December 2018 Vol 72, Number 12

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Also Inside  SpartanNash Buys Martin’s Super Markets, page 7  Nino Salvaggio Opens Fourth Location, page 7  Bills Introduced to Improve Recycling, Repeal Bottle Deposit Law, page 8  Meet Michigan’s New Legislative Leaders, page 9

Legislature Makes Minimum Wage, Paid Leave Mandates Palatable, Governor Signs Bills

MRA applauds the Legislature and Governor for taking action on Senate Bills 1171 and 1175 to make reasonable adjustments to otherwise unworkable policies. The bills, signed into law as Public Acts 368-369 of 2018, make adjustments to the increased minimum wage rate and paid medical leave benefit proposals adopted earlier this year. Recall that the Legislature adopted the proposals to keep them off the November general election ballot. SB 1171 revises Michigan’s minimum wage law to increase it to $12 over 12 years ($9.45 by 2019, then increase 23-cents per year until it reaches $12.05 by 2030). The state’s current minimum wage is $9.25. The bill also removes the (current) inflationary increase each year after $12.05 is reached. SB 1175 modifies the paid leave act to reflect the federal Family Medical Leave Act definitions which only covers employers with more than 50 employees and reduces the number of hours earned from 1 hour for every 30 hours of work to 1 hour earned per 35 hours. It also reduces the minimum number hours of earned time that employers must allow employees from 72 to 40 hours. Finally, seasonal workers, part time workers, and variable hour workers would not be covered by the requirement. While Michigan will be the only Midwest state with a mandated medical leave law, these changes bring the law in line with the 10 other states that also have medical leave laws. The revised law is still more generous than California’s law. These policies take effect in late March 2019. MRA does not recommend that employers make changes to employee policies before that time. 9

Michigan Retailers Association 603 S. Washington Avenue, Lansing, MI 48933

PRSRT STD U.S. POSTAGE PAID Lansing, MI Permit No. 846

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president ’s message

Year-End Musings James P. Hallan Publisher Lisa J. Reibsome Editor

Advertising Index Michigan Lottery ............................................. 2 SpartanNash ..................................................... 4 UBCR............................................................... 6

Effective January 1, 2018, Michigan Grocers Association is officially a division of the Michigan Retailers Association

Michigan Grocers Division Board of Directors James P. Hallan, President Michigan Retailers Association Rich Beishuizen, Country Fresh Craig Diepenhorst, H.T. Hackney Dave Duthler, AMRA Energy Jim Forsberg, Arctic Glacier Premium Ice Jim Gohsman, SpartanNash John Leppink, Leppink’s Food Centers Ken McClure, Kroger Company of Michigan Bryan Neiman, Neiman’s Family Market DJ Oleson, Oleson’s Food Stores Joe Risdon, Prairie Farms Dairy Don Symonds, Lipari Foods Thom Welch, Hollywood Markets Jim Zyrowski, Ben’s Supercenters Michigan Food News is completely recyclable. Printed on recycled paper with soyoil-based ink. Publisher does not assume responsibility for statements made by advertisers in business competition. MICHIGAN FOOD NEWS © 2018 Michigan Retailers Services, Inc. All rights reserved.

Contact Information Lisa J. Reibsome, communications director 517.449.2256 MGAReibsome@comcast.net  Michigan Food News advertising  Michigan Food News all content, layout, and printing  Grocers Division public relations Grocers Division Michigan Retailers Association 603 South Washington Avenue, Lansing MI 48933 517.372.5656 or 800.366.3699 www.Retailers.com

As we close out 2018, it’s been a year of many changes in Michigan. These are just a few of the highlights as we jump into 2019. Elections One of the most significant political changes we’ve seen in years is that Michigan has a new sheriff in town. Congratulations to Governor-elect Gretchen Whitmer who will be sworn into office on January 1. She enters office with significant legislative experience and clearly knows the process. Over the years, our association has worked well with leaders from both parties, and we expect that tradition to continue. Retail employs one out of every five jobs in the state, and our business-centric message is usually well received by all elected officials. With the House and Senate still controlled by the Republican Party, we do not expect a significant shift in major public policy issues given the balancing effect of each party. The unknown is most likely on the regulatory side where legislative action is not required. Going forward, we will have to watch closely the actions of the Liquor Control Commission and the Consumer Protection Division of the Attorney General’s office, among other agencies. Lame Duck This Michigan lame duck legislative session has been one of the most interesting and contentious that I can remember. While many people disagree with the concept of a lame duck session, it is a time-honored process that goes back to the founding fathers. Like most sessions, issues tilt both ways given the interests of each out-going party. In our case, the session has been favorable on two key issues: A sense of balance has been restored to both the paid leave and minimum wages ballot initiatives. Without corrective legislative intervention, the results could have been extremely harmful to the retail community. See the cover article for more details. I always tip my hat to out-going legislators. Most serve with distinction, trying their level best to become acquainted with a wide variety of complex issues with competing interests. Terms limits have prematurely ended the careers of many talented leaders in government while giving new officials the opportunity to make their mark on public policy. The past eight years have been particularly friendly to the retail community. Under Governor Snyder’s watch, we were able to repeal item pricing, pass Main Street Fairness, pass a strong Organized Retail Crime act, and enact legislation that preserves state authority over far-reaching local ordinances such as banning or taxing plastic bags. Governor Snyder and his team have done a terrific job for the retail community, and we thank him for his leadership and common-sense business approach to politics. Crystal Ball Looking forward to 2019, my crystal ball is optimistic. In the ever-changing retail environment, many economic fundamentals are sound. Employment is at record levels, wages are rising, consumer confidence is strong, and taxes are lower. On the flip side, the country remains divided and international strife continues to be on the forefront. But, all in all, there is much more good than bad. The glass is full. We wish you all good health and prosperity in the 2019! . MRA President and Chief Executive Officer

it ’s the law

Treasury: Businesses Reminded About Wage Statement Due Date Change

The Michigan Department of Treasury reminds business taxpayers that a new state law requires them to submit their wage statements — such as a W-2s and 1099s — by January 31. In previous years, employers had until February 28 to submit the statements. The change brings the state into alignment with the IRS deadline. Under the state law change, Public Act 118 of 2018, employers may electronically upload their wage statements by using Michigan Treasury Online (MTO) beginning January 2019. Employers with more than 250 employees must file their wage statements electronically. For more information about MTO and how to file wage statements electronically, see mto.treasury.michigan.gov. Also note: Although the wage statements are due on or before January 31, 2019, the Sales, Use and Withholding Taxes Annual Return (Form 5081) is still due on February 28, 2019. Wage statements filed on or before the January 31 due date need not be submitted again with Form 5081. IRS pointers to help filers prepare: Employers should verify employees’ information including names, addresses, and Social Security or individual taxpayer identification numbers. They should also ensure their company’s account information is current and active with the Social Security Administration before January. If paper W-2 forms are needed, they should be ordered early. Automatic extensions of time to file W-2s are not available. The IRS will only grant extensions for very specific reasons. Details can be found on the instructions for Form 8809, Application for Time to File Information Returns. For more information, read the instructions for W-2 and W-3 forms and the Information Return Penalties page at IRS.gov. December 2018  Michigan Food News 3

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() one-stop-shop for all the must-haves to celebrate the upcoming holidays including the New Year and, of course, February’s honorary holiday: The Super Bowl. Consumers say they will spend 4.1% more this holiday season than last year, according to the National Retail Federation. “Confidence is at an all-time high, unemployment is the lowest we’ve seen in decades, and take-home wages are up,” says NRF President/CEO Matthew Shay. “All of that is reflected in consumers’ buying plans.” A survey from Quotient Technology agrees, finding that 52% of consumers are more confident this year about their personal finances; 31% report having good jobs; and 21% say they saved money for the holidays. NRF reports that shoppers will spend in three main categories this holiday season: Gifts averaging $637; holiday items such as food, flowers, and greeting cards at $215; and non-gift purchases that take advantage of deals and promotions at $155. Consumers are planning to spread their shopping across multiple channels and types of stores, with 44% saying they will holiday shop at grocery stores/supermarkets. In addition, 50% of the online shoppers say they will pick up their purchases in-store. NRF’s survey also found that, for the 12th year in a row, gift cards remain the most popular items on wish lists. While the holidays mean different things to different people, most include traditions where friends and family gather to enjoy special food and drinks. Grocers tend to know their markets and which holidays their shoppers celebrate. However, as it becomes increasingly more common to expand marketing and merchandising efforts to include more cultures and ethnic identities, it’s important to do your homework before launching any promotions. Over the years, well-intended grocers have made what are now well-known cultural marketing mistakes. More recently, the London grocery store chain Tesco came under attack for offering bacon flavored Pringles as part of a Ramadan promotion. Since Muslims do not eat pork, both the store and Pringles ended up issuing apologies, with a PrinWhere consumers plan to shop gles spokesperson having to explain that, while the promoConsumers plan to spread their holiday purchases across a variety of retail destinations tion was the company’s idea, other flavors were meant to be 55% 55% 51% featured. 44% The lesson to be learned 33% here is simple: If your com24% 17% munity has diverse ethnic, 14% cultural, or religious groups, make sure your entire team learns the norms of each beOnline Department Discount Grocery/ Clothing/ Electronics Crafts/ Drug fore moving forward with any Store Store Supermarket Accessories Store Fabric Store holiday promotions. Store Store

In the spirit of multiculturalism: A popular website called Kveller, which is a resource for parents of Jewish children who “want to learn the many ways of adding a Jewish twist to their parenting,” published an article — “What Every Grocery Store Gets Wrong About Hanukkah.” The author, Stacey Zisook Robinson, laments about how retailers think they are serving the needs of the Jewish community by putting up a display with a few items. “With the exception of grocery stores in the more Jewish neighborhoods, every Jewish holiday seems to mean a single aisle endcap display of matzah, grape juice, and jelly glass candles,” she writes. “You’d think, after all this time, after the science that marketing has become — where advertising and manipulation and cash go hand in hand — these grocery stores would at least learn to distinguish which Jewish holiday requires matzah, which require menorah candles, and when to lay out the yahrzeit candles (hint: people die year-round). I won’t even get into the major retailers who refuse to carry any Hanukkah merchandise in their glut of holiday paraphernalia. ... I’ve called corporate offices. They all have a policy. That’s fine; I have money to burn and other stores in which to burn it.” Retailers: Take this as a heads up. Is it time to revisit your holiday efforts? If your shoppers celebrate Hanukkah or any other holiday, make sure your store is doing it right. Grocers aim to connect to their communities in a meaningful way, and the holiday season poses an excellent opportunity to do just that.

Keep Holiday Season Sales Going Through the New Year to the Super Bowl The New Year is typically associated with popping corks and pouring bubbly drinks. New research finds that sparkling wines are branching out beyond the holidays. The U.S. wine market reached 344.7 million nine-liter cases in 2017, an increase of 1%, according to Beverage Information Group’s “2018 Wine Handbook.” That’s down from a 2.4% gain in 2016, perhaps a sign of the category’s struggle to compete with spirits and beer for a share of beverage alcohol occasions. As with the previous year, sparkling wines — up 5.8% in 2017 — drove the growth. This marked the 16th consecutive year of increases for the total sparkling category. It seems that consumers have discovered that sparkling wines are not just for special occasions. Strong sales of rosé and wines in the $15-plus per-bottle price points also contributed. According to the Wine Handbook, millennials are more interested in trying new flavors than adhering to one style or one brand, so they buy across different categories, countries, and varietals of wine. They are also drawn to eye-catching label art and a strong brand story. In addition, higher quality boxed/canned wines are changing consumers’ negative perceptions of this wine packaging. Two of the major boxed wine brands posted double-digit growth in 2017. Red wine blends have also On the cover: Classic Potato latkes to increased in popularity. Concelebrate Hanukkah; a turkey on a wellsumers no longer look at the decorated holiday table; traditional Christterm “blend” as a negative but rather as a sign that a wine mas cookies; fried Okra for a Kwanzaa is fine-tuned and flavorful. celebration; shoppers buying chips for a To ring in the New Year, Super Bowl party; bottles of champagne people pair sparkling wine to toast the New Year; a holiday ham, and and other beverages with a drinks for a Super Bowl party. variety of food. Foods eaten

on the last night of the old year and the first day of the new one are often tied to the holiday’s “out with the old, in with the new” sentiment, with people “eating for luck” — celebrating the hope and prosperity of a coming new year. What people consider foods that bring luck is largely based on the region where they live and which groups founded the area, thereby bringing their traditions along. For instance, if your store serves a community with a strong German heritage, shoppers may be looking to serve baked ham, pork loin, chops, or sausage as part of their New Year’s celebration. If your community is primarily Dutch, shoppers may be looking to make Oliebollen, a dutch donut often studded with fruits, or apple beignets. Recurring themes across several cultures are serving green foods to represent life or money/wealth as well as pork or ham. Pork and ham are served because pigs root forward as they eat, signifying that you are embracing Continued on page 8 the challenges of the year to come. December 2018  Michigan Food News 5

Schupan and UBCR Celebrate Anniversaries Association members Schupan and UBCR hosted open houses at both the Wixom and Grand Rapids facilities for retailers and distributors to celebrate Schupan’s 50th and UBCR’s 20th year in business. Schupan & Sons Incorporated, founded in 1968 by Nelson L. Schupan, began as a six-person non-ferrous industrial scrap processor and has grown to an over 500-employee metals and plastics business with five divisions — beverage container processing, electronics recycling, industrial recycling, materials trading, and aluminum and plastic sales — throughout Michigan, Indiana, Illinois, and Ohio. As a third-generUBCR General Manager Nick Kronsbein and Schupan Recycling ation, family-owned business, Schupan says they are poised for longPresident Tom Emmerich at the Wixom facility open house. term success. “For fifty years, this company has anticipated the diverse and changing needs of the metals and plastics business,” says CEO Marc Schupan. “As Wayne Gretzky, the famous hockey player said, ‘I don’t go where the puck is; I go where it is going to be.’” In 1998, Schupan & Sons, in a joint venture with Connecticult-based TOMRA North America, formed UBCR to collect, transport, and process empty beverage containers from Michigan’s largest retailers on behalf of the soft drink and beer distributors, with all program fees paid by the distributors. Today UBCR is responsible for picking up 80% of all deposit beverage containers collected at retail stores with Reverse Vending Machines. Recently, UBCR’s territory expanded to include northern portions of the Lower Peninsula. “Our job is to provide great service at a reasonable cost for our industry partners — retailers and distributors,” says UBCR General Manager Nick Kronsbein. “We will always listen to their concerns and look for the most efficient way to meet those needs. Our goal is to exceed our customers’ expectations, and we’ve been doing that, every day, for 20 years.”

Great Lakes Fresh Market is Closing Two Muskegon Stores

Association Member Great Lakes Fresh Market is closing two of its three Muskegon locations. The store on Apple Avenue, which opened in October 2017, and the one on Sherman Boulevard, which opened February 2018, will permanently close on December 22. The third Muskegon-area location, which is on Whitehall Road, will remain open. The three are all former Plumbs stores; that company ceased operations in February 2017 after more than 80 years in business. Plumbs’ assets were taken over by L.M. Foods which reopened the stores as Great Lakes Fresh Markets. In addition to the Whitehall Road location remaining open, there is a Great Lakes Fresh Market in the Upper Peninsula and four locations in Wisconsin.

s r e l i a t e R , u o Y k Than ! p i h s r e n a P s r a e y 0 For 2 “UBCR works successfully in partnership with more than 600 Michigan retailers. This year, UBCR celebrates 20 years of business. On behalf of everyone at UBCR, we sincerely thank you for your business!” Nick Kronsbein, UBCR General Manager

UBCR, LLC 4820 Holtz Drive Wixom, Michigan 48393 (888) 422-7404 www.ubcrllc.com 6

Michigan Food News  December 2018

SpartanNash Buys All 21 Martin’s Super Markets Association member SpartanNash will acquire longtime Association member Martin’s Super Markets. The transaction is expected to close by yearend. Martin’s currently operates 21 stores in Southwest Michigan and Northern Indiana with approximately 3,500 employees. For the fiscal year that ended July 29, 2018, Martin’s had more than $450 million in net sales. Martin’s President and CEO Rob Bartels said people would not lose their jobs because of the sale. “Our Martin’s family remains the same,” he shared. “The same leaders at our corporate office, and of course, the same folks at our stores.” He also said the stores will continue to be called Martin’s, and that favorites such as the Side Door Deli and Side Street Deli Food Truck will continue, as will Martin’s great customer and community service. “We looked for a partner that would help us maintain the values, culture, trust, and respect that we have earned,” Bartels explained. “We also looked for a partner who would benefit from our culture, practices, and experience. We found that partner in SpartanNash.” He added, “The metaphor I’m using is [that we are] taking a tree and planting it in deeper, more fertile soil.” “Martin’s has been a valued independent retail customer since 2005, and we have the greatest respect for the Martin’s management team and its commitment to their associates, customers, and the communities they serve,” said SpartanNash President & CEO David Staples. “We look forward to working with members of the team to continue to deliver the quality shopping experience and high level of customer service to Martin’s customers. Our long-standing relationship has built the foundation for our future success and will enable us to grow our corporate retail business in Indiana and Michigan consistent with our long-term strategic growth strategy.”

From Parade Floats to Turkeys, Elmer’s County Market Continues to Give Back

SpartanNash launches ‘Check Out Now’ For Quicker Way to Shop

SpartanNash launched a scan, bag, and go app called Check Out Now. The app allows store guests to scan bar codes on products, bag their own groceries, and get in and out quicker with each trip to the grocery store. The app also integrates with yes loyalty accounts, allowing store guests to access special Check Out Now-only deals throughout the store as well as digital coupons, clubs, rewards, and fuel savings at check out. It’s currently available at two Michigan stores, the Georgetown Family Fare in Hudsonville and the Metro Family Fare in Wyoming. To use Check Out Now in either of the stores, shoppers can connect to the store’s WiFi, then scan barcodes on products as they shop, or visit electronic produce scales to add items — bagging as they go. The app keeps a running total and alerts customers to digital savings along the way, with quick and easy checkout available at the exclusive Check Out Now kiosks. The company plans to add Check Out Now to additional stores in 2019.

Nino Salvaggio Opens Fourth Location

Association Member Nino Salvaggio International Marketplace is opening a new store on December 28th in the Bloomfield Plaza Shopping Center at Telegraph and Maple roads in Bloomfield Township. The 42,000-square-foot store will house the fresh produce that the business is known for, as well as a large prepared foods section; plenty of locally made and other speciality products; a full beer, wine and liquor department; bakery, cheese, butcher, flower, and gift shops; a chocolatier; a sit-down cafe; catering services, and more. Founded in 1979 by Nino Salvaggio, the company’s three additional locations are in Clinton Township, St. Clair Shores, and Troy.

Association Member Elmer’s County Market in the Upper Peninsula supports the community by participating in the Escanaba Christmas Parade to kick off the holiday season. This year’s theme was “906 Christmas,” and Elmer’s float took second place. Local residents say that they look forward to seeing Elmer’s float every year. Known throughout the community for giving back, Elmer’s has a reputation for giving teenagers their first jobs, supporting local schools, sports, and events as well as food and clothing collections, in addition to offering a few unique programs such as Turkeys Not Tickets. In November, Elmer’s donates turkeys to Escanaba Public Safety to be given in place of tickets during some routine traffic stops. Elmer’s does this to support local law enforcement as well as the community. At an officer’s discretion of someone in need, he or she can give a turkey instead of a ticket. Store Founder Elmer Dagenais had a vision that started back in 1945 when he opened his first grocery store. In 1986, he built the current Elmer’s County Market. Throughout the years, he also built a reputation for outstanding service and great customer appreciation. Later, Elmer’s son Wayne joined his dad in the family business and was equally as passionate about taking care of families and the community. Today, Wayne’s wife Judy and three of their children, Pat, Mike and Barb, continue to operate the full-service supermarket built on Elmer and Wayne’s tradition of hometown pride and great service. December 2018  Michigan Food News 7

Keep Holiday Season Sales Going, cont. from page 5 Super Bowl Sunday USDA reports that Super Bowl Sunday is the second largest food consumption day of the year after Thanksgiving. The week leading up to the Super Bowl is the second busiest period for food retailers. Each year, the Super Bowl kicks off National Snack Food Month. Research and consulting firm Technomic recently released its “2018 Snacking Occasion Consumer Trend Report” revealing that consumers are taking a broader view of snacking and are more likely now, than in 2016, to replace one or two meals per day with snacks. While most consumers eat three meals a day with a few snacks throughout, the gap between eating three meals per day and replacing meals with snacks is narrowing. Key takeaways from the report include:  80% of consumers say they snack at least once a day.  Those who replace meals with snacks are most likely to replace lunch.  37% say that any food can be a snack if the portion is small.  71% say they are usually watching TV at home when they snack.  Compared to two years ago, consumers are eating more sweet snacks and salty snacks, with young adults showing the biggest snacking jump. Of those ages 18-34, 20% are eating more sweets, and 16% are reaching for more salty snacks. According to researcher IRI’s “2018 State of the Snack Food Industry:”  56% of consumers choose snacks that have convenient portion sizes.  86% seek snacks that are a good value for the money.  Bacon-flavored snacks remain a favorite, with a 19% sales increase over the prior year.

Contribution Limits to Increase

The IRS announced that the contribution limit for health flexible spending arrangements (health FSAs) will be $2,700 in 2019, up from $2,650 in 2018. In addition, the amounts employees can contribute to 401(k)s and IRAs will increase in 2019. In particular: The employee contribution limit for 401(k) plans will be $19,000, up from $18,500 in 2018. The catch-up contribution limit for employees age 50 and over remains unchanged at $6,000. The employee contribution limit for IRAs will be $6,000, up from $5,500 in 2018. The catch-up contribution limit for employees age 50 and over remains unchanged at $1,000. The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans will be $13,000, up from $12,500 in 2018. The catch-up contribution limit for employees age 50 and over remains unchanged at $3,000.

Answers for Retailers about Romaine Lettuce Labeling

Both the Centers for Disease Control and the FDA released new food safety updates regarding the multi-state outbreak of E. coli O157:H7 infections linked to romaine lettuce. The CDC update included the latest illness numbers (52 illnesses, 19 hospitalizations, 15 states), while both CDC and FDA continue to indicate that the likely source of the current outbreak is contaminated romaine lettuce from the Central Coast growing regions of northern and central California. The FDA update goes further than CDC’s, stating: “Traceback information from four restaurants in three different states so far has implicated 10 different distributors, 12 different growers, and 11 different farms as potential sources of the contaminated lettuce. The information indicates that the outbreak cannot be explained by a single farm, grower, harvester, or distributor.” Six companies entered into negotiations with the FDA to develop a voluntary labeling initiative to identify the harvest location and date of romaine to allow for reintroduction of product into the market. The FDA then released recommendations on this new labeling system. The National Grocers Association and the Food Marketing Institute partnered to compile a list of frequently asked questions and answers regarding the outbreak and the new voluntary labeling program. The list will be updated as new information comes in. See www.nationalgrocers.org/government-relations/food-safety. 8

Michigan Food News  December 2018

Bills Introduced to Improve Recycling, Repeal Bottle Deposit Law

A package of bills was introduced on November 27 to boost community recycling programs by ending Michigan’s 40-year old bottle deposit law. According to the Michigan Recycling Partnership — of which Michigan Retailers Association Vice President of Government Affairs Amy Drumm serves as chair — Michigan can increase its recycling rate by putting valuable materials like aluminum in curbside recycling carts, which helps defray the cost of recycling, rather than returning them to stores for a deposit. A single-stream approach is easier for residents and for retailers, manufacturers, and distributors who spend millions of dollars annually to take back recyclable bottles and cans. Michiganders have long felt they were doing their recycling duty by simply returning bottles and cans, while the state’s overall recycling rate has severely lagged behind other Great Lakes states. This two-pronged approach to recycling is a significant contributing factor in Michigan’s dismal overall recycling rate of 15%. House Bills 6532-6536, introduced by Reps. Jim Lilly (R-Park Township, Joe Bellino (R-Monroe), Beau LaFave (R-Iron Mountain), Triston Cole (R-Mancelona), and Daire Rendon (R-Lake City) would end the bottle deposit law on December 31, 2022. Prior to the repeal, additional money from unclaimed deposits would be directed into local recycling programs, including support for recycling carts, education, and material sorting facilities. MRA and the Michigan Recycling Partnership urge legislators to seriously consider and support the bill package during broader discussions about recycling and waste disposal. The bills present an opportunity to revisit the 40-year old law and begin a conversation about how to improve Michigan’s recycling rate.

Lame Duck Churns Along at Full Speed

As the Michigan Food News went to press, Michigan legislators were threequarters of the way through the lame duck session. “Most of the items on MRA’s legislative to-do list have already been checked off, so at this point we’re mostly guarding against potentially harmful bills and following some lower-tier retail issues as they get wrapped up for the year,” reports MRA Vice President of Government Affairs Amy Drumm. “We’ll send out a year-end update once legislators head home for the holidays and we have a final tally of where legislation impacting retailers ended up. December 20 is the last scheduled session day.”

Selling Fireworks Could Get More Expensive Under Bills Approved by the House

Legislation modifying state laws allowing sales and use of fireworks was discussed earlier this year, and then it quickly moved through the house during lame duck. House bills 5939-5941 attempt to regulate temporary structures (tents) by allowing local zoning rules prohibiting tent sales. The bills also add a new $50 per location licensing fee (originally proposed at $100) for retailers selling only low-impact fireworks. Retailers with multiple locations would pay $50 per location up to $1,000. In addition, the bills increase the fines for retailers who fail to file and remit the fireworks safety fee (even if no fireworks were sold during that period). MRA is advocating for lower fees and lower fine increases which are expected to be amended on the senate floor.

MRA Amendments Included in New Data Breach Notification Requirements

The House approved legislation that presents mostly reasonable updates to Michigan’s notification requirements in the event residents’ information is compromised as a result of a data breach. Unlike legislation introduced in the Senate, which MRA strongly opposed, House Bills 6405-6406 have been more carefully crafted. “While we believe ultimately that data security concerns are best handled at the federal level, HB 6405-6406, with the addition of several amendments, will strike the right balance in allowing for reasonable compliance by covered entities while respecting residents’ right to privacy and information,” explains Drumm. MRA suggested several amendments to the bills in the House that were adopted by the Senate Finance Committee. These amendments allow flexibility in investigations, preempt local regulations, offer flexibility in who provides the notice if a third party is at fault, allow alternative notice if the number of individuals impacted exceeds 500,000, and make other small tweaks. The Senate is expected to approve the bills with MRA’s amendments.

November 2018 Election Results: While Michigan Democrats picked up five seats in each chamber, Republicans will return majorities to the Michigan House and Senate when the 2019-20 session of the 100th Legislature begins January 9. In the House, the GOP will enjoy a 58-52 advantage. In the Senate, Republicans will hold a 22-16 majority. Republicans have controlled the Michigan Senate since 1984. “Democrats won big in statewide races, including picking up the governor’s seat with Governor-elect Gretchen Whitmer, but failed to flip control of the Legislature,” says MRA VP of Government Affairs Amy Drumm. Gretchen Whitmer will be sworn in January 1 as Michigan’s 49th and second female governor. “Divided government often means legislative gridlock on contentious issues,” adds Drumm. “The good news is we don’t expect serious movement to undo much of the good work we’ve done over the last eight years. And while Governor-elect Whitmer might have campaigned on some items that may concern retailers, those will likely end up in the Legislature’s ‘agree to disagree’ pile.”

Michigan House

Representative Lee Chatfield (R-Levering) was elected by the Republican caucus to be the next Speaker of the House. Chatfield, who served as Speaker Pro-Tempore for the past two years, was first elected to the House in 2014. “It has been a privilege to represent the people of Northern Michigan and the Upper Peninsula for the past four years, and I’m looking forward to giving them an even greater voice at the Capitol in my new role as Speaker,” he said. At 30 years old, Chatfield will be one of the youngest speakers in Michigan’s history and the youngest Speaker actively serving in the country. He is also the first Speaker from Emmet County. Representative Christine Greig (D-Farmington Hills) will be the new House Minority Leader. She currently serves as the House Democratic Floor Leader. “Michigan families deserve a Legislature that focuses on the issues that matter to them, which is why House Democrats have an agenda that puts people before corporate profits, lowers healthcare costs, cleans up our water, strengthens our schools, and fixes our roads” she said. “Along with Governor-elect Gretchen Whitmer, we will make that agenda a reality and get the job done for all Michiganders.” Michigan Senate Senator Mike Shirkey (R-Clarklake) was elected Senate Majority Leader. Shirkey was recently reelected to a second term in the Michigan Senate representing the citizens of Branch, Hillsdale, and Jackson counties. He previously served in the Michigan House. In a profile article for the Michigan Food News a few years ago, Shirkey said, “I think associations have an obligation to help the Legislature identify areas where state government is an impediment to their members growing their businesses or better serving their customers.” Senator Jim Ananich (D-Flint) was chosen as Senate Minority Leader. He also served as Senate Minority Leader following the 2014 election. In 2015, Governor Snyder signed Ananich’s Main Street Fairness legislation, which holds online-only retailers under the same sales tax collection laws that Michigan brick-and-mortar businesses operate. He told the Michigan Food News at that time, “Anyone who owns a business knows there’s nothing we can do that guarantees success. All we can do is take away barriers so businesses can succeed.”

Chatfield

Greig

Apply Now for Scholarships The Michigan Retailers Association Foundation scholarship competition kicks off January 1. As an official division of the Michigan Retailers Association, Michigan Grocer members are eligible to apply for the MRA scholarships as well as the long-standing Paul M. Felice scholarship. Applications will be accepted through April 1 for 21 one-year scholarships for the 2019-20 academic year. Those eligible to apply are high school seniors and college freshmen, sophomores, and juniors who are dependent children of owners or full-time employees of MRA member businesses, which includes Michigan Grocers members. Part-time employees who are full-time students are also eligible. MRA will award four $1,500 Paul M. Felice scholarships. An independent selection committee made up of educators will select the winners in April. Financial need is not a consideration. In selecting the winners, the committee evaluates the applicants’ academic records, test scores, and extracurricular activities including, but not limited to, retail employment. The committee will not discriminate on the basis of sex, race, religion, or national origin. Applicants will be notified of the results in June. Students may apply online at bit.ly/mrascholarships or www.retailers. com under the Member Benefits tab at the top of the homepage. Students may also contact MRA’s Rachel Schrauben at (800) 366-3699 or rschrauben@retailers.com to check eligibility or request an application.

Shirkey

Ananich

New Minimum Wage, Paid Leave Laws continued from cover

“While this is a big win, we do expect these changes will be challenged in court, and there may be another ballot proposal attempt in 2020 by the same group,” Drumm says. “The two bills I signed today strike a good balance between the initial proposals and the original legislation as drafted,” Gov. Snyder said. “They address a number of difficulties for job providers while still ensuring paid medical leave benefits and increased minimum-wage incomes for many Michiganders.”

Marijuana is Now Legal, Have You Reviewed Your Employee Policies?

Thanks to voter approval of Prop. 1, Marijuana can now be legally possessed and used in Michigan as of December 6. That doesn’t mean you have to allow it to be used in your store or workplace or allow your employees to come to work under the influence. Employers can continue to adopt and enforce drug-free workplace policies. Employees can be terminated for violating a workplace drug policy, but employers should ensure employees have reviewed and consented to follow those policies. For more information about drug policies, prepared by Retailers Insurance Company, contact MRA’s Amy Drumm at adrumm@retailers.com. December 2018  Michigan Food News 9

MDARD News

Reflections on Food Safety By Tim Slawinski, Director, Food and Dairy Division, Michigan Department of Agriculture and Rural Development During this time of year, people often reflect on things that took place over the last 12 months and set goals for next year. This seems like the perfect time to reflect on some of the most common violations found by our inspectors and to identify ways that operators can address these items. None of these are new concepts and operators generally know these need to be addressed, but we all get busy and sometimes things slip through the cracks. The topics below are the areas that tend to get neglected as operators try to keep up with their daily work. The key is often finding ways to keep these items as top priorities while managing the rest of your workload.  Improper temperature control for foods that require refrigeration or hot holding is by far the most common issue our inspectors find during store visits. That means foods requiring refrigeration are being held at a higher temperature than they should be or foods that are supposed to be hot are at a lower temperature than is safe. Temperature is an important factor when it comes to keeping foods safe. We don’t live in a sterile environment, so it’s common for some bacteria to get onto our food. Under the right conditions, that bacteria can grow to levels that will get people sick. Keeping foods at the right temper-

ature will prevent or slow bacteria growth, and in turn, prevent food from making people sick. Most bacteria cannot grow below 41 degrees F or above 135 degrees F. When certain foods are held between those temperatures, there is a higher risk of getting people sick. It’s vital that operators routinely monitor temperatures to ensure the store is not increasing the food safety risk to customers.  Cross-contamination is another concern our inspectors commonly see. One example is storing raw meat in an area where it can contaminate fresh produce or other ready-to-eat food. Most people understand that raw meats need to be cooked properly to be safe. However, operators aren’t always as aware of the risk related to storage of raw meats in relation to other foods. Storing raw meat above or near ready-to-eat food can contaminate the other ingredients. Since those other ingredients may not get cooked, that increases the risk of getting people sick. Training staff on proper storage and organizing coolers in a way that allows raw meats to be stored below other foods is an important way to address these concerns.  Another top item is the lack of proper cleaning and sanitizing of utensils, equipment, and food contact surfaces before use. A few examples: utensils used for raw food then used on ready-to-eat food without cleaning and sanitizing; a cutting board used for raw and ready-to-eat foods without cleaning; and utensils

Farm Bill Contains Important Victories

As the Michigan Food News went to press, Congress passed a farm bill expected to cost $867 billion over 10 years, clearing the way for the bill to head to President Trump’s desk for signature. “The 2018 Farm Bill leverages technology to better serve every customer shopping in our members’ grocery stores,” said FMI in its official statement. “It drives modernization in the electronic benefit transfer (EBT) systems, while protecting retailers from unfair and predatory interchange and processing fees. FMI is also pleased the Farm Bill encourages creative proposals from retailers who would like to incentivize SNAP customers to buy more fresh fruits, vegetables, milk, and whole grains in addition to permanently authorizing the Food Insecurity Nutrition Incentive (FINI) program (also known as Double Up Food Bucks).” The bill prohibits state EBT processors and subcontractors from charging retailers a fee for switching or routing a transaction. It also provides a route for retailers to get guidance on how to select EBT equipment and service providers. National Grocers Association was also pleased with the bill. “This legislation addresses important issues for independent grocers, including the protection against harmful processing fees and the increased investment in the FINI program,” responded NGA President Peter Larkin. “We were especially pleased to see the Farm Bill contain NGA offered language that would direct significantly more FINI funding to independent supermarkets.” A few highlights: • The final bill does not include the stricter work requirements for SNAP beneficiaries that was included in the House bill. • It increases funding for employment and training from $90 million to $103.9 million for each fiscal year. • It allows retailers to receive a waiver from SNAP equal treatment regulations to provide incentives for purchasing healthy foods (whole grains, dairy, fruits, and vegetables) with SNAP benefits. • The bill requires participating retailers to apply to USDA for a waiver to provide incentives. To apply, retailers must provide: (1) the types of incentives that will be offered; (2) the types of foods that will be incentivized for purchase; and (3) an explanation for how the incentives support meeting dietary intake goals. • It does NOT provide government funding for incentives. 10 Michigan Food News  December 2018

used on foods requiring temperature control not being cleaned frequent enough. All these practices can lead to contaminated food. There are various approaches to proper cleaning and sanitizing. In some cases, using separate utensils and equipment for raw and ready-to-eat food can help reduce the risk. Training staff, along with scheduled cleaning and sanitation for certain utensils and equipment, also helps. In many cases, it’s a matter of identifying the equipment and utensils that could pose a risk and developing procedures to prevent contamination and a schedule to keep the equipment clean and sanitized.  Finally, while proper handwashing is fundamental to food safety, improper handwashing is one of the most commonly found violations. Most people understand handwashing is important; however, ensuring employees properly wash their hands at the right times requires a proactive effort. Training, along with frequent reminders, are steps to help encourage staff to wash their hands. People get busy and handwashing takes time. Frequent reminders are needed to make sure handwashing continues to be a focus. Some form of monitoring by management helps reinforce the training, and making sure handwashing stations are convenient and properly stocked is critical. By making food safety a top priority and taking time to identify ways to avoid common violations, we all can enjoy a happy and healthy 2019.

More Menu Labeling Help

FDA Launches Education Module

The FDA has a new online education and training module to help industry, regulators, and consumers understand the menu labeling regulations. Launched in December, the module describes in detail what types of establishments and foods are covered by the regulations and provides guidance on how to comply. There are also two fact sheets available on menu labeling and declaring calories that provide in-depth information on industry requirements. The menu labeling rule took effect May 7, 2018. During this first year of implementation, FDA is focusing on education and outreach to ensure that establishments understand the compliance rules. Retailers are encouraged to take full advantage of the FDA guidance during the current cooperative period. Find the new guide at www.fda.gov/Food/NewsEvents/ ConstituentUpdates, click “12/3/2018 New FDA Online Education and Training Module on Menu Labeling.”

Survey Finds 77% Would Rather Eat a Homemade Meal than Eat Out in 2019

Michigan Apple Queen Crowned

A new survey by Peapod found that 77% of Americans say they would rather eat a homemade meal than go out for dinner. Resolving to spend more time in the kitchen in the New Year, 43% said they plan to cook more in 2019. That number is even greater for millennials as 59% plan to cook more. Their reasons for cooking at home? While more than three in four respondents (77%) prioritize cost savings, eating healthier is also important for more than half (51%) of respondents. Family time is also a bonus with 41% of those surveyed saying cooking at home offers more quality time at home with family, and millennials show the most interest (48%) in this. Weekdays are overwhelmingly when respondents were most likely to make a home cooked meal, with Wednesdays peaking as the most popular day to cook dinner at home (75%). Perhaps aiming to keep meal planning easy in the middle of the work week, Wednesday is also the most popular day for respondents to look to the convenience of meal kits (51%). Health Trends to Look for in 2019 Consistent with the results from the 2017 and 2018 surveys, more than half of respondents (53%) expressed intentions of cooking more healthy meals in 2019. One in two (52%) is looking to use more fresh ingredients in the coming year, and more than half of respondents (51%) are looking to consume fewer processed foods in 2019. Younger survey respondents were more likely to express interest in trying new things, with millennials leading in intentions to try items like jackfruit (27% vs. national average of 17%), tofu (25% vs. national average of 19%), Paleo products (21% vs. national average of 16%), and Keto products (28% vs. national average of 19%). Another trend to try for 2019 is incorporating more meatless dinners, with nearly half of respondents (48%) sharing that they already eat no meat for dinner at least once a week. Eating meatless is more common among female respondents, with 52% forgoing meat weekly or more often, compared to 44% of men. Convenience is Key for Consumers Americans are looking to keep meal preparations easy for 2019. Nearly half of all adults surveyed (47%) plan to take advantage of at least one of the following options in 2019:  Click-and-collect grocery shopping (27%),  Home grocery delivery (26%), and/or  Meal kits (20%). Men show slightly more interest than women (23% vs. 18%) in using a meal kit in 2019, and millennials show the most interest with twice as many respondents (60%) expressing intent to purchase as compared to boomers (31%). Millennials are also three to four times more likely than boomers to show interest in creating weekly meal plans (51% vs. 16%), cooking with kids (39% vs. 9%), and using home grocery delivery (29% vs 10%).

Left to Right: 2018 Michigan Apple Queen Emily Kropf, 2019 Michigan Apple Queen Celeste LeMieux, and 2019 First Runner-Up Lauren Freeland. Association Member Michigan Apple Committee selected Celeste LeMieux of Conklin as the 2019 Michigan Apple Queen to represent Michigan’s apple industry. The daughter of David and Ann LeMieux, Celeste is a student at Lake Superior State University. She is the daughter of a third generation apple grower. “Each year since 1952, the Michigan apple industry has crowned a queen. The Michigan Apple Queen has the great responsibility of serving as an ambassador for the Michigan apple industry,” says Michigan Apple Committee Executive Director Diane Smith. LeMieux will spend the next year attending events and festivals across Michigan as the face of the industry. She will also travel to schools teaching students about apples. The queen and first runner-up each receive scholarships from the Michigan Apple Committee and the Michigan State Horticultural Society.

Lottery News

Preliminary Results Show Record 2018 Fiscal Year for Michigan Lottery; Retailers Receive Record Commissions By Brian O. Neill, Michigan Lottery Commissioner The preliminary results for the Lottery’s 2018 fiscal year bring very good news for retailers, the Lottery, and most importantly, public education in Michigan. The numbers show that Lottery sales broke the $3 billion mark for the third straight year. This impressive record is the result of teamwork between the Lottery and its 11,000 retailers across the state:  The 2018 figures show a record $3.6 billion in Lottery sales, topping the previous record set in 2017 by about $300 million.  Retailers also enjoyed a record year in 2018, with commissions hitting a record $264.9 million, up about 7% from the previous record of $248.4 million set last year. The Lottery’s instant game portfolio once again was a major part of this success. Instant games remain a favorite for the most loyal Lottery players, as well as casual players, and make up nearly 42% of overall sales. The Lottery’s team puts a great deal of focus and effort into developing instant games that will attract players to retailers and boost sales. The

Lottery’s marketing team developed a number of advertising campaigns to support new instant games, helping to raise awareness of our games and boost sales for retailers. That work paid off in a big way in 2018, with total sales of instant games surpassing $1 billion for the fourth straight year. Instant game sales increased an impressive 15% from 2017 to $1.5 billion. The hard work of retailers and the Lottery also led to a record contribution to the state’s School Aid Fund. Preliminary figures indicate the Lottery’s contribution to the School Aid Fund will total about $938 million, the fourth consecutive record annual contribution. Since it began in 1972, the Lottery has provided more than $22 billion to support public education in our state. The record results in 2018 wouldn’t have happened without each retailer’s hard work and commitment to serving customers and the Lottery’s mission. We’re excited about the opportunities that 2019 presents and look forward to working with retailers to break even more records! December 2018  Michigan Food News 11

Meet your Marketing Representatives

Your Association has four full-time regional marketing representatives in the field providing service to members and signing up new ones. Their areas and contact information are shown below.

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