difficult to assess, partly because the pandemic has yet to fully release its grip, while at the same time fast-moving technology is affecting every aspect of food retailing. So what’s a grocer to do? How does one serve today’s shoppers who are still grappling with pandemic concerns, while positioning a business for future growth on the shifting sands of uncertainty? That’s Rob Weisberg’s job. As SVP of e-commerce, technology and services at Winston-Salem, N.C.-based Inmar Intelligence, Weisberg helps retailers and CPG companies look around the corner to understand what lies beyond, especially as it relates to the coming wave of technological transformation. Weisberg and his team at Inmar see several macro-trends coming out of the pandemic, some well understood and others less so. For example, he talks about the concept of hybrid shoppers, individualization and wellness. Transformation in each area is driven by the adoption and application of technology that has lagged compared with other industries.

“e-commerce is a transferable skill, and at its core, Inmar is a data company because of the deep relationships we have with grocers that give us visibility into shopper behavior.” —Rob Weisberg, SVP of E-Commerce, Technology and Services, Inmar Intelligence

“The retail grocery space has been in the dark ages when it comes to technology adoption,” Weisberg asserts. “For some, a point-of-sale system was the major tech adoption of the past 25 years.” That’s a harsh assessment, and obviously, retailers vary widely in their levels of sophistication, but Weisberg contends, “The retail grocery space is ripe for innovation right now.” A key reason for this is that the pandemic lit a fire of change under everyone involved in retail grocery. Organizations that were earlier adopters of technology fared better, but the pandemic caught some grocers flat-footed, prompting them to say, as Weisberg notes, “My customers are afraid to come into the store. What do I do?”

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Been There, Done That

The world of grocery is one of the last major industries to feel the same type of disruptive effects of technology that have transformed other sectors. That’s what drew Weisberg to Inmar roughly a year ago. “I like going into industries that have been slower to technology adoption, to help revolutionize those industries,” he says. A glance at Weisberg’s background reveals what he means. He was previously CEO of Boston-based Invaluable, an online marketplace for fine art, antiques and collectibles. Prior to that, he was chief marketing officer at Boston-based Zipcar, the car-sharing company acquired by Avis-Budget Group. And before that, he was VP of multimedia and marketing at Ann Arbor, Mich.-based Domino’s Pizza. Weisberg may not be a veteran grocer, but that also means he isn’t encumbered by legacy points of view that can hinder innovation. Further, as Weisberg observes, “e-commerce is a transferable skill, and at its core, Inmar is a data company because of the deep relationships we have with grocers that give us visibility into shopper behavior.” It’s that visibility, as well as the abundance of data it yields, that has Weisberg excited about being part of the next wave of transformation in grocery. He sees similarities to other sectors where he was part of transformative


change, whether it was art auctions, car sharing or pizza delivery. In each case, those sectors relied on outdated processes and methods of serving shoppers, and were ripe for new approaches. “When I was at Domino’s and proposed online ordering for the pizza category, people laughed at me,” Weisberg recounts. Digitally enabled orders now account for well over half of Domino’s business, and CEO Patrick Doyle refers to Domino’s as a tech company that just happens to sell pizza. At Zipcar, the goal was to create a mobile-first, completely digital experience that streamlined some of the more unpleasant aspects of purchasing transportation. “Who enjoys going up to the rental car counter and being pushed to buy insurance?” Weisberg says. “At Zipcar, your entire relationship can be digital.” For its part, the auction industry was even further behind the digital adoption curve than grocery, relying on a system of gestures and paddles at a physical auction location. “The biggest technology adoption of the past 25 years in the auction industry was they allowed phones into the room so a clerk could raise a paddle for you,” Weisberg says. That approach wasn’t scalable, so Invaluable leveraged technology to create new digital engagement methods that opened auctions up to a global audience, benefiting buyers, the auction house and consignors.

Grocery Is Different

Grocery is going through a great transformation currently, in terms of technology enabling shopper behavior, how brands engage shoppers and how retailers operate. The pandemic forced the migration of shoppers to digital buying channels at an unprecedented rate. As a result, roughly half of grocery shoppers are what Weisberg calls “hybrid shoppers.” They make purchases online and in-store, which makes them of extreme value to the retailers who earn their loyalty. Key to earning that loyalty is personalization, or what Weisberg describes as “individualization.” Shoppers are sharing more and more data about themselves and their households with retailers — every transaction, every basket, every click, every coupon redemption, every loyalty program engagement, every credit card swipe, every survey are supplying retailers with valuable data on each unique consumer’s declared or inferred preferences, according to Weisberg. The data allows retailers to consider the individual customer’s dietary preferences, household routines, meal occasions and lifestyle. In return for their data, shoppers want grocers to provide tailored offers, product suggestions, recipes and information based on their buying patterns — essentially a store or circular designed just for each shopper. Today, retailers no longer have to rely on the hit-and-miss aspect of a one-size-fits-all environment, but can make solid recommendations based on household demographics and past buying behaviors across channels. “If you show a product with gluten to someone with celiac, it’s a wasted impression,” Weisberg observes, “but with more accurate data, brands can stop throwing away marketing dollars on something a specific shopper will never consume. From the media to the circular to the site, data means that every touchpoint is oriented toward defining a customer’s needs as an individual, remembering those insights and presenting the information in a scalable fashion

What to Expect in E-Grocery The pandemic has had a profound effect on shopper behavior, but now what? To find out, Winston-Salem, N.C.-based Inmar Intelligence surveyed 1,000 shoppers and uncovered surprising new patterns of behavior and future shifts. For example:

28% of shoppers say that they won’t return to in-store grocery shopping following widespread vaccine availability, because they find online shopping so much easier.

39% of shoppers do 75% of their grocery shopping in stores, and only 19% solely shop online for all of their groceries.

Although 86% say that they’ll return to in-store grocery shopping, 14% say that they won’t because they won’t feel safe or don’t have the time to go to stores.

25% of shoppers do 75% of their grocery shopping via a mobile device/app.

20% do all of their grocery shopping via a mobile device/app.

35% say that online shopping offers a faster product selection and checkout process.

that meets their complex preferences.” If there’s one thing grocers understand, it’s expense control. So the prospect of eliminating marketing waste while growing sales makes a compelling case for greater adoption of technology. It also gives retailers a metaphorical “thread of steel” throughout their efforts. “Thread of steel is a concept that came out of the technology world, but in retail, it is an undeniable record of the media dollar that is being spent and the transaction and being able to track the user behavior, that thread of steel, throughout the journey,” Weisberg explains. “The holy grail of marketing is for every dollar you spend, to be able to track exactly what happens. Because Inmar is integrated into a retailer’s POS system, e-commerce site, mobile app and loyalty card program, we can tell if a media impression was received and whether it results in the subsequent desired behavior, which is to make a transaction.” PROGRESSIVE GROCER August 2021

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STORE OPERATIONS

Checkstand Reimagined

Retail’s Radically Different Future

The Just Walk Out technology pioneered by Amazon stands to change retail settings fundamentally and forever.

AMA ZON’S JUST WALK OUT TECHNOLOGY WILL TR ANSFORM THE STORE E XPERIENCE IN WAYS THAT ARE ONLY LIMITED BY THE IMAGINATION By Mark Landini mazon has changed the future of retailing in varied ways, and the company’s latest invention — Just Walk Out cashierless technology — will cause a rethinking of almost every aspect of grocery store operations. It’s an exceptionally clever advance, one that looks simple to outsiders and will likely be refined before our very eyes. I think they’re still in “day one” of development, to use a frequent phrase those at Amazon use to stay future-focused. Just Walk Out will lead to a transformation of retail environments and properties, too. And the race is on to understand the implications. First, consider what’s behind this set of technologies that allows customers to avoid checkout lines forever. Instead, they enter supermarkets with a card, find

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Key Takeaways Amazon won’t do anything that doesn’t benefit customers. Just Walk Out technology is expensive, but it's also a gold mine of customer data. Going cashierless gives retailers back as much as 12% more floor space (and earning potential).


STORE OPERATIONS

Checkstand Reimagined what they need and just make for the exit. Credit Amazon’s relentless focus on the customer for this radical innovation. Say what you like, but the company won’t do anything that doesn’t benefit customers. This includes everything at its testbed Amazon Go, where the company has had years of experience with this special combination of remote detection and virtual carts. In this way, Amazon rises above the criticism. Second, ask this simple question: Why has Amazon decided to offer every grocer and retailer in the world this same capability? Just Walk Out helps everyone, rather than deflecting labor back to the customer. It’s a bold move. Critics counter that Just Walk Out is expensive. On top of that, retail executives are asking each other — on social media, of course — “Who will own our data?” Cost concerns are miniscule when compared with potential customer preference across a year of purchasing at a few stores. On the data side, well, it’s a gold mine. Third, turn to the ways Just Walk Out stands to change retail settings fundamentally and forever. Stores can be much more interesting. Point of sale (POS) evaporates, along with associated customer anxiety. With no checkout areas, supermarkets will have 8% to 12% more floor space, based on studies by Landini Associates. For some grocery executives, that means a comparable increase in earnings potential.

Store Design Changes Forever

Another promising change in store design: If you can just walk out, you can just walk in, too. Moreover, store layout is freed from the longstanding model of controlled shopper flow through the checkout corral. In short, why not have various entrance areas based on customer preference and need? Parking lots change. They could wrap completely around store locations, offering more customers premium spots and a shorter walk to the door. This is just a start. Inside, think about customer preference as a driver for store planning. There are so many opportunities that as a retail designer, it’s dizzying to decide where to begin. Along with entrance location, the Just Walk Out kiosks may become a central organizing feature of better store departments and customer-facing teams. Completely reinventing their layouts, operators and developers of shopping centers can rebuild retail models based on optimizing cost and potential worth. Just Walk Out also benefits the customer-facing workforce. Eliminating checkouts makes workers more enthusiastic and proactive. Sales grow in other ways, too: As precedent, witness the sales success following the introduction of kiosk ordering systems at McDonald’s. Reduced POS pressure felt by customers helped lead to an increase in revenues.

Real-Time Business Benefits

Now look at real-time accounting and replenishment. The potential with Just Walk Out technology is

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astounding. There are savings in supply chain from the availability of live data, which savvy operators will begin implementing immediately. Think of Walmart, for example: It didn’t begin to concentrate its technology this way on a whim. This also leads us back to our gold mine: customized information capture. The greatest value found in the adoption of this disruptive technology is in the ways that retailers will deploy and monetize the data. It provides food for thought in everything from marketing to supply chain to product R&D, and more. Beyond store design and planning, the grocer of the future is also responsive and interactive. Promotional engagement at the most personal level is possible: “Welcome back! Here’s a list of your purchases from last week. Could we bag the same order for you now?” The store could also invite customers to try new product samples, chat with the gluten-free specialist or see the latest entrants in a favorite department — all while the store fulfillment bots pack up the bags and deliver to car or home. Let’s face it: Setup costs may be very high for Just Walk Out, on par with other major business decisions for grocers today. And yes, there remains the issue of data sharing. Yet these downsides pale in comparison to the customer benefit. That’s the genius behind Just Walk Out and so many other Amazon innovations. Their DNA closely matches the customer’s, allowing Jeff Bezos to continue “Reinventing Normal” as our design team at Landini Associates asks, “if it’s not going to rock the shopper’s world, why bother?”

With no checkout areas, supermarkets will have 8% to 12% more floor space, based on studies by Landini Associates. For some grocery executives, that means a comparable increase in earnings potential.” Mark Landini, Landini Associates

Mark Landini is creative director of Landini Associates, a global design and brand consultancy based in Sydney, Australia. Since 1993, Landini Associates has created and evolved retail brands, including McDonald's, T2, Aldi, Glassons, Sass & Bide, Jurlique, and Coles. The firm’s new Aldi Corner Store debuted in July.


Debuting this November in Orlando, Florida, the first annual Grocery Industry Week will be a place where grocery leaders converge to learn, network and celebrate the achievements of the grocery community. Grocery Industry week is an Invite Only event that will take place from November 2nd through the 4th at the Hyatt Regency Grand Cypress Resort in Orlando, FL. Anchored by the 15th Annual Top Women in Grocery, Progressive Grocer has created the highly curated “Grocery Industry Week” as a way for grocery leaders across the retail grocery spectrum to come together to celebrate, source new ideas, network, collaborate and learn. PG is in the grocery industry’s unique position to be able to bring together leaders and decision makers at every level and category of specialization for 3 high energy days of celebration, collaboration, sharing and learning you won’t want to miss.

Learn more about attending and sponsoring:

groceryindustryweek.com


CPG INNOVATION

Brand Building

Amazon Sellers Are Selling Out WITH BILLIONS IN FUNDING AND SIMIL AR VALUE PROPOSITIONS, NE W T YPES OF BR AND BUILDERS ARE SCOURING AMA ZON FOR PRODUCTS TO BRING TO GROCERS’ SHELVES. By Mike Troy

ike most things in retail, the process of launching and growing a brand has been disrupted. From product development to marketing and the supply chain, brand building today can be achieved by methods vastly different from those traditionally used by major CPG companies. Credit the internet for the monumental shift that eliminated barriers to entry that previously favored large, established companies. To compete, an entrepreneur with a dream faced an uphill battle to secure appointments with demanding buyers at multiple retailers’ headquarters. Then, if the product was deemed worthy, there were advertising commitments and sell-through guarantees to meet that retailers could justify based on the scarcity of physical shelf space. Not so with the internet, and more specifically, the advent of Amazon’s third-party marketplace. Suddenly, an entrepreneur with an idea and access to contract manufacturing facilities or a steady flow of products could set up shop in the Amazon marketplace, gaining access to the world’s largest loyalty program in Prime, the nation’s dominant product discovery platform; sophisticated marketing capabilities; and a world-class supply chain focused on ever-faster delivery times. Amazon’s marketplace became wildly successful, generating billions in sales and fees for Amazon, but also serving as a critical element of the company’s flywheel. The breadth of assortment available on Amazon, powered by third-party sellers, helped the company supplant Google several years Consumer products is ago as the place where the majority of shoppers search for products. typically a game where

The Next Phase of Growth

scale matters a lot. We find winners who have succeeded in what is the most difficult marketplace in the world, and we acquire them and bring them onto our platform and take them to new geographies and channels.”

So many third-party sellers are so successful on Amazon, generating sales in the seven- or eight-figure range, that a new type of company has emerged to help take those companies to the next level. These companies acquire the most successful brands in the marketplace, and then help them scale. Perch is one such —Chris Bell, Founder and CEO, Perch company, founded by Chris Bell, a former Bain & Co. executive who was most recently general manager of supply chain for North America with home furnishings retailer Wayfair. Bell left Wayfair in 2019 to found Perch. “We find great brands and make them better. We grow them and make them more effective and profitable,” is how Bell describes Perch’s busi-

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ness. “A big part of what we are building is a technology platform that will let us manage all these brands at scale. We focus mainly on the Amazon third-party marketplace, but we are starting to expand into other channels.” There is tremendous investor interest in what Bell is doing, because the brands being acquired are already profitable, and there are a lot of them. In Amazon’s more recent second quarter, the company said that third-party sellers accounted for 56% of its unit volume, up from 53% in the same quarter the prior year. Perch estimates that in 2020, there were 8 million third-party sellers generating gross merchandise volume (GMV) of $300 billion in the Amazon marketplace. Amazon doesn’t disclose GMV, only the fees that it earns for the various services that it provides sellers, which totaled nearly $49 billion during the first half of the year. Between the large pool of acquisition targets and Bell’s track record at Bain and Wayfair, it didn’t take long after Perch was founded to attract capital. In April 2020, it secured $8 million in funding, and six months later, in October 2020, it raised another $123.5 million. Then the company received a huge infusion of $775 million in May to advance Bell’s goal of building a next-generation consumer products company. “The raise was purely to allow us to buy more great brands and invest in them,” Bell says. To find those brands, the team at Perch scours the Amazon best-sellers lists and


looks for companies that have a high degree of social proof, meaning that they’re highly rated and provide good value. It’s a straightforward process, aided by Amazon’s transparency, and changes in how shoppers search for products. Bell describes the path to purchase as an unbranded approach of searching, finding and buying, which has given rise to an abundance of micro-brands. “These micro-sellers are developing great products and winning on these platforms, but they get to a point where they can’t really scale anymore,” Bell says. “Consumer products is typically a game where scale matters a lot. We find winners who have succeeded in what is the most difficult marketplace in the world, and we acquire them and bring them onto our platform and take them to new geographies and channels.” Several brands in the Perch portfolio sell into brick-and-mortar retailers with physical products in operators such as Target, Walmart, Costco and Kroger. Perch has also built out a dedicated team to drive sales in brick-and-mortar stores, with people who have experience selling into grocery, value and specialty retailers.

The Size of the Prize

When Perch was founded and funding was more scarce, Bell says that the company focused on deals in the $1 million-to-$2 million range. Now acquisitions of companies with $100 million in revenue are possible. “We buy companies with products that are already successful within their niches and work to make them even better,” Bell notes, adding that Perch opts to steer clear of products in categories that are trendy and thus prone to sales volatility. “One of our internal discussion points is, ‘Can we see people buying this product in 10 years?’ If yes, then we would love to own it. If no, then it’s not really our play.” Once Perch owns a company, it’s all about achieving scale, because driving the next phase of growth requires extending beyond the Amazon marketplace. “A lot of brick-and-mortar retailers don’t want to work with a bunch of $5 million dollar brands,” Bell says. “They want to work with a $1 billion company.” Retailers also want to work with companies that are proficient in supply chain matters, which is why Perch is looking to establish a network. Fulfillment for most of its brands is handled by the Fulfilled By Amazon (FBA) service, but as relationships with other retailers grow, Perch is looking to add an East Coast distribution facility to complement an existing facility in Los Angeles. “As we get more into other channels, as we get into brick and mortar, and as we add more value-added services like returns processing, having our own distribution centers is very important, and we have started down that path,” Bell says. Supply chain is an area where Bell has considerable experience. While at Wayfair, he noted that the online-only retailer had a very limited physical supply chain in North America. That gave Bell an opportunity to build it from scratch. “We opened 50 buildings in three and a half years, and my team went from about 30 people to 1,300 people,” he recounts. “I just love that build phase.” Building a next-generation CPG company of sizable scale will eventually require gaining distribution for brands that got their start in the Amazon marketplace with other brick-and-mortar retailers. So far, Bell acknowledges that those conversations

have been challenging, but there’s a growing openness, and having established sales on Amazon is a compelling data point, he says. “In general, we are finding openness to it because retailers want great products,” Bell observes. “Retailers want to make sure you are helping them grow a category or grow margin within a category.”

A Crowded Field

While Perch has attracted considerable interest, so, too, has a competitor called Thrasio. It was founded in 2018, has received a total of $1.75 billion and has made several key personnel moves. In January, Thrasio raised $500 million, and then it quickly raised another $750 million in February. In March, it revealed the acquisition of its 100th brand and said that it was selling more than 15,000 products. In April, the company named Bill Wafford its CFO. He had also held that role at JCPenney and Vitamin Shoppe, as well as finance roles at Target and Walgreens. Even more notable than Wafford’s appointment was the November 2020 addition of Tom Szkutak to the Thrasio board. Szkutak spent 13 years as Amazon’s CFO before leaving the company in 2015. Commenting on whether the level of funding that Thrasio has raised is sufficient, co-founder and CoCEO Carlos Cashman offers a long-term view of how retail is changing. “In 10 years, omnichannel retail will be the backbone of the entire consumer products ecosystem, but today, it’s still in its genesis,” Cashman says. “Every day, the very fabric of this market is twisting as it continues to evolve. Our balance sheet isn’t built to win yesterday’s battles. It is designed to pursue the accelerating opportunities that accompany these kinds of seismic changes in an industry.” In addition to Thrasio and Perch, there are dozens of other companies with names like Forum, Branded, Foundry, Intrinsic and Elevate Brands, who fit into the classification of FBA aggregators. The premise is similar: acquiring existing businesses in the Amazon marketplace that use Amazon’s fulfillment services, and helping them scale. The products being acquired run the gamut, but food and consumable items are among them, which means that the next innovative item being pitched to a retail grocery buyer may have gotten its start in the Amazon marketplace. PROGRESSIVE GROCER August 2021

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SUSTAINABILITY

Packaging

Key Takeaways PCC Community Markets, New Seasons Market and Aldi U.S. are among the grocers striving to offer more eco-friendly packaging in their stores. Companies such as Evanesce and ProAmpac are upping the ante on sustainable packaging innovation. CPG giants like Kraft Heinz are introducing packaging solutions that are recyclable.

Capped With Toxics

The Journey to Eliminate Plastic Pollution IN AN AGE OF ENVIRONMENTAL CONSCIOUSNESS, FOOD RE TAIL IS COMMIT TING TO REDUCE PACK AGING WASTE WHERE VER POSSIBLE. By Marian Zboraj bout 11 million metric tons of plastic are dumped each year in the ocean — an amount that’s projected to nearly triple by 2040 without urgent, large-scale action, according to research by The Pew Charitable Trusts and SystemIQ, a London-based sustainability consultancy. Certain U.S. states have even stepped up to ban single-use plastics to combat this issue. Efforts geared toward zero-waste solutions not only appease government regulations, but also consumer demand for environmentally conscious packaging. According to a survey of 661 consumers conducted last year by Madison, Wis.-based Pinpoint Software, maker of an expiration and product-dating solution, more than 57% of consumers say that plastic and packaging waste is the most important grocery store sustainability initiative.

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In addition to polluting the environment, plastic packaging can be dangerous to human health. “Capped With Toxics,” a new report by the Toxic Free Food Campaign, a national public-health coalition of nonprofit organizations, identified the type of plastic in bottle caps and found toxic chemicals called ortho-phthalates in more than onethird of the packaging for the 141 beverage brands tested. Specifically, the Toxic-Free Food Campaign collected 273 bottle caps from 141 brands sold in glass bottles at retail locations in 12 U.S. states; Washington D.C.; and Toronto. Prior research has linked ongoing exposure to phthalates during pregnancy and early childhood to reduced fertility and harm to brain development. According to the public-health coalition, phthalates have been shown to migrate from the plastic cap liners into food and beverages that are packed in glass. The chemicals may also leave on the rim of the bottle a residue that can be consumed. Of the beverages tested, the types that most frequently contained phthalates in the bottle cap liners were soda (52% of brands tested), kombucha (40%) and ready-to-drink coffee (38%). For certified-organic beverages, 41% of brands had toxic bottle caps. In good news, the “Capped With Toxics” report found that more than one-third of the brands tested had bottle cap liners that were phthalate-free and not made of PVC (vinyl), often called the “poison plastic” due to the toxic hazards created across its lifecycle. Several major brands have since switched to phthalate-free bottle caps, including Brew Dr Kombucha; Whole Foods Market (spar-


SUSTAINABILITY

Packaging

kling mineral water); Keurig Dr Pepper (IBC and Stewart’s root beer, Snapple tea, Nantucket Nectar juice); and Maine Root (craft soda). Phthalate- and vinyl-free caps are widely available.

Retail Singles Out Single Use

PCC Community Markets, one of the largest community-owned food markets in the United States, said in July that it will stop selling plastic water bottles smaller than 1 gallon, eliminating the sale of nearly 100,000 single-use plastic bottles across PCC’s 15 stores each year. This move is part of the Seattle-based co-op’s ongoing mission to reduce use of petroleum-based plastics. PCC is already working to eliminate all petroleum-based plastics from deli packaging by 2022; in 2019, it switched deli round containers from petroleum-based plastic to plant-based compostable, eliminating more than 8 million pieces of petroleum-based plastic per year. Aligned with the updated water bottle ban, PCC has worked to provide shoppers with more sustainable options, including water sold in refillable and reusable aluminum bottles. Rather than single-use cans, these bottles are sturdy enough to be reused multiple times, and if they get damaged, the bottles can be easily recycled. Additional ways that PCC provides alternative options for water containers include: Bulk water dispensing; Boxed water (in packaging similar to milk cartons), which is 92% plant-based, recyclable in the Puget Sound region and made from Forest Stewardship Council-certified paper; and Water in glass bottles, which are reusable and recyclable. “PCC’s focus on eliminating petroleum-based plastics is an absolute priority,” says Brenna Davis, PCC’s VP of social and environmental responsibility. “It is a critical concern for the co-op to address, with plastics being tied to land and water pollution, human exposure to chemicals, and contributions to climate change through plastic production. At PCC, we are continually looking to support the environment and provide our shoppers with sustainable alternatives.” Another retailer that removed single-use water bottles earlier this year is New Seasons Market. But the Portland, Ore.-based Certified B Corp grocer isn’t stopping there in its mission to reduce single-use plastic. It recently expanded its GO Box program to more departments across all stores. Through a subscription service, customers can now choose reusable GO Box containers to purchase items in the deli, bakery, produce, olive bar and bulk departments. To date,

We want to be a part of the solution, and we’re committed to shaping a new future of plastics use.” —Joan Kavanaugh, Aldi U.S. the GO Box reuse cycle has helped the retailer eliminate more than 16,600 pieces of single-use waste from communities. New Seasons has also added more environmentally preferable tubs in its grab-and-go and produce departments. The 16-ounce containers — with more sizes coming soon — are lighter in weight, with a tamper-evident button instead of a wasteful strip, reducing total plastic by 10%. The tubs are made of 100% recycled PET and sourced from curbside recycling bins along the West Coast, resulting in one-ninth the transportation emissions, due to their local origins. Sustainability is also incredibly important at Aldi U.S., one of the nation’s fastest-growing grocers. “As a leading retailer, we’re striving to limit the use of plastics and packaging anywhere we can,” says Joan Kavanaugh, VP of national buying at Batavia, Ill.-based Aldi U.S. “We want to be a part of the solution, and we’re committed to shaping a new future of plastics use. In 2019, we committed to making 100% of Aldi-exclusive packaging — including plastic packaging — reusable, recyclable or compostable by 2025. Also, by 2025, we committed to reducing packaging by 15% overall. Already this year, we have made significant strides toward these goals, and we are proud of our progress.” More than 90% of the products that Aldi sells are exclusive items. By the end of 2021, Styrofoam, a type of plastic material, will be removed from all of the retailer’s produce packaging. To date, Aldi has redesigned packaging to remove or reduce excess plastic from products such as teas and bread. Packaging redesigns have resulted in the removal of more than 250 tons of excess plastic Included in its series of initiatives designed to protect the planet’s resources and ecosystems is Aldi U.S.' commitment to making 100% of Aldi-exclusive packaging – including plastic packaging – reusable, recyclable or compostable by the year 2025.

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Move Over, Paper Straws … packaging from its products. In select stores, Aldi is also introducing packaging such as top-seal produce containers, which use 20% less plastic than traditional containers, for perishables like blueberries and tomatoes. In a majority of markets, Aldi’s mixed bell peppers packaging now uses 44% less plastic.

Zero-Waste Packaging Partners

Later this year, Evanesce, a sustainable packaging disruptor, plans to launch its own patented solution for greener packaging that will help food retail, foodservice companies and food processors Heinz’s move to use new reduce their packaging costs while meeting increasing envisustainable caps will save ronmental regulations and public demand for more sustainable 1 billion plastic lids from solutions. The company’s vision is to eliminate single-use plastics being sent to landfills every year globally. with its patented compostable technology using plant-based byproducts. According to Evanesce, its proprietary starch- and fiber-based meat and meal trays are approximately half the cost of leading green tray alternatives and are expected to be available at mass scale in early 2022. The Vancouver, British Columbia-based company has already introduced its modified polylactic acid durable straws that compost within 90 days. Meanwhile, sustainable flexible-packaging provider ProAmpac recently opened its 35,000-square-foot, state-of-the-art Collaboration & Innovation Center (CIC) in Ogden, N.Y., to help customers address their packaging product development needs in one place. The $8 million facility aims to become the go-to source for sustainable packaging solutions, serving as the company’s base for rapid sample prototyping and evaluation of new packaging, as well as a training hub for customers and employees.  In April, ProAmpac expanded its Rapid Action Packaging’s fresh-food-to-go portfolio into North America. Widely recyclable in paper streams, each product strives to remove avoidable plastics and use the least amount of materials possible. In addition to the sustainability benefits, ProAmpac’s fresh-food-to-go packaging offers modified-atmosphere options in a sleek and unified design with various customization options.

The next big trend in plastic alternative utensils will be ones that you can eat. Incredible Eats’ incrEDIBLE spoons are a new crunchy eco-friendly alternative to plastic. Lightly flavored IncrEDIBLE spoons, crafted from plant-based ingredients, including non-GMO wheat, corn, oats, brown rice and chickpeas, are made to withstand hot or ice-cold foods for 30 minutes. They can be used with foods such as soup, yogurt, ice cream, oatmeal, cereal, pasta and rice. incrEDIBLE spoons are dairy-free, vegan and made in a nut-free facility. The spoons are available in sweet and savory flavors, including chocolate, vanilla, oregano chili and black pepper.  According to the company, edible utensils offset 200% of all plastic and carbon produced during manufacturing and shipping. Plus, for every 20 boxes sold, the Milpitas, Calif.-based company plants one tree.  Other products are already in the works at Incredible Eats. Edible Sporks are planned for winter 2021, and Edible Straws/ Chopsticks will most likely be released sometime in 2022.

Counting on CPG Innovation

CPG companies are also looking at their product lineups and developing solutions to reduce the use of plastic. For example, Chicago-based Kraft Heinz is introducing more sustainable caps for its squeezy sauce bottles, made to be 100% recyclable. Traditionally, Heinz sauce bottles used a flexible valve that was challenging to recycle. The new cap — made of an innovative single type of material — was created after eight years of research and development involving more than 185,000 hours and the investment of $1.2 million to find a suitable replacement cap for the squeezy bottles, which sold 1 billion units globally in 2020. The first Heinz varieties to get the new cap will be Heinz Tomato Ketchup and Heinz BBQ Sauce. The cap, which will roll out globally from 2022, starting in Europe, uses a single, rigid and more recyclable material so that it, along with the Heinz squeezy bottle, can be conveniently recycled. According to Heinz, the move will mean a potential 1 billion plastic caps — enough to fill 35 Olympic swimming pools — can be recycled, instead of finding their way into landfills. “We’re excited to be announcing these first-to-market innovative new caps, meaning our consumers can now recycle every part of their Heinz squeezy bottle in their weekly curbside collection,” notes Jojo de Noronha, president of Kraft Heinz Northern Europe. “A huge amount of work has gone into finding the right solution that means no compromise on using and enjoying our hugely popular squeezy bottles for the hundreds of millions who buy them. While we know we still have more to do, from a sustainability and environmental perspective, this is positive news.”

An eco-friendly alternative to plastic, IncrEDIBLE spoons offset 200% of all plastic and carbon produced during manufacturing and shipping. The edible utensils are available in various sweet and savory flavors.

PROGRESSIVE GROCER August 2021

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EDITORS’ PICKS

Food, Beverage & Nonfood Products

From Soap to Chocolate

Best known for its popular natural soap, family-owned Dr. Bronner’s, a certified B Corporation, has introduced a line of certified USDA Organic, Fair Trade, vegan, kosher and Non-GMO Verified chocolate. Featuring chunky bites and smooth rich fillings, the line is made with 70% dark chocolate from cocoa beans grown using regenerative organic practices, and sweetened with lower-glycemic coconut sugar. Magic All-One Chocolate is on track to become Regenerative Organic Certified in 2022, by which the company seeks to demonstrate that chocolate can help mitigate climate change and support small-scale farmers globally. Available at retail in Salted Dark Chocolate, Roasted Whole Hazelnuts, Crunchy Hazelnut Butter, Salted Whole Almonds, Salted Almond Butter and Smooth Coconut Praline varieties, the line retails for $5.49 per approximately 3-ounce bar with a 20-month shelf life from the date of manufacture. What’s more, the outer wrapper of Magic All-One Chocolate is made from 100% recycled paper, with a minimum of 80% post-consumer recycled fiber. http://www.drbronner.com

Seafood Made Simple

Bristol Seafood has augmented its retail range with the Bristol Seafood Singles pack for the frozen case. The convenient product features quality seafood, along with chef-crafted compound butter and spices, packed in perforated, easy-peel singles with a QR code connecting the consumer to recipes and sustainability information. Bristol’s line offers center-cut Atlantic salmon portions, with additional SKUs including lemon and pesto butter or ginger and garlic butter. Seafood Singles is produced at Bristol’s facility in Portland, Maine, and shipped frozen. The 20-ounce packs have a suggested retail price range of $14.99-$16.99 each. Among the company’s other retail products are IQF bags of scallops, shrimp, and U.S.-produced line-caught haddock and cod; the My Fish Dish value-added skin pack line in frozen and slack-and-sell; and the recently launched Grab & Go offering. https://bristolseafood.com/

Specialized Smoothies

Seal the Seasons, the first national brand to sell locally grown frozen produce, has now launched a line of Farmer Blends smoothies. The offerings, initially launched in the Carolinas, mix the best locally grown fruits with organically grown tropicals like mango, banana and pineapple. Long a staple for those seeking fast and nutritious options, smoothies have gained in popularity as a result of consumers’ increased awareness of where their food comes from, as well as their desire to stay healthy amid the pandemic. The Farmer Blends line retails for a suggested $9.99 per 32-ounce bag. A Certified B Corporation, Seal the Seasons currently has 65-plus unique local SKUs available, supporting more than 70 farms and operating more than 12 freezing and packing sites across the United States. All of the company’s products are locally grown and locally sold. https://sealtheseasons.com/

Disney for Dogs

Developed by longtime contract manufacturer Phelps Pet Products, Table Scraps is a line of dog treats in packaging adorned with such beloved Disney characters as Pluto, Stitch (of “Lilo and Stitch”), Winnie the Pooh, and Simba (of “The Lion King”). The line also features quality clean-label recipes, four of them meat-first — Sweet Hawaiian Bacon, Roast Beef, Smoked Salmon and Hot Diggity Dog — as well as two USDA Organic Certified varieties, Organic Chicken Tender and Organic Honey Roasted Turkey, and two 100% plant-based options, Vegan Surf-N-Turf and Meatless Meatloaf. Table Scraps retails for a suggested $6.99 per 5-ounce resealable package. www.phelpspet.com; www.tablescrapstreat.com

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Pizza Goes Brazilian

Brazi Bites, a Latin-inspired, naturally gluten-free and better-for-you food maker, has now launched Pizza’nadas, an extension of its Empanadas line. Pizza’nadas consist of the same Brazilian cheese bread (pão de queijo) base, made from such clean ingredients as tapioca flour, eggs, cheese and milk, which is then stuffed with fresh mozzarella, uncured pepperoni and tomato sauce for an authentic pizza flavor. The item goes straight from the freezer to an oven or air fryer for a quick snack, appetizer or light meal that’s ready in minutes. Brazi Bites Pizza’nadas have a suggested retail price of $5.99 per 10-ounce pouch. The brand also recently launched a line of single-serve gluten-free Homestyle Breakfast Sandwiches, available at select Target locations. https://brazibites.com/

All Mixed Up

Creator of a vegan version of Australia’s popular chicken salt that was featured on “Shark Tank,” Jada Brands has now introduced a Plant-Based Lightly Seasoned Porkless Mix and a Plant-Based Mediterranean Chick’n Mix, both of which make it easy for home cooks to create their own clean-ingredient meat-free meals. When combined with water and oil, the 100% vegan, soy-free products can be shaped into items like breakfast sausages or meatballs, and then cooked. The Porkless Mix offers the subtly sweet and savory taste of pork, while the Mediterranean Chick’n Mix contains spices like garlic and onion, and is suitable for salads, gyros and falafel. Made from high-quality, functional ingredients like textured wheat protein, pea protein and pea fiber, the dry shelf-stable mixes feature 21 grams of plant-based protein per serving, and are rich in vitamin B12 as well as low in calories — just 125 per serving — and free of preservatives, sugar and cholesterol. A 5.9-ounce box of either mix retails for a suggested $8.99, and foodservice packaging is also available. https://www.jadabrands.com/

Pudding on the Go

Developed by an international team of research and development experts at parent company MOM Group, GoGo squeeZ AlmondBlend Pudding is the latest innovation from the brand of portable snack pouches. The nondairy vegan almond-based line features 5 grams of plant-based protein and 30% less sugar compared with dairy puddings; is a good source of calcium (140 milligrams, or 10% Daily Value); and contains no preservatives or gluten. Available in four varieties — chocolate, banana, cocoa-hazelnut and vanilla — GoGo squeeZ AlmondBlend Pudding has 110 calories per serving. A pack of four 3-ounce BPA-free, shelf-stable pouches of any flavor retail for a suggested $3.79. https://www.gogosqueez.com/; https://www.momgroup.com/

Tea With Purpose

Social impact beverage brand Purpose Tea showcases purple tea, a recently discovered supertea, in various “hint of sweet” and “unsweetened” flavors: Purple Reign, Mint To Be, Watermelon Mint, Blood Orange, Coconut Lime and Simply Purple. Each variety is made from organic purple tea; contains clean, simple ingredients providing antioxidant benefits; and boasts no more than 70 calories per bottle. Providing up to 50% more antioxidant activity than green or black tea leaves, purple tea is grown in Kenya and derived from the common tea leaf, Camellia sinensis. The suggested retail price for a 16-ounce bottle of any flavor is $2.79. Funding raised through the purchase of each Purpose Tea bottle supports Kenyan women tea pickers by providing training and education, scholarships for children, and access to land. https://purposetea.com/ PROGRESSIVE GROCER August 2021

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AHEAD OF WHAT’S NEXT By Gina Acosta

The New Pandemic Panic WHY GROCERS SHOULD BE RE ADY FOR MORE PANTRY LOADING. re masks, hand sanitizer and toilet paper flying off the shelves again in your store? If they’re not, they could be soon. Just a few weeks ago, most Americans were ditching their masks, going out to restaurants and taking vacations, believing the pandemic to be over after the Centers for Disease Control and Prevention (CDC) lifted masking requirements and social-distancing practices for the fully vaccinated. But if we’ve learned anything during the past year and a half, it’s that things can change suddenly, and that’s exactly what’s happening with a new variant of the virus that causes COVID-19. The “hypertransmissable” Delta variant has prompted a new surge of COVID-19 cases, hospitalizations and deaths this summer. While many of the new cases are mostly affecting the 45% of Americans who are unvaccinated, COVID infections are also occurring among vaccinated people in so-called breakthrough cases. As a result, the CDC has reinstated its masking and social-distancing guidelines, and Americans are worried: A July poll by the Associated Press found that 64% believe that the vaccines are ineffective against variants, including Delta. Consumers are reacting to this news by once again avoiding restaurants and putting on masks, and even getting extra vaccine shots. They’re also reacting at the grocery store with varying levels of panic, depending on where they live. To wit, Instacart has new data showing just Even though how much of an impact Delta is having on grocers are already grocery shopping patterns. navigating a storm As of July 26, mask sales via Instaof COVID-related cart were up 37% over the past three weeks, with dramatic differences across challenges — higher the country. Mask sales via Instacart had costs, product been consistently dropping since their shortages and peak on April 11, but on July 7 start- trucking delays ed slowly rising again. Over the past — they should be three weeks, mask sales via Instacart have grown by 37%. Mask sales vary plotting a new across the country, with most western path for the fall states buying more masks over the past and winter. six weeks versus most of the rest of the country, which continues to see dramatic decreases in mask sales. In addition, Instacart data indicates notable increases in consumer purchases of key COVID-related health-and-wellness products: Disinfectant sprays (up 20%) Disinfecting wipes (up 18%) Hand sanitizer (up 15%)

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Cold and flu medicine (up 15%) Children’s pain and fever reliever (up 12%)

“As the Delta variant introduces new uncertainty into consumers’ plans to return to normal, we’re starting to see noticeable shifts in consumer purchase patterns across the Instacart marketplace,” says Asha Sharma, COO of San Francisco-based Instacart. “While we don’t anticipate seeing a return to early COVID-era behaviors like extreme pantry loading, we won’t be surprised to see consumers start restocking their pantries in preparation for more time at home and increased safety measures if COVID-19 cases continue to rise and local communities start to pull back on reopening plans.” Even though grocers are already navigating a storm of COVID-related challenges — higher costs, product shortages and trucking delays — they should be plotting a new path for the fall and winter. Delta — never mind the emergence of another highly contagious strain of the virus — could set off another round of shortages, supply constraints and empty shelves. Masking requirements may have to be reinstated. Deep cart cleaning may have to be restarted. Self-service food stations may have to be shut down again. Grocers can’t control how the COVID resurgence evolves, but they can control how they prepare. Gina Acosta Executive Editor gacosta@ensemleiq.com


Natural Products Expo East will be held in-person at the Pennsylvania Convention Center, September 22-25, 2021. New Hope Network is excited for the return to events in 2021! This is your long-awaited chance to connect in-person with the natural, organic, and healthy products industry. Be there to network with the industry and connect with your peers!

Keeping your Health and Safety in Mind Natural Products Expo East will be organized in accordance with Informa AllSecure, a detailed set of health and safety standards. ExpoEast.com will be regularly updated regarding safety and hygiene measures attendees and exhibitors can expect.

Connect Virtually Digital extensions of Expo East will be hosted on the Natural Products Expo Virtual platform to enhance your on-site experience. Access virtual booths, on-demand education, and online networking a couple weeks prior to the Philadelphia event.

Join us in Philadelphia when we return to in-person events! Register online today!

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