July-August 2021 Michigan Food News

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President’s Message

Michigan’s bottle bill is a false sense of accomplishment for a job not well done william j. hallan

MRA President and Chief Executive Officer

I wrote the following op-ed that was published in Crain’s Detroit Business on April 25 as part of a forum examining the state of recycling in Michigan.

Yet, Michigan is the only state among our neighbors with a bottle deposit law and also the only one that barely invests in recycling, budgeting only $15 million a year. That’s 15% of what retailers and distributors are paying to manage deposit containers, which only make up an estimated 2% of the waste stream.

A year ago, when the COVID-19 pandemic hit, we all started to look at the world differently. Retail employees began looking at bottle returns with even more fear and disgust. How long could viruses live on these containers that have been in contact with people’s saliva and mouths? Would handling them present another way retail workers could be exposed to COVID-19?

Part of the problem is that residents believe that taking back their cans and bottles to the store is enough. It isn’t. Yet, local recycling programs struggle because the cardboard and plastic food containers returned don’t offer much value. The real valuable materials: aluminum and PET plastics are diverted through the bottle deposit law instead of helping offset the costs of local recycling programs.

The bottle deposit law has always presented cleanliness and safety challenges for retail workers. Employees are tasked with containing and cleaning up the sticky drips and all that’s attracted to them (yes, we mean bugs).

Let’s imagine a better way. The Michigan Legislature is working on reforms that would require most communities to provide curbside recycling and recycling drop-off centers.

That’s not to mention the other surprise items humans tuck inside returned bottles and cans. It is tremendously expensive and inefficient to manage the collection of these containers in a retail setting.

We strongly support efforts for the state to invest in more robust, convenient recycling opportunities for residents.

Larger retail stores have to deal with an extraordinary volume of returns, and smaller stores have to find room to sort and store empty containers in limited space and juggle employee time to handle them.

Recycling needs to be as easy and convenient as tossing something in the trash. Building programs and infrastructure is one step. We need to make it easier on residents by having a single-stream system.

Collectively, retailers and distributors spend over $100 million each year managing the takeback of these materials given the state-prescribed method of takeback.

If we direct all our recycling, including bottles and cans, through a single-stream, convenient drop-off system model, we should see actual results that improve Michigan’s recycling rate.

Michigan’s current recycling programs are dismal at best. Despite being the Great Lakes State, where we take pride in promoting “Pure Michigan,” somehow our overall recycling rate of just 18% lags well behind our neighboring states and the U.S. average of 34%. We send a lot of pure recycling to landfills.

It will also eliminate the food safety concerns of bringing dirty containers that attract pests into stores where we buy groceries and reduce the risk to retail workers currently required to handle them. continued on page 8

Michigan Grocers Division Advisory Board William J. Hallan, President Michigan Retailers Association

Rachel Hurst Kroger Company of Michigan

DJ Oleson Oleson’s Food Stores

Craig Diepenhorst H.T. Hackney

John Leppink Leppink’s Food Centers

Don Symonds Lipari Foods

Jim Gohsman SpartanNash

Bryan Neiman Neiman’s Family Market

Thom Welch Hollywood Markets

Michigan Grocers is a division of the Michigan Retailers Association

William J. Hallan Publisher Lisa J. Reibsome Editor/Layout & Design/Ad Sales (517) 449-2256; LReibsome@retailers.com Publisher does not assume responsibility for statements made by advertisers in business competition. © MICHIGAN FOOD NEWS 2021 MICHIGAN FOOD NEWS

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CONGRATULATIONS

2021 scholarship winners Meet the 2021 Paul M. Felice Memorial Scholarship and the Albert (Al) Kessel, Jr. Memorial Scholarship winners. These one-year, $1,500 scholarships are awarded annually to high school seniors, college freshmen, sophomores or juniors whose parents work for MRA Grocers Division members or who are part-time student employees of member companies for at least six months a year. Recipients are chosen by a third-party administrator. The 2022-2023 scholarship competition opens Jan. 1.

Paul M. Felice Memorial Scholarship Winners

Albert (Al) Kessel, Jr. Memorial Scholarship Winners

Michael Flickinger is now a three-time Paul M. Felice scholarship winner. With a 3.28 GPA, he will be a senior at Grand Valley State University in the fall. He majors in math and minors in engineering science. Michael says that he has been staying active during the pandemic by reading, hiking and playing disc golf. During previous summer breaks, he completed full-time engineering internships. Michael was a 2017 homeschool graduate with a 3.95 GPA. “It is a great honor to be selected for this scholarship three consecutive times,” he says. “The scholarship is greatly appreciated.” After graduation, Michael plans to work as an engineer for a company where he “can make a difference.” He was eligible to apply for the scholarship because his father, David, works for Meijer.

Jacob Flickinger will be a sophomore at Grand Valley State University this fall where he majors in accounting and law enforcement. With a 3.77 GPA, he is now a two-time Albert Kessel, Jr. Memorial Scholarship winner. He was eligible to apply for the award because his father, David, works for Meijer. Jacob’s extracurricular activities at GVSU include intramural sports and Law Society Club. Homeschooled through Mother of Divine Grace, he graduated high school in 2020 with a 3.92 GPA. “I don’t think words can really express how truly thankful I am to receive this scholarship,” he says. “I plan on going to the police academy and joining a law enforcement agency, and I hope to bring my accounting experience into that field to help improve whatever agency I go with.”

Mason Gabriel is also a three-time Felice Scholarship winner. He will be a junior at Grand Valley State University where he has a 3.3 GPA. Majoring in secondary education, he plans to teach biology. A 2018 graduate of Orchard View High School, he received varsity letters for cross country and band. He also participated in Quiz Bowl and the Links Club, which is a program that helps kids with disabilities. Mason was eligible to apply for the scholarship because he works part-time at Orchard Markets — a job he’s held for several years. “Thank you for helping me reach my goals and thrive,” he says. “I appreciate the scholarship and all the help my teachers and parents have provided.”

Christopher Garbe will be a senior at Grand Valley State University this fall where he majors in biomedical sciences. He is also a two-time Kessel Scholarship winner. With a 3.71 GPA, he is a member of Alpha Phi Omega, which is a co-ed service fraternity. He graduated summa cum laude from Bay City Western High School in 2018. “I am beyond grateful that this scholarship has allowed me the opportunity to continue with my studies,” he says. After graduating, he plans to attend graduate school. “I have found a passion for healthy living and am now considering going into dietetics,” he says. Chris was eligible to apply for the scholarship because his mother, Diane, works for Meijer. MICHIGAN FOOD NEWS

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town & country supermarket A deep sense of community helps define this neighborhood grocery store BY LISA J. REIBSOME, EDITOR

As a small independent supermarket operating for over 80 years, Town & Country competes among big box stores to serve a loyal following. The 20,000-square-foot store is about 2 miles southeast of downtown Kalamazoo in the Edison neighborhood — the most populous and diverse community in the city. “This is the oldest grocery store in the area that’s still operating in the same location,” says owner Mike Rupp during a store tour. “Although there are three Walmarts, four other large-format stores and several medium-size grocery stores nearby,

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MICHIGAN FOOD NEWS

we survive thanks to our extremely loyal, engaged customers. Many have shopped here all their lives and remember coming in with their parents when they were small.” Originally an open-air market in the 1940s, Town & Country has always been part of the neighborhood’s daily life. While the name has alternated several times between Harding’s Market and Town & County Supermarket, community support has remained steadfast. Over the years, the store’s reach has expanded. “We get a variety of shoppers because we are on a very

busy street. It’s extremely convenient for people to shop here,” Rupp says. “Portage Road is the third or fourth busiest in Kalamazoo.” The store also has devoted customers who travel hundreds of miles — from Northern Michigan, Chicago, Ohio and other states — to stock up on meat. “We’ve got people who come in with several coolers and buy hundreds of dollars worth of meat whenever they pass through the area,” says Rupp, who’s owned the store for 26 years. “I became co-owner in 1995 when I was 25 years old, and I’ve been the sole owner since 2003.”


Owner Mike Rupp stands in the meat department, which runs the length of the store behind him. Inset: Town & Country got its start as an open-air market in the 1940s.

Town & Country has three other locations: A 14,000-squarefoot store opened in Bellevue in 2008; a 44,0000-square-foot store opened in Pinconning in 2015 and a 25,000-square-foot store opened in Gun Lake in 2018. “I’ve been in the grocery business since I was 16 working as a bagger,” Rupp says. “Then I worked as a meat cutter for Jack’s Fruit & Meat Market and as a meat manager for Harding’s Market while attending college.” He graduated with a food marketing degree from Western Michigan University in 1992. With Rupp’s experience as a meat cutter, it’s no surprise that the meat department is the cornerstone of the business. “At this location, we’ve got over 40 feet of fresh meat and 100 feet of frozen,” he says. “Meat makes up 35 to 40% of our sales. And our Bellevue location isn’t too from that at about 30%.” The stores all have full-time meat cutters. “Here in Kalamazoo, I am one of three full-time meat cutters,” Rupp says. “All meat is cut in our store; we don’t purchase precut or prepackaged meat. Our fully stocked self-service meat counter continues to be a customer favorite. We have incredible premier cuts and a wide variety of seafood items.” In addition to a full selection of top-quality USDA Choice meat, the store also sells hard-to-find specialty meats such as goat cubes, rabbit meat, ox tails, Texas BBQ whole beef brisket and four kinds of spareribs. They also make six kinds of bratwurst.

“In this neighborhood, the price of an item goes a long way,” Rupp says. “With my 30 years of meat-cutting experience, I am able to offer deep discounts on a lot of great meat products. I follow the market reports, so I buy at the best prices and pass the savings on to our customers.” Town & Country also prioritizes produce. As you enter the store, your eye immediately goes to the colorful produce department. “Our customers are not into local the way shoppers are in a lot of stores,” Rupp says. “They want freshness, quality, variety and good prices. We’re committed to buying the absolute freshest fruits and vegetables and making them available to our customers at low prices.” Rupp knows and respects the community and is dedicated to meeting their needs. “I know most of our customers by name, and they know us,” he says. “We’re part of an inner-city neighborhood, and we work hard to make sure we have an extremely clean, well-stocked store that people are proud to shop in.” The Town & Country team has an especially high standard when it comes to cleanliness. “Of course we clean high-touch points frequently, but we also have a regular schedule for deep cleaning,” he shares. “For instance, there are set times when all the products are removed so we can clean the shelves. And we clean the ventilation ducts, the walls, the floors, the cases, the cabinets — you get the idea.” continued on page 9 MICHIGAN FOOD NEWS

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MIOSHA rescinds COVID-19 emergency rules for non-health care workplaces Only health care settings still have state workplace regulations pertaining to COVID. The previous rules on face-coverings, social distancing, health care screenings, etc. are rescinded.

President’s Message:

Bottle bill is a false sense of accomplishment continued from page 3

The state should lead by example and include recycling bins at state highway rest areas, in state buildings and on state property.

On June 22, the Michigan Occupational Safety and Health Administration (MIOSHA) rescinded and replaced its COVID-19 emergency workplace rules. The revised emergency rules align with OSHA’s federal Emergency Temporary Standard (ETS) that is specific to health care settings.

And while businesses have a role in helping these programs be successful, the entire cost of recycling and managing our waste should not be shouldered by private industry. It is a state problem that needs a state solution, and everyone needs to step up.

What does this mean for retailers and suppliers? Employers in non-health care settings may use their best judgment to determine whether to maintain daily health screenings, face covering requirements and social distancing requirements, regardless of vaccination status. When making these decisions, employers should keep the following in mind:

The state is long overdue in its development of a comprehensive solution for all our recyclable materials. Michigan cannot continue relying on an outdated and overly costly deposit law that neglects 98% of the remaining waste stream while giving residents a false sense of accomplishment.

n MIOSHA strongly encourages workplaces to follow the available CDC and OSHA recommendations to mitigate hazards.

Editor’s note: For more about bottle bill frustrations, see the Town & Country Supermarket article, starting on page 6.

n In addition, since 1975, the Michigan Occupational Safety and Health Act has required Michigan employers to provide each employee a safe and healthful work environment free of recognized hazards. MIOHSA says it will respond to complaints from employees who believe that a health or safety hazard exists in the workplace. Pharmacies and clinics within retail stores MRA members with pharmacies should note that OSHA’s COVID-19 Emergency Temporary Standard does not apply to the following: The dispensing of prescriptions by pharmacists in retail settings. Furthermore, where a health care setting is embedded within a non-health care setting (such as a walk-in clinic in a retail store, including clinics providing vaccinations), the ETS applies only to the embedded health care setting and not to the remainder of the physical location. In these embedded health care environments, under the ETS, employers must require face coverings, social distancing and health screenings of non-fully vaccinated employees and maintain physical barriers between patients and employees. This screening provision applies only to the area where health care services are administered, not the entire facility. In addition, employers must screen all non-employees before entry into the area of the facility in which health care services are administered. OSHA defines “screen” to mean that an employer “ask(s) questions to determine whether a person is COVID-19 positive or has symptoms of COVID-19.” No COVID testing or temperature checks are required. These new MIOSHA rules expire Dec. 22, 2022. 8 JULY/AUGUST 2021

MICHIGAN FOOD NEWS

A whole new look. Same community loved freshness.

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Town & Country Supermarket continued from page 7

In 2009, a severe thunderstorms produced a tornado and a lot of rain — about 6 inches an hour for several hours — causing the roof to collapse. “No one was hurt, but the roof was a total loss,” Rupp says. In addition to a new roof, the store has undergone many upgrades and expansions to every department as well as the parking lot and storefront. “In 2014, we added a new entryway for carts and bottle returns,” Rupp says. “We collect and sort all our returnables by hand. We don’t have reverse vending machines. We can’t afford everything that’s involved with the RVM process — especially the monthly maintenance fees.” The store also struggles to find employees, especially now, as the country faces a huge labor shortage coming out of the COVID-19 pandemic. Town & Country employs about 140 people throughout its four locations. “It’s impossible to get workers,” Rupp says. “And it’s hurting our customers.” As an example, Rupp says the store can no longer take back returnables after 4 p.m. “because we don’t have enough employees to do that,” he explains. “We also have to limit the number of returnables we accept from customers. I hate to do that, but it’s our only option,” he says. The store takes back about 15,000 cans and bottles a week.

Town & Country is known for its fantastic meat department, fresh produce and community support, as well as for providing a very clean store and a friendly atmosphere.

“I’d like to see the bottle bill replaced with a better system,” Rupp says. “Not having to devote resources to managing used cans and bottles would allow us to better serve our customers.” Rupp supports the community beyond providing a store where neighbors are happy to shop. For many years, Town & Country supported anyone who asked; but today, they tend to focus on charities where they can do the most good. “I’d rather feed people than hang a banner with our name on it to sponsor an event,” Rupp explains. “With my industry contacts, I can turn a $200 donation into $500 or $600 worth of food.” Town & Country has received numerous honors for their generosity, including the 2020 Food Industry Supply Hero award from Kalamazoo Loaves and Fishes. “We contributed over 200,000 pounds of food to that organization,” he shares. “We also support the Boys & Girls Clubs, Kalamazoo Salvation Army and Kalamazoo Gospel Ministries, which helps people dealing with hunger and more.” Town & Country’s wholesaler is SpartanNash, and Country Fresh supplies milk and other dairy products. “Both companies do such a great job that I don’t really need to source a lot of product from other places,” he says. Rupp is the newest board member of the Michigan Grocers Fund. (See the article on page 19.) “We are very safety-

oriented,” he says. “We train and coach our employees to proactively prevent injuries. Being part of the Grocers Fund makes great financial sense for us.” “The food business has been a big part of my life and my family for a long time,” Rupp says. “I met my wife when I was working for Harding’s in Union City. She works for Kellogg’s.” The couple has been married 26 years. Both of their children started working in the store when they turned 15. “My daughter is a cashier and attends Kalamazoo Community College,” he says. “My son works in the meat department. He just graduated high school and will play baseball for Glen Oaks Community College this fall.” Rupp is proud to own a neighborhood grocery store with a distinguished reputation and a tradition of quality. The team knows what customers want and serves them well. If the previous eight decades are any indication of the future, it’s likely that Town & Country Supermarket will continue to thrive. MICHIGAN FOOD NEWS

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Where should grocers focus their time and money?

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conditions that could undermine growth

Consulting firm Oliver Wyman’s Hunter Williams is a partner in the Retail and Consumer Goods and Pricing, Sales and Marketing practices. As we emerge from the COVID-19 pandemic, he identifies three market conditions that could undermine growth and provides strategies for Michigan grocers to overcome these challenges and improve business operations.

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ver the last 18 months, the food industry ecosystem has experienced a shock of epic proportions, driven by reactions to the COVID-19 pandemic. These include aggressive consumer pantry loading, massive supply chain disruptions, significant reductions in supplier and retailer promotions, and seismic channel shifting from food away from home to in-home dining. In addition, work from home and a desire to limit social interaction have driven trip consolidation, larger basket sizes and e-commerce — both delivery and click-and-collect. Grocery sales today remain elevated, more than a year after initial lockdowns. As we move through the summer, communities across the country are beginning to recover. According to Oliver Wyman’s Health and Life Sciences practice, thanks to a combination of vaccinations and resolved infections, most of the U.S. will reach herd immunity this summer, enabling a confident return to something resembling normalcy. The pandemic hit Michigan hard: For every confirmed case, Oliver Wyman estimates that 1.9 more Michiganders contracted COVID-19, but those cases went undetected. The good news is that the firm’s Pandemic Navigator predicts that Michigan will reach the herd immunity threshold — around 71% of the population — by mid-August, making the continued spread of the disease unlikely.

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While there’s light at the end of the tunnel, there are also new threats to navigate. We’ve identified three of the stronger headwinds hitting grocers as well as ways to cut their impact.

BY HUNTER WILLIAMS

Partner, Retail and Consumer Goods & Pricing, Sales and Marketing practices Oliver Wyman 10 JULY/AUGUST 2021

MICHIGAN FOOD NEWS

INFLATIONARY PRESSURES The problem: In May, the U.S. consumer price index rose 5% over May 2020, making its greatest jump since 2008. While durable goods led the rise, the food index also increased. The outlook for food prices and the overall economy in the next six to 12 months includes continued inflationary pressure. Many manufacturers have announced price increases, citing the high costs of raw materials, labor and logistics. Solutions: Retailers must evaluate which increased costs to absorb and which to pass on to consumers. In doing this, grocers must take a close look at their operating model and ask a tough question: How can we best deliver value to our


customers while continuing to operate a profitable business? In answering, keep in mind that today’s shoppers are hyper value-focused, often casting aside brand loyalty for lower prices. They are also more likely to switch to store brands. More tough questions to consider: Does your management structure enable you to react quickly to increased price sensitivity? Does your store’s value strategy align with current customer needs and expectations? Effective areas on which to focus your time and money: n Ensure your assortment strategy can attract price-conscious consumers by offering the right mix of brands at various price tiers. Try to leverage new product introductions that incrementally grow categories. n Assess the balance of value provided by low base prices (“everyday low prices”) and promotional activities (“high-low”). Are you offering the right balance to create compelling offers for shoppers? n A strong value-based pricing strategy — especially on basic products and key value indicators — is required to respond to changing customer needs. Be deliberate when using price investments to deliver value and when selecting products on which to make margin.

this by enticing shoppers with meal solutions to slow the shift back to other channels. Now is the time to up your game in the store perimeter with an increased focus on ready-to-eat, ready-to-cook and semi-prepared offerings. Spending time and money here right now can pay off quickly. BONUS SUGGESTIONS Here are some additional strategies to consider when determining where to focus limited resources. Focus on the consumer As your shoppers deal with higher prices and other post-pandemic considerations: n Make sure your store continues to excel in the areas its known for such as friendly service, a great meat department, fresh & local, homemade deli or bakery items, and so on. For instance, if you stake your store’s reputation on service, remind all your employees what you expect and how to provide it. It’s also important to recognize employees who do this well. n Shoppers value a quick, easy checkout experience. Be sure all your employees understand the nuances of your POS system. Does anyone need more training in this area? n Peak shopping times have shifted since the pandemic. Do you have enough cashiers scheduled during busy times?

n Optimize promotional programs. Promotional activity is returning to pre-pandemic levels, but economics have changed. To optimize returns, rethink the assumptions in your promotional planning calendars, effectively leverage investments in supplier funding and improve your data feedback loops.

n Have you looked into mobile checkout solutions? They are one way to lessen the impact of the labor shortage and still provide great customer service.

ACCESS TO LABOR The problem: Grocers welcomed thousands of displaced food-service workers during the pandemic to meet the surge in demand. This summer, as conditions in the hospitality and transportation sectors improve, grocers are in fierce competition for a shrinking labor pool. Now more than ever, the ability to attract, train and retain labor is critical for success.

n Out-of-stocks frustrate shoppers. Are you staying on top of what’s selling the most?

Solutions: New, out-of-the-box thinking will be required. Some ideas to get you started:

n Relentlessly focus on supply chain and logistics improvements to eliminate waste while maintaining stock.

n Offer new hires a sign-on bonus. Take a look at Tops Markets in the Northeast. In June, they began offering $2,000 bonuses to new hires.

n Grocers made strides in controlling operating costs during the pandemic. Now is a great time to embed these savings in your day-to-day business operations.

n Offer a retention bonus that kicks in after 60 or 90 days. Offering signing or retention bonuses are good options because they do not raise wages permanently.

n More tightly control your spending. It is always more efficient to control demand than to negotiate on price.

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n Invest in your employee onboarding and training programs. A strong training problem will allow you to tap into a wider labor market that includes lower-skilled job candidates.

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REEMERGENCE OF FOOD AWAY FROM HOME The problem: Grocery demand is expected to slowly ebb for the remainder of the year, as the food service and hospitality industries continue their recoveries and consumers head back to restaurants. Solutions: During the pandemic, consumers got used to relying on grocery stores for easy, no-cook meals. Capitalize on

n Are you rewarding loyal customers with personalized offers?

Reduce costs Lowering your costs frees up resources so you can better react to increased prices and labor needs. Deliver additional value to customers in the following ways:

n Consider shifting to zero-based budgeting to reset costs in an ambitious way. Manufacture scale for the post-pandemic era As you implement the strategies touched on here, it helps to find partners and ways to “manufacture scale.” That means working more closely with your wholesaler and other distributors. Rely on them to help with marketing, promotions, merchandising, media solutions, branding and more. Forming buying alliances and joining peer share groups can also help you get the most from your time and money.

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UPCOMING MRA EVENTS We’re eager to get back together face to face

Fall Legislative Reception

MRA is planning to hold its annual Legislative Reception this October. This fantastic event is typically held in April; however, it was postponed due to the COVID-19 pandemic. The reception is an ideal setting to build rapport with public officials while showcasing the top-of-the-line food and beverages that you — our members — create and sell everyday. In the next few weeks, MRA will announce the exact date of the event.

Ask Us First

MRA is always here to answer your business questions. We have legal, governmental, retail, insurance and technical expertise on staff. Why not take advantage of it? You can reach us at 800.366.3699 or askusfirst@retailers.com.

Spring gathering planned for retailers, suppliers

MRA has begun to plan a fun new event tentatively called “Retail’s Night Out” for spring 2022. The goal of the event is to reinvigorate the former grocer’s fall conference and expand the audience and attendance to all MRA members. We’re looking to build a can’t-miss event where you’ll get a host of new ideas to take back to work and plenty of networking opportunities. “As we make our way out of the COVID-19 pandemic, we’re eager to meet in person again,” says MRA President & CEO Bill Hallan. “Come spring, we expect more event venues will be available. We’re also hopeful that the workforce shortage will fade by then, and retailers will be able to step away from their stores to attend the event.” Stay tuned for details.

HAPPY RETIREMENT

Don Symonds The entire Lipari Foods organization is proud and grateful to have had a true ambassador and friend to the grocery industry as part of our team for the last 20+ years! Congratulations, Don!

Keep "livin' the dream!" Keep "livin' the dream!" Keep "livin' the dream "livin' the dream!" Keep "livin' the dream!" Keep "livin' the dream!" Keep "livin' the dream!" Keep "livin' the dream!" Keep "livin' the dream 12 JULY/AUGUST 2021

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Don Symonds to retire after 53 years in food industry “I’ve always heard the saying, ‘when it’s time to retire, you’ll know it.’ Well, I know it.” That’s a quote from Don Symonds, director of events and trade relations for Lipari Foods, during a recent chat with Michigan Food News Editor Lisa Reibsome. Don announced that he will officially retire on Aug. 7, 2021. “The pandemic has made me think differently about the future,” he says. “During the last 15 months, I’ve discovered how much I enjoy being at home.” That strengthened his desire to retire this year. “I’m so fortunate to have worked for what I think are three of the best companies in the country,” he says. “I’ve enjoyed every minute of it, but I’m ready to move on.” Don’s career began as a bagger for Meijer in 1968. He later held a variety of positions with Meijer including store director in Michigan and Ohio. After that, he worked for Spartan Stores as a retail counselor, merchandising supervisor and purchasing manager. Don joined Lipari Foods in 1996. Before becoming director of events and trade relations, he was regional sales manager and then marketing director. “It’s all been so much fun,” Don says. “I’ve met so many amazing people and developed many lifelong friendships.” Don spent a large part of his career serving on many trade association boards including Michigan Grocers Association. Elected in 2010, he always brought plenty of energy and good ideas to every meeting. He was also an enthusiastic supporter of MGA’s annual events. When MGA became a division of Michigan Retailers Association in 2018, Don became part of the Grocers Division Advisory Board.

Above left to right: Don in 1986 as Meijer store director. Don and his wife, Sandi, at a Lipari Foods event in 1996. Don — flanked by Bryan Neiman, Neiman’s Family Market, and John Leppink, Leppink’s Food Centers — at MRA’s 2019 Legislative Reception. Beluga Pool Solutions, has really taken off,” he says. “It’s something where the whole family gets involved, which I really enjoy. I will be spending a lot of time on that.” People who know Don well know that he loves to fish. “We have a cottage in Beaverton on a great fishing lake, so I plan to spend a lot of time fishing,” he says. “I’m going to look for as many lakes as possible with big bass just waiting to be caught.” While traveling also makes his retirement list, his number one objective is to enjoy more time with his family. “One of my favorite ways to spend time is with my grandchildren,” he says. “When I play with them, the cares of the world disappear for a while.” For those of us not yet ready to see Don leave work behind completely, there’s good news. “I really am retiring, but there’s a chance you’ll still see me around,” he says. “I’ve got a meeting scheduled with Thom Lipari to talk about consulting for the upcoming Lipari show in March. I’ve already put so much work into making that a fantastic event. I may not be quite ready to let it go.”

“Don’s expertise, connections and willingness to help made him a valuable member of the grocers advisory board,” says MRA President & CEO Bill Hallan. “We appreciate his strong support of the association and wish him the best in his retirement.”

What advice does someone closing out a successful career of more than five decades have for the rest of us? “Step out of your comfort zone and do more than what’s in your job description,” Don says. “I know from experience that the times I’ve helped other departments get a job done and the times I’ve gotten involved in trade associations and other industry groups, not only helped my career but also increased my enthusiasm for it.”

It shouldn’t surprise anyone to learn that Don’s got a long list of plans for how to spend his retirement. “My family business,

Maybe that’s the secret to Don’s ability to be “livin’ the dream” every day. MICHIGAN FOOD NEWS

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Government Affairs News Gov. vetoes bills to provide tax refund for businesses

Gov. Gretchen Whitmer vetoed two bills that would have provided a tax refund for businesses to help defray the cost of complying with state-mandated safety protocols during the COVID-19 pandemic. The MRA-supported bills would have created a rebate for sales and use tax paid by businesses on personal protective equipment (PPE) purchased between March 10, 2020, and Dec. 31, 2021. PPE typically used in manufacturing operations is already exempt from sales and use tax. The bills would have extended the exemption to businesses and covered PPE and supplies related to COVID-19, including plexiglass and disinfecting products. The governor said she vetoed the legislation because it created a tax credit, rather than a grant program. “I am supportive of a grant program to help small businesses defray the cost of purchasing personal protective equipment to keep their employees safe during the COVID-19 pandemic,” she wrote in her veto letter. “Unfortunately, House Bills 4224 and 4225 fall short because they would create a tax credit rather than a grant program, making the expense ineligible for American Rescue Plan dollars.”

Bill introduced to increase commission on Lottery sales

Rep. Roger Hauck (R-Union Township) introduced House Bill 4981 to increase retailer commissions on Lottery ticket sales. Specifically, the bill would: n Increase sales commission to retailers from 6% to 7% for each ticket sold. n Increase retailer sales commission to 9% for tickets sold between Sept. 30, 2021, and Oct. 1, 2022. n Eliminate the current flat bonus commission on various winning jackpot or top prize-winning tickets and replace it with a bonus commission of 1% if the winning ticket is $1 million or more. The House Regulatory Reform Committee heard testimony on the bill but has not yet voted on it. The testimony focused on how retailer commissions have not increased in almost two decades, and that Michigan retailers receive far less commission than retailers in other states. 14 JULY/AUGUST 2021

MICHIGAN FOOD NEWS

Bill to provide a distributor credit for returnables advances The Michigan Senate Regulatory Reform Committee approved two bills, House Bills 4443-4444, to give distributors an income tax credit of a half cent per deposit container if the bottle deposit fund balance exceeds $50 million.

The Michigan Department of Treasury recently announced that the state collected $108 million in unclaimed deposits for 2020. Amendments were added to HB 4444 to hold the first $50 million in the escheats fund harmless and add in a sunset after FY 2021. MRA is neutral on the bills, sponsored by Rep. Jim Lilly (R-Park Township) and Rep. Kevin Hertel (D-St. Clair Shores), since they ensure that the retailers’ portion of the unclaimed escheats will not be impacted. The bills already passed the House and now go before the full Senate for a vote.

Bills create new bottle bill enforcement fund

The Michigan House passed a bill package, House Bills 47804783, to shift the distribution formula for unclaimed bottle deposits that are returned to the state to include $1 million to a new Bottle Bill Enforcement Fund. Of the remaining unclaimed bottle deposit money, 75% would go to environmental cleanup and 25% would go to retailers. The bills: n Require a distributor to originate a 10-cent deposit on sales to a dealer of nonrefillable containers of a nonalcoholic beverage and to maintain a record of the deposits. n Create enhanced criminal penalties, based on the value of the filled beverage containers of nonalcoholic beverages, for a distributor who violates the above provision with the intent to defraud and cheat. n Create the Bottle Bill Enforcement Fund and direct money designated to the new fund to the Michigan Department of State Police (MSP). MRA is concerned about the open-ended enforcement powers created by the bills and about the funding being directed to the MSP. MRA will work to add amendments to the bills in the Senate to address these concerns.

Bill introduced to lower the age to sell alcohol

The House Regulatory Reform Committee heard testimony on an MRA-supported bill, House Bill 4232 introduced by Rep. Michele Hoitenga (R-Manton), to lower the minimum age to sell or serve alcohol from age 18 to 17. Committee members also discussed the possibility of lowering the age to sell or serve alcohol to 16 in a further effort to help businesses find employees. The committee did not yet vote on the bill.


High-Water Mark

Research shows bottled water sales keep growing BY LISA J. REIBSOME, EDITOR

Bottled water, the biggest beverage category by volume in the U.S., grew again in 2020, and it did so at a faster rate than in 2019. This is the recent finding from Beverage Marketing Corporation (BMC). Total bottled water volume grew from almost 14.4 billion gallons in 2019 to 15 billion gallons in 2020, an increase of 4.2%, compared to an increase of 3.7% the previous year. Different crisis, different responses Bottled water volume has grown every year since 1977 with one exception: During the financial crisis in 2008-2009, bottled water saw a small decline. Then, from 2010 on, bottled water volume has consistently grown at solid single-digit percentage rates — passing a major milestone in 2016, when it surpassed carbonated soft drinks to become the largest beverage category by volume in the U.S. Beverage sales faced another crisis in 2020: the COVID-19 pandemic. This time, however, demand increased, especially early on. Consumers stocked up on what they considered to be essential goods and this meant buying more bottled water. “Bottled water had already demonstrated the appeal of essential qualities like affordability, portability and convenience,” observes BMC Chairman and CEO Michael C. Bellas. “The pandemic showed how consumers have come to depend on bottled water for healthy, calorie-free hydration and refreshment.” Consequently, per capita consumption surpassed 45 gallons in 2020, while average intake of carbonated soft drinks (the

U.S. Beverage Market Changes in Volume & Retail Dollars By Segment 2019-2020

Percent Change Volume Retail Dollars

Segments Ready-to-Drink Coffee

13.0%

10.1%

Sports Beverages

5.5%

5.9%

Bottled Water

4.2%

4.8%

Energy Drinks

2.5%

1.3%

Value-added Water

2.4%

0.1%

-3.7%

-6.3%

Ready-to-Drink Tea

-3.3%

-6.7%

Fruit Beverages

-3.0%

-2.7%

Carbonated Soft Drinks

Total

0.5% -1.7%

Source: Beverage Marketing Corp.

former number one category) dipped to about 35 gallons. As a comparison: At the turn of the century, per capita soft drink consumption regularly exceeded 50 gallons. BMC expects bottled water to reach that level by the middle of the 2020s. Single-serve rules the market Single-serving sizes are the most popular bottled water option, accounting for the majority of the category’s volume. In 2020, single-serve volume grew by more than 4% and dollar sales grew by almost 5%. Michigan: That’s in line with what grocers in Michigan are seeing. Leppink’s Food Centers reports that bottled water sales were up about 5% in 2020. Water sales show no sign of stopping. “Over the last 6 months, bottled water sales are still trending about 5% up over last year,” says Robert Leppink with Leppink’s Food Centers. “The issue we’re facing right now is getting water in. The demand is so high that the supply chain is having a tough time keeping up.” Nationally, bottled water had four entries among the leading trademarks in 2020 — Nestle Pure Life, Poland Spring, Dasani and Aquafina. But only Poland Spring grew. According to BMC, that’s because consumers turned to either high-end brands or value-priced brands/private label brands during the pandemic. Leppink’s reports that they are seeing increased sales for both private label and national branded water. Over at Orchard Markets, owner Alex Rogalla says that private label bottled water sales have increased over the past year “and continue to be a strong seller within the bottled water category, especially in the 24-count packages.” “Recently, the Our Family brand introduced a new 24 countpackage that includes alkaline,” Rogalla says, “but there is not continued on page 17 MICHIGAN FOOD NEWS

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Wet Your Whistle

Beverage alcohol sales post largest gain in nearly 20 years BY LISA J. REIBSOME, EDITOR

New research from IWSR Drinks Market Analysis — a global data and analysis firm — suggests that the COVID-19 pandemic drove us to drink. IWSR data shows that total beverage alcohol consumption in 2020 experienced the largest volume gain in nearly 20 years in the U.S. The total volume of beverage alcohol for both on- and off-premise sales was up +2.0%. Good news for grocers: Total beverage alcohol volume in the U.S. grew by +13.2% in the off-premise channel last year. Alcohol sales remain strong in 2021 IWSR research published in June 2021 found that, while alcohol sales in 2021 are less than they were in 2020, year-to-date 2021 performance is higher than in 2019. IWSR expects the year to end with +3.8% growth in total on- and off-premise volume and +5.5% increase in total on- and off-premise value. “A key driver of U.S. beverage alcohol consumption is flavor,” says Brand Rand, IWSR’s COO of the Americas. “Flavored sub-categories — from beer to vodka to U.S. whiskey — are significantly outperforming traditional non-flavored sub-categories. Flavor is also the top consumer driver of the fast-growing ready-to-drink category, and that’s likely creating a halo effect on total alcohol as well.” RTDs to become second largest beverage alcohol category The biggest gains in beverage alcohol consumption last year were seen across the ready-to-drink (RTD) category, which includes the popular hard seltzer sub-category. This makes RTDs more sizable in volume than total spirits. And, by the end of 2021, IWSR projects that RTDs will be larger than total wine. RTDs grew +62.3% in total on- and off-premise volume in 2020, led by hard seltzers which grew +130%. More good news for grocers: RTDs grew +79.7% in off-premise volume in 2020. Hard seltzer sales explode The market for hard seltzer has grown considerably in a relatively short amount of time. According to Statista, a company that specializes in providing market and consumer data, off-premise sales of hard seltzer in the in the U.S. increased tenfold in 2 years — from approximately $496 million in 2018 to more than $4.1 billion in 2020. Statista also reports that dollar sales of hard seltzer reached $104.9 million during the week of May 23, 2020 — up from a mere $28.1 million in the same week a year prior. That’s a 455% increase. IWSR reports that hard seltzers represent 56.7% of the total RTD category, followed by flavored alcoholic beverages (25.9%), and ready-to-drink cocktails/long drinks (6.9%). Cocktails/long drinks refer to ready-to-drink products that typically are spirits-based such as Daily’s Pouches or Smirnoff pre-mix cocktails.

Shoppers check out Woodward Corner Market’s “Liquor Wall.”

“Though the cocktail/long drink sub-category is still comparatively small by volume, the segment grew +52.7% in 2020 with canned cocktail growth spurred by on-premise closures and the on-premise pivot to ‘drinks to go,’ as well as off-premise sales for more at-home consumption and outdoor socialization,” notes Rand. In Michigan, new laws — Public Acts 16-19 of 2021 — now allow distilleries to directly ship ready-to-drink canned cocktails to retailers. This may impact canned cocktail growth in our state. IWSR says the RTD category shows no signs of slowing down. The firm expects RTDs sales to reach a 22% volume share of total beverage alcohol by 2025 —up from a 9.6% share currently.

Bottled water sales continued from page 15

enough elapsed time or targeted marketing yet to get a good feel for how it will perform over the long haul.” Nationally, dollar sales of value-added water such as alkaline water increased slightly at +0.1% from 2019 to 2020. Most other water segments, including 1- to 2.5-gallon multiserve sizes, sparkling water and imports, also grew in 2020. In fact, domestic sparkling water advanced at a double-digit rate, and imports outperformed the overall market — though both still claimed comparatively small shares of volume. Not surprisingly, the delivery segment took a hit. Volume in this segment dipped, largely as a result of more people working from home during the pandemic, resulting in fewer workplace accounts being serviced. BMC expects bottled water to lengthen its already considerable growth record over the next 5 years. MICHIGAN FOOD NEWS

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MDARD News

Let’s take a look at the anatomy of a food recall By Lisa Hainstock

Food Safety Specialist and Food and Dairy Division Recall Coordinator Michigan Department of Agriculture and Rural Development

Food safety is a top priority for the Michigan Department of Agriculture and Rural Development (MDARD), its federal and local public health partners, and the food and agriculture industry regulated by these agencies. When problems are identified through routine inspections, testing or foodborne illness outbreaks, recalling implicated food products is the best tool available to protect the public. To help you — our retail partners — better understand the recall process and how it may affect you, we’ve outlined the recall process. What is a food recall? In general terms, most often a recall is an action to remove food products from commerce due to a possible health risk to consumers.

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MICHIGAN FOOD NEWS

Who decides when a recall is necessary? Most often, issuing a recall is a voluntary decision made by a company to prevent further risk to customers and the business. In certain circumstances, federal agencies may request or require a company to recall a product. If a company decides not to conduct a recall, MDARD may issue a public health advisory about any potential risks associated with that company’s product. How does industry learn about problems that may result in a recall? There are various ways a company may find out about a problem. These include: (1) contamination found by sampling performed by the company, one of its customers or a regulatory agency; (2) consumer complaints indicating a food safety problem; (3) findings during inspections by regulatory officials


identifying violations such as under-processing, undeclared allergens or other food safety risks; or (4) contact by a regulatory or public agency about an illness that might be or is linked to a product. Once a company finds out about an issue, they may decide to immediately recall a product and initiate other control measures such as issuing a press release, notifying their direct customers, etc. How does MDARD respond to a food safety risk? When MDARD learns of a potential problem associated with a Michigan company, it investigates. This includes notifying the company and finding out what it plans to do or what it has done to correct the problem. Other actions MDARD may take to investigate include the following: n Collect and review production and distribution records. n Interview the operator and employees to gather information on the storage, production, packaging, shelf life and shipping of the implicated product. n Collect product samples and analyze for contaminants. n Place suspect product under a formal seizure; and, n Consult with federal regulatory agencies on findings. Ultimately, a determination of ongoing risk to the public must be made quickly to ensure MDARD and the company have enough information to decide what steps are needed to protect consumers. If affected product is still in commerce or in the hands of consumers, MDARD will ask the operator about their plans to address the public health and safety risk as soon as possible. These plans may include a recall.

I need to issue a recall. Where do I start? The Food Safety Modernization Act (FSMA) requires many food companies to have a recall plan in place. For those not regulated by FSMA, having a recall plan is strongly recommended. FDA and USDA have recall guidance available on their websites, and MDARD can often assist with resources as well. Reaching out to the regulatory agency early in the process is important, as they can often provide guidance on the recall process and documentation practices, including press releases, if warranted. Issuing a press release is often the best way to inform consumers about the recalled products, possible health risks and what to do with any product they have on hand. Having an up-to-date distribution and contact list ready that can be referenced and shared with the regulatory agency is an important part of any recall plan. Firms should quickly identify where the products are located and/or distributed and take steps to stop further sale and consumption of the product, including immediately contacting direct customer accounts (distributors, wholesalers, retailers, brokers, etc.). Notify them to stop selling the product and about what to do with any product on hand. Picking up recalled product from other companies or instructing them to dispose of it is the firm’s decision. Monitoring this process is also part of the recall, to track whether customers followed instructions and to account for returned or destroyed inventory. Finally, reporting this information to the regulatory agency is important to ensure they are satisfied the firm took adequate action to recall the product and protect public safety. Hopefully, this outline of the recall process will help you prepare for potential recalls. Questions? Your MDARD food inspector is always a great resource.

Meet Michigan Grocers Fund’s newest trustee

The Michigan Grocers Fund is a member-owned self-insured workers’ compensation program launched seven years ago as a solution for grocers facing expensive insurance premiums. As a member-owned program, profits from the fund are returned to the participants. The Fund is regulated by the Michigan Workers’ Compensation Agency and guided by a volunteer Board of Trustees comprised of actual participants who are entrusted with the fiduciary responsibility of overseeing the Fund’s operation. In April, the Michigan Grocers Fund added Mike Rupp, owner of Town & Country Supermarket, to the board. Mike’s been in the grocery business for over 35 years. He has a bachelor’s degree from Western Michigan University’s Food Marketing Program. He worked for Jack’s Fruit & Meat Market and Harding’s Markets before buying into Town & Country Supermarket in 1995. Town & Country now has four locations: Kalamazoo, Gun Lake, Bellevue and Pinconning. (For more about Town & Country, see the profile article beginning on page 6.)

“We joined the Grocer Fund in 2014. It was a fantastic decision to join, and it’s an even better move to stay in the Fund today,” Rupp says. “Workers’ compensation insurance premiums for the grocery industry can be one of the largest expenses of doing business, but the Grocers Fund rates are very competitive and the program’s gotten stronger every year.” Continuing board members include Chair Rich Cole, Leppink’s Food Centers; Kim Kennedy, Polly’s Country Markets; Curt DeVries, Harding’s Markets-West; Paul O’Donnell, Nino Salvaggio’s; and Dave Duthler representing Roger’s Foodland. MICHIGAN FOOD NEWS

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