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SPECIAL REPORT: WINNING WITH WINE AND CHARCUTERIE BREAKFAST IS BACK! How Americans start their day PROTEIN DEEP DIVE Exclusive beef and pork research BE COOL Equipment innovations changing the store experience

Inside Instacart

Exclusive: President Nilam Ganenthiran and top Instacart executives share their vision of food’s digital future

October 2020

Volume 99, Number 10 www.progressivegrocer.com


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Contents 10. 20

Volume 99 Issue 10

32

Features

22 DIVERSITY & INCLUSION

46 SOLUTIONS

COVER STORY

Reckoning With Race

Grocers grapple with how to address the pervasive issue of racial equity.

Aged to Perfection

32 The Predictable Rise of Instacart A suddenly essential service envisions grocery’s digital future.

30 DIVERSITY & INCLUSION

Racial Equity Matters at Procter & Gamble

Monica Turner, the CPG powerhouse’s president of sales, North America, discusses its approach to this critical issue.

Departments 6 EDITOR’S NOTE

20 NEW HORIZONS

Dairy

Female CEOS: More is Not Enough

16 MINTEL GLOBAL NEW PRODUCTS

8 IN-STORE EVENTS CALENDAR

18 ALL’S WELLNESS

December 2020

Homemade and Healthier

Better Breakfast Choices

4

14 NIELSEN’S SHELF STOPPERS

A Vote on the Future of Work

10 MENU TRENDS

progressivegrocer.com

Retailers can win with enticing, wellmerchandised wine and charcuterie offerings during a time of greater at-home dining and entertaining.

Vegetables

88 EDITORS’ PICKS FOR INNOVATIVE PRODUCTS 90 AHEAD OF WHAT’S NEXT

Food Retailers Can Provide a Nudge in the Right Direction

10


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

58 SOLUTIONS

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

Morning Momentum The pandemic’s effect on breakfast can be felt throughout the store.

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

58

63 EXCLUSIVE RESEARCH

Beef and Pork Keep Sizzling

MANAGING EDITOR Bridget Goldschmidt 347-962-9395 bgoldschmidt@ensembleiq.com SENIOR DIGITAL & TECHNOLOGY EDITOR Abby Kleckler 773-992-4405 akleckler@ensembleiq.com SENIOR EDITOR Thad Rueter 773-418-8975 trueter@ensembleiq.com CONTRIBUTING EDITORS Princess Jones Curtis, Bob Ingram and Lynn Petrak

Consumers crave popular proteins, but preferences have shifted and future opportunities loom.

ADVERTISING SALES & BUSINESS SENIOR SALES MANAGER Nella Veldran (NEW ENGLAND, SOUTHEAST) 201-937-7972 nveldran@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

70 INDUSTRY EVENTS

JUNIOR ACCOUNT MANAGER-GROCERY GROUP Natalie Meehan p 773-992-4410 m 619 823-4926 nmeehan@ensembleiq.com

Welcome to the Future PG’s virtual Retail Foodservice Innovation Summit helped attendees figure out, amid the chaos of the pandemic, where the category is headed.

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

74 CPG PROFILE

EVENTS DIRECTOR Karen Mahoney, 952-467-8592 kmahoney@ensembleiq.com

How Amy’s Kitchen Keeps the Dream Alive

MARKETING BRAND MARKETING MANAGER Rebecca Martin 773-992-4407 rmartin@ensembleiq.com

63

The plant-based pioneer’s CEO dishes on what makes the company successful.

AUDIENCE LIST RENTAL MeritDirect Marie Briganti 914-309-3378 SUBSCRIBER SERVICES/SINGLE-COPY PURCHASES Toll Free: 1-877-687-7321 Fax: 1-888-520-3608 contact@progressivegrocer.com PROJECT MANAGEMENT/PRODUCTION/ART VICE PRESIDENT OF PRODUCTION Derek Estey destey@ensembleiq.com CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ADVERTISING/PRODUCTION MANAGER Jackie Batson 224-632-8183 jbatson@ensembleiq.com

76 EQUIPMENT & DESIGN

ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com

Playing it Cool

REPRINTS, PERMISSIONS AND LICENSING Wright’s Media ensembleiq@wrightsmedia.com 877-652-5295

Refrigeration and cold storage can help meet changing consumer demands, including omnichannel shopping and sustainability. 81 TECHNOLOGY

Adding ‘Media Company’ to the Résumé

76

Retailers’ platforms can engage consumers in unique ways and offer an alternative stream of revenue. 85 PG PET

Pet Care in a Pandemic The category is seeing big changes in response to extraordinary circumstances.

85

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF INNOVATION OFFICER Tanner Van Dusen 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). 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 ©2020 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.


EDITOR’S NOTE By Mike Troy

A Vote on the Future of Work here’s an important election coming up, and the outcome could have lasting consequences for the nation. Not that election. The presidential election is hugely important for all sorts of reasons, but for the retail industry, there’s a different issue on the ballot in California that could impact the fastest-growing part of the food retailing world. Here’s a condensed version of what’s going on, and why the future of grocery e-commerce could look different after Nov. 3. Voters in California are being asked to vote “yes” on a proposition that seeks to undo a law enacted last year that imposed what were seen at the time as worker-friendly restrictions on big corporations. That’s generally the type of thing that lawmakers in California do, except in this case, it backfired, especially in the eyes of new economy technology companies that operate platforms and are dependent on being able to classify workers as independent contractors. The situation of how grocery e-commerce came to be affected by the decision of voters in California this November arose in 2018. That’s when the California Supreme Court ruled in a worker classification case that most workers should be considered employees, and placed the burden on employers to prove otherwise. Legislators then passed, and Gov. Gavin Newsom signed, Assembly Bill (AB) 5 last year, which expanded the ruling and imposed new requirements for determining when a worker is an independent contractor versus an employee.

Whether California’s Prop 22 passes or fails, there will be implications for retailers of food and consumables. The effect of AB 5 was to define workers at gig economy companies, those providing rides and delivering all sorts of products, including groceries and food from restaurants, as employees, as opposed to independent contractors. The distinction is huge, because a key element of the business models of crowd-sourced companies is their ability to avoid the full-loaded expense of workers who are considered employees at other types of companies. 6 progressivegrocer.com

AB 5 was, and is, a huge issue for gig economy stalwarts such as Uber, Lyft, Instacart, DoorDash and Postmates. The five companies banded together and secured the signatures needed to place Proposition 22 on the ballot and make a direct appeal to California voters. What Prop 22 does, according to language on the ballot, is “[exempt] app-based transportation and delivery companies from providing employee benefits to certain drivers.” The outcome of the election on the gig economy business model is so significant that the five companies previously mentioned have spent close to $200 million, a national record for a ballot measure, on educating California voters about the benefits of voting “yes” and the dire consequences that a “no” vote would have on an already beleaguered state. In a sense, the Prop 22 campaign has all of the posturing, unsubstantiated claims and information distortion that come with any hotly contested political campaign. However, the Prop 22 debate is blended with the added complexity of worker classification issues and labor laws that are hard enough for human resources professionals to understand. Proponents contend that the issue is about saving jobs, preserving worker flexibility, and even protecting vulnerable communities by warning of service cuts if the measure fails. They have a slick website with an intuitive user experience befitting the capabilities of leading technology companies. Opponents of Prop 22, who are actually proponents of AB 5, argue that it’s about worker protection and treating businesses equally, because treating workers as employees requires employers to make contributions to Medicare, Social Security and unemployment insurance programs. Whether Prop 22 passes or fails, there will be implications for retailers of food and consumables. Passage would bring some short-term clarity to the issue, but it doesn’t mean those advocating for independent contractors will let go of the issue. They could simply shift tactics and focus instead on the retailers that use the services of platform companies to drive the fastest-growing part of their business. We’ll have a better idea of the path forward on the morning of Nov. 4. Mike Troy Editorial Director, Grocery Group mtroy@ensembleIQ.com


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IN-STORE EVENTS

Calendar

12.20

National Pear Month Root Vegetables and Exotic Fruit Month Worldwide Food Service Safety Month

S M T W T F S

1

National Eat a Red Apple Day

2

3

4

5

National Fritters Day. How many foods can you make into fritters? Find out from your shoppers.

National Disability Day. Evaluate how accessible your store(s) and services are, and make improvements where needed.

National Cookie Day. Have customer needs covered with conveniently merchandised ingredients and tasty ready-made options.

National Sacher Torte Day. Direct customers to the bakery to pick up this Viennese indulgence.

Giving Tuesday

6

7

8

9

10

11

12

13

14

15

16

17

18

19

National Gazpacho Day. Run an online demo to show consumers the right way to make this cold Spanish soup.

National Cocoa Day. It’s the perfect occasion to curl up with a steaming mug of chocolatey goodness — marshmallows optional.

20

National Sangria Day

National Cotton Candy Day. Sell this carnival staple in a booth by the store entrance, with all proceeds going to charity.

National Bouillabaisse Day. This hearty fish stew is a natural for the slow cooker.

21

Winter Solstice National French Fried Shrimp Day

National Brownie Day. Show of hands: Who likes the crunchy bits in the corners of the pan?

National Cupcake Day. Now is the time to break out the holiday-themed decorations to add on the tops.

22

National Date Nut Bread Day. Provide tips to keep this classic suitably moist.

National Pastry Day. Add a mouthwatering selection to your grab-and-go breakfast offering.

National ChocolateCovered Anything Day. Technically, this also includes crickets ...

23

Festivus. As famously noted on TV’s “Seinfeld,” it’s for the rest of us.

Chanukah begins.

National Maple Syrup Day. Ask how consumers use the versatile ingredient besides pouring it on pancakes.

24

It’s no surprise that Christmas Eve is also National Eggnog Day.

National Pfeffernusse Day

27

National Fruitcake Day. Have customers share how they use the divisive baked good/present: post-holiday snack or doorstop?

8

28

National Chocolate Candy Day. Mark down any leftover advent calendars with a treat behind each door.

progressivegrocer.com

29

National Pepper Pot Day. This Caribbean dish is traditionally served at Christmas and other special events.

30

National Bacon Day. Breakfast all day, anyone?

31

New Year’s Eve. Raise a toast to your associates for helping you get through a uniquely challenging year.

National Noodle Ring Day. Discover customers’ favorite versions of this fun casserole.

National Roast Suckling Pig Day. Provide full instructions on making one for your more adventurous home chefs.

25

Christmas

Gingerbread House Day. Get shoppers to post their most ambitious edible structures.

National Hard Candy Day National Oatmeal Muffin Day

26

Our Canadian cousins observe Boxing Day, but in the United States, it’s National Candy Cane Day.


MENU TRENDS

Research & Analysis

Better Breakfast Choices Grabbing your favorite breakfast burrito from the restaurant across from work isn’t as accessible as it once was. Now is the time to reclaim making breakfast from scratch. According to Datassential’s COVID-19 reporting, 44% of consumers say that they’re cooking more because it’s easier to eat healthy now. While we have more time at home, why not experiment with better breakfast choices by creating some global and plant-based options with ingredients easily found in the grocery store? Sources: Datassential MenuTrends 2020, FLAVOR 2020, and HotShot Report: COVID-19 Report 20: Health At Home, Custom Research fielded March 25 with n=1,000 consumers

Shakshuka MAC stage: Inception — International markets, global independents and fine dining. Trends start here and exemplify originality in flavor, preparation and presentation. A traditional Middle Eastern breakfast dish consisting of a tomato-and-red-pepper sauce seasoned with cumin, paprika and cayenne. Once the sauce is made, eggs are nestled in the sauce and poached until they have a perfectly runny texture. This dish is topped with feta and fresh herbs, and then served with challah on the side. On 1.2% of U.S. restaurant menus Up nearly 119% over the past four years 15% of consumers know it/ 7% have tried it/ 3% love or like it Menu Example Sunnin Shakshuka Pizza Poached eggs with tomato, onion, bell pepper and cheese, baked on fresh dough

10

progressivegrocer.com

Açai Bowl MAC stage: Adoption — Global foods 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. Touted as the “world’s healthiest breakfast,” açai bowls consist of superfood açai, a small purple berry native to Central America. Açai is blended with ingredients like plant-based milk, bananas and other berries to create a creamy-textured smoothie. This concoction is served in a bowl and decorated with other superfoods like coconut, pepitas and hemp seeds for an Instagram-worthy dish that skews toward younger consumers. On more than 0.7% of U.S. restaurant menus Up 227% over the past four years 46% of consumers know it/ 20% have tried it/ 15% love or like it Menu Example La Prima Quinoa Chocolate Bites Quinoa rolled with dates, figs, almonds and coconut, and then dipped in chocolate

Frittata MAC stage: Proliferation — Proliferation-stage trends are adjusted for mainstream appeal. Often combined with popular applications (on a burger, pasta, etc.) An Italian-style omelet in which eggs are scrambled and mixed with a variety of meats, cheese, vegetables, potatoes or pasta, and cooked in a skillet until the bottom is perfectly brown. Unlike traditional omelets, frittatas are cooked partly on the stovetop and finished in the oven, giving them a fluffy texture. On nearly 10.7% of U.S. restaurant menus

Scramble 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. Eggs that have been scrambled with sautéed vegetables, cheese and meat are truly ubiquitous, with a wide variety of innovation possible. Operators have experimented with plant-based options such as tofu, plant-based eggs like Just, and chickpeas, as a vegan option on menus. Scrambles have resurfaced in popular formats like bowls, burritos and tacos, all of which are trending across all dayparts.

Up 8% over the past year 64% of consumers know it/39% have tried it/29% love or like it

On over 6.3% of U.S. restaurant menus Up 14% over the past four years

Menu Example The C Restaurant + Bar Ricotta Frittata Sun-dried tomato, spinach, artichoke hearts, fennel, thyme, served with roasted Yukon gold potatoes

91% of consumers know it/ 84% have tried it/ 70% love or like it Menu Example Good Stuff Restaurant Vegan Tofu Scramble Scrambled tofu with grilled mushroom, zucchini, spinach, onions, bell pepper, fresh basil and a scoop of black beans. Served with warm corn tortillas or tortilla chips. Gluten-free, vegan


Wildly Good ! Give your customers what they want — real food that’s healthy, delicious, and sustainable. There’s no end to what’s good about wild-caught seafood from Alaska.

The Alaska Seafood Marketing Institute is your resource for wild seafood — nutrition, merchandising materials, training, recipes and more. Visit alaskaseafood.org


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©2013 Trion Industries, Inc. Toll-Free in U.S.A. 800-444-4665 info@triononline.com www.TrionOnline.com Note: Product photography is a simulation of a retail environment and is not meant to imply endorsement by or for any brand or manufacturer.


FRONT END

Shelf Stoppers

Shelf Stoppers

Frozen Vegetables TOTAL FROZEN VEGETABLE SALES REACHED $2.97 BILLION IN THE PAST YEAR

Dairy

(52 weeks ending April 2, 2016)

Basket Facts

Total Department Performance Latest 52 Wks 2 YA W/E 07/25/20

Dairy

$75,804,802,540

Latest 52 Wks YA W/E 07/27/19

Latest 52 Wks W/E 07/28/18

$69,310,933,095

$68,953,247,731

Top Dairy Categories by Dollar Sales Cheese

Milk Products

Beverages

Yogurt

Eggs

$18,000,000,000 16,000,000,000

How much is the Consumers chose average American frozen broccoli over household alternatives for a variety ofper reasons: spending trip on various dairy products versus the 12% year-ago period? because it’s quick and easy

14,000,000,000

10%

12,000,000,000

because it tastes great

10,000,000,000 8,000,000,000

$9.21 9%

6,000,000,000

on dairy products, up 4.2% because it’s

4,000,000,000

Spotlight on Frozen Broccoli

2,000,000,000

WHEN ARE CONSUMERS EATING FROZEN BROCCOLI?

0

Broccoli as an ingredient is most commonly by52 lunch. Latest 52consumed Wks 2 YA at - dinner, followed Latest Wks YA W/E 07/25/20 W/E 07/27/19

Frozen broccoli is most often used in a side dish, followedLatest by as 52 a main Wksentrée. -

W/E 07/28/18 3%

Source: Nielsen, Total U.S. (All outlets combined) – includes grocery stores, drug stores, mass merchandisers, 9% select dollar stores, select warehouse clubs and military commissaries (DeCA) for the 52 weeks ending July 25, 2020

OCCASION

MEAL ITEM

29% TYPE CLASS 62% 61%is Total dairy annual sales from the end of July are up 9.4% compared35% to a year ago, which significantly outpacing growth seen in prior periods. COVID-19 is a contributing factor to this acceleration in sales trends, as consumers pantry-loaded on key staples such as cheese (up 12.6%), butter/spreads (up 14.3%) and eggs (up 8.4%) during the initial stage of the pandemic on U.S. soil. Although dairy sales are benefiting from the stock-up, the category has also had LUNCH OTHER Due to the SIDE DISH MAIN ENTRÉE to cope with supply-chain issues DINNER as demand for staples soared. perishable nature of this OTHER category, interruptions in the supply chain can have major implications. COVID-19 is not only influencing the supply and demand of dairy staples, but it is also providing opportunity for growth in previously declining categories. As consumers spend more time at home due to the restrictions caused by the pandemic, baking has become a new hobby for many Americans. Dough and batter products are up 16.7% this period, after seeing two years of decline in prior periods.”

healthy and nutritious

8%

because it’s low in calories, fat and sugar

$3.43

on all cream cheese, up 1.9%

$4.86 on specialty cheese, up 5.7%

—Katie Hazlett, associate manager - global client delivery, Nielsen

Generational Snapshot Which cohort is spending, on average, the most per trip on specialty cheese?

$4.02 on traditional dairy yogurt, up 0.4%

Millennials

Gen Xers

Boomers

The Greatest Generation

$4.92

$5.05

$4.79

$4.71

Source: Nielsen Homescan, Total U.S., 52 weeks ending June 27, 2020

14

progressivegrocer.com

Source: Nielsen Homescan, Total U.S., 52 weeks ending June 27, 2020


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MINTEL CATEGORY INSIGHTS

Global New Products Database

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Vegetables Marketing Overview

Prior to 2020, the vegetable category was continually growing, heavily dominated by the fresh segment, which accounted for more than three-quarters of category sales.

Key Issues

Now more than ever, consumers are trying to eat more vegetables, and they’re looking for new ways to do so, whether it’s by adding vegetables into recipes or substituting vegetables for less “desirable” foods.

Sales across all segments have reached new heights because of COVID-19, with both fresh and frozen/shelf-stable vegetables posting impressive sales growth. Consumers increased their vegetable consumption not only because they were cooking and eating more at home, but also because of a reinforced interest in healthy eating, leading to continued strength in the fresh segment. More than a third of consumers report increased vegetable consumption this year, and 80% of those consumers cite health as the reason.

Of consumers believe that fresh vegetables are healthier than non-fresh ones. Consumers’ increased purchase of non-fresh products is likely to be fleeting, unless brands work to chip away at well-established stigmas associated with such products.

What Does It Mean? Both frozen and shelf-stable brands will need to adjust messaging to communicate their value and to stay in the consideration set for the long term, and also to reinforce relevant better-foryou connections. Across the segment, brand communications should focus on two fundamental messages: the nutritional role that vegetables play in overall well-being, and programs that can help consumers find even more value. Consumers are reaching for vegetables as betterfor-you snacks or as a meat and carb replacement. Brands can tap into this trend by offering items that meet these wants.

16

progressivegrocer.com


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ALL’S WELLNESS By Diane Quagliani

Homemade and Healthier

nonperishables the night before. For those breakfasting away from home, suggest quick-to-pack portable items such as single-serving cereal boxes and cups, cereal bars, nuts, yogurt cups, fruit, and 100% juice boxes.

GROCERY STORES CAN MAKE THE BRE AKFAST OCCASION E VEN BE T TER.

Serve Up Hot Foods and Nutrients

rguably, starting the day with a good breakfast is a smart move for adults and children alike. Eating breakfast may provide much-needed nutrients and fuel for the body and brain. And yet, an estimated one-quarter of Americans miss out on these benefits by skipping breakfast, according to government surveys. But since the COVID-19 pandemic hit earlier this year, several eating patterns have shifted as people spend more time at home. Noteworthy for retailers is that almost nine out of 10 (88%) people are cooking more meals at home, according to a May 2020 survey conducted by social and digital consultancy Influencer Central. With many adults and kids continuing to work and learn from home this fall, home food preparation — including breakfast — will likely remain on the front burner, giving retailers and retail dietitians opportunities to offer new and nutritious breakfast options.

Fiber, whole grains and protein from plant sources top the list of foods and nutrients that consumers consider healthiest and seek out the most, according to the International Food Information Council (IFIC) 2020 Food & Health Survey. Feature these components in unique prep-ahead recipes and online cooking demos to help shoppers enjoy hot and hearty cold-weather breakfasts on even the busiest mornings. Examples are casseroles filled with veggies and plantbased sausage or chorizo to bake in the morning; “set-it-and-forget-it” slow-cooker or electric pressure-cooker “porridges” made with dried fruits, spices and less typical fiber-rich whole grains such as farro, quinoa, millet or buckwheat; and freezable whole grain muffins and quick breads full of the season’s apples, pears, cranberries or pumpkin. Include swaps for hard-to-get recipe ingredients and ideas for using up well-stocked pantry items like cereal, flour, nut and seed butters, and frozen, canned and dried fruit.

Put the ‘Fast’ in Breakfast

Lack of time is a common reason that people skip or skimp on breakfast, but with newfound time in the morning, 39% of people say that they’re eating a more filling or balanced breakfast, according to the Influencer Central survey. Nevertheless, quick options are still in demand on busy at-home work and school mornings. Provide shoppers with digital resources like downloadable monthly calendars and shopping lists of quick-to-make breakfasts and time-saving tips such as setting the table and putting out breakfast

Offer Edible Fun for Kids A superfood açai bowl can serve as a filling and nutritious breakfast.

Involving kids in breakfast preparation can be a fun and educational family activity that helps instill good eating habits. For younger kids, offer printable activity sheets inviting them to “put on their best breakfast face” by decorating toaster waffles or pancakes with fruits, nuts, yogurt and other breakfast components. Challenge older kids to get creative with smoothies, overnight oats or chia pudding, for a chance to have their recipe published on your website.

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

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NEW HORIZONS By Sarah Alter

Support women in your workplace, and resist the urge to call “done” on decades of discrimination when a record is broken.

and men who have worked tirelessly to ensure that women share an equal opportunity to rise to the top. Yet we can’t ignore the fact that this record-breaking number is still just 7.6% of the companies that make up that 500. Compare that with the 49.584% of our world that’s female, and the problem becomes blatantly apparent. While we’re talking about an obvious disparity, where are the women of color on this list? There were just three when the list was announced in May, a shocking 0.6% of the total CEOs on the list. There are only four Black CEOs on the list, and all four are men. Further, the United States is predicted to become “minority white” by 2045, making this gap all the more stark.

Accelerating the Rate of Change

Female CEOS: More is Not Enough FIRSTS AND BROKEN RECORDS ARE TO BE CELEBRATED, BUT THERE’S STILL MORE ROAD TO TRAVEL. hen I heard the news that Citigroup had become the the first major financial institution in the United States to name a woman, Jane Fraser, as its CEO, I was thrilled. These “firsts” — the women who are first through the door of the top office in their industry — are always a cause for celebration. At NEW, our mission dictates that Advancing All Women, our mission, is just good business. The facts of this have been proved time and time again. Yet the very fact that there are still barriers to be broken – that there are still “firsts” to be had for women in the c-suite – goes to show how much work there still is to do.

Seeing the number of female CEOs continue to grow in this country is so encouraging, and it is a personal point of pride to be among that group of women. I’m particularly affected when one of our partner organizations appoints a female chief executive, as our partner Clif Bar & Co. did earlier this year, when it brought Sally Grimes in to helm the organization. But looking at these numbers in context shows the work left to be done, particularly for women of color. What can you do? Start by committing yourself to surmounting this challenge, making a promise to yourself not to stop until the work is done. That alone is a very powerful thing, but that commitment must be followed by action. Support women in your workplaces, and resist the urge to call “done” on decades of discrimination when a record is broken. Advocate for women of color, and ensure unconscious bias in our workplaces is challenged and demolished. Find men who can be allies to the cause. Celebrate the wins, but never willingly lean back. There’s good news, however: For this fight, you’re in the best of company.

A Record-Breaking 38

When the Fortune 500 was announced earlier this year, it came with a celebrated number: 37, the most female CEOs ever on the list. In 2018, that number was just 24. Clorox, which recently named Linda Rendle its new CEO, has brought that exciting total up to 38. That this number continues to rise is a testament to the women

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Sarah Alter is president and CEO of the Network of Executive Women, a learning and leadership community representing 12,400 members in 22 regional groups in the United States and Canada. Learn more at newonline.org.


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DIVERSITY & INCLUSION

Racial Equity

Good Food Markets has invested in training to help its employees advance to living-wage management positions.

Key Takeaways In the wake of George Floyd’s killing, food retailers felt compelled to increase and publicize their racial equity efforts. As community anchors, grocers can play a crucial role in advancing racial equity through their hiring, training and benefit strategies, among others. The benefits of successful racial equity programs for food retailers can include more committed employees, deeper connections with communities, and a stronger bottom line.

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Grocers grapple with how to address the pervasive issue of racial equity. By Bridget Goldschmidt

T

his past summer, racial equity finally became an issue too big to ignore or to attempt to deal with quietly. In the wake of the killing of George Floyd in Minneapolis police custody late last May, outraged protesters took to the streets of various American cities and towns, demanding justice, and many companies, including food retailers, wanted to be seen as doing something to effect change in this regard. The Fresh Market, a Greensboro, N.C.based grocery store chain, was one of many supermarket operators to make large donations to organizations working for social justice — in The Fresh Market’s case, the NAACP Legal Defense and Educational Fund Inc., and, in its hometown, the International Civil Rights Center & Museum. The grocer also committed publicly to conducting unconscious-bias training for all employees, placing an increased focus on diversity hiring and career progression and mentoring, and enhancing the diversity of its supply chain. “We are deeply committed to serve and make a difference in our communities to ensure inclusion, empowerment and opportunity for everyone,” says The Fresh Market CEO Jason Potter. “Advancing racial equity makes The Fresh Market [not only] a better place to work for our team members, but also a better place to shop for our guests, and a stronger partner in our communities.” It’s true that major food retailers have made major strides in this area. For in-

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DIVERSITY & INCLUSION

Racial Equity

stance, in its recent (and first-ever) midyear diversity report, Bentonville, Ark.-based Walmart revealed substantive positive trends in such areas as management-to-management promotions for people of color; appointment of officers of color; and U.S. people-of-color new hires. The company has also instituted a two-day Racial Equity Institute workshop for all U.S.-based officers this year, as well as a self-paced race and inclusion curriculum that all U.S. associates can access. Minneapolis-based Target, meanwhile, has pledged to increase representation of Black employees across the organization by 20% over the next three years, and created an action plan to improve its diversity metrics. In the drug store channel, Deerfield, Ill.-based Walgreens Boots Alliance (WBA) has publicized various diversity and inclusion efforts, including the implementation of a leadership accountability program; scholarships for diverse candidates at accredited U.S. pharmacy schools, with job placements at Walgreens pharmacies; unconscious-bias training across the global organization; the expansion of a diverse supplier network; and a commitment to the health care needs of diverse communities through such means as its partnership with VillageMD to provide in-store clinics. “A diverse and inclusive organization is a top priority for our business, and we are proud to embrace and support the many cultures, backgrounds and experiences of our customers, patients and employees across the globe,” says Stefano Pessina, executive vice chairman and CEO of WBA. “Diversity and inclusion are core to our purpose of helping people live healthier, happier lives.” Among pure-play grocers, The Kroger Co., based in Cincinnati, is particularly known for its longstanding diversity and inclusion efforts; still, in the wake of George Floyd’s death, CEO Rodney McMullen delivered a video message noting “that we all have deeper work to do” in the area of racial equity, and the company created a $5 million fund through The Kroger Co. Foundation for that very purpose.

The Market @ 25th features a timeline that covers the history of the surrounding Church Hill neighborhood, in Richmond, Va., to assert the store's status as part of the community.

Why it Matters

What exactly is meant by racial equity, however, and why is it important in the food retail space? “Racial equity means giving equal opportunity to everyone, no matter their race, income or gender,” notes Norm Gold,

“Advancing racial equity by making sure all workers have access to quality jobs has ripple effects well beyond the workplace, impacting families, neighborhoods and communities.” —Janell Thomas, National Fund for Workforce Solutions

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developer and operator of The Market @ 25th, a Richmond, Va.-based grocery store in a community that is 80% African-American. “Racial equity in action would mean having a diverse executive team, a board that reflects the community, and equitable policies and practices that foster two-way communication between employees and employers that result in equitable outcomes,” says Janell Thomas, director of worker success at the National Fund for Workforce Solutions, a nonprofit based in Washington, D.C. As for why it’s crucial for food retailers to address the issue, Sandra Medrano, senior consultant at the Seattle office of consulting firm FSG, explains that “approximately 9 million of the country’s 24 million front-line employees are people of color. A significant segment of these workers are part of the front-line workforce in grocery stores, restaurants and other food retail businesses. The majority of these workers face disadvantages that create systemic barriers, including residential and educational segregation, lower rates of digital readiness, and limitations in social networks.” Beyond the retail workforce, there’s the entire food supply chain to be addressed, she adds. “Food retailers are anchors in the community — they provide food and essential goods,” observes Medrano. “They are part of the larger food system, which research has shown is also permeated by issues of economic inequality and systemic racism.” “From the food retail lens, racial equity looks like the abolishment of these disparities, which are actually forms of structural racism and found in every link of the food chain,” says Amanda Stephenson, owner of the Fresh Food Factory, a Washington, D.C.-based retail incubator market. “Grocery stores play a critical role in anchoring


and solidifying the growth and health of the areas they serve,” observes Thomas. “Advancing racial equity by making sure all workers have access to quality jobs has ripple effects well beyond the workplace, impacting families, neighborhoods and communities. By creating opportunities for all, retailers and their communities can create an even more fruitful mutual relationship.” Further, at a time when many of their associates, shoppers, and existing and potential suppliers are calling for greater equity, supermarket operators shouldn’t be sitting on the sidelines. “If food retailers are not advancing racial equity, they are perpetuating it,” asserts Philip Sambol, executive director of Oasis Community Partners, the nonprofit owner of Good Food Markets, in Washington.

“If food retailers are not advancing racial equity, they are perpetuating it.” —Philip Sambol, Oasis Community Partners

gender to understand gaps within the workforce and make active plans to address them; diversity, equity and inclusion (DEI) training and capacity building for internal staff; and considering racial analysis across other strategic decisions, like where to open future store locations. “When looking at programs and policies to advance racial equity, employers need to start by listening and making sure they are providing good jobs,” advises Thomas. “At the most basic level, a good job includes family-sustaining wages, benefits and stable scheduling. A good job offers opportunities for training, advancement and participation in decision-making. A good job has an employer that is equitable in

What to Do

Fortunately, grocers can take various actions in response to these systemic inequities. According to Medrano, “[I]n looking at the system in which food retailers operate, there is a lot that they can do — from shifting policies (where they open a store, internal HR management for workers) and practices (where they supply from, when stores are open, how they stock and advertise healthful food) — to contribute to combating racism and advancing racial equity.” These moves include creating equitable outcomes for workers, such as desegregating data by race, ethnicity and

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DIVERSITY & INCLUSION

Racial Equity

its actions, decisions, behaviors, policies and practices. Talk to your employees and get a better understanding of the specific issues facing them before making big changes. Leaders should look for opportunities to make immediate, sustainable changes ... while also taking steps to address the problems that require a longer-term strategy. For example, if your employees are struggling with child care or elder care — like so many workers are right now — start with setting hours/schedules that work better for them.” Among the other opportunities she cites for building a more equitable workforce are: Hiring practices: Look beyond traditional hiring

pools, including those without a degree, or the formerly incarcerated. Career ladders: Advance employees from within;

offer flexible, earn-while-you-learn programs; and more. Make sure they’re accessible to all applicants, and don’t unintentionally exclude people. Benefits: Consider financial wellness programs that

promote economic mobility and wage growth. “To achieve racial equity and equitable outcome, food retailers may have to take a nontraditional approach to adopting programs/policies,” advises Stephenson. “All programs, policies, proclamations and laws will have to be revisited to see which of them will have the most effective, efficient and long-lasting impact on addressing the impacts of systemic racism. ... [B]y addressing and correcting blatant and covert structural racism, food retailers are in a position to make change and help disrupt current institutional and societal structured barriers and inequity within the current food system.” The Fresh Food Factory, she notes, “enhances food equity and economic development opportunities, and interacts with the community as a nutritional and economic lifeline for residents and resident-owned businesses, [by selling] healthy, local minority-made and culturally specific groceries ... which has filled a dire need in the community and will serve as a model for other communities to follow.” “At Good Food Markets, we have engaged with our fellow retailers to improve training, and provide real pathways to living-wage management positions,” says Sambol. “Invest in people by paying them well, spend money on training, spend time in the store working and just existing with the team. The answers are going to be different in each circumstance, but it is about sustained investment of time, money and risk to elevate people who would otherwise not get the chance to thrive.” “To provide racial equity, a business must provide opportunities and be inclusive to everyone,” observes Gold, noting that The Market @ 25th “was created to make a difference in an area where opportunities to buy healthy, sell products and have stable employment were nonexistent.” The market set out to address those problems by giving people the opportunity to work there, regardless of background or criminal history; working with minority-owned local businesses to help them 26

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Amanda Stephenson, owner of The Fresh Food Factory, is providing a nutritional and economic lifeline for local residents and resident-owned businesses.

grow and give them the chance to sell their products; and making healthy items like produce accessible to local shoppers at reduced cost.

Benefits for All

For grocers who undertake comprehensive racial equity initiatives, the rewards can be plentiful — and not just of the monetary kind. Medrano notes that changes to internal structures like HR can lead to a stronger talent pipeline and more engaged, loyal and productive employees, while external effects can include better brand recognition and stronger connections to the communities that retailers serve and operate within. “Advancing racial equity — especially as it relates to a good jobs approach — delivers competitive advantage and a host of benefits,” agrees Thomas, going on to name such results as a stronger bottom line, lower turnover, and operational excellence stemming “from the diversity of mindsets, ideas, and approaches to problem-solving.” Further, she notes, “when a business’ employees reflect the identities of its consumers, it creates trust and better customer service — and therefore, better customer satisfaction.” “The benefit that retailers can expect from successful racial strategies ... is the shift in the trajectory of the health and wealth and the overall life expectancy of [minority-owned] business on local, state, federal and international levels,” asserts Stephenson. “The American and international food system will be rebuilt and bolstered. Blacks, African descendants and other


DIVERSITY & INCLUSION

Racial Equity

groups who have been racially oppressed would have a greater share in the food system, from growing to processing, serving and eating food; all humans, specifically the population that has been disadvantaged the most, would be able to secure a more prosperous future based on what is done in the present.” “Business-wise, making the store part of the community, offering [hiring and entrepreneurial] opportunities, and serving has helped us gain trust in our intentions, where mistrust has been significant in the past,” says Gold. While noting the financial gains to be realized from investments in staff development, and the further “PR benefit” for retailers that engage authentically with other stakeholders in promoting racial equity, Sambol warns that “if [an initiative] isn’t rooted in real work, then it will eventually be called out as window dressing. The work is hard, and doesn’t always go according to plan, but Good Food Markets has seen only positive results by investing in people that would otherwise not have a chance to grow.” It’s clear that such hard — or, as Kroger’s McMullen described it, “deeper” — work is necessary to create a more equitable food system, and that grocers have a key role to play in bringing about necessary change across all of society. “Retailers and others have to stay committed to the development of solutions to overcome systemic challenges and to be a catalyst to close the healthy food/grocery gap and the wealth gap for African-Americans and people of African descent,” says Stephenson. Predicting that inaction would lead to “more of the same: continuously increasing inequality, civil unrest and a stagnating economy,” Sambol warns, “If we don’t invest in improving the mistakes of the past, we will continue to be dragged down by its destructive ideas.”

“[B]y addressing and correcting blatant and covert structural racism, food retailers are in a position to make change and help disrupt current institutional and societal structured barriers and inequity within the current food system.” —Amanda Stephenson, The Fresh Food Factory

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COVID-19 and Racial Equity Among other things, the ongoing COVID-19 pandemic has highlighted already existing racial inequities in society, with communities of color more likely to be severely affected by the virus but less likely to receive timely or even lifesaving medical treatment, as well as being more likely to face economic challenges such as layoffs as a result of the outbreak. In terms of food retailers, large numbers of their front-line workers risk daily exposure to the coronavirus. “COVID-19 revealed how essential these [supermarket] workers are, as grocery stores became critical community anchors,” notes Sandra Medrano, senior consultant at the Seattle office of consulting firm FSG, a mission-driven consulting firm. “Yet many of these workers did not have sufficient [personal protective equipment], worked long and exhausting hours, and dealt daily with negative customer interactions. Unemployed workers are unable to cover an unexpected $400 cost, and 30% of Americans don’t have paid sick leave — without additional support, many are forced to work while ill, or simply not show up for work. Dozens of thousands of them have been infected or exposed to coronavirus; thousands have died.” Further, shoppers care about the impacts of COVID-19 on others, especially their friends and neighbors working at the local grocery store, with whom they have regular contact. As Monica Turner, president of sales, North America at Cincinnati-based Procter & Gamble, points out, citing research fielded by the Consumer Brands Association, “68% of consumers expect companies and brands to engage in social actions for those affected by COVID-19 and social justice issues.” Ways that food retailers have helped their associates during this period include providing effective protective measures and adequate sick leave, but they should also look into “financial wellness programs that promote economic mobility and wage growth that would help in a time of crisis, like the one we are currently experiencing,” suggests Janell Thomas, director of worker success at the National Fund for Workforce Solutions, a Washington, D.C.-based nonprofit. “The National Fund has a step-bystep guide that makes it easy for employers to implement a financial wellness program for their workers.” Meanwhile, Deerfield, Ill.-based drug store chain Walgreens Boots Alliance has sought to redress the balance with regard to health care access by expanding its drivethrough COVID-19 tests to underserved areas nationwide. “Food retailers can’t afford to not engage in matters of racial equity,” says Thomas. “They will lose the trust of their employees and the community. An equitable job doesn’t just impact the workplace; it affects other areas, such as housing, transportation, child care, health care, and more. When employers understand that the social elements that contribute to healthy individuals and communities are all interconnected — and include employment — they will recognize that one weak link can quickly crumble so many other areas in employees’ lives.”


DIVERSITY & INCLUSION

RACIAL EQUITY

Racial Equity Matters at Procter & Gamble MONICA TURNER, THE CPG POWERHOUSE’S PRESIDENT OF SALES, NORTH AMERICA, DISCUSSES ITS APPROACH TO THIS CRITICAL ISSUE. By Bridget Goldschmidt ince racial inequity exists throughout the grocery industry, it’s important to get a sense of what other areas of the business are doing to address this systemic problem. Progressive Grocer connected with Monica Turner, president of sales, North America at Cincinnati-based Procter & Gamble, to get a sense of how the iconic consumer packaged goods company is working toward a more inclusive world. Progressive Grocer: What does racial equity look like in the CPG industry, and at your company specifically?

world. P&G, as one of the biggest advertisers in the world, uses our voice to put a spotlight on bias and inequality to spark dialogue that leads to understanding and action. Third, investing with diverse suppliers. We aim

to be more equitable in our spending and advocacy of diverse-owned and -led businesses. When our supply networks reflect the diversity of our consumers, employees and stakeholders, our community thrives. PG: Why is it important for the CPG industry to advance racial equity? MT: The social, economic and public health crises

today have transformed how companies serve consumers and communities. More than ever, consumers expect companies like P&G to take a stand and lead positive, lasting change. Consumers want to know the people behind P&G, our values, and the actions we’ve taken on key issues. Nine of 10 consumers have a more positive im-

age of a brand or a company when it supports a social cause.

Monica Turner: P&G has a long-standing commitment to equal-

ity and inclusion — where respect and inclusion are the cornerstones of our culture, where equal access and opportunity to learn, grow, succeed and thrive are available to everyone. We fundamentally believe that a diverse workforce makes us better. With diversity of thought, experiences, skills and styles, we get the best performance from each of our people, because we create an environment in which they can thrive. Within the CPG industry, we need to drive progress and action in racial equity through a few key areas: First, creating an inclusive work environment. At P&G,

we aim to create a culture where everyone is valued, everyone is included, and everyone contributes to their full potential. We have the most diverse workforce we’ve ever had — for example, we have 140 nationalities, and 48% of our managers globally are women (up from 44% just four years ago) — but we need to make faster progress on representation of multicultural employees in the U.S. We aspire that 40% of our U.S. employees will be multicultural. To get there, we need to understand the contextual realities for multicultural employees and ensure we have systems, programs and great managers to attract, hire, advance and retain all people. Second, representing the diversity of the consumers we

serve — not just within our own employee base, but in how we leverage our voice as brands and advertisers. We build the world’s most trusted and valued brands by serving people in an inclusive way, bringing visibility to the uniqueness of their humanity. We know that images and messages we put into the world affect how people see the 30

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Half of consumers say they make purchase deci-

sions based on shared beliefs with the brand.

“CPG companies must use their power to advance racial equity across employees, brands, partners and community. At P&G, we stepped up our ongoing efforts in our workplace and in our community.” —Monica Turner, Procter & Gamble


People of all ages — from Gen Z to Millennials to Boomers

— expect brands to take a stand on societal issues. Companies and brands have an impact on norms and culture. Advertising affects how people see the world, and has the power to spark conversations, open hearts and change mindsets. As some of the biggest companies and biggest advertisers in the world, CPG companies have the responsibility to shape culture and the opportunity to make a positive impact. PG: What programs/policies should CPG companies be adopting to advance racial equity? MT: CPG companies must use their power to advance racial

equity across employees, brands, partners and community. At P&G, we stepped up our ongoing efforts in our workplace and in our community. Internally, we are bold about our goals and intentional about tracking our progress toward a more diverse employee and leadership base. P&G today has the most diverse organization that we’ve ever had. We have been very intentional about this through long-term talent plans, equality-based policies and the right accountability. We have made significant progress, but we are not done yet. To create a talent ecosystem that supports, develops and retains multicultural talent, we develop specific programs, including: Managing for Inclusive Partnerships supports, develops and

advances African Ancestry talent. It is anchored by the employee, the employee’s manager and the organization taking shared accountability to achieve the desired results. Open Doors Experience supports, develops and advanc-

es multicultural women. We develop both core and cultural leadership competence for engaging and retaining them. We forge relationships of trust, empathy and authenticity that open doors and improve collaboration for better business results. We also continually review our policies, benefits and practices to ensure we have an equality-based approach. We enable dialogue and understanding through deeper relationships and trainings about systemic bias, microaggressions and racial injustice. For example, Unbias is an immersive learning experience where participants learn to activate their growth mindset, recognize the impact of microaggressions, and help create an organizational environment that is more inclusive and equitable. Externally, P&G is a force for good and a force for growth in our community, empowering communities through our brands, people, partnerships and platforms to achieve true equality. We established the P&G Take On Race Fund with an initial contribution of $5 million to accelerate the work of organizations that fight for justice, advance economic opportunity, enable greater access to education and health care, and make our communities more equitable. We also established the Take On Race website at www.pg.com/takeonrace to provide resources to help people on their journey of understanding and action. We re-released two films, “The

Talk” and “The Look,” which help bring awareness of the experiences of Black people in society, and we created a new film, “The Choice,” to encourage the silent majority in the white community to read, listen, donate, speak out and step up. Beyond our own brands, we will continue to increase our spending with diversity-owned and -led businesses. We also hold our creative agency partners accountable to the same equality standards and goals internally. We need to engage in partnerships that shape more inclusive policy and societies. CPG companies need to inspire and enable bold collective action within their organizations and their communities. It is critical that companies like P&G drive racial equity, not only through words, but more importantly through actions. PG: What are the consequences of CPG companies not engaging on matters of racial equity, financial or otherwise? What benefits can CPG companies expect from successful racial equity strategies, financial or otherwise? MT: Consumers increasingly expect companies

and brands to take a stand and make a difference. People are past words, feelings and statements. They want specific, tangible and sustained actions that make a difference. At P&G, we serve diverse consumers around the world. In everything that we do, we aim to closely reflect the diversity of our consumers. When we understand our consumers, their needs and challenges, we can delight them better with our products and services. Advancing equality for all people is the right thing to do for business — but more importantly, it’s simply the right thing to do. We should all do our part, using our power and privilege to lead change and make a difference. PG: What impact, if any, do you think your racial equity efforts have on the retailers that carry your products, and why? MT: P&G works closely with retailers to serve

diverse consumers and drive shared, sustainable growth. Together, we work to reflect the diversity of our consumers in our media and community efforts. For example, P&G’s My Black Is Beautiful (MBIB) was founded in 2006 to promote a more positive representation of Blackness. Since inception, this has evolved to launch a portfolio of products with our retailers that meets the unique needs of Black consumers — from the MBIB Golden Milk Collection, to Pantene Gold Series, to Walker & Co.’s shaving, hair and skin care products. P&G is proud to work with retailers who share our commitment to serve as many people as possible. PROGRESSIVE GROCER October 2020

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COVER STORY

E-Commerce

THE PREDICTABLE RISE OF INSTACART A suddenly essential service envisions grocery’s digital future. By Gina Acosta

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redicting the future is inherently difficult, even if you work in a futuristic industry like online grocery. But only nine months ago, Instacart President Nilam Ganenthiran did exactly that. In a not-much-noticed press release published by the company on Jan. 14 — before COVID-19 would change the world — Ganenthiran proclaimed that 2020 would be “the year for online grocery pickup.” Eight weeks later, the U.S. federal government declared a national emergency over the pandemic, and everyone was typing “Can you get coronavirus at the grocery store?” into Google. Suddenly, tens of millions of Americans wanted to buy groceries online and were waking up at 3 a.m.

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COVER STORY

E-Commerce to find a grocery pickup (or delivery) slot on Instacart.com. In the eyes of consumers and grocers, the company’s grocery e-commerce service had morphed from niche to necessity. And with so much demand, Instacart was going to face operational challenges more severe than even Ganenthiran could have ever prophesized. “It’s crazy to think about this, but in a two-to-four week period, we experienced the adoption of grocery e-commerce that we were expecting to see in a two-to-four year period,” Ganenthiran said. “We saw a 500% jump in order volume. Almost overnight, we saw basket sizes expand 35% and Instacart become a lifeline for people across North America looking to get their groceries and goods delivered. We saw things that normally are always in stock — toilet paper, bottled water — just disappear from store shelves. And we had over 400 retailers, across more than 30,000 retail store locations, more than half of North American grocery e-commerce basically, looking at us and saying, ‘Hey, you got to be there and show up for our customers.’ ” Fast-forward eight months. Today, Ganenthiran and the rest of the Instacart executive team have moved a bit beyond worrying about toilet paper stocks. They’re now laser-focused on leveraging the growth opportunity before them, and on building a future vision to help the grocery industry thrive during the next pandemic and beyond.

Four-Sided Marketplace

Founded in San Francisco in 2012 by former Amazon engineer Apoorva Mehta and his friends, Instacart’s mission was then, and remains now, to help brick-and-mortar grocers be successful online. Since then, the company has been measuring that success by scale, expanding rapidly into new geographical markets and launching new features designed to make grocery e-commerce irresistible to consumers. Then in March, irresistible turned into essential. Since the COVID surge, nearly 750,000 “shoppers,” more than half of which were hired since the coronavirus outbreak, have been shopping on the Instacart platform. These are the mostly independent contractor workers who pick orders, stage them for pickup or deliver them to customer homes. On any given week, the company, which Roughly 70% of Instacart shoppers are women, serving a customer base that's more than 80% female.


Comparing the Instacart Shopper and Customer INSTACART CUSTOMERS Instacart customers are primarily female (over 80%)

Between the ages of 25-44 (nearly 50%) 55-75 (just over 30%)

Nearly 40% of customers are parents

60

%

Nearly 15% of customers are retired

Nearly 60% of Instacart customers live less than 1 mile from the closest grocery store

INSTACART SHOPPERS

61%

Women make up the majority of the community, at nearly 70%

Shoppers are primarily between the ages of 25-44 (61%)

On average, shoppers

50

%

shop between 10-15 hours a week

Many shoppers are parents: 50% have children under 18 living in the home

has about 2,000 full-time workers, has 100,000 shoppers picking orders on the platform. “We brought on board those new shoppers while increasing our shopper satisfaction as measured by our Net Promoter Score,” says Ganenthiran, who believes that the days of a retailer not offering e-commerce pickup and delivery are definitely over. “Today, our shoppers are happier working on our platform than they’ve ever been in the past. The credit goes to our teams, who have been coming up with new programming to support shoppers and continuously being the voice of our shoppers during this time, while also adding 8,000 new store locations, 150-plus new retailers and expanding pickup to more than 1,500 new stores.” Indeed, it’s not just the size of its shopper network that has exploded since the pandemic. Every part of the Instacart business has accelerated, from the number of its retailer customers to the size of its Instacart Care team to the breadth of its consumer packaged goods (CPG) partners (now more than 1,000 brands).


COVER STORY

E-Commerce The company’s shoppers and retailers make up two sides of what Walmart to offer same-day delivery in four test Instacart calls a “four-sided marketplace” business model that markets in California and Oklahoma. In Septemalso includes consumers and CPGs. Instacart makes money from ber, Instacart ramped up expansion efforts even delivery fees, as well as from partnerships with CPG and retailer further by teaming up with Dallas-based 7-Eleven, partners. It remains to be seen whether the model is profitable its first national convenience store retail partner, to or sustainable beyond all of this pandemic demand for grocery expand same-day grocery delivery. e-commerce (Instacart doesn’t publicize specific sales figures); GaIn addition to groceries and everyday goods, nenthiran says that it’s a unique model that’s difficult to manage Instacart has expanded its offering over the past but perfectly positioned to leverage what he sees as an unstoppayear to include alcohol and prescription delivery ble digital renaissance in grocery. (Costco), beauty (Sephora) and now even general “This is definitely a period that has changed forever the way merchandise (Big Lots). The company plans to expeople get groceries,” he says. “Most of the time, the interests pand its Instacart Meals program, first launched of the four sides of our marketplace are aligned. There can be with Lakeland, Fla.-based Publix earlier this year, times when one side of the marketplace becomes unbalanced to more retailers in the coming months. relative to another. All we can do is try to apply technology Instacart is now accessible to more than 85% of and empathy to try to bring things back in households in the United States and balance and solve for the customer — be it more than 70% of households in Cana consumer, shopper or partner.” ada. The company has accelerated its “We think that the Bringing things back in balance means launch cadence with retailers since the American customer “using technology and scale to be able to start of the year, and now partners will want her lower costs while also making sure our rewith more than 400 national, regional tailers’ P&Ls are healthy,” he explains. It and local retailers across North Amergroceries delivered also means building great apps and websites ica to deliver from more than 30,000 some of the time. on behalf of the company’s retail partners, stores across 5,500-plus cities in the She will want to go turning technology into something they can United States — encompassing all 50 into the store some use to create custom experiences and build states — and Canada. online stores to connect with their shoppers. “Before COVID, less than 5% of of the time, and she Instacart has a robust Enterprise business groceries were bought online. We alwill want to pick up building websites for grocers such as Wegways believed that number was going her groceries, order mans Food Markets and Heinen’s. to be 20% in five years,” Ganenthiran “The breadth of ways that we’re partsays. “With the overall adoption inonline, pick up in nering with the grocery industry to do crease with existing partners and the store some of the that has evolved where now Instacart number of retailers that have been time, and all three Enterprise plays a more important part, signing up to be part of this experiwill matter. And where we’re building websites and apps ence, customer adoption has acceleratand today power the full e-commerce it’s not like some experience for more than 175 grocers,” customers do one Ganenthiran notes. “It’s not just about deand some customers livery anymore. We’re constantly trying to do another. No, all find new ways that we can add value as a chief ally to our partners and believe we three will matter for can by building the technical e-commerce a customer. And we infrastructure for retailers big and small.” believe, because of Speaking of value, in June Instacart raised $225 million in a new round of financing, that, gone are the making it one of the most valuable private days of a retailer not companies in the United States. (Ganenthihaving e-commerce.” ran says that Instacart will eventually be a —Nilam Ganenthiran, Instacart President public company — one day.) The round increased Instacart’s valuation to $13.7 billion, up from $8 billion when it last raised money, in 2018. The new cash infusion comes at a pivotal time for the company. According to San Mateo, Calif.-based research firm Second Measure, which tracks credit-card spending, Instacart’s share of grocery pickup and delivery sales jumped to 55% in the third week of May, up from about 30% in February, pushing past Walmart. Perhaps that’s one reason Instacart announced in August that it has partnered with Bentonville, Ark.-based 36

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COVER STORY

E-Commerce ed dramatically, and we now believe we will meet that 20% goal sooner than five years from now.” All of this growth is driving the company to upgrade its value proposition to all four sides of its marketplace. “We are benefiting from a tremendous tailwind, and we have been very fortunate to be able to partner with the best retailers out there,” Ganenthiran asserts. “We take the position that they have given us, as their partner, the e-commerce partner, to lift up brick and mortar, very seriously. And we can’t rest on our laurels. We have to do everything possible to lift our retailers.”

The Future Is Already Here

As part of its strategy to help grocers own the digital food future, Instacart is making some major changes to the way it operates. The company is deploying its resources in a number of new ways as it looks to lift up grocery e-commerce for its retailer partners. Among them is continuing to grow and support its growing shopper community with new workforce initiatives, investing in helping retailers achieve greater operational efficiencies with e-commerce, improving customer service, and further scaling its technical teams to help meet the increased customer demand for grocery delivery and pickup. Supporting its hundreds of thousands of shoppers has been job one, although Instacart’s workforce is facing uncertainty in California over worker classification efforts. The company, along with Uber, Lyft and DoorDash, is backing a November ballot measure, Prop 22. The measure, if it passes, would exempt rideshare and delivery workers from the California labor law known as AB5, which went into effect this year and makes it harder for companies to classify workers as independent contractors. “Employment shouldn’t be a binary decision; our laws need to take into account the new way people are choosing to earn today,” Ganenthiran says. “If Prop 22 doesn’t pass, things will

Whether on a mobile device or desktop, Instacart continues to refine the experience for users of the service, and for its shoppers.

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The Instacart team has expanded dramatically this year to keep pace with pandemic-driven demand.

probably have to change. Our accessibility may be impacted, we may no longer be able to provide earnings opportunities to all of our shoppers in California, and the cost to customers may increase. We’re committed to finding an approach that preserves what’s best about our model for customers and retailers, while finding solutions that further support shoppers, such as benefits like earnings guarantees and health care.” In the meantime, Instacart has overhauled every part of how it hires, trains and onboards shoppers, from background checks, to converting physical ID cards to digital cards, to recruiting efforts via social media and referrals. The company has even teamed up with big-name employers such as Hertz and Hilton to hire some of their furloughed workers. Ganenthiran says that the company took its workforce protocols “all the way back down to the studs,” and has prioritized safety and training programs that help shoppers be ready to pick the perfect avocado. Customers now have an exclusive “super-app” to help them navigate grocery stores, find where the deli is, navigate to a customer’s home, and more. The company has also been working closely with retailers to optimize e-commerce fulfillment operations in-store. “We’re deeply involved with grocers’ store-planning and real estate teams on the most efficient ways to set up the store to fulfill e-commerce orders,” Ganenthiran observes. “Where’s the best place to put a staging area? How do I think about pickup and the flow there? What do I ask the landlord about curbside pickup? Do I


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COVER STORY

E-Commerce need dedicated parking spots for customers to come and pick up their orders? Do I need dedicated parking spots for the Instacart personal shoppers?” The company gives retailers access to a lot of data science modeling showing how to shave seconds and minutes off the picking process to save costs. But, Ganenthiran says, there’s one thing he wants grocers to realize: “The most important thing that grocers need to understand about Instacart is we have not, and will not, compete with our grocers. If you’re a grocer, we want you to consider us as a true partner and extension of your team and think about us through the lens of, ‘Okay, how can I work in partnership so that I can use Instacart’s strengths to make my strengths even better?’ ” Instacart has doubled its pickup offer since 2018 and now offers Delighting customers is something that Ganenthiran also the capability at more than 3,000 retail locations. thinks the industry needs to focus on, and that goal was a guiding principle when the company expanded its customer service team, early in the pandemic, from 1,800 to 18,000 agents. Grocery gineers have spent a lot of time over the past few e-commerce customers, whether on Instacart or other platforms, months building different machine-learning modoften complain about late deliveries, missing items, inappropriate els and using artificial intelligence to better assess item substitutions or out-of-stocks. whether a certain product has run out. “We had a lot of first-time consumers trying grocery e-com“What is the next best product?” he ponders. merce,” he says. “And, you know, every minute of every day “And then, based off a customer’s previous purchasthat we’re disappointing customers, I feel it personally, because ing habits, giving our shoppers a better sense of what I understand that’s a single human being who is disappointed will be an acceptable replacement. There’s a lot of with their strawberries. So we work night and day to try to recinvisible technology that we’ve built to actually make tify the situation and are constantly focused on how we can imthe experience for the shopper as simple and as clean prove our overall quality and deliver cusas possible so that they are able to deliver the best tomers an exceptional experience. And experience for the customer as well.” Most Popular that included a few things.” Three things are certain in this period of unSearch Terms on The company made the decision to certainty: grocery e-commerce is here to stay, the Instacart in 2020 overstaff its customer service department, American consumer is fickle, and Instacart plans and became comfortable with not trying to help grocers win more customers in a perma Cleaning products to forecast staffing down to the second. It nently transformed grocery retail landscape. Toilet paper Bird food also started not just retraining agents, but Ganenthiran thinks that the American customer Melatonin “overtraining” them to make the customwill want groceries delivered some of the time, will Yeast er happy, no matter what. The third thing want to go into the store some of the time and will All-purpose flour that the company did was re-evaluate how want to pick up their groceries some of the time. All Pumpkin spice customers could contact Instacart Care. three will matter, and no matter how many compet Hair dye “We realized the most efficient way itors spring up (Uber, DoorDash, Shipt and Ama Tanning lotion and best way for customers to get order zon, to name just a few), Instacart’s value proposi Pickling issues resolved was through chat,” Gation will remain helping grocers win in e-commerce. Mason jars nenthiran says. Instacart also launched “There’s two big differences between Instacart Protein supplements a special toll-free number for older cusand all of its competitors,” Ganenthiran points Açai drinks tomers to use for placing orders. out. “The first is Instacart doesn’t compete with “Today, our customer SLAs [service-levour retailers. The second difference is our commitel agreements] are better than they ment not just to a marketplace, a multi-retailer marwere pre-pandemic,” Ganenthiran ketplace, but the retailers’ own sites, via the Innotes. “Our CSAT [customer satstacart Enterprise offering. We believe Instacart isfaction] score for folks who are will be successful if brick-and-mortar grocery contacting us is significantly highis successful. Competition is inevitable, and er. Our costs are back in line, and competition has always existed. So we just we’re now able to even extend have to keep doing better.” new ways that our customer serDoing better and being nimble is what vice team can help.” Instacart has proved that it’s capable of. Of course, the No. 1 customer But the real challenge going forward will service problem for Instacart during be proving that it can become a profitable, the pandemic has been out-of-stocks. sustainable business. According to Ganenthiran, Instacart en40

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Algorithms for Avocados

“Nobody plans for 500% growth in a matter of weeks,” Schaaf admits, “and so we did a lot of infrastructure work to scale out our core systems.” For the retailer and CPG pillars of the marketplace, the company has implemented “basketboosting” features before a purchase is completed INSTACART’S TECHNOLOGY SERVES by a customer. TO DELIGHT THE CUSTOMER. “ ‘Hey, it looks like you’re planning a barbecue. Did you forget the mustard?’ ” Schaaf says, in imitation By Gina Acosta of an Instacart prompt. “We want to make sure that the consumer, even at the time of checkout, is buildWhen COVID-19 overwhelmed the U.S. grocery industry in ing the fullest cart possible.” March, Mark Schaaf, CTO of San Francisco-based Instacart, Schaaf’s engineering team has also focused on recalls being in bed every night with his computer. making the shopper experience safer and more “There were times in March and April that I didn’t sleep, or efficient by retooling algorithms that route shopI slept with my computer, Schaaf says. “Traffic was growing around 20% every day. You wake up at 5 a.m. and see how pers through the store in the most efficient manner, much higher traffic was from 5 a.m. the previous day, and then launching Leave At My Door (contactless) delivery move quickly to try to do a bunch of things to scale our systems and ASAP Delivery (quicker delivery windows), and to support customers, shoppers and retailers.” improving the company’s “found rate,” a metric that Schaaf joined Instacart in 2018 after a stint as CTO at conshows how often an item is on the shelf where it’s sumer service website Thumbtack and working as an engineer supposed to be. The metric pre-COVID was usually at Google’s mobile display advertising division. His first love has above 90%. In late March, it dropped to 60%. always been grocery, however. Schaaf spent his high school “Our found rate has picked back up to above years bagging groceries at Seessel’s (later Schnucks) in Tennes90%,” Schaaf notes, “but we had to do a lot with see. For Schaaf, coming to work at Instacart is coming full replacements there. We had to do a lot with circle — back to the industry he loved growing up. prediction and letting customers know early “Grocery is deeply personal to customers,” that, for example, meat was in high Schaaf says. “They want the ripest avocado, demand and hard to find.” and we have personalization algorithms for The company has also updated that. Customers are trusting us to give them a its machine-learning models to great experience.” help shoppers do a better job with According to Schaaf, building a great experireplacements, a common customence on Instacart means having to match supply er complaint. and demand across the company’s four-sided “If a customer is trying to order marketplace of customers, shoppers, retailers and a specific item that isn’t in the store consumer packaged goods (CPG) companies, and then that we’re shopping, that’s something customizing it all for each market, whether it’s Tampa, we’d look at algorithmically to make Fla., or New York City. sure that we are sending shoppers to the right store,” Schaaf explains. Going forward, at the top of Schaaf’s tech to-do list is making the checkout experience smoother for Instacart’s shopper workforce. The company has launched bypass checkout for shoppers at some retailers. “It requires some integration between us and the retailers, but I think you’ll see more of that hap—Mark Schaaf, Instacart CTO pen over time, because retailers want to make sure our shoppers are able to move quickly and efficiently through their checkout lines, side by side with customers who are shopping in store,” he says. “There’s just no end in sight to how this technology and product can evolve.”

“Grocery is deeply personal to customers. They want the ripest avocado. … Customers are trusting us to give them a great experience.”

PROGRESSIVE GROCER October 2020

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COVER STORY

E-Commerce

Curbing Friction With Pickup CUSTOMIZED SOLUTIONS HELP GROCERS GE T IT RIGHT. By Gina Acosta

When Instacart’s VP of retail, Chris Rogers, talks to retailers in need of e-commerce help, the first thing he tells them is that there’s no one-size-fits-all solution. The second thing he tells them is that doing online grocery is really, really hard. “I tell them doing e-commerce well is difficult,” affirms Rogers, who worked at Procter & Gamble and more than a decade at Apple before joining Instacart in 2019. “I believe grocers are understanding that: Getting the shop, the delivery and the pickup all right is not easy. The attention to detail takes years to get right. And we’ve invested a lot in this part of the business to make it look seamless.” Rogers spends a lot of time in conference rooms helping retailers solve e-commerce problems, from creating turnkey white-label apps, to building an entire customized digital end-toend ecosystem, to expanding their online assortment, to talking to legislators in each state to help bring something like alcohol delivery to life, to designing parking spots for grocery pickup. Today, out of the San Francisco-based company’s 400 retail partners, 175-plus have partnered with Instacart to digitize their catalogs, to create their online storefronts, or, in many cases, just to build their entire e-commerce end-to-end capabilities. “All of these initiatives drive growth for our retail partners, but they also help differentiate them and bring a true omnichannel experience to life online,” Rogers says. Lately, during the pandemic, the dominant topic of conversation for Rogers and retailers has been grocery pickup, which has been exploding during the pandemic. “There is very, very strong demand both on the retailer side and

Getting the shop, the delivery and the pickup all right is not easy. The attention to detail takes years to get right. And we’ve invested a lot in this part of the business to make it look seamless.”

—Chris Rogers, Instacart VP of Retail

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the consumer side for pickup,” Rogers notes. “It’s been interesting, because we’ve been enabling our partners with technology to do the pickup themselves.” One example of this is Lakeland, Fla.-based Publix Super Markets, which offers grocery pickup, but uses a combination of Instacart shoppers and Publix employees to fulfill pickup orders. An Instacart shopper picks and stages the order, and a Publix employee takes the order out to the customer waiting in her car. “Ninety-nine percent of our pickup stores are a curbside experience,” says Sarah Mastrorocco, general manager of the pickup program at Instacart. “COVID has forever changed the way people shop for groceries. The one thing that differentiates curbside from a delivery experience is it is more economical — the fees are less. So I think pickup makes sense for a lot more people post-COVID and in the future, because it is much more of a value play versus delivery.” Since March, Instacart has brought pickup online in more than 1,500 locations, doubling its pickup footprint since 2018 to 3,000 stores. Mastrorocco says that the company is seeing consumers “put more items in their baskets overall, relative to delivery.” According to the company, its pickup program has been so successful because it’s leveraging a “deep partnership” approach to working with food retailers. “We are supporting our retailers behind the scenes,” she says. “We work with them weekly and ask them, ‘How are your sales growing? Which stores are underperforming? Do we have the right staffing? What do we predict the demand will be? What happens if there isn’t an open window? How can we make sure that you’re driving quality? Quality is going to retain customers. And how do we make sure that we’re doing it efficiently so we can all save money and maximize our profits in the long run?”

“Ninety-nine percent of our pickup stores are a curbside experience. COVID has forever changed the way people shop for groceries. —Sarah Mastrorocco, Instacart General Manager of the Pickup Program


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Wine & Charcuterie Report

Aged to Perfection RE TAILERS CAN WIN WITH ENTICING, WELL-MERCHANDISED WINE AND CHARCUTERIE OFFERINGS DURING A TIME OF GRE ATER AT-HOME DINING AND ENTERTAINING. By Lynn Petrak ood things come to those who wait. In the culinary world, aged foods and drinks are some of the best-tasting and most appreciated, including wines, cheese and cured meats. In a year that seems to drag on forever, it’s perhaps fitting that wine and charcuterie are among the strongest-performing categories. Wine sales spiked from February through May, according to market intelligence from St. Petersburg, Fla.-based Catalina. Dollar sales of wine rose 38%, and unit sales were up 32%, in that period marked by pandemic anxieties and stock-up trips. From April through June, high-frequency wine consumers bought “somewhat” more moderately priced wines and “significantly” more wines priced at $20 or more, compared with the same time last year, according to a survey from Saratoga Springs, N.Y.-based Wine Opinions. That same survey showed that 78% of high-frequency wine buyers went back to buying in stores rather than online, as they did earlier in the pandemic. There’s also keen interest in specialty cheeses and charcuterie kits and ingredients. Business Insider reported earlier this year that growing demand for cheese helped spur increased cheese prices in a competitive market. Cured meats that are a centerpiece of charcuterie boards have also been doing well. According to Chicago-based Nielsen Perishables Group, specialty deli meats has grown as a category, with dollar sales up 3%.

Across the Board: Charcuterie 101

The term “charcuterie” comes from the French word for a pork butcher shop. Today, charcuterie has a broader meaning, encompassing cured meats presented on a platter or board, along with other types of savory, aged, pickled or artisan foods. The array of items on a board is part of the fun of charcuterie, which offers a taste for every palate. Usually, different mild and robust meats are laid out, including dry meats like prosciutto, hard salami and mortadella, and spicier offerings like soppressata. Cheese is a foundation of most charcuterie boards, both in restaurant offerings and in retail displays and packaged charcuterie kits. As with meats, cheeses used in charcuterie often include a mix of soft and hard forms, and both mild and bolder flavors. Rounding out a charcuterie board are accoutrements like artisanal breads, crackers, nuts, chocolates and fruits, including fresh and dried options.

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Key Takeaways Amid the pandemic, wine and charcuterie are among the strongest-performing categories. The rise in popularity of cheese and charcuterie boards has driven consumers to look beyond conventional wine-and-cheese pairings. To maintain or even grow wine and charcuterie sales, retailers can meet demand with an array of products and merchandising tactics.


PROGRESSIVE GROCER October 2020

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ADVERTORIAL

Award-winning Cheddar, Perfect for Pairings

C

heese and wine pairings have been customer favorites in foodservice for several years— and now they’re heating up the at-home dining scene, too.

Plating cheese has become part art, part entertainment: cheese aficionados can delve into details in books about cheese plating, pore over cheese-laden Instagram images, and even tune in to TikTok for 60-second takes on the topic. “Pairing cheese and wine is an experimental journey that more and more people are embarking on,” says Jill Allen,

R&D Director and International Cheese Judge at Tillamook County Creamery Association, a farmer-owned dairy cooperative headquartered in Tillamook, Oregon that has been connecting farmers and food lovers across the country through better-made dairy products, including its award-winning line of cheeses, for more than a century.

Cheese does more than enhance the appeal of pairings; it can stimulate cross-category sales and boost basket spend, too. For example, 50 percent of baskets that contain cheese from the deli section also contain natural cheese from the dairy case;1, 4 and shoppers who buy products from the deli are more likely to drink wine or craft beer than other spirits2, 4, industry data show. “Research reveals that Tillamook consumers spend more on the cheese category and 48% more per buyer in natural cheese3, Allen reports. “They also spend 17% more per buyer across total store.”3 As consumers strive to create photo-worthy wineand-cheese pairings in the comfort of their home kitchens, creatively merchandising and marketing cheese can help grocery retailers capitalize on the trend. When selecting cheeses for pairing programs and promotions, Cheddar should land atop the list, since Cheddar is the most purchased type of cheese in the U.S., with over 850 million pounds sold in the past year5. “Cheddar is one of the most versatile pairing cheeses and


ADVERTORIAL

JILL ALLEN, R&D Director and International Cheese Judge, Tillamook County Creamery Association can fit any occasion. Whether paired with dark chocolate for dessert, an IPA for afternoon appetizers or a light red before dinner, it always delights,” Allen explains. Taste and uniqueness are top satisfaction drivers when pairing specialty cheese6— two qualities Tillamook’s Maker’s Reserve Extra Sharp White Cheddar collection (which includes five “vintages of aged cheddars available at a time) delivers. “Tillamook’s sensory team evaluates every single vat of Maker’s Reserve Cheddars. The best of the best is saved for Maker’s Reserve Cheddars,

TILLAMOOK 2015 MAKER’S RESERVE Flavor

Texture

Food Pairings

Spirit Pairings

1

Complex, sweet top note, strong grapefruit, citrus, tangy tart, Parmesan, umami, almond nutty, grapefruit bitter finish More crystals, crumbly, short body, dry, thick bite, velvety smooth, creamy

our vintage line that includes only the cream of the crop, you might say,” Allen says. Those cheeses “are tucked away for three to 10-plus years to age,” Allen adds. “I evaluate products in our Maker’s line with our team of cheese experts once a year to document flavor and texture changes as each cheese ages. This yearly evaluation helps us determine the food and drinks that best complement one another each year and, in the process, helps us create tools and programs that grocery retailers can use to educate their consumers and help boost sales.”

TILLAMOOK 2017 MAKER’S RESERVE Flavor

Classic Cheddar, summery, citrus, bright, lemon, smooth, creamy, fresh

Texture

Slightly dry, some crystals, slight short body, very creamy

Food Pairings

Orange-marinated green olives, rosemary, chutney, strawberry sweet heat, honey, Marcona almonds, rosemary pork tenderloin dinner, mashed potatoes, pimento mac and cheese

Marcona Spanish almonds, cured meats, smoked honey, smoked salmon, blood oranges, pomegranates Rosé wines and red wines like Syrah/Shiraz

Spirit Pairings

Pinto Gris and other light, crisp wines

IRI Industry Dairy-Deli Hierarchy (RW+UPC), Total US Multi Outlet, 52 weeks ending 4/21/2019 IRI ShopperSights Industry Dairy-D eli Hierarchy (RW+UPC), Total US Multi Outlet, 52 weeks ending 4/21/2019 3 IRI Panel, Total US – AO, 52 WE 4.19.20 4 What’s In Store 2020, ©2019 IDDBA 5 IRI Market Advantage, Total US - Multi Outlet, Latest 52 Weeks Ending 1-26-20 6 ECI Category A&U Online Survey, December 2019 2

Q: Tillamook has been a leader in the dairy category for 110 years. To what do you attribute the company’s long-term success? A: Tillamook’s dedication to doing right by every bite of cheese, along with the consistent quality of our Cheddar make process, have been key components in our over 110-year success. We use premium milk that is rBST-free, has low somatic cell count and high butterfat, and we have extremely high quality standards.

Q: Focusing specifically on your Maker’s Reserve Cheddar—how are cheeses in that line made? What makes them stand out above other brands? A: The milk in our Maker’s Reserve is gently heat shocked. That is a time-honored process in which the milk is gently heated to a lower temperature when compared to a fully pasteurized Cheddar. The process maintains the natural, indigenous cultures and enzymes that are building blocks to bold flavor. It is what gives Tillamook Cheddar a complex, original flavor that cannot be duplicated anywhere in the world. We also make our own Cheddar starter cultures for Maker’s Reserve Cheddars every single day—this has become a lost art within the large-scale dairy industry. All of our Cheddars are formed into 40-pound blocks of cheese, not into 640-pound blocks that large Cheddar producers have moved to creating. That helps us cool the Cheddar much faster and much more consistently to maintain the flavor and texture from the outside of the block to the inside, no matter how it is cut. The Maker’s Reserve collection has won several awards from the American Cheese Society and the US Championship. For example, Tillamook’s 2015 Maker’s Reserve Cheddar won 1st place in the 2017 and the 2018 American Cheese Society Judging & Competition.

Q: How can grocery retailers use cheese in-store for charcuterie programs and promotions? A: One option is to do a vertical tasting and pairing using our Maker’s Reserve Cheddars. Each vintage is unique and distinct, and it is fascinating to try them side by side. It is fun to pair vintages—for example, an Oregon 2015 Pinot Noir with our Maker’s Reserve 2015. Being an Oregon-based company, we love to pair with other, local Oregon producers because ‘what grows together goes together.’ Some favorites are Oregon dried cherries and hazelnuts. We also can provide retailers with flavor spider plots that highlight specific pairing ideas to match each vintage’s unique flavor profile.

WANT TO LEARN MORE? Visit tillamook.com.


SOLUTIONS

Wine & Charcuterie Report

Wine and Dine

Just as a charcuterie board is built around foods with complementary flavors, charcuterie experiences are often combined with wine as a beverage partner. Flavor exploration is key in this pairing, too, since many wines work well with charcuterie, with the possible exception of highly acidic or overly sweet wines. Wine, of course, is a reliable partner for a variety of foodstuffs. Wine-and-cheese pairings are one of the most prolific examples. In addition to traditional duos like champagne and brie, aged port and blue stilton, cabernet sauvignon and aged cheddar, consumers enjoy experimenting with different kinds of wine-andcheese matchups. “For the most part, the common rules of wine-andcheese pairing still ring true, but people are learning there are so many more options for unexpected pairing options as well,” notes Molly Browne, education manager at Whitewater-based Dairy Farmers of Wisconsin and an American Cheese Society Certified Cheese Professional. “White wines generally pair more readily with a larger variety of cheeses, because of the tannins

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Charcuterie encompasses cured meats presented on a platter or board, along with other types of savory, aged, pickled or artisan foods.

in red wines, but some unexpected pairings, like Beaujolais and young cheddar, cannot be overlooked. The rise in popularity of cheese and charcuterie boards has driven consumers to look beyond the conventional cheese-and-wine pairings as well, so people are taking bigger risks with more whimsical accompaniments, and there’s a big payoff when things go right.” In addition to cheeses and cured meats, wines can be partnered — and cross merchandised — with several other complementary charcuterie foods, including meats, fruits, breads and chocolates.


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SOLUTIONS

Wine & Charcuterie Report

COVID and Comfort

The fact that consumers are dining out less often and seeking to replicate restaurant experiences at home — especially memorable experiences — is a chief driver of recent gains in the wine, cheese and charcuterie categories. Still, even before the pandemic, charcuterie was trending both at foodservice and retail, and wine and cheese remained a perennially popular pairing. “Charcuterie is particularly popular with people between the ages of 21 and 39,” observes Burt Flickinger III, managing partner of New York-based Strategic Resource Group. “That started when restaurants were open and when younger people with less compensation and more debt were going out, and charcuterie became a popular way to share food without each person paying full price.” Now, in the COVID-19 era, there may not be a lot of sharing of food among big groups in restaurants, but charcuterie boards for at-home and smaller gatherings remain popular. In addition to recreating a restaurant board and making a flavorful shared dish that works well in intimate groups, charcuterie offers some practical benefits. For one thing, charcuterie boards tend to be packed with protein-rich foods. “Charcuterie is a good way to have smaller portions with a better depth and range of fine and gourmet foods,” adds Flickinger, noting that in today’s health-oriented climate, portion control is

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During the pandemic, chacuterie boards for at-home and smaller gatherings remain popular.

on many consumers’ minds. The fact that wines and charcuterie foods have a long shelf life is another benefit. Packages of cured meats like salamis and aged cheeses can be kept for months, compared with many fresh foods, while some wines can be kept for years. In addition to taste and entertaining experiences, there’s storytelling behind wines and charcuterie foods that adds to their appeal, both in “normal” times and in times when comfort and sentiment are paramount. In its annual “What’s in Store” report, the Madison, Wis.-based International Dairy Deli Bakery Association (IDDBA) found


that people like to know the story behind the foods they’re eating, which is an important contributor to the rise of charcuterie over the past few years. Aged and cured products generally have a story behind their production. Regionally and locally produced wines, cheeses and specialty meats are also enticing to today’s shoppers, who look for authenticity and often seek to support local businesses from an economic standpoint. “We know that consumers are more interested in learning where their food comes from,” says Browne, of the Dairy Farmers of Wisconsin, noting that 39% of shoppers are buying more local products compared with a year ago, and that almost half think that that buying local is the most important food-related cause.

The Story Continues With New Consumers

While high-frequency wine buyers are increasing their average consumption of wine this year, according to information from Wine Opinions, there are opportunities to reach new wine buyers. For example, Catalina’s data found that the number of wine buyers rose by 16% during the early stages of the pandemic, from February through May. Moreover, new buyers are becoming repeat purchasers. In particular, younger Millennial and Gen Z consumers of legal drinking age are getting more into wine and charcuterie. Research from Wine Opinions found that Millennials have boosted their wine consumption by as much as 50%.

Products for Many Palates

To continue to maintain or even grow wine and charcuterie sales, retailers can meet demand with an array of products and merchandising tactics that make it enjoyable and easy for customers to shop for these kinds of items. Carrying new products is one way to generate interest. Colonial Heights, Va.-based Fiorucci Foods Inc., which offers a wide range of charcuterie-ready cured meats, is adding prosciutto di Parma and a fruit-infused line featuring All Natural Prosciutto, Peach and Mozzarella and All Natural Hard Salami Cranberry and Mozzarella, among other items. Columbus Craft Meats, a division of Austin, Minn.-based Hormel Foods that has staked a significant claim in charcuterie with its line of authentic meats, offers a wide variety of cured meats and packaged meat-and-cheese items, including a Charcuterie Sampler with four meats and a Charcuterie Tasting Board with Italian Dry Salame, Calabrese Salame, multigrain crackers, Castelvetrano olives, dark chocolate-covered cranberries and white cheddar

Consumers’ knowledge of specialty products such as food and wine, including how to serve them and pair them, has grown significantly over recent years, partially due to the increased accessibility of the products.” — Molly Browne, Dairy Farmers of Wisconsin

cheese. Columbus has created an interactive feature on its website that shows consumers how to build a perfect charcuterie board. The versatility of charcuterie lends itself to some innovative products. Salt Lake City, Utah-based Creminelli Fine Meats, for example, offers uncured salami made with wild boar, while the Veroni brand, whose U.S. headquarters is in Logan Township, N.J., pairs Italian mortadella with pistachio nuts. Although the traffic and displays in stores look a little (or a lot) different this year, retailers can leverage ongoing interest in wine, charcuterie and common charcuterie foods to attract shoppers to their deli, cheese and wine departments, as well as to their online offerings. Charcuterie is ideal for cross promotion, with complementary items that can be merchandised in one area or cross merchandised in other areas to make it easier for shoppers and more lucrative for grocers, too. Meanwhile, as consumers head indoors, after a long season of spending time outside during the pandemic, and ramp up for holidays from Halloween through New Year’s, the wine category likewise looks ripe for strong sales.

Imparting Knowledge

Even if COVID-related restrictions have essentially halted in-store gatherings like classes and tastings, many grocers, CPG companies and industry groups are getting creative in merchandising wine and charcuterie to consumers. Virtual tastings and classes are proving popular, especially at a time when consumers are getting used to video calls and webinars. Earlier this year, one Hy-Vee store in Mankato, Minn., offered an online charcuterie and wine-tasting event with a chef at the West Des Moines, Iowa-based grocer who shared his best tips. Harmons Grocers, based in West Valley City, Utah, is another example, recently promoting a Zoom class featuring its chef talking about how to match Northern California white wines and cheeses, and providing pointers on how to build a charcuterie board. Also, Murray’s Cheese in the New York metropolitan area has set up virtual classes on wineand-cheese and cocktail-and-cheese pairings. Dairy Farmers of Wisconsin, for its part, has pivoted to help educate consumers about the foods they love through virtual events. “Since COVID hit, we’ve been hosting virtual cheese parties for thousands of cheese lovers nationwide,” says Browne. “Our July event was on National Wine and Cheese Day, and all 750 spots were filled within minutes.” The organization also offers a pairing guide on its website. Some industry players are thinking outside the proverbial box. Batavia, Ill.-based Aldi recently revealed that it will offer its wine, beer and cheese advent calendars in early November, while Albertsons, Southeastern Grocers and Costco also offer advent calendars for lovers of alcoholic beverages. PROGRESSIVE GROCER October 2020

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ADVERTORIAL

Ready to Goat? AS DEMAND GROWS, SO DO GOAT CHEESE OFFERINGS AND USES

How has consumer interest in specialty cheeses, including fresh goat cheese, continued to grow? The most recent “The State of the Specialty Food Industry” report from the Specialty Food Association shows cheese continues to be one of the top 10 categories in specialty food retail sales, and buyers are trending younger. Despite being in their early earning years, younger millennials and Gen Z consumers are most likely to spend more on specialty cheese products. Demand for goat cheese is increasing with the rest of the specialty category, with growth partly attributed to larger awareness of its health benefits (such as easier digestibility), a rising number of health-conscious consumers and a greater lactose-intolerant population. And with the impact of COVID-19, consumers have been looking to recreate diningout experiences at home, including appetizers, salads, pizzas, entrée salads and egg dishes made with goat cheese.

While consumers like to eat goat cheese, what are some challenges in their knowledge of storing, preparing and cooking with this specialty cheese?

Despite the increasing popularity of goat cheese, Montchevre® recognizes there are many U.S. consumers who remain unfamiliar with cheese products that are not from dairy cows. Montchevre® has launched a new brand campaign, “Try It with a Little Goat” that answers top consumer questions related to goat cheese and equips fans with the tips and recipes they need to easily introduce the cheese into their regular food routines, resulting in a delightful surprise. This campaign has already begun to appear on top online food sites, social media, and blogger partner websites.

How is Saputo’s Montchevre® brand delivering on increased demand for goat cheese with a variety of high-quality products and ideas for using these cheeses? Our fresh milk supply is the driving force behind our brand and is one of the many characteristics that differentiate us from other goat cheeses manufactured in North America. We offer a full line of goat cheese offerings, including fresh, aged, soft-ripened, organic, and snacking options. From our wide selection of plain and flavored fresh logs to aged and specialty goat cheddar and feta varieties, there is something for everyone willing to give goat cheese a try.

LEARN MORE: https://www.montchevre.com | 1.800.824.3373

This year, Montchevre® is seeking to inspire consumers to think about goat cheese in new and exciting ways beyond the cheeseboard. Whether used as a savory topping on pancakes at breakfast, mixed into a favorite dip recipe or incorporated into a dessert for an extra sweet and tangy bite, the possibilities and flavor potential is endless. Many of the recipes will pr ovide inspiration for specific occasions.

What are some of Montchevre’s newest products headed into the fall and holiday season? Now that it’s September, we know fans will be actively seeking all things pumpkin as they cope with saying goodbye to summer and hello to fall. This fall, Montchevre® is excited to launch our newest flavor: Spiced Pumpkin. Infused with pumpkin puree, cinnamon, nutmeg and ginger, its subtle fall flavor is combined with the tangy twist of goat cheese to make it the perfect combination for seasonal cheeseboards, baked goods and desserts. While not new, other returning fall and winter flavors include fan-favorites such as Cranberry Cinnamon, Blueberry Vanilla and Truffle.


SOLUTIONS

Breakfast Foods

Morning Momentum THE PANDEMIC’S EFFECT ON BRE AKFAST CAN BE FELT THROUGHOUT THE STORE. By Bridget Goldschmidt reakfast is back — at least more breakfasts at home. For this shift in consumer eating patterns, we have the coronavirus to thank. According to “COVID-19: Reinventing How America Eats,” a report released in September by Jacksonville, Fla.based sales and marketing agency Acosta, 55% of U.S. shoppers are eating at home more often since the pandemic began, with 44% of them eating breakfast at home every day, versus 33% before the pandemic. What’s more, even after the current situation has passed, a sizable 47% of shoppers plan to eat breakfast out less often or not at all. Despite all of the bad news coming out of this ongoing public-health emergency, the news is unquestionably good for breakfast food categories and the retailers that carry them. Both groups have the opportunity to maintain sales growth as consumers initially obliged to have breakfast at home discover that they actually enjoy preparing and eating what Mom always said was the most important meal of the day.

COVID-19 has caused more Americans to eat breakfast at home.

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Key Takeaways The coronavirus has prompted more people to prepare and eat breakfast at home, and to enjoy more leisurely morning meals, creating opportunities for retailers and suppliers to grow the breakfast food category. Among the breakfast foods to capture consumer attention and dollars are cereals, frozen items and eggs. Many popular offerings are more nutritious options, reflecting shoppers’ desire to stay well in the midst of a public-health crisis as well as to attain their overall health goals.

Sales Surge

“In the wake of COVID-19, we saw a surge in frozen breakfast items, including croissants, bagels, danishes and bread, as well as traditional ‘freezer aisle’ breakfast items like pancakes, waffles, breakfast sausages, and pre-made heat-and-eat breakfast meals,” notes Scott Crawford, chief merchandising officer at Bronx, N.Y.based e-grocer FreshDirect, which like other online retailers, is benefiting from the uptick in consumers’ use


SOLUTIONS

Breakfast Foods

of e-commerce platforms during the pandemic. “Sales are still significantly up but have normalized with consumer shopping behavior. For our Corporate Office customers, we are also starting to see an increase in demand as offices reopen.” Adds Crawford: “We’re seeing the increased need for easy meal solutions as customers juggle working from home with remote learning and other challenges. We’re also seeing requests for more individually packaged items — like waffles, mini muffins, etc. — from offices as people return to work.” He observes that sales of grab-and-go prepared breakfast items have been up as high as 40% year over year, noting, “This was a relatively underpenetrated daypart in prepared foods, as many customers were eating outside of the household — at work, etc.” Further observations from Crawford on the current state of breakfast: Customers are searching for easy meal solutions for the entire family; as people consistently have breakfast at home, FreshDirect is seeing growth in multiserve versus single-serve items, as with yogurt; there’s been growth in “nostalgia” items such as traditional cereals, which customers have been buying

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%

of U.S. shoppers are eating at home more often since the pandemic began, with 44% of them eating breakfast at home every day. Source: Acosta, "COVID-19: Reinventing How America Eats”

“at higher rates than we have seen in several years”; and within the cereal category, there’s been strong growth in healthier options for families.

Cereal Winners

Speaking of cereal, Battle Creek, Mich.-based Kellogg Co.’s signature items were much in demand as more people started making their own breakfasts every day. “In the second quarter, our cereal consumption was up almost 16%,” says company spokeswoman Kris Bahner. “We also saw an increase in consumer trial and rediscovery from new and lapsed users in cereal, so we are tailoring our messaging and media to reach these consumers.” “What we’ve really noticed is that before the onset of the pandemic, people were chronically pressed for time and looking for more on-the-go options,” observes Arjan Stephens, general manager of Richmond, British Columbia-based Nature’s Path, which puts out a variety of organic breakfast cereals and granolas, among other products. “Now people are taking the time to enjoy a delicious, nutritious breakfast, and realizing the positive impact that it’s having both on their health and their overall quality of life.” This realization has led to “consumers rediscovering


their love of cereal in particular,” asserts Stephens. “We’ve seen an uptick in sales for both cold and hot cereal — consumers are especially gravitating towards oats, which are a nutritional powerhouse, packed with fiber and plant-based protein.” The company has “also seen an increased focus on health and nutrition overall, which has brought many new consumers to our always organic products,” he adds. Among the company’s recent products are Nature’s Path Superfood granolas and oatmeal cups, which comes in such varieties as Golden Turmeric and Smoothie Bowl, the latter featuring a blend of strawberries, raspberries and blueberries, plus an innovative mix of super greens. “The launch of our Superfood line hits during a time when consumers are putting their wellness first, focusing on what they can do to include functional ingredients in their diet while still enjoying a delicious treat,” says Stephens.

Griddle Me This

Cereals may be big now, but how about shelf-stable items that require a little more preparation, like pancake mixes?

According to Andrew Maida, founder of Vaughan, Ontario-based Flourish Pancakes, available online and at select U.S. retailers, the company's high-protein, high-fiber, easy-to-make product is a smash hit with homebound consumers. “We’re seeing more first-time customers purchase online and in-store,” notes Maida. “Our store locator searches have increased over 500% as consumers try to find Flourish in their favorite stores. Some of these customers that don’t have stores near them will shop online.” The reason for this flurry of interest? “Consumers have more time in the mornings and are making the right choices — they’re eating better-for-you options that the whole family can enjoy,” he says. “We should see this [trend] stick around, as consumers are falling in love with these new products and should still be working from home for some time. ” When it comes to product innovation, Flourish aims “to keep things fresh and exciting with limited-edition flavors like Birthday Cake, Pumpkin Spice and more coming soon,” observes Maida. “Consumers are really enjoying the excitement of something new. ... We have a whole range of new innovation for dietary restrictions, and also new product lines in the breakfast space launching early 2021.”

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SOLUTIONS

Breakfast Foods

Frozen Breakfast All Day

As Crawford at FreshDirect has already observed, frozen breakfast foods are currently hot — but it turns out they’re not just for breakfast. “The hours to eat breakfast foods have ... become more varied, with people eating breakfast foods later in the morning or as an afternoon snack,” explains Scott Glenn, senior director of marketing for the Jimmy Dean brand, part of Springdale, Ark.-based Tyson Foods. Glenn goes on to cite data from The NPD Group: “In fact, since the start of the pandemic, products that play in the frozen protein breakfast, bacon and breakfast sausage categories have all seen an increase in consumption at occasions outside of breakfast. Remote school and working from home have created more flexible eating schedules, with people grabbing protein breakfast options throughout the day.” The brand has forged ahead with new product introductions, despite the public-health crisis. “Innovation, even in times of uncertainty, is critical for addressing evolving consumer needs,” notes Glenn. “While convenience during the pandemic may be less about eating on the go, people are still looking for convenient protein breakfast options for the morning and throughout the day. Jimmy Dean brand is excited to introduce two new products this fall that respond to changing consumer behaviors in the midst of the pandemic: Jimmy Dean Casserole Bites and Jimmy Dean Delights Breakfast Wraps.” The former product offers “everything consumers love about breakfast casseroles baked into handheld, poppable bites made with premium, seasoned Jimmy Dean pork sausage, real eggs, and other breakfast favorites like bacon, potatoes and cheese,” he says, while the latter is “a protein-packed option made with real veggies, all-natural turkey sausage or bacon, white cheddar cheese, and whole scrambled eggs, all conveniently wrapped up into a whole wheat tortilla that can be enjoyed at home or on the go.” These are just two breakfast items in the brand’s “exciting pipeline of innovation,” promises Glenn. Other companies are also meeting the frozen breakfast moment. For example, cinnamon bun purveyor Cinnabon has entered the category with a line of Frozen Breakfast Creations that includes savory options, among them a CinnaBiscuit Chicken Sandwich consisting of fried chicken on a cinnamon chip biscuit, with cinnamon sauce. Despite newcomers venturing into their territory, however, stalwarts in the frozen breakfast space are holding firm. “Our frozen foods business ... saw elevated at-home demand continue, driving very strong net sales growth,” notes Kellogg’s Bahner. “We outpaced each of the [breakfast] category’s three product segments — waffles, pancakes and French toast – aided by strong innovation and renovation.”

Chilling Effect

In the refrigerated section, sales in some categories may have been slightly dented by

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COVID-19-inspired shopping patterns, but new products are still capturing consumer interest — and dollars. “For cream cheese products, we believe shopping trends have impacted sales, more so as people are less in explore mode in the grocery store, and new items are having a hard time being discovered at shelf,” notes Abby Kempf, category manager, innovations at Tillamook, the Oregon-based dairy cooperative whose other products include a variety of other cheeses, as well as yogurt, sour cream and butter. “That said, Tillamook’s new Farmstyle Cream Cheese Spreads are already the No. 2 branded dairy-based cream cheese spread in the U.S., when looking at the past 12 weeks.” Early next year, Tillamook plans to leverage consumer flavor trends and expand the line with a new flavor. Eggs, meanwhile, have been in high demand as a breakfast staple, which George Weaver IV, brand specialist and fourth-generation co-founder of Lancaster, Pa.-based Utopihen Farms, attributes to their sheer versatility: They can be prepared on their own in various ways as well as serving as an ingredient in many other breakfast recipes. Further, even though the category has certainly benefited from Americans’ comparatively more leisurely breakfasts in the age of the coronavirus, Weaver is quick

to point out that “the egg also lends itself to being an inherently quick meal to prepare. It is easy to grab a couple of eggs and cook them right up. ... [They provide] nutrition without time-consuming meal preparation.” According to Weaver, Utopihen’s pasture-raised chicken and duck eggs have proved popular with shoppers eager to stock up on them to avoid too many store trips. He observes that “store buyers ... are upping their orders for pasture-raised eggs because more and more consumers care about what they buy, related not only to what they believe are the best foods for them nutrition-wise, but also foods they know are healthier for the planet and aligned with principles around sustainability.” In regard to the brand’s innovative offerings, Weaver notes that its “soy-free eggs are typically asked for by those [who] may be cutting soy out of their diet, and ... [our] duck eggs ... make pancakes fluffier, and they are higher in protein for those eating Paleo or keto.” As for future brand innovations, he says that the brand is “working with chefs to create simple-to-produce home meal breakfast options that will roll out later this year.”


EXCLUSIVE RESEARCH

Beef & Pork Deep Dive

Beef and Pork Keep Sizzling CONSUMERS CR AVE POPUL AR PROTEINS, BUT PREFERENCES HAVE SHIF TED AND FUTURE OPPORTUNITIES LOOM. By Mike Troy

he value of the beef and pork segments of the protein department as key drivers of store traffic, sales and customer satisfaction is well understood by retailers. These staples of the American diet are popular, versatile, affordable and routinely at the center of the table when friends and family gather for special occasions. However, the beef and pork categories are evolving, as all categories do, thanks to shifting consumer preferences, new lifestyle choices, the emergence of protein alternatives, and spending choices driven by economic conditions. To understand the dynamics of these powerful categories, Progressive Grocer conducted an exclusive consumer study of more than 1,000 people in the last installment of the “Deep Dive Grocery Insights� series. The goal was to uncover new insights into consumer behavior regarding beef and pork that retailers can use to inform merchandising and shopper communication strategies.

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EXCLUSIVE RESEARCH

Beef & Pork Deep Dive Notable insights revealed by the research include: A majority of beef and pork purchases continue to be made at traditional grocery stores or mass/supercenter locations. However, when shoppers indicate where they prefer to shop for meat, specialty channels such as club, butcher and specialty/natural stores have gained in preference compared with grocery and mass. Balance is important. More than half of shoppers definitively believe that fresh beef (55%) and pork (57%) products have a place in a balanced diet. Interestingly, lean pork and lean beef are considered part of a healthy and balanced diet by more shoppers than dark-meat poultry (49%) and plant-based alternatives (47%). Despite the rise of digital grocery, shoppers overwhelmingly prefer to shop in-store (72%) for fresh meat rather than online for store pickup or home delivery. Ground beef is tremendously popular — 98% of shoppers purchase it regularly or occasionally — while ground pork is the least popular cut of pork, with 64% purchasing it regularly or occasionally. Shoppers indicate varied preferences in steak cuts, with sirloin, rib eye, round and strip each purchased regularly by nearly one in three. In the pork family, chops are the leader, with 92% purchasing them regularly or occasionally. Product claims matter, with “made in the USA” ranked as the most important — more than twice the rate of response for “all natural” and “fresh, never frozen.” Specialty items appeal to convenience minded shoppers. The most often purchased items include pre-formed patties, meat strips and stew meat. The versatility of beef and pork are well established, and that has never been more evident of late. Survey respondents identified

How we Know Insights contained in the “Beef and Pork Deep Dive Grocery Insights” report are based on a survey of 1,081 respondents, 70% female and 30% male, conducted July 13-18 of this year. The largest group of respondents were Millennials (ages 2239), at 42%, followed by Gen Xers (ages 40-55), at 27%, and Baby Boomers (ages 56-74), at 22%. Progressive Grocer editors worked with the Insights & Innovation Group at parent company EnsembleIQ to develop a series of questions focused on consumers’ preferences, product trends and sentiment concerning the beef and pork categories. Survey participants were consumers of beef and pork who identified as their household’s primary or shared decision-maker for grocery shopping, meal planning and cooking.

Percent Who Shop for Fresh Meat: Regularly, Most Frequently and Most Preferred GROCERY

DISCOUNT GROCERY

BUTCHER SHOP

31%

22%

22%

28%

7%

6%

23%

9%

5%

MASS

CLUB

66%

56%

MOST FREQUENT

35%

MOST PREFERRED

34%

REGULARY SHOP

Source: Progressive Grocer Market Research, 2020

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SPECIALTY/ NATURAL

ONLINE GROCERY

DOLLAR

21%

20%

17%

6%

4%

5%

3%

11%

6%

5%

3%


6FT

6FT

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EXCLUSIVE RESEARCH

Beef & Pork Deep Dive Frequency of Beef Cut Purchases 1% 84%

GROUND BEEF

43%

ROAST

RIB EYE STEAK

38%

38%

40%

36%

39%

SIRLOIN STEAK

RIBS/SHORT RIBS

33%

ROUND STEAK

32%

STRIP STEAK

32%

FILET STEAK

14%

SKIRT/FLANK/HANGER

24%

BRISKET

22%

14%

4%

16%

6%

17%

39%

6%

21%

36%

6%

20%

41%

28%

11% 19%

37%

7%

22%

34%

11%

23%

30%

1%

16%

29% Regularly

17%

Occasionally

Rarely

Never

Frequency of Pork Cut Purchases CHOPS

67%

25%

6%

ROASTS

43%

40%

12%

TENDERLOINS

43%

40%

10%

SPARE/BABY BACK RIBS

GROUND PORK

37% 34%

41% 30% Regularly

5% 6% 6%

15% 15%

21% Occasionally

2%

Rarely

Never

Source: Progressive Grocer Market Research, 2020 Figures may not add up to 100% due to rounding or other factors.

grilling, roasting and slow cooking as the most popular methods, used by at least 80%. Overall, at least half of those surveyed used nearly all methods, with the exceptions being air frying, a relatively new method, and microwaving. And when it’s time to cook, roughly 75% of those surveyed rely on one or a combination of sources for inspiration when meal planning. For example, personal cookbook/recipe collections, social media and cooking websites lead the list of potential sources among all shoppers. Beyond direct sources for recipes, other factors that are influential when planning meals include household preferences, sales/promotions, easy or quick to prepare, health and diet-related issues, and seasonality. Looking ahead, consumption trends and planned purchases

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suggest more growth for beef and pork. At least one in four say that they’re purchasing more beef (31%) and pork (25%) during the pandemic compared with before. By comparison, other protein alternatives like fresh seafood and frozen meat see a larger percentage of shoppers who are purchasing less during the pandemic than before (17% for seafood and 12% for frozen meat, compared with 10% for both fresh beef and pork). Looking one year ahead, 93% of fresh beef and 91% of fresh pork shoppers anticipate purchasing the same amount or more. This bodes well for category growth, considering that shoppers could be anticipating the opportunity to return to restaurants as an alternative to cooking at home.


Importance of Product Claims When Purchasing Beef or Pork Ranked 1st

Ranked 1st - 3rd 22%

MADE IN THE USA

38%

ALL NATURAL

10%

24%

FRESH, NEVER FROZEN

10%

23%

LEAN/LOW IN FAT

8%

PRIME OR PREMIUM-QUALITY

8%

20%

5%

NO ADDED HORMONES HIGH PROTEIN RAISED WITHOUT ANITBIOTICS

21%

20% 8%

20%

4%

17%

5%

NON-GMO

15%

LOCALLY SOURCED/PRODUCED

3%

GRASS-FED

3%

11%

MINIMALLY PROCESSED

3%

10%

RESPONSIBLY/HUMANELY RAISED

12%

4%

10%

CERTIFIED ORGANIC

2%

8%

PASTURE-RAISED

2%

7%

Source: Progressive Grocer Market Research, 2020 Figures may not add up to 100% due to rounding or other factors.

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PROGRESSIVE GROCER October 2020

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EXCLUSIVE RESEARCH

Beef & Pork Deep Dive Beef and Pork Make the Holidays Happy The upcoming holiday season is expected to be different in many ways, due to ongoing COVID-19 concerns. Close to 60% of those surveyed say that they’re confident they’ll be celebrating the holidays differently, largely as a result of people traveling less or traveling shorter distances to participate in different types of gatherings. However, holiday traditions are well entrenched and celebrations will take place, but the “Deep Dive Grocery Insights” data shows that celebrations and menu choices will be affected, and that in-home meal prep could also look different and be of higher quality. After all, for the past eight months of the pandemic, Americans have been able to experiment with and refine their meal preparation skills. These trends will be evident during an upcoming holiday season in which turkey and ham are expected to retain their dominance, but slip in overall popularity. For example, preparing turkey as a main dish for the holidays is expected to decline to 54%, from 59% last year, while preparing ham as a main dish will decline to 47%, from 51%. Making up for those declines, are expectations of gains in other protein types more suitable for smaller gatherings, such as roast chicken, pork loin and beef brisket. Other changes in holiday celebration plans will be evident along ethnic lines. The highest percentage of people most likely to change how they celebrate the holidays are African-Americans (69%), followed by Hispanics (67%) and Caucasians (56%). Caucasian households also indicate a heavier reliance on the traditional turkey and ham entrées this year, whereas Hispanic households plan to draw on a variety

of entrées during the holidays. For example, Hispanics are more likely than Caucasians to plan to prepare prime rib (38% versus 27%); roast beef (35% versus 25%), beef brisket (36% versus 23%); and pork loin or tenderloin (33% versus 22%). Interesting differences in product preferences were also evident along generational lines. For example, Millennials are more likely than Gen Xers and Baby Boomers to plan to include fresh beef and pork on their holiday menus this year. This includes prime rib (35% of Millennials versus 25% of Gen Xers and 23% of Baby Boomers); roast beef (34% of Millennials versus 25% of Gen Xers and 18% Baby Boomers); beef tenderloin (29% of Millennials versus 21% of Gen Xers and 13% of Baby Boomers); and beef brisket (32% of Millennials versus 21% of Gen Xers and 16% of Baby Boomers). With pork, the numbers show pork roast (37% of Millennials versus 22% of Gen Xers and 17% of Baby Boomers) and pork loin/tenderloin (32% of Millennials versus 19% of Gen Xers and 13% of Baby Boomers) are popular with the emerging generation of shoppers.

Percent Expecting Holiday Celebrations to Change 15% NOT SURE

Percent Preparing Main Dish for Holiday Meals

59% YES

59%

Prepared Last Year

54%

Likely to Prepare This Year

51% 47%

27% NO 30%

29%

31% 28%

26%

27%

26%

28% 23%

TURKEY

HAM

PRIME RIB

ROAST CHICKEN

Source: Progressive Grocer Market Research, 2020 Figures may not add up to 100% due to rounding or other factors.

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ROAST BEEF

PORK ROAST

22%

BEEF TENDERLOIN

23%

25%

24%

PORK LOIN/ TENDERLOIN

21%

BEEF BRISKET

20% 21%

ROAST LAMB


SPONSORED CONTENT

THE REAL DEAL: TRUSTED VEAL FROM EUROPE European veal is a safe, reliable meat option with tremendous market potential in the United States. AN OVERSEAS FAVORITE READY TO BREAK THROUGH Milk-fed veal has been a beloved European food product for many decades. It’s a center-of-plate staple in home diets and a standard on restaurant menus — particularly with regard to Italian and French cuisine. Satisfied customers recognize veal’s many health benefits: it’s easy to digest, low in cholesterol, and rich in vitamins and minerals. Veal enjoys a widespread presence throughout Europe, providing tremendous returns to grocers across the continent. In North America, however, veal is now considered a niche product, barely making a dent in a red meat market dominated by beef and pork. Beset with PR problems that highlight outdated notions of veal production, and lacking a sustained campaign to present veal as a truly healthy and safe beef alternative, meat retailers in America are missing a golden opportunity.

improved the quality and safety of the product and built trust with consumers. Dutch veal producers utilize a set of stringent auditing standards — known as the Integral Chain Management and Control Program — that provide a solid, transparent, sustainable program for quality control and animal welfare.

HEALTHY LIVESTOCK MEANS HEALTHY VEAL The Dutch veal industry is committed to the health and wellbeing of its animals. Calves are raised in well-ventilated barns that provide room for them to properly groom themselves, stand up, lie down, stretch out, and interact with other calves. Animals are only isolated if they are sick and present a health risk to the rest of the herd. And calves are subject to regular blood tests to prevent the spread of disease.

The “Trusted Veal from Europe” campaign is on a mission to change all of this.

These welfare practices ensure the quality of the end product. When retailers and customers fully trust the quality and safety of their veal, the market grows for this healthy red meat alternative. It’s a proven system that bolsters sales.

TRUSTED VEAL FROM EUROPE

A JOINT EFFORT TO GROW SALES

The campaign is co-financed by the European Union and the Dutch Meat Industry Association (Centrale Organisatie voor de Vleessector, or COV). COV — which represents the slaughterhouses, meat cutting plants, meat processors and meat exporters that drive the Dutch veal industry — is renown for its forward-thinking positions on product safety, production control (from farm to fork), animal welfare and sustainability.

The standards for animal welfare and quality control that are practiced in the Netherlands can be replicated in North America. Dutch veal producers can lead the way. Partnerships will improve American veal production and eventually help grow the category.

Trusted Veal from Europe hopes to grow veal sales and increase grocer revenue in the U.S. by enhancing the import and marketing of Dutch veal. More than that, however, the initiative also intends to create partnerships with North American manufacturers and retailers, who can learn the vital production practices and health standards that have built trust and grown sales for Dutch veal producers.

PRODUCTION STANDARDS THAT DRIVE SUCCESS

Current veal exports to the United States are limited. But there’s exciting potential to increase overall U.S. veal consumption once again, thanks to the re-opening of the American market for European veal. Smart grocers will want to pay attention to Trusted Veal from Europe.

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While American appreciation of the product has dropped over the last decades, European veal producers have done a tremendous job maintaining the meat’s popularity and category growth. This success is accomplished through strict food production measures that support full traceability of an animal’s movements throughout the food chain. It’s a “farm to fork” approach that has

The content of this promotion campaign represents the views of the author only and is his/her sole responsibility. The European Commission and the Consumers, Health, Agriculture and Food Executive Agency (CHAFEA) do not accept any responsibility for any use that may be made of the information it contains.

CAMPAIGN FINANCED WITH AID FROM THE EUROPEAN UNION


INDUSTRY EVENTS

Retail Foodservice Innovation Summit

Among the participants in the Retail Foodservice Innovation Summit were, from left to right, top row: Catherine Lee, Wolfe Research; Rick Stein, FMI; Rachel Shemirani, Barons Market; and Brian Doyle, Accenture. Bottom row, left to right: Art Sebastian, Casey's General Stores; Emma Ignazewski, The Good Food Institute; Scott Aakre, Hormel Foods; and Xulin Guo, Alibaba.

Welcome to the Future PG ’S VIRTUAL RE TAIL FOODSERVICE INNOVATION SUMMIT HELPED AT TENDEES FIGURE OUT, AMID THE CHAOS OF THE PANDEMIC, WHERE THE CATEGORY IS HE ADED. By Mike Troy

etween displaced demand from restaurants, constant innovation, and new safety and operational challenges, the retail foodservice industry has been through more in the past six months than in the prior six years. Throw in continued uncertainty regarding consumer behavior and COVID-19 this fall, and impossible sales comparisons in the spring, and food retailers are faced with a set of circumstances unlike anything they’ve dealt with before. For many of those seeking insights into what the future holds and how to navigate the uncer-

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Key Takeaways Speakers at the virtual Retail Foodservice Innovation Summit presented a range of viewpoints on insights and innovation, safety and foodservice solutions, and transformation trends and 2021 disruption. A big opportunity exists to elevate awareness of prepared foods and digitally integrate the offerings so that they’re available for pickup or delivery. Lasting trends such as working from home and avoiding inrestaurant dining are likely to affect retail foodservice sales.


tain retail foodservice landscape, the solution was to attend Progressive Grocer’s Retail Foodservice Innovation Summit, held Sept. 30-Oct. 2. The first-of-its-kind event featured 35 speakers and 25 sessions designed to enhance the industry’s knowledge of a highly dynamic market and reveal new strategies and solutions consistent with PG’s value proposition of “ahead of what’s next.” Understanding what’s next in food retailing and retail foodservice, let alone getting ahead of it, is a challenging proposition with many layers. Accordingly, speakers presented an array of viewpoints on daily themes of insights and innovation, safety and foodservice solutions, and transformation trends and 2021 disruption, all with an emphasis on retail foodservice innovation. “Foodservice at retail was on a great trajectory prior to the pandemic,” said Rick Stein, VP of fresh at Arlington, Va.-based FMI — The Food Industry Association, in a summit presentation. Stein noted that the pandemic-driven safety considerations that affected retail operations led to a surge in dinners prepared at home and changes in preparation methods, with the concept of semi-scratch growing in popularity. “Ready-to-cook is making a big comeback during the pandemic,” Stein explained. “Going into the pandemic, meal kits were dead, but what’s come out of the ashes of meal kits is meal bundles.” Stein shared insights from FMI’s fifth annual “Power of Foodservice” report, which included a consumer survey conducted in late July and early August. At the time that the survey was conducted, 40% of people said that they were avoiding foodservice offerings such as grab-and-go, salad bars and hot bars, but 60% indicated that they desired those products. Another 67% indicated that they were OK with retailers opening self-serve as long as precautions were in place and safety measures were communicated. Beyond the basics of safety measures, the big opportunity going forward, according to Stein, is to elevate awareness of prepared foods and digitally integrate the offerings so that they’re available for pickup or delivery. One retailer that has led in that regard is Casey’s General Stores. The Ankeny, Iowa-based operator of 2,200 convenience stores is well known for its prepared foods and pizza: It’s the nation’s fifth-largest pizza chain, and recent enhancements to its digital experience and loyalty program bode well for further growth. Art Sebastian, Casey’s VP of digital experiences, described how Casey’s launched a mobile app last year that features appetizing product visuals, along with great functionality that makes it easy to order and reorder. The app is integrated into Casey’s loyalty

“Going into the pandemic, meal kits were dead, but what’s come out of the ashes of meal kits is meal bundles.” —Rick Stein, FMI VP of Fresh

program, so relevant offers can be served. “We want to create frictionless digital experiences,” Sebastian said. Casey’s efforts with prepared foods are representative of the larger trend in convenience retailing which involves companies looking to play a bigger role in consumers’ “what’s for dinner or lunch” conversations. “Convenience channels seem like they are able to win meal occasions because the stores are convenient and they are elevating their offerings,” said Scott Aakre, VP of consumer insights and corporate innovation at Austin, Minn.-based Hormel Foods. Aakre noted that the inverse of that opportunity exists for grocers that are already good at prepared foods and store experience, but could become more convenient. Aakre was a participant in a panel discussion on “The Intersection of Change: Foodservice, Grocery, E-Commerce and Restaurants,” along with futurist Garrett Law and fellow Hormel executive Jeff Frank, VP of foodservice marketing. The topic of the blurring of traditional channels was a recurring theme throughout the summit as major food industry players increasingly compete with one another in new ways.

Constant Pivoting With Prepared Foods

“The prepared foods business has always been about presenting the best of the best, and understanding that consumers eat with their eyes first,” said Juan Romero, founder and CEO of api(+), a Tampa, Fla.-based retail design, branding and architectural firm. “Now retailers are turning prepared foods into packaged foods, so packaging is becoming more critical.” So, too, is where foodservice is located in the store. Romero envisions food retailers positioning foodservice nearer store entrances to aid with convenience, and also to facilitate carryout service. He additionally foresees drive-thru lanes becoming part of new store designs. The newest Wegmans Food Market store, which recently opened in West Cary, N.C., didn’t have drivethru lanes, but the highly regarded provider of prepared foods did include dedicated parking spaces for customers picking up orders. PG Executive Editor Gina Acosta highlighted grocers’ innovation during her presentation, “A Case Study of Excellence in Action at Wegmans Food Markets and Lowes Foods.” Both retailers have extensive foodservice operations, with Rochester, N.Y.-based Wegmans devoting about one-third of its new store to foodservice, and Winston-Salem, N.C.-based Lowes devoting one-fourth of its store in a nearby market to prepared foods, according to Acosta. Meanwhile, on the other side of the country, the ninestore Barons Market chain in Southern California offered innovative wrinkles of its own. Rachel Shemirani, an SVP with the Poway, Calif.-based company, which is highly PROGRESSIVE GROCER October 2020

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INDUSTRY EVENTS

Retail Foodservice Innovation Summit

regarded for its prepared foods, described a situation of constant pivoting and making large decisions very quickly as the pandemic unfolded. That’s a situation that all grocers have dealt with, and in the case of Barons, it meant converting the self-serve food bars to full-service and adjusting product offerings. The company also converted its self-serve bulk food area to a pre-packaged program that was so well received that Shemirani questioned whether it makes sense to bring back self-service once the pandemic is over. On the other side of the planet, Retail Foodservice Innovation Summit attendees heard from Xulin Guo, chief of staff and business assistant to the CEO of Alibaba’s grocery business, which operates under the brand Freshippo. There are currently more than 200 Freshippo stores in more than 20 cities in China, and the locations were designed with the purpose of integrating the online and offline shopping experience. The stores incorporate all kinds of cutting-edge technology, including robotics, unique services, overhead conveyor belts, prepared foods, 30-minute delivery and new types of payment methods that provide a glimpse of what innovations could come to the United States. During his presentation, Guo said that 75% of Freshippo sales are digitally enabled. One area of innovation touched on during the three-day virtual event involved ingredient transparency, preparation methods and product discovery. For example, Emma Ignazewski, a corporate engagement strategist with The Good Food Institute, in Washington, D.C., noted that plant-based products’ rising popularity has created new expectations among shoppers, who are looking for plant-based options among retailers’ prepared food offerings.

See What You Missed The views shared in this article are a small sampling of the unique perspectives and insights presented by the 35 speakers who participated in the Retail Foodservice Innovation Summit. Replays of all of the sessions are available online through the end of October. To catch the on-demand version of the event, visit www.RetailFoodserviceInnovation.com.

Opportunity Abounds in Prepared Foods

As FMI’s Stein observed, prepared foods were on a solid trajectory prior to the pandemic. That trajectory could resume and accelerate in the years ahead, according to Brian Doyle, managing director and global Future of Food lead with Dublin, Ireland-based Accenture, and Jeremy Dawkins, global head of design with ?What If!, an innovation consultancy acquired by Accenture 18 months ago. “We believe there is a $1 trillion opportunity for food at home to give people back what has been lost,” Doyle said. “The home is going to be the place where people socialize over the next six months.” Doyle also believes that the work-from-home trend will stick, with one-third of employees working from home regularly, which

“We believe there is a $1 trillion opportunity for food at home to give people back what has been lost.” —Brian Doyle, Accenture Managing Director and Global Future of Food Lead

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he described as a conservative estimate, but that phenomenon will influence where people eat meals. Looking ahead at the demand environment for retail foodservice, several speakers shared views about how economic conditions are likely to unfold, and the implications for how America eats. José Gomes, the Chicago-based president of dunnhumby North America, sees competition heating up in the fall as supply chains have recovered somewhat and demand has begun to normalize. As a result, he sees a heightened promotional environment, with a significant round of price investment coming as grocers look to build back trips and generate store traffic. He also envisions a double-dip recession as dunnhumby’s proprietary “worry index” remains elevated. Consumers are worried, and until a COVID-19 vaccine and widespread immunization happen, traditional food-spending patterns will remain disrupted, according to Catherine Lee, co-head of consumer at New York-based Wolfe Research. Speaking on the topic of “Wall Street’s View of the Competitive Food Landscape,” Lee offered two key takeaways about how investors are viewing food retailers’ unusual near-term situation and 2021 outlook. “We think that sales will remain elevated through the balance of 2020, up at least 5% industrywide, and while 2021 comps will be negative, they should still be up mid-single digits on a two-year stack basis,” Lee said. That view is supported by the fact that restaurants are still operating at reduced capacity, resulting in displaced demand, and winter weather is going to make outdoor dining impractical in most parts of the country. Those factors will benefit food retailers’ sales this fall and winter. However, comps will turn negative in the spring, according to Lee, as retailers lap the pantry-loading effect and the impact of restaurant closures that began in March. Once a vaccine emerges, food retail sales growth will slow, “but we don’t expect an immediate snap back to restaurants,” Lee predicted. “We think there will continue to be some individuals who are concerned about the virus, and there will be pockets of consumers who do not get the vaccine.”


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EGGS $1.90

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BUTTER $4.02

Store Y knows the price of all KVIs at competitors near each of their stores. They can choose if they want to compete with the lowest neighboring stores, or if it is safe to raise prices as their costs rise. PRICES

EGGS MILK $1.79 $2.35

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CPG PROFILE

Plant-Based Innovation

How Amy’s Kitchen Keeps the Dream Alive THE PLANT-BASED PIONEER’S CEO DISHES ON WHAT MAKES THE COMPANY SUCCESSFUL. By Mike Troy ong before plant-based got hot, Andy and Rachel Berliner founded Amy’s Kitchen in 1987. Named after their newborn daughter, the company’s all-natural, organic and vegan products gained popularity, and its portfolio now features about 250 items. In 2017, former Mars Inc. executive Xavier Unkovic joined the company as president, and he was named CEO in August. Unkovic spoke with Progressive Grocer about the Amy’s philosophy, coping with the pandemic and being a trend-setter.

Progressive Grocer: You’ve been with Amy’s three years now. Can you take us back to what was appealing about the opportunity after spending 25 years with Mars? Xavier Unkovic: I was very grateful to have worked for Mars. It’s a family-owned company, a principle-driven company, and I felt very fortunate to learn the right way of doing business. When I met with Andy and Rachel, the owners of Amy’s, I felt naturally connected with them and what they were trying to achieve and do in the food world, which is to help people have a better life through food. Their sense of purpose resonated very strongly with me.

PG: Amy’s was ahead of the curve when it came to the natural and organic space, so it sounds like you’re in a good place. XU: I always connected personally to the “why,” more so than the “what” or the “how,” because the “why” speaks to the purpose of the business, or what I call the beautiful dream that Amy’s started more than 30 years ago, before being organic, plant-based and vegan was cool.

PG: It’s definitely cool now. XU: Yes, but you and I know that businesses with a purpose are the ones defining the trends, and this is definitely what the family has done. Trends get set by the companies that have a mission and a purpose, and then other companies follow.

PG: What does the Amy’s product portfolio look like today? XU: We have slightly more than 250 SKUs today. We are in the soup, frozen entrée and frozen pizza category, and we recently entered the candy category.

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PG: Candy? XU: We have some beautiful vegan candy that tastes great and, like many of our products at Amy’s, helps people with specific needs. It’s not that we want to be big in candy; it’s because we heard from consumers that couldn’t have candy, especially kids, because they had specific allergies, and we wanted to help those consumers and kids have a better life.

PG: So you’re uncovering the white space in some of these areas where people have specific needs and facilitating their desire to make attribute-based food choices. XU: Our owners have that exact consumer-driven approach when it comes to answering specific needs, and it is working well.

PG: Amy’s is a big company and you’re in a lot of categories, but how do you compete with the major CPGs that want a piece of your market and have greater resources and sophistication to work with major retailers? XU: We’re the only family-owned company of our size that competes with the big CPGs. Retailers value Amy’s for what we bring to the party when it comes to products. We have 155 plant-based products.

“Trends get set by the companies that have a mission and a purpose, and then other companies follow.” —Xavier Unkovic, Amy’s Kitchen CEO


We have the highest repeat rate when it comes to consumers. We have the highest loyalty rate when it comes to consumer retention. We are growing faster than the average of every category we’re in. We’re bringing new consumers to retail, we’re bringing more purchasing rates to the retailers, and we’re in those categories that are growing.

PG: Let’s talk about growth, because the past seven months, everyone grew, and if you weren’t growing, there was something wrong. XU: We saw a huge spike, with triple-digit growth, and it became very evident to us that we were not in a position to handle the growth, and I don’t think anyone was. Even with double-digit growth, which is the case today, it is challenging to handle.

PG: How did you adjust? XU: We quickly decided to limit the product offering for two main reasons. One was we needed to have all of our people in the manufacturing environment being safe. We make our products by hand, and we have 2,600 people working in our three factories, and suddenly we had to practice social distancing. So very quickly, we had to assess our product portfolio and understand which products we were able to make according to social distancing, to have our people safe. Then it was also a race towards how many products can we make in order to maximize the volume.

PG: Where are you at today as far as supply chain normalcy and producing those 250 SKUs you mentioned? XU: Initially, we limited our SKUs to 78, and now we’re back to around 110, but we’re still challenged to deliver for our consumers and our customers effectively.

PG: Has that caused you to think that maybe you don’t need all 250 of those SKUS, based on their velocity? XU: The challenge we’re facing is we also love to offer choices to our retailers and our consumers. If you think about it in a very short-term way, yes, of course, you can definitely be successful with a limited product offering. But being in a food industry where consumers continuously are looking for new products, it is important to bring innovation to the trade.

Amy's Kitchen offers a little more than 250 SKUs, 155 of them plant-based, but during the pandemic, the company limited the number of SKUs that it manufactures, to keep employees safe.

PG: As you look out to next year, what sort of trends are you seeing in the market that you want to get ahead of? What’s cooking in your test kitchen right now? XU: At Amy’s, we’re not responding to trends much. Trends are set by people that have a vision and purpose. The fact that we are an organic, vegetarian, plant-based company — the same as we were 30 years ago — means that for us, it is about a continuation of what we do. Part of the Amy’s story is we’re offering products for people that have specific needs.

PG: How are you thinking about forecasting for next year? This year was an anomaly, so you’re in the same boat as everybody else, trying to figure out how much of that displaced demand from foodservice, with people eating at home, how sticky that is. XU: We don’t know, so we need to stay very agile, very flexible in our approach. We are looking forward to adding new capacity, but also not putting ourselves into the position where if demand goes down, we’ll be in trouble. The good news about Amy’s is we still have a lot to grow and to develop.

PG: Are you a $1 billion company? XU: No, not yet. We’ll get there one day. We’re around $600 million right now.

PG: Amy’s is a great brand, and you are growing fast. I have to believe your phone rings regularly with people interested in acquiring the company. XU: I get this question a lot, and the family didn’t create this business for money. They created this business because of their own personal belief of making it enjoyable for everyone to eat well. The owners are very happy and amazed about the size of the company. They just want it to continue and to play the role that they envisioned for it at the beginning, which is answering specific needs of people. It’s not about making money or being rich. If that were the case, they would have sold it already. PROGRESSIVE GROCER October 2020

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EQUIPMENT & DESIGN

Refrigeration/Cold Storage

Danfoss has developed low-GWP (global-warming potential) refrigeration systems.

Playing it Cool REFRIGER ATION AND COLD STOR AGE CAN HELP MEE T CHANGING CONSUMER DEMANDS, INCLUDING OMNICHANNEL SHOPPING AND SUSTAINABILIT Y. By Bob Ingram

n these pandemic times, food retailers are adapting to new consumer shopping patterns and expectations; in one sense, normal evolution has been accelerated, and the refrigeration and cold-storage industries are keeping pace. Peter Dee, sales director at Baltimore-based Danfoss, notes: “Consumers are looking for more and more solutions in relation to shopping for their perishable goods, [including] in-store shopping, click-and-collect [and] home delivery. Refrigeration systems and solutions must meet all these consumer experiences. As a manufacturer, this means developing product to meet these requirements and – more importantly – food safety.” He adds that refrigeration plays a large role as supermarkets establish goals to show the public their investment in being “greener, cleaner and more energy-efficient.” Danfoss supports these sustainability efforts by developing low-GWP (global-warming potential) refrigeration systems, including carbon dioxide systems with GWP of 1, allowing supermarkets to dramatically reduce emissions.

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Key Takeaways The pandemic has sharpened the grocery industry’s focus on food safety and greatly accelerated customer adoption of click-andcollect, both issues requiring up-to-date refrigeration and cold-storage systems. Grocers also need to consider the cost effectiveness, ease of maintenance, and, as they grapple with evolving regulations, the environmental friendliness of such solutions. Cold storage plays a critical part in food retailing’s current metamorphosis, as with Ahold Delhaize USA’s major investment in transitioning its supply chain to an integrated self-distribution model.


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EQUIPMENT & DESIGN

Refrigeration/Cold Storage

Dee cites Danfoss’s CALM solution (CO2 Adaptive Liquid Management), which features a CO2 liquid ejector enabling retailers to transition to CO2 as a refrigerant across all climate zones, by combining other innovative products such as the Rack/Pack controller and refrigeration case controller with liquid ejector technology, to improve efficiency by up to 10%. Regarding refrigeration regulations, Dee says: “Regulatory consistency across the United States has been a concern for equipment manufacturers, [original equipment manufacturers] and end users. As we see more harmonization, it makes the implementation of natural and low-GWP solutions that much faster.” In the future, he predicts: “Food retailers are looking for cost-effective, smarter and cleaner natural refrigerant and refrigeration systems, as well as certainty with refrigerant regulations. We’ll see more IoT [Internet of Things] as systems get smarter, providing more data for both operation and maintenance of systems.”

Finding the Best Fit

Katrina Krites, marketing and business development manager, food retail, cold chain at St. Louis-based Emerson, observes: “The coronavirus pandemic has only increased the industry’s focus on food quality, safety and sanitation in supermarkets. In response, we have accelerated the development of related refrigeration products [and] monitoring and sensing devices, from refrigeration equipment that supports increased omnichannel fulfillment demand to connected sensors for food preparation.” She notes that many retailers have established formal temperature-tracking programs in their supply chains, and Emerson provides them with GO Real-Time trackers and support services to help them manage these programs. “Today,” Krites adds, “refrigeration is often a major focus of retailers’ sustainability objectives. Forward-thinking retailers who seek the lowest possible environmental impacts are exploring CO2 technologies such as CO2 transcritical boosters which utilize parallel compression and advanced controls to manage CO2’s high pressure and unique operating characteristics.” It’s not always feasible to replace equipment with more advanced solutions, Krites points out, so Emerson also offers digital compressor upgrades, advanced supervisory and suction controls, and similar strategies to help reduce energy consumption and lower refrigerant costs. She notes that the pandemic has greatly accelerated customer adoption of the click-and-collect business model, and that refrigeration strategies for omnichannel fulfillment vary greatly among retailers, from repurposed cases or walk-in coolers to newly added capacity specifically for click-and-collect cold-storage purposes.

The coronavirus pandemic has only increased the industry’s focus on food quality, safety and sanitation in supermarkets.” —Katrina Krites, Emerson

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Danfoss' CO2 Adaptive Liquid Management (CALM) solution lets retailers transition to carbon dioxide.

“To help retailers select the best-fit refrigeration for both click-and-collect and traditional purposes,” Krites says, “Emerson has developed a free box-load calculator that provides recommendations based on specific cooler or freezer loads.” She adds that leveraging the power of IoT, operational data, and software that can extract insights and value from this information will loom much larger in future supermarket refrigeration strategies. “To that end, continued efforts to achieve connectivity throughout the various links of the cold chain will allow supermarkets to gain much greater control of food quality and safety well before it reaches the shelves of grocery stores,” notes Krites.

Full Blast

According to Eric Wickberg, EVP of sales and marketing at Minneapolis-based CrownTonka by Everidge Inc.: “Refrigeration should support the supermarket store design and shopper experience. The challenge is how to optimize the shopping experience and potential trade-offs for cost effectiveness, maintenance and energy consumption.” Increasing and evolving Department of Energy regulations affect the specifications required for refrigerants and refrigeration equipment, and CrownTonka partners with leading refrigeration suppliers to address this reality. Wickberg points out that the company’s PrepRite brand features “the first U.S. R290 blast chiller, an ultra-refined propane refrigerant which is currently limited to 250-milligram systems, which is optimal for the popular undercounter 50-pound capacity blast-chiller category.” He says that educating contractors and end users on the changing regulations and on implementing a transition plan has been an increased area of focus at CrownTonka, which has in turn relied on such partners as HeatCraft and Russell to develop educational seminars and plans to meet these shifting standards and provide unique state-by-state requirements. Wickberg views as a significant recent innovation in refrigeration advanced diagnostic software that enables predictive maintenance scheduling of refrigeration and offers uptime benefits, for a fraction of the maintenance costs of reactive or preventive maintenance programs. While CrownTonka has been designing and building cold storage for curbside pickup for almost a decade,


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EQUIPMENT & DESIGN

Refrigeration/Cold Storage

Wickberg says the company has seen “a dramatic shift and adoption by almost all our retail customers to adopt some type of curbside program.” To that end, Everidge has designed and contracted for turnkey solutions that have ranged from custom indoor reach-ins that offer 25% greater capacity than traditional reach-ins; an outdoor one-piece walk-in cooler/freezer/dry-storage unit that’s custom vinyl-wrapped to promote its retailer/curbside capabilities; storewithin-a-store curbside concepts; and a partnership enabling an insulated grocery tote-bag company to use a PrepRite Blast freezer to rapidly chill hundreds of totes in 60 minutes, “to offer grocers and consumers that critical final mile of delivery.” Wickberg believes that the trend toward smaller store designs is driving changes to the traditional rack-mounted refrigeration system for display cases, walk-in coolers and freezers, and that increased foodservice capabilities create a need for blast chillers with cook-in capabilities.

Ahead of the Curve

Scott Mallarme, sales development manager at Fort Worth, Texas-based Traulsen Refrigeration, thinks that refrigeration is especially critical in retail locations offering online ordering, where holding fresh ingredients for pickup has become a popular trend. “Many large chains put a program in place prior to the pandemic, and they are harvesting a very nice reward,” Mallarme says. “Most remaining chains are actively seeking to implement a program.” Traulsen’s one-, two- and three-section freezers and refrigerators with solid glass doors meet the requirements for this application. Mallarme stresses, however, that the most important way that refrigeration can contribute to sustainability is by providing energy-efficient operation, especially as larger supermarkets often have large banks of refrigeration that can significantly impact energy usage. “In addition to our focus on energy-efficient operation, reducing our carbon footprint through the use of more environmentally friendly refrigerants has been another major initiative for commercial refrigeration manufacturers,” he observes

Traulsen's freezers and refrigerators are critical to online ordering.

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CrownTonka by Everidge's box has advanced diagnostic software that enables predictive maintenance scheduling.

Infinite Capacity

Cold storage plays a critical part in food retailing’s current metamorphosis. Carlisle, Pa.-based Ahold Delhaize USA, for instance, is investing $480 million to transition its supply chain to an integrated self-distribution model, and a key component of this transformation is cold storage space. Atlanta-based Americold will build two fully automated frozen warehouses, expanding the grocer’s cold storage space by 500,000 square feet. According to David Stuver, Americold Logistics’ EVP, supply chain solutions: “Retailers traditionally run their temperature-controlled supply chains at maximum capacity, because these assets are capital intensive. It’s still unclear if there will be permanent changes to retail strategies, but with the increase in sales volumes caused by COVID-19, many retailers did need to increase their temperature-controlled supply-chain capacity to meet the sudden increase in demand.” He adds that “many retailers appear to be using forward-buy strategy to ensure they have key items in stock for unexpected surges or for the holiday selling season, which also requires additional cold-storage capacity.” Americold has seen an increase in the availability of frozen and refrigerated-supported automation for the grocery supply chain, while most automation investments in the grocery supply chain have been on the dry side. “However,” notes Stuver, “over the last five years, automation vendors have created the frozen and refrigerated technology equivalent, and almost all automation providers now have refrigerated or frozen capability,” as Ahold Delhaize USA is currently working toward. He notes, too, that refrigeration technology, which maintains frozen temperatures, is improving and changing from traditional very large-capacity central refrigeration systems to smaller-packaged systems, and that Americold is heavily invested in this shift, allowing the company to scale capacity more easily. “Recent frozen automation capabilities are now able to support cold storage at the micro-fulfillment level,” Stuver says, “and we expect retailers to take advantage of that technology.”


TECHNOLOGY

Marketing Innovation

Adding ‘Media Company’ to the Résumé RE TAILERS’ PL ATFORMS CAN ENGAGE CONSUMERS IN UNIQUE WAYS AND OFFER AN ALTERNATIVE STRE AM OF RE VENUE. By Abby Kleckler

he number of traditional retailers developing their online media platforms continues to grow, with giants such as Walmart, Target and Kroger investing substantially and profiting in return over the past couple of years. Now, today’s landscape makes food retailers both big and small even more attractive to CPG companies and advertisers to execute their media campaigns. Grocery e-commerce sales have skyrocketed during the COVID-19 pandemic. August 2019 saw only $1.2 billion in online

Key Takeaways The surge in online shopping during the pandemic offers a huge opportunity for an alternative revenue stream in the grocery industry, which is characterized by tight margins and minimal growth. Walmart, Kroger, Target and Albertsons are among the major retailers to roll out media platforms, either inhouse efforts or partnerships with e-commerce advertising companies, to offer analytics for advertisers. Independent grocers — even single-store operators — can avail themselves of similar services from providers such as Freshop.

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TECHNOLOGY

Marketing Innovation

billion

in grocery e-commerce sales in the month of August 2020, compared with August 2019, which saw only $1.2 billion in online pickup and delivery sales Source: Brick Meets Click/Mercatus grocery shopping survey

pickup and delivery sales, while August 2020 saw $5.7 billion, according to a Brick Meets Click/Mercatus grocery shopping survey. This surge — that was projected to take years instead of months — means a huge new audience for retailers’ digital properties and their supplier partners. These new eyeballs offer a huge opportunity for an alternative revenue stream in an industry characterized by tight margins and minimal growth. “Grocery itself is not a growth area — let’s not be confused,” clarifies Steven Boal, CEO of Mountain View, Calif.-based Quotient Technology, which has partnered with the likes of Albertsons, Giant Eagle, Dollar General and Ahold Delhaize USA on their media networks. “There are no incremental dollars in this industry. It’s about moving offline, ineffective spend to digital, effective spend.” Some retailers have been more successful than others so far in becoming viable national advertising platforms and obtaining the additional dollars that come with these programs.

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Walmart

If one traditional retailer has the ability to compete with or even surpass the media platform capabilities of Seattle-based behemoth Amazon, it may just be Walmart. The Bentonville, Ark.-based company’s Walmart Media Group — branded as such in 2018 — continues to evolve by offering advertisers on-demand visibility into how their campaigns are performing in-store and online. In January, Walmart Media Group launched its Walmart Advertising Partners program to expand advertisers’ direct access to their sponsored products campaigns, giving them more transparency and control. Since this launch, new dashboards have also added an easier on-demand solution to their analytics, bringing together in-store and online campaign reporting in a new single sign-in platform. There’s no doubt that Walmart — and many other food retailers — have Amazon beat when it comes to brick-and-mortar stores, giving them an edge for national brands that want to deploy omnichannel campaigns at a large scale. “I could see e-commerce stabilizing between 9% and 12% post-pandemic, and then starting to rise from

Personalized e-commerce experiences can be a win-win-win for retailers, CPG companies and shoppers.

there again with the normal rise rate that it was before, but that doesn’t mean 9% to 12% of households are going to be exclusively e-commerce,” Boal says. “When you have a physical presence and you have a brand affinity with a shopper, that shopper shops in your stores, and they do it physically or with e-commerce.”

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TECHNOLOGY

Marketing Innovation

Kroger

Other retailers won’t be outdone by Walmart’s media efforts. The Kroger Co.’s Kroger Precision Marketing launched in 2017 under its 84.51° data science subsidiary. Earlier this year, the Cincinnati-based retailer introduced a new sales attribution capability powered by Microsoft PromoteIQ to provide brands full transparency into media performance for in-store and online sales results attributed to advertising campaigns. Kroger and 84.51° can capture large amounts of data from shoppers both offline and online, and can use this data to provide a more personalized shopping experience and a better idea of what advertising to what targeted customers will lead to the largest number of purchases. Gary Millerchip, CFO of Kroger, has said that he expects Kroger Precision Marketing to experience 50% growth in 2020. That’s a lot of additional revenue in a year when many CPG companies had to halt or cancel advertising campaigns amid the onslaught of the coronavirus pandemic and its resulting out-of-stocks.

Successful Partnerships

Walmart Media Group and Kroger Precision Marketing aren’t the only in-house self-service retail media networks in the grocery space. Minneapolis-based Target rebranded its platform to Roundel in 2019, and Boise, Idaho-based Albertsons has Albertsons Performance Media, although this solution is powered by Quotient. These types of partnerships with e-commerce advertising platforms and technology companies are a way for retailers of all sizes to become more viable media networks for CPG advertising and harness the companies’ ad dollars. Take, for example, CitrusAd, which launched in 2016. The Australia-based company works with such U.S. supermarkets as Harris Teeter, Wakefern Food Corp. and Hy-Vee to help them serve up personalized digital marketing experiences for shoppers. These experiences can include sponsored products and display ads. The CitrusAd platform is designed as a white-label native ad server, so retailers still maintain control over when, where and how ads are served. CitrusAd says that products that are live with its offerings have an average 94% increase in total online sales month to month. All of these advertising offerings center on the idea that personalization is beneficial to retailers, CPG companies or advertisers, and consumers, something that Boal strongly believes. “In order to get something of value, we have to know you, and if you don’t demonstrate to shoppers that you know who they are, they’re turned off,” he explains. “In a store, there’s treasure hunting, and you can walk all the aisles, and you can have an experience. You can discover. [With] a screen, you have to give that same rewarding e-commerce discovery, but you have to narrow the consideration set.” An advantage to the increase in online pickup and delivery sales is that every e-commerce experience is a logged-in and directly connected experience, so retailers can deliver this personalization.

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Online pickup and delivery sales offer the advantage of being completely logged-in and directly connected experiences to help the retailer know a specific shopper.

Indies, Too

While major retailers have well-established and sophisticated media operations, even independent retailers are able to operate as media platforms. This is true even for those with a single store whose e-commerce capabilities are provided by a third party. Just like major retailers, functioning as a media platform gives independents the ability to drive digital sales and ad revenue. Rochester, N.Y.-based Freshop provides e-commerce solutions for digital engagement through key features such as promoted banners, paid search results and interception at checkout. “One of the ways Freshop supports independent grocers is by leveraging digital ads for revenue,” says Kevin Sullivan, director of digital category management with Freshop. “We work directly with leading consumer packaged goods companies to bring the most up-todate product info to the site, but also drive sales and bring in extra revenue streams for the retailer.” Plans are constructed for promoted products that also integrate with sales and coupons, using mechanisms such as clickable banners and sets of promoted products, with revenue generated on a cost-per-click basis. “Digital ads with Freshop are a way for CPGs to promote their products and a way for retailers to add an extra stream of revenue,” Sullivan adds. “To participate, retailers just opt into the ad program, and Freshop does all the negotiation with the CPG companies.” An individual independent retailer wouldn’t be worth the effort, but collectively, the more than 3,000 stores using the Freshop platform represent meaningful volume. Whether for independent retailers or the likes of Walmart, the success of digital media channels lies in the ability to make them a win-win-win for all parties involved. Shoppers need to benefit from the personalized offers; CPG companies need to experience increased sales, brand awareness and return on their ad spend; and retailers need to garner increased product sales and alternative revenue.


Pet Care in a Pandemic THE CATEGORY IS SEEING BIG CHANGES IN RESPONSE TO E X TR AORDINARY CIRCUMSTANCES. By Princess Jones Curtis

t’s been big business. Honestly, I’ve gotten more inquiries in the past six months than I did all last year,” says Ruchika Mustafa, the director of Tiny Paws Rescue, an organization that takes in local displaced animals in the Hampton Roads area of Virginia and finds forever homes for them. Mustafa adds that since the COVID-19 pandemic led to mass closures of U.S. businesses in March, she has seen a major uptick in applications to both foster and adopt pets. “When you think about it, it makes a lot of sense,” she observes. “Everyone is home and spending 100% of their time with their loved ones, and that includes their pets. A lot of people might not have had time for a pet, before but now they have all of this time on their hands.” As a small rescue organization, Tiny Paws has sometimes found that meeting the demand for furry friends is difficult. “A couple of times during the past few months, we’ve had to put people on waiting lists,” marvels Mustafa. “There just weren’t enough to go around!” Pet ownership was already big business before the onslaught of lockdowns, quarantines and self-isolation. According to the American Pet Products Association’s (APPA) second volume of the “COVID-19 Pulse Study: Pet Ownership During the Pandemic,” 6% of survey participants said that the virus caused them to acquire a new pet this summer. That could represent millions of newly acquired pets, all of which need food, medicine and supplies.

Key Takeaways In the midst of the coronavirus crisis, pet ownership is up, as consumers with more free time seek furry friends for companionship. Pricing of pet care items is not only important to shoppers worried about their finances in an uncertain economy, but a key consideration for grocers that wish to create loyal customers. Online purchases not only keep pet owners safer, since they don’t have to risk exposure to the virus in a store, but also provide a convenient way to obtain their needed items that looks set to outlive the current situation.

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Pricing Importance

While COVID-19 may have made pet adoptions trend upwards, it has fewer positive effects on the finances of pet owners. Sixty-one percent of them think that the economy is heading into a recession, and more than half are very concerned about their finances over the next year. Pet retailers are watching the numbers, too. The Stamford, Conn.-based APPA reports that more than $95 billion was spent within the U.S. pet industry in 2019, with nearly $37 billion spent in the food and treat categories, and $19 billion on supplies, live animals and over-the-counter medicine, but the COVID-19 pandemic has added a healthy dose of uncertainty to the 2020 projections. There’s some good news for retailers, however: According to Progressive Grocer’s 2020 Consumer Expenditures Report, pet food is up by a couple of percentage points, while treats and supplies both grew significantly through July 2020. Lisa Tuttle is the owner of Posh Pets, a Dallas pet boutique brand. With more than a decade in business, she’s seen a lot of ups and downs in the pet industry. “If you think about it, right now we have people stuck at home and valuing pet companionships more than ever,” notes Tuttle. “All of these pets are getting more walks, more treats, more love. But on the other hand, everyone is worried about their finances and what the future will bring. That tells me that there’s money on the table, but customers are going

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In a time where most people are limiting their in-store visits, online retailers will gain market share.” —Mike Franco, Merchandiser and Consultant to be picky about the pricing.” Pricing has always been a big factor in marketing pet products, but when the economy grows unstable, it becomes an even bigger priority. Retailers will need to be careful about pricing and margins to bring in those price-conscious consumers while also taking care of their own bottom lines. One way to do that could be offering enticing discounts on bulk-food purchases or grooming products.

Repeat Customers

“The first thing you should remember is that pet owners are repeat customers,” explains Posh Pets’ Tuttle, adding that repeat business is the cornerstone of selling to pet owners. “No one gets a cat and buys one just bag of litter


for the next decade. They’re going to need litter every single month, right? So, if you don’t see them again, it’s because you didn’t meet their expectations in some way, and they’ve taken their business somewhere else.” In terms of marketing and branding dollars, it’s always more cost-efficient to keep a returning customer than to bring in a new one. Keep repeat customers by not only meeting their needs, but also anticipating their evolving needs. In many cases, retailers should work to fulfil parallel needs to encourage repeat business. Grocers have a lot of choices in this because they sell so many product categories, but the natural add-on product would be in the pet category. Dog food customers can also be sold treats. Cat litter customers may also need toys. The more needs fulfilled, the more likely that customers will keep coming back. Online retailers encourage repeat business by using features like recurring orders. A customer might order pet food through the website and receive reminders or even automatic deliveries on that product every month. It becomes a no-brainer item on the customer’s to-do list while also being expected income for the retailer. Grocers can implement their own programs by adding this feature to their online and/or delivery offerings.

Convenience During COVID

Consumers are settling in for the long haul with this pandemic. When the APPA asked its survey participants how long they think the COVID-19 crisis will last, one-fifth of them said that they expected it to last a year or longer. Many have drastically changed the way that they shop, which may have long-lasting impacts on consumerism. “You have Amazon, Chewy and Petco — they’re all online retailers. Those are the ones thriving right now, and for obvious reasons,” points out Mike Franco, a professional merchandiser and retail consultant who has worked with grocery brands big and small, including Food Lion and Farm Fresh. “In a time where most people are limiting their in-store visits, online retailers will gain market share.” Social-distancing restrictions vary per location, but the overall message is for consumers to stay at home if they can, and limit their trips for supplies. In that environment, consumers flock to online retailers that provide delivery right to their front doors. Despite this trend, brick-and-mortar retailers have an opportunity to trade on those needs, too. Many already offer online shopping, as well as delivery or curbside pickup options. They can promote those services to their current customer base by placing marketing collateral where consumers will want to look. “I once worked with a client that wanted to push their delivery service,” recounts Franco. “We came up with a sticker to put on large items during the checkout process that reminded customers they could get this item delivered next time. As that bag of kitty litter gets lighter and

lighter, the information is right there for the customer.” Retailers could also take advantage of receipt space or place fliers inside grocery bags. With the future determined by so many variables, it’s easy to get overwhelmed by the possibilities. “It’s hard to think of this whole pandemic as a blessing, but some great things have come out of it,” admits Tiny Paws’ Mustafa. “Whenever I think of all of those pets I’ve placed in the last few months, I can’t help but think that the future might be better than it looks.”


EDITORS’ PICKS

Food, Beverage & Nonfood Products

Lose the Lactose

Less is More

Better-for-you snack brand LesserEvil, known for its Organic Popcorn, Grain Free Paleo Puffs and Egg White Curls, has now branched into the sweet snack space with the launch of Keto Certified Mini Cookies. Made with such simple, nutritious ingredients as organic coconut sugar, organic coconut flour, organic coconut oil and organic ghee, the cookies come in two grain-free flavors, Almond Butter Chocolate Chip and Snickerdoodle, with more seasonal flavors set to roll out this winter. Crispy on the outside and soft inside, LesserEvil’s latest product line is Keto Certified, Certified Grain Free and Gluten Free, and Non-GMO Project Verified, while Almond Butter Chocolate Chip is also Certified Paleo Friendly. A 4.4-ounce bag of either variety of mini cookies retails for a suggested $5.99. https://lesserevil.com/

In response to consumer requests, ultra-filtered milk producer Fairlife LLC has teamed with sales, marketing and distribution partner Boardwalk Frozen Treats LLC to offer Fairlife Light Ice Cream, the beverage brand’s first venture into frozen desserts. Made from ultra-filtered milk from cows raised without artificial growth hormones, the creamy dessert boasts a strong nutrition profile compared with its traditional counterparts. The lactose-free offering comes in seven varieties: Vanilla, Chocolate, Cookies & Cream, Chocolate Peanut Butter, Double Fudge Brownie, Java Chip, and Mint Chip. Depending on the flavor, a serving has 8 or 9 grams of high-quality protein and 40% less sugar than traditional ice cream, with no artificial preservatives or colors. A 14-ounce container retails for a suggested $4.98. https://fairlife.com/light-ice-cream/; https://boardwalkfrozentreats.com/

Dessert Reimagined

Noops, billed as the world’s first protein-rich, plant-based organic oatmilk pudding, was founded by Gregory Struck, who previously founded plant-forward food subscription service Hungryroot. Featuring real ingredients like organic oats, organic dates and organic sunflower seed protein, each 180-calorie serving of the vegan, non-GMO, OU Kosher and allergen-friendly pudding has no added sugar, 5 to 7 grams of protein, 5 to 7 grams of fiber, and about half the carbohydrates found in conventional competitors, while providing gut- and immunity-boosting prebiotics and heart-healthy whole grains. Available in Cocoa, French Toast, Sticky Bun and Mocha varieties, Noops retails for a suggested $2.99 per 4.75-ounce cup. The company recently closed a $2 million pre-seed capital investment, which it will use to pursue more product innovation, further commercialize and expand into retail and foodservice, and invest in strategic marketing and operations. https://eatnoops.com/

Goodbye to Odor

Hello Products, one of the fastest-growing personal care brands in the United States, has now launched Naturally Friendly deodorants in Clean + Fresh and Fresh Citrus fragrances, as well as a Fragrance-Free option. Featuring gender-neutral, trend-driven formulas in 100% previously recycled packaging, the deodorants are made with such sustainably sourced ingredients as tea tree oil, activated charcoal and shea butter to help diminish odor, soothe and moisturize. Dermatologist tested and clinically proven to provide 24-hour odor protection, the quickly absorbed, non-irritating solid deodorants are free from aluminum, baking soda, parabens, talc and dyes. Like all Hello offerings, the products are made in America with globally sourced ingredients, vegan, and cruelty- and gluten-free. The suggested retail price is $6.99 per 2.6-ounce 100% recyclable container made with 100% previously recycled materials. https://www.hello-products.com/

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Juicy Water

Tree Top’s single-serve low-sugar Fruit+Water pouches are made with 50% juice — more than many other drinks in the same category. The pouches’ list of simple ingredients includes fruit juice concentrates and water, with natural flavors and vitamin C. They offer real fruit taste with 50% less sugar than average 100% juices, no high-fructose corn syrup, and no artificial colors or flavoring. “Knowing we’re owned by fruit growers, parents trust Tree Top and our quality fruit-based products,” says Brooke Goodrich, senior product manager at Tree Top, a cooperative of nearly 1,000 apple and pear growers. “Tree Top Fruit+Water pouches can give parents peace of mind for healthy hydration on the go without the sugar overload. Kids will love the natural fruit sweetness, not to mention the playful package designs!” A single-flavor carton of eight 6-fluid-ounce pouches retails for a suggested price range of $3.49-$3.99. https://www.treetop.com/

Joy of Cooking

Meaning “joy” in Yoruba, Black-owned Ayo Foods, an authentic line of West African-inspired cuisine developed from family recipes, offers nutrient-dense, flavor-infused frozen meals in a convenient format that, according to the company, will appeal not only to West African Millennials, but also to the growing number of “ethnic explorers” of any background. Initial offerings in the sustainably sourced line are Cassava Leaf Soup, made from slow-cooked ground cassava leaves, chicken and spices; Jollof Rice, long-grain rice spiced and stewed in a flavorful tomato broth with roasted red peppers and onions; and Egusi Seed Soup, consisting of ground melon seeds, fresh peppers, onions and spinach slow-cooked into a savory stew. The suggested retail price for an 8-ounce box of any of the items from Ayo Foods is $5.99. https://ayo-foods.com/

Acid Rocks

Acid League has launched a limited line of bold, flavor-forward Living Vinegars in seven flavors craft-brewed from fresh-pressed fruits and vegetables: Mango Jalapeño, Strawberry Rosé, Garden Heat, Meyer Lemon Honey, Cabernet Port, Apple Cider Maple and Smoked Malt. Taking inspiration from fashion in its approach to capsule collections, the brand has adopted the “drop” mindset and already has a pipeline of weekly innovation that expands into other acid-driven inspirations, among them limited-edition shrubs, dressings and spices. Acid League’s diverse entrepreneurs — two food scientists, a serial entrepreneur, and a wine and sake expert — contend that they can ferment just about anything into vinegar, allowing the brand to quickly create myriad flavor profiles and product offerings that cross categories. Raw, unpasteurized, unfiltered and oxygenated for optimal nutrition, the vinegars can serve as dressings or add kick to food and cocktail recipes. The suggested retail price is $9.99 per 12.7-fluid-ounce bottle. https://www.acidleague.com/

Hot Stuff

Manufacturing company Monogram Foods has entered into a licensing agreement with the Utz and Zapp’s brands to launch a line of frozen take-home hot appetizers, enabling consumers to enjoy their favorite snack flavors in a different form. Kitchen specialists from both iconic brands worked collaboratively to ensure that the flavor profiles of the frozen products matched the unique seasonings of Zapp’s potato chips and Utz Cheese Balls. The line of hot appetizers consists of Zapp’s Boudin Balls, coated with Cajun Crawtator seasoning and including Cajun-style andouille sausage and rice; Zapp’s Fried Pickles, thick crinkle-cut pickles battered with Voodoo seasoning and including an extra packet of the fan-favorite condiment; Zapp’s Pimento Cheese Stuffed Jalapeño Peppers, made with 100% premium Palmetto pimento cheese and coated with Hotter N’ Hot Jalapeño seasoning; and Utz Cheese-Filled Cheese Balls, made to look just like Utz Cheese Balls, down to the color and flavor, but with genuine hot, melty cheese inside. A 14-ounce box of any of the appetizers retails for a suggested retail price range of $5.99-$6.99. http://monogramfoods.com/; https://www.utzsnacks.com/pages/zapps; https://www.utzsnacks.com/ PROGRESSIVE GROCER October 2020

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AHEAD OF WHAT’S NEXT By José Gomes

Food Retailers Can Provide a Nudge in the Right Direction HOW GROCERS CAN HELP CUSTOMERS MAKE HEALTHIER CHOICES. n the decade since the publication of Richard Thaler and Cass Sunstein’s “Nudge: Improving Decisions About Health, Wealth and Happiness,” nudge theory has enjoyed unprecedented success. Predicated on the idea that individuals respond better to indirect suggestion than outright commands, nudge theory is commonly used as a way of subtly influencing behavior toward positive choices. The idea has gained such traction that governments around the world have created “nudge units” in a bid to tackle issues like obesity and climate change. Just as governments are exploring usage of nudge theory, grocers have a similar opportunity with regard to their customers’ dietary choices. With even a few small changes, grocers can help to nudge shoppers in the direction of healthier food decisions. But to do this will require a good knowledge of their customers – what the grocery industry calls behavioral and customer data science. As is true in many other successful solutions to health challenges, there is no “one-size-fits-all” response, but there are some nudges grocery retailers can implement to aid customer health with the benefit of behavioral and customer data science:

1

Tackle the Temptation of Treats

In 2018, scientists published findings from an experiment in which some U.K retailers removed snacks and candy from the checkout. Sales fell by 76% when compared with supermarkets that kept those items in place. Just changing the location of products can nudge shoppers into healthier decision-making.

2

Give Healthier Products More In-Store Space

Another nudge was discovered by a group of U.S. scientists in 2017, when they found that introducing an area in a shopping cart specifically for fruits and vegetables led to higher sales of those items. Another study showed that if more space was devoted, sales increased further.

3

Normalize Fruit and Vegetable Purchases

Change4Life, a campaign run by the United Kingdom’s Department of Health, aims to nurture healthier lifestyles. A 2015 study commissioned as part of the campaign suggested that “normalizing” the purchase of

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fruits and vegetables goes a long way toward influencing shoppers. When shopping carts displayed statistics showing how many other shoppers purchased fruits and vegetables, spending in those categories rose by 12.4%. Social-norm communication like this is a classic form of nudge that targets our deep-seated need for conformity.

4

Use Animation to Encourage Healthy Eating Among Children

To help tackle childhood obesity, the Food Dudes program put cartoon role models at the center of its in-school campaigns. One London-based study found that fruit consumption among the poorest eaters increased from 4% to 68%, while an unexposed control group showed no change. The concept of using entertaining imagery and characters to promote healthy eating out of store should be equally applicable in store. The method has been used to promote unhealthy products, but the Food Dudes program applies the same rules to drive healthier outcomes.

5

Assess the New Nudge on the Block

New nudges are always popping up. In November 2019, before the pandemic, a new DnaNudge shop opened in London. Combining a wristband and app, DnaNudge helps users make better food-shopping choices based on their DNA and lifestyle. Food is scanned using the wristband, which will then flash red or green based on its suitability for the owner’s biological profile. A product with high salt content will flash red for a user with high blood pressure, for instance. Noncommunicable diseases, such as heart disease, cancer and diabetes, still account for around 70% of global deaths, and many of these deaths are due to factors that the victim may be able to influence through lifestyle choices. While grocers might not be directly responsible for commanding their customers to eat better, they do have the opportunity to play a huge role. As behavioral and customer data science becomes better known around the world, and savvy customers expect grocers to make it easier for them to make healthier choices, expect a tipping point soon, at which the nascent nudge becomes the new normal.

José Gomes is president of North America for dunnhumby, responsible for leading growth and customer success for retail and brand partners.


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