Inside • Special Report: Club Channel 2 • The Future of Series 4 • Growth Drivers Series 14 • Category Leadership Series 18 • Q&A with Jennifer Warner, Raley’s 22 August 2022Grocery Insight Leading private label manufacturers examine how the segment will unfold in the coming months, along with what is coming down the pipeline in the form of opportunities to move private label product forward and what the next phase of growth looks like The Future of Private Label Merchandising:
Current President Grant Haag was ap pointed in 2018 and under his leader ship, the company opened its first stores in Montana in 2019. Haag had been Se nior VP of Department Operations for WinCo prior to his appointment. Starting Aug. 1, WinCo announced it will stop accepting credit cards as a form of payment. “At WinCo, our goal is to offer the same quality products oth er stores offer, but at overall combined lower prices. There are many different strategies and features that help us ac complish this; and eliminating credit card fees is one of them,” said WinCo through post on Facebook.
Special Report
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WinCo: WinCo started with a sin gle discount store in Boise, ID named Waremart Foods founded by Ralph Ward and Bud Williams. As Ward even tually purchased Williams’ stake in the company, Waremart grew into a small chain of stores still located predomi nantly in the Pacific Northwest. In 1999, the company changed its name to Win Co Foods and the employees took own ership of the business.
Club Channel
Costco: Costco currently has 810 warehouses worldwide with 559 in the United States. Costco’s membership traces its origins back to the 70s at a time when multiple players were toy ing with the concept of discount ware houses and another well-known banner – Price Club – had staked a spot in the business landscape. Costco and Price Club were two separate entities, the lat ter having been established in 1976 by Sol and Robert Price in San Diego, CA.
Presently, Richard Galanti is evp, Chief Financial Officer, and Ron Vachris is President, Chief Operating Officer. Sam’s Club: Sam Walton’s first Walmart store opened in Arkansas in 1962, with a vision to help consumers save money. As the retailer grew, Wal ton’s attention increasingly turned to the plight of small business owners managing their own costs of doing busi ness. In 1983, Walton opened the first membership-based Sam’s Club in Mid west City, OK. There are nearly 600 Sam’s Club loca tions across the US and Puerto Rico, led by President and CEO Kathryn McLay, who first came to the company in 2015 as VP of US Finance and Strategy. This leadership team has spearheaded a number of initiatives in 2022 that illus trate why Sam’s Club continues to lead in this channel, taking its innovation cues from the challenges for businesses and consumers and turning them into opportunity.
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Seven years later, Seattle-based lawyer Jeff Brotman and former Price Club ex ecutive Jim Sinegal used their own mon ey to open the first Costco warehouse. The companies merged in 1993 and be came Price/Costco. By 1999, the com pany had officially become Costco— what members are familiar with today. Craig Jelinek has been a Costco exec utive officer since 1995 and served as CEO since 2012. Brotman, who served as chairman of Costco’s board of direc tors nearly continuously since its in ception, passed away in August 2017.
The club channel began with the intentions and hopes of offering consumers lower priced, high-quality grocery items. Leaders within the chan nel have been able to grow and prosper year-after-year while keeping consum ers at the heart of everything they do even during challenging times. Inflation has more than doubled since the begin ning of the year, and with numbers like this, the club channel has become even more important to members and con sumers. The club channel has contin ued offering lower prices on products for their consumers who shop in store or online. Bi-Mart: Since 2004, Bi-Mart has been employee-owned with origins stemming from a mission to offer shop pers the most value for their money. The founders of Bi-Mart decided to create a membership structure so members can shop at a discounted price. The first lo cation was opened in 1955 in Yakima, WA under the leadership of first CEO and President Jack Phelan. The compa ny has approximately 80 locations. According to media reports, Bi-Mart owners subsequently sold the company to its employees in 2004, as part of a lev eraged employee stock ownership plan transaction. Throughout the years, the company opened several other Bi-Mart locations that do not require a mem bership but have continued to maintain putting its consumers first and offering affordable grocery items. In 2021, the company launched its searchable e-commerce site carrying merchandise from both Bi-Mart and Cascade Farm and Outdoor. The same year the company closed most in-store pharmacies and transferred custom ers’ prescriptions to nearby Walgreens stores. According to The Oregonian, the change impacted 56 Bi-Mart locations across Oregon, Idaho and Washington. Some initiatives that have taken place include the welcoming of new President and CEO Rich Truett.
BJ’s Wholesale: With 229 clubs and 160 BJ’s Gas locations in 17 states, BJ’s Wholesale has become the leading op erator of membership warehouse clubs in the eastern United States. The company began in 1984 as a dis count department store chain known as Zayre. While the name BJ’s was purport edly named for Beverly Jean Weich, the daughter of Zayre owner Mervyn Weich, BJ’s Wholesale Club came about after a number of changes including resigna tions, sales, spin-offs and consolida tions. The company was later acquired by Leonard Green & Partners and CVC Capital Partners in 2011 and then re turned to public markets in 2018. BJ’s Wholesale has continued offering convenient shopping options including online, pick up in-club, curbside pickup, same-day delivery and digital coupons. Current President and CEO Bob Eddy assumed his position in April 2021 fol lowing the unexpected death of then CEO Lee Delaney. Eddy first came to BJ’s in 2007 as SVP of Finance. He was serving as evp Chief Financial and Ad ministrative Officer when the company board appointed him interim CEO and then permanent CEO. In June, the company announced in its latest expansion news that it would be opening four new clubs in the next phase of its 2022 development plans. Specifically, the new clubs will be in No blesville, IN, New Albany, OH, Wayne, NJ and Midlothian, VA.
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“The next stage of private label mer chandising will be to obtain customer loyalty by not just providing the best value, but also understanding custom er needs in an evolving market,” Fisher said. “Retailers will need to be current in their private label product offerings through premiumization, health and wellness or sustainability in order to engage and retain its consumers. Re tailers will need to be engaged in digital technology to boost their products on line and make it convenient for custom ers to find their label not only on their website, but also through social media.”
“It is much tougher in 2022 versus 2021 to keep products on the shelf for retailers due to supply chain and the cost of goods due to inflation,” Coleman with Catania Oils said.
Private Label Merchandising
As for how the future of the private la bel segment will shape up for the rest of 2022 and going into 2023, “Two things I will predict: the gains private brands have recently made are a great base for continued consumer engagement, and with overall grocery sales rising, con sumers have maintained their ability to spend,” she said. “That means they’re adapting and shopping smarter for themselves and their families, looking for high-quality, innovation and value, a trend that always accrues to store brands’Privatefavor.”label suppliers anticipate a boon to the segment in response to ris ing costs of essentials forcing consum ers to seek out deals and money-saving opportunities in store and online. But price isn’t enough, suppliers caution. In order to hold consumers’ attention and gain their loyalty, suppliers will have to reflect consumers’ shopping preferenc es and demands from specific catego ries including baked goods and center store staples like cooking oil, pasta, soups and dips. “As many financial reports indicate continued inflation through 2022, private label merchandising will be sought-after by consumers as a better economic choice,” said Anu Fisher, Mar keting Manager, Lantmännen Unibake USA. “However, as we head into 2023, it will be important for retailers to not only focus on price, but also take the opportunity to meet the needs of these new customers to develop loyalty in the future.”“With the new normal in place result ing from the pandemic, private label manufacturers should be focused on growth through innovation and sustain able packaging,” said Rob Wagner VP, US Sales for Mondiv Food Products. “Inflation and supply chain are still wreaking havoc in the industry which looks to continue throughout the rest of 2022 and into 2023,” said Mark Coleman, SVP Retail Sales, Catania Oils Corporation. “Sourcing edible oils for retail, foodservice and the bulk class es of trade has been quite challenging throughout the year requiring the end user to be flexible and the need to pivot to other oils from time to time.” At this time last year, consumers were impatient to get back to a sense of nor malcy. As such, they reverted to shop ping patterns they adopted pre-pan demic. This meant reaching for familiar national brands and swapping out the budget-friendly private label groceries shoppers had relied on when so many aspects of their lives were on hold. “In 2021, consumers were coming out of the pandemic ready to go back to normal, which meant going back to their familiar national brands,” Fisher said. “According to the Food Industry Association, private brand sales com pared to 2020 decreased 4.6 percent, while national brands achieved a .2 per cent growth. The report suggests that the combination of high levels of in ventory, stimulus checks and pandemic assistance programs contributed to the decreased interest in private labels.”
“The learning curve is flattening as private label manufacturers realize from 2020 what is most important to retailers—i.e. fill order in full and on time,” Wagner said. Some private label manufacturers point out the work isn’t over once the journey of getting products from ware houses to the shelf is complete. That is often half the battle.
The private label segment has expe rienced a whirlwind of activity in a short period of time. Sales ascended to record peaks and were followed by flat growth within two years. Nevertheless private label is proving its durability and tenacity as the segment faces rising costs due to inflation and temporarily empty store shelves while waiting out supply chain roadblocks still untangling themselves. One constant throughout this volatility is consumers’ trust in private label brands coupled with their increasing ability at shopping efficiently and strategically to stretch their dollars while feeding their families. “The recent wave of store brand growth contains a great deal of good news for private label manufacturers,” Private Label Manufacturers Associa tion (PLMA) President Peggy Davies said in late May. “Private brands con tinue to show strong growth. Through the first five months of the year, through May 20, 2022, according to IRI, store brands dollar sales have surged to 7.8 percent while national brands in creased 5 percent.”
“After the highs and lows of the pan demic era—when we saw record, dou ble digit, store brand dollar sales in 2020 followed by all but flat growth in 2021—it’s reassuring that, so far this year, we seem to be returning to the middle single digit sales increases that characterized most of the decade pri or to the pandemic,” Davies continued. “But, of course, we have new forces to contend with: record-level inflation, re cession fears, supply chain issues and geopolitical unrest.”
In addition to deeply discounted pric ing, consumers value products that are readily available on shelf during their shopping trip. Retailers have responded by ensuring their private label items are accessible to time-starved shoppers.
The next phase of growth for private label merchandising requires manufac turers and retailers to offer shoppers products that fit at least one of the fol lowing boxes: good, better and best op tions; health and wellness related; and/ or made with sustainable materials. Further, digital technology is playing an increasingly major role in promoting and making consumers aware of what exists which retailers need to tap into.
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“As many financial reports indicate continued inflation through 2022, private label merchandising will be sought-after by consumers as a better economic choice. However, as we head into 2023, it will be important for retailers to not only focus on price, but also take the opportunity to meet the needs of these new customers to develop loyalty in the future.”
“Offer solutions to retailers that brands are slow or reluctant to pur sue—keeping products in stock on shelves provides a solution which fu els growth for private label manufac turers,” Mondiv’s Wagner said. “The next phase of growth is hap pening right before our very eyes as the struggle to keep products on the shelf has yielded a higher percentage of private brand product trial if the national brand is out of stock for peri ods of time,” Coleman said.
PG 6 / GROCERY INSIGHT The Future
Mondiv Food Products intends to continue driving private label mer chandising forward through filling “all orders in full and on time in an environment where branded prod ucts are experiencing sporadic service i.e. keeping shelves full,” Wagner said. “At Catania Oils, one of our greatest attributes is our ability to communi cate to the customer base,” Coleman said. “Whether it’s order updates (good or bad) or market intel, we believe the majority of the retailer community is thirsty for that kind of partnership and is the centerpiece of driving growth for both parties. One of our core values is just that: Regardlesscustomer-focused.”ofthecircumstances, the PLMA has remained a steady advocate for private label manufacturers. Two key areas of interest for the PLMA— executive education and professional development—have been priorities at PLMA for more than 20 years, Davies said. The PLMA has completed sever al initiatives and educational outreach programs with more in the works for later this year to continue its efforts to advocate for and support private label. “They have been largely carried out with annual, university-level programs we offer in conjunction with Saint Jo seph’s University in Philadelphia, PA in the US and with Nyenrode University in the Netherlands,” Davies said. “Several thousand industry professionals have completed coursework in these pro grams. In a few weeks, a new class of students will arrive on the Saint Joseph’s campus for our 2022 Executive Edu cation program. Speakers include Jac Ross from Sprouts Farmers Market, Dr. John Stanton, author and food market ing professor at the Host University, and Jim Hertel, SVP of Inmar Intelligence. To augment that important membership service, in 2021 we launched the Lunch and Learn Speaker Series. Earlier year, three L&L events were held, featuring in-depth presentations by representa tives of market researcher IRI, flavor and ingredients leader Kerry and top packaging design firm Tjarks & Tjarks, respectively. In October, PLMA will con duct a program to discuss Sustainable StoreWorkingBrands.”together is often more ben eficial and impactful than going at it alone. To continue moving private la bel forward, the PLMA reunites private label stakeholders. Its principal col laboration in the private label space is through the PLMA’s annual tradeshows. “Following two well-subscribed on line shows we conducted during the pandemic, we just successfully con cluded our first in-person show since November 2019, the ‘World of Private Label Trade Show,’ in Amsterdam,” Da vies said. “We welcomed more than 2,500 exhibitors and the visitor count equaled the number who attended the May 2019 version of the event. Both of our shows—in Chicago and Amster dam—have become well known as the place for buyers and sellers to meet and conduct business; the place for manu facturers to showcase their capabili ties and innovations; and the place for retailers and wholesalers to discover innovation in food and non-food cate gories from companies who are locat ed around the globe. Twice a year, they become the transactional hub of the retailer brands industry.”
The next phase of private label pres ents an opportunity for retailers to look at where national brands are neglect ing to match consumers’ demands and make sure retailers are addressing these issues with their own solu tions-based products.
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— Anu Fisher, Lantmännen Unibake USA
Despite the highs and lows, be it val ue-seeking consumers looking for com petitive prices or supply chain choke holds, the private label segment has proven time and again it has the where withal and stamina to continue outpac ing the overall market. of Private Label
Mondiv Food Products want re tailers and consumers to remember amidst all of the challenges they have faced this year, the company values straight-forward conversations with its partners. “Our focus as manufactur ers should be constant communication with retailers about supply chain is sues not only as changes happen, but we should proactively alert our cus tomers if we foresee any disruptions,” Wagner said. Catania Oils is sharing with retail ers that both sides of the partnership need to do their part whether it’s nim bly changing their product offering or dutifully providing a comparable alter native to the product that is delayed. When both sides do their part to make a tough situation easier, both sides can succeed. “It is imperative that the retailer creates ways to be flexible in their product offerings,” Coleman said. “Being able to pivot and adjust to sup ply chain disruptions. It is also crucial that the manufacturer be able to create other products for the retailer to put on their shelves in a timely manner. Per haps the most important and glaring need that has come from the Covid era is the need for ‘partnership’ between manufacturer and retailer. The retailers that have been receptive to a true part nership with Catania Oils both over the years and new ones created have yield ed a much greater in-stock percentage during these tough times versus those that are simply transactional.”
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Alongside grab-and-go chip bags and jerky sticks, the snacking category has expanded to include options such as on-the-go fruit and vegetable snacking solutions.
The snacking category has contin ued to grow year-after-year with new products and innovations to satisfy and fulfill consumer cravings. Catego ry leaders have been able to continue to add to the already wide variety of high-quality snacking options while re maining true to their signature recipes and company values. With a mission to create quality prod ucts that are bold and delicious, Baja Vida Snacks are crafted using fresh in gredients and unique spice blends. The company’s Baja Jerky has become a leader in the snacking category. Accord ing to the company, the category has been growing year-after-year, and it has planned to continue to innovate within the“Thespace.snacking category is going to continue to grow,” said Will Dryden, Brand Development of Baja Vida Snacks. “Baja Vida Snacks has doubled down and purchased our own beef jerky manufacturing facility to assure a solid supply chain with quality snacks. We are planning to relaunch our brand with updated packaging, and we’ll have some innovation coming towards the end of 2023. I see new, exciting snack brands popping up all the time—as we keep snacking throughout our busy days, this category is just going to keep booming! Hopefully, we can all get bet ter, healthier snacks to be a staple for our friends and family.”
“Baja Snacks is going to continue to bring unique, innovative flavors from Baja for adventurous snackers,” said Dryden. “Keep your eyes peeled be cause we have some exciting snacks coming. Our relationships with our re tailers and distributors will continue to drive growth. In addition, our branding is like nothing else on the market.”
Last November, The Hershey Com pany announced it would be acquir ing Dot’s Pretzels. According to media reports, Dot’s Pretzels are the perfect complement to Hershey’s growing snacking profile. “As the fastest growing US pretzel brand, Dot’s Pretzels would further accelerate our success in the permis sible salty snack category, along with our successful SkinnyPop and Pirate’s Booty brands,” said Michele Buck, The Hershey Company President and Chief Executive Officer. “With a unique range of bold, distinctive seasonings and a flavorful crunch that creates a premi um pretzel experience for consumers, Dot’s Pretzels stand apart from all oth er products in the pretzel category and represents 55 percent of the pretzel cat egory’s growth during the past year.”
“One of our successes was the launch of our Bliss Bento lineup,” Steven Ware, VP and General Manager, Valued Add ed for Naturipe Farms said. “The flavor profile and the low-calorie count have provided a nice balance for a healthy indulgent snack. These have been very well received by retailers and consum ers, and the distribution of this new line continues to see strong growth.”
Looking at the challenges presented within the last two years, Dryden men tioned the company has continued to adapt and work through those issues to ensure consumers receive high-quality, premium snacking solutions. “The category continues to grow and it’s just a new year with new challeng es,” said Dryden. “Last year at this time, Covid was still so uncertain and felt much more threatening, and as that felt like it was getting better, we hit more supply chain issues, inflation, reces sion—all that fun economy stuff. I think every brand is just continuing to work through obstacles and do the best that they can to navigate these uncertainties while keeping bellies filled with good, healthy“Moresnacks.”andmore people are focused on their health and finding better op tions to feed their families, so healthy snacks that taste delicious are going to keep booming,” said Dryden. “It’ll also be interesting to see how the plantbased snacks grow, and with apopto genic ingredients becoming such a huge trend—I bet we’ll see more snacks in corporate those. Will the plant-based category have an impact? My bet is not for a long. Most plant-based snacks are lacking a key factor: delicious flavor!”
“Honestly, we’ve got a great team, and we’ve really come together,” Ware con tinued. “Looking back, we initially had some concerns about releasing a new product during the current uncertain ty and constantly changing environ ment. However, we see that now more than ever, there is a focus on health and immunity, which creates the demand for nutritious and immune-boosting products. Our Bliss Bentos satisfy this demand with their antioxidant-rich blueberries combined with other goodfor-you ingredients like granola, nuts and“Wechickpeas.”havebeen creative about where Frooze Balls are found in store,” said Cherie Jackson Frooze Balls CEO. “Well ness snacking blurs the lines across sev eral different traditional supermarket segments. Merchandising fruit-based snacks in the produce section, as a hang sell in the dried fruit and nut section, at the front counter for an impulse pur chase, with nutritional bars or even in the spreads section as a portable PB&J solution are all ways to capture the interest of new customers and drive growth. Of course, being front and cen ter in consumer’s minds and making sure that their best interests are at the heart of what we do will naturally grow the category.”
Snacking
Another leader in the category, Dot’s Pretzels is a family-owned business with bakeries located in North Dako ta, Arizona and Kansas. The company started in North Dakota and uses the highest quality ingredients to create ev ery batch of pretzels. Dot’s has several recipes and products such has its Origi nal Seasoned Pretzel Twists, Southwest Seasoned Pretzel Twists and Pretzel Crumbles, which is used as a crispy rub or topping for different recipes. Recent ly the company added Honey Mustard Seasoned Pretzel Twists to its product line. “We are so happy to finally have the Honey Mustard flavor reaching shelves and the hands of our fans,” said Found er Dorothy Henke. “We want everyone to have a Dot’s flavor to enjoy so it’s important for me to listen to feedback from everyone out there eating Dot’s.”
In the hopes of bringing consumers new and improved flavors, the compa ny has continued to expand and evolve within the “Consumerscategory.arechanging their men tality about indulgence. They are more open to ‘treating’ themselves as part of a balanced lifestyle. New flavors and platforms are going to continue to drive people to this category. Our plan is to bring continued disruption into the category by creating unique platforms and flavors,” said Parisi. “In particular, we are focused on nostalgic indulgent treats where we feel we can put a new fresh spin on things.”
For more than 70 years, Ferrero North America has been in the confec tion industry making delicious prod ucts. The company started as a small family bakery in Alba, Italy, and today, its presence reaches 55 countries on five continents with brands distribut ed in more than 170 countries. Under the leadership of Giovanni Ferrero, the company has stayed in the family gen eration after generation. The company has several brands in cluding Nutella, Tic Tac, Ferrero Pre mium Chocolates, Kinder, Butterfinger, Crunch, Baby Ruth, Fannie May and more. Recently, Nutella launched a limited edition “Breakfast Across America” jars in an effort to give consumers an idea of signature breakfasts other regions within the country enjoys. The jars fea ture 16 landmark locations including Lake Tahoe, Napa Valley and Niagara Falls with corresponding breakfast rec ipes.In May, the company showcased sev eral innovations and partnerships at the 2022 Sweets & Snacks Expo. “The innovations we’re unveiling at this year’s Sweets & Snacks Expo will excite and attract new consumers, as well as expand our power brands into new categories and consumption mo ments,” said Jim Klein, Chief Custom er Officer, Ferrero US before the show. “Launching impactful innovations and building strong customer partnerships will continue to deliver category growth and drive our success in the US.”
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More recently, Kruger shifted to the use of sustainable cocoa. The manufac turer launched the initiative as the ‘coca commitment,’ which is connected to the Rainforest Alliance and Fairtrade stan dards.
“We seem to be through the worst of the supply chain bottlenecks but infla tion is something we will all be dealing with for some time,” said Parisi. “Focus ing on brands that remain committed to quality and community are going to be key for weathering the storm.”
Chocolate confections have contin ued to be not only a way to fulfill a sweet tooth craving but also remain a comfort treat or snack. Chocolate confections leaders have been innovat ing and producing delicious chocolate treats for decades, and their commit ment to using quality ingredients and refreshing the category has remained a constant. These companies have been able to perfect these recipes while con tinuing to create within the space yearafter-year.
Muddy Bites
Ferrero North America
Harry Lea, one of the family’s eight siblings, had a variety of occupations for years, and eventually met his wife Esther Goldman in 1905. In 1915, the couple moved around Australia and had four children, which was when Harry started catering, baking and making tof fee. Two years later, the couple opened a fruit and vegetable store in Sydney, and Lea’s European toffees were on sale as Bywell.1924, Harry and his wife decided to focus on confectionery by opening a milk bar and confectionery store called ‘King of Sweets’ with discounted prices. When the couple’s fifth child was born, they named him Darrell, and he eventu ally was the only family member to get a formal education. The store expanded to the city and opened another location in 1934. The family was going to name the company “Levy Brothers,” but set tled with Darrell Lea. The following decades, the company continued to add various confections to its inventory and expanded its presence with more locations. In 2018, Darrell Lea decided to change to 100 percent sustainably sourced co coa, and a year later launched a range of Darrell Lea Chocolate Blocks. In 2020, the company officially went palm oil-free in all of its products. To day, Darrell Lea employees more than 500 people across New Zealand, Austra lia and the US. According to the compa ny, Darrell Lea makes 1 billion chocolate bullets, the company’s line of chocolates that have a licorice center, per year. The company plans to continue expanding locally and internationally while inno vating with new flavors and recipes.
Chocolate Confections
Kruger North America Located in Chicago, IL, Kruger North America has been in the American mar ket since 2012. Since joining the market, the company grew with several brands and products through the acquisition of French Manufacturer NUTRIMAINE and in 2017, the founding of HNC Healthy Nutrition, which focuses on protein products, sports nutrition and health snacks. In 2019, the company acquired the start-up company Hafervoll GmbH, which included the production of ov en-baked flapjacks. Alongside this, the company is one of the leading man ufacturers of chocolate products and processors of raw coca with product lines that range from cocoa powder, co coa mass and butter to chocolate bars, spreads, drinking chocolates and more.
Founders Jarod Steffes and Tyler DeVos started Muddy Bites after being inspired by their love of sundae cones filled with chocolate.
Darrell Lea Darrell Lea’s story began in 1888 when the Lea family made the threemonth trip from England to Sydney.
“The chocolate confection category remains strong, driven by Millennials and Gen Z who are consuming more chocolate in 2022 indicating contin ued excitement and momentum for the category in 2023,” said Michael Parisi President of Muddy Bites. “Consumers are more comfortable going into retail locations than they were this time in 2021, making innovation a lot easier to discover. A win for brands looking for trial and awareness.”
Myers says that the challenges man ufacturers have been faced with are in evitable, but the company has been able to work through and prosper despite the pressures and obstacles. “Yes, these challenges are undeniable,” he said. “Everyone is facing them—suppliers, manufacturers, customers and consum ers. But Benestar Brands believes the manufacturers who will survive these pressures will not only innovate new products that provide an exceptional experience for the consumer, but also innovate new supply chain processes that will improve efficiencies to main tain the right value proposition for cus tomer and consumers for the long haul.”
“At Benestar Brands we will continue to ensure our portfolio of chicharron and meat snack brands are available when and where our consumers expect to find them, by focusing on tightly man aging our supply chain to deliver the highest level of customer service and quality,” said Myers. “Further we will in troduce breakthrough innovation that addresses the unmet needs of our con sumer base in nutrition, taste, texture and convenience. One example was the award-winning partnership with Tajin. Our 4505 Tajin flavored pork rinds are proving to be a crowd favorite.”
More than half of consumers, 51 per cent, prefer snacks with a high protein content, a trend which Benestar Brands has noticed and is capitalizing on with its pork rinds offering. “That is because consumers look to snacks as meal re placements,” explained CEO/CFO Bruce Myers. Pork snacks specifically fill a need for consumers looking for high protein snacks on the go and pork rinds are versatile in how they are consumed, whether as a standalone snack with dips or as an ingredient in a larger dish. As we expand 4505 Butcher Snacks distribution in 2023, we are well posi tioned to participate in this growth.”
Focusing on the section of the snacking category that zeroes in on protein-forward solutions, leaders in the category have been able to innovate within the space to meet consumers de mands and stay ahead of trends. Carl Buddig is a family-owned and operated company and has continued to be since its inception. The company has entered its fourth generation of fami ly ownership, and it is demonstrated through its values and commitments to producing high-quality products.
When it comes to the protein-focused snacking category, Buddig has been a leader in the category for years, and evp Thomas Buddig has noticed sever al trends over the past few years that have taken off within the category. “The line between snacks and meals have blurred significantly over the last few years, especially for younger consum ers,” explained Buddig. “Snacks as meal replacements has become mainstream with 90 percent of people snacking multiple times per day. More than 92 percent of Americans indicate that they have replaced at least one meal with a snack, and 7 percent of people snack exclusively throughout the day with no formal meals.” “As snacks continue to replace meals both on-the-go and at home, the focus on health, satiety and protein have be come increasingly important across cat egories,” Buddig continued. “Protein-fo cused snacks continue to grow across all segments—jerky, kippered fish and sausage sticks and bites. With the pop ularity of keto and low-carb diets, the combination of meat and cheese snacks looks to be on trend and growing, up more than 25 percent year-over-year. We are also seeing manufacturers intro ducing more flavor variety, like our new ‘hot and spicy’ Old Wisconsin offerings. Some companies are exploring alterna tive meat snacks and plant-based.”
Demand for snacking has increased significantly, but Buddig has recog nized it’s not just the average chip and dip, but protein-forward, meat solution snacking has made a wave in the snack ing category as a whole. “Demand for meat snacks continues to grow, mak ing supply increasingly challenging for manufacturers given supply chain bot tlenecks and inflationary pressures,” he said. “We are doing our best to meet the needs of our consumers without sacri ficing on quality and taste. The expo nential growth of the category has made it difficult to keep up with demand and some manufacturers are expanding their production capabilities to match.”
Protein Focused Snacking
Chomps started as a smaller brand within the protein-focused snacking category but has grown in popularity year-after-year. “Year to date, the meat snacks category along with all other snacking categories are seeing some unit softness versus 2021 as house holds are shopping less frequently with less units in the basket. The meat snacks and jerky category is declining -7.6 per cent and it has been one of the most impacted categories due to increased prices on shelf,” said Claire Hanold with Chomps. “Average price for the catego ry has increased more than 13 percent versus a year ago and leads total snack ing. Within meat snacks, jerky is the largest driver of both unit decline and price as meat sticks are proving to be more“Theresilient.”snacking category is moderat ing in recent months as shoppers’ con cern about rising food and gas prices grow. The average household purchases snacks every 2.9 days and shops more than 10 retailers for snacks, so having the right assortment and promotional strategy is key to capturing a fair share of the market,” Hanold said. “For brands, the average household shops around 75 snack brands per year, down slightly vs. 2021 as households are becoming more loyal to brands. Brands need to stand out more than ever before,” she continued. Hanold also emphasized why onshelf presence is important, especially in products’ ability to convey key mes sages like high protein, clean ingredi ents, low calories and low sugar: almost half of current Chomps buyers became aware of Chomps on store shelves, she said. “Prioritizing inventory and keep ing our retail partners’ shelves stocked at this time is a top priority.”
The Future of PG 12 / GROCERY INSIGHT
Looking at the growth of the category, Buddig mentioned several increases in sales and prices. “Meat snacks continue to grow by double digits and consump tion continues to be strong with money sales up 13.5 percent over the last year,” he continued. “As is the case with most items across the store, prices have gone up in the category this year, up over 10 percent across all meat snack varieties.”
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Growth In
PG 14 / GROCERY INSIGHT
Wawona Frozen Foods is keeping an eye on keto blends and won’t budge until the company has combined keto offerings with amazing tastes and flavor profiles. Until then, Wawona is aware of consumer-driven trends. “We’re watch ing the new consumer, the Gen X-ers and Gen Y-ers that they are looking for convenience,” Smittcamp said. “We are doing a lot of different things whether it’s prepackaged bowls of acai or an oat meal blend with our fresh frozen fruit on top. New products where you put it in the microwave and zap, you’re ready to go. Or single serve smoothies that are continuing to grow.” Being on the frontlines of supply chain barriers and rising costs, suppli ers lead by example through their ac tions and the way they treat others. “It’s all about communication and knowing what’s coming down the track, “Smit tcamp“There’ssaid.a human on the other side of the computer screen and the telephone,” Mateer said. “We’re all trying the best we can to create the world we want to live in. One of our core values here at Seal the Seasons is we believe that if we want to change something about the world, if we’re passionate about it and we try hard enough, we can create that change. It doesn’t always happen over night. You have to be patient with peo ple. You have to come to people on their terms. Remember everyone is human.”
For 2023, Wawona Frozen Foods is looking at opportunities for the com pany to get more value-added prod ucts closer to consumers, namely fruit smoothies which consumers are driv ing demand for. “Individual packaging for smoothies as an example, it’s an item that really has blossomed over the last three or four years for us in the Costcos of the world,” said Wawona Frozen Foods President Bill Smittcamp. “The product that we pack is one that is a smoothie blend. It’s got 6-8-ounce bags inside of it. I’d much rather pack a three-pound bag of the same material, but the consumer is driving it, and they like the convenience of that pack. In the same vein, we pack close to 100 million fruit cups for the USDA and we hope to re-enter that into the retail and the box store after the first of the year.”
“As we look forward into the rest of this year, it’s steady,” Smittcamp said. “There’s certainly isn’t going to be any thing robust because of the economy. We’re treading water a little bit and waiting until after the first of the year to launch new things. Our goal for 2022 and 2023 is to target and market some of the specialty grocery stores.”
Drivers
Frozen Fruit Aneed for convenience is driving the frozen fruit category and basket rings at retail. While consumers want to eat fruit for the sweet and juicy flavor profiles and the powerhouse of nutrients, they don’t necessarily have the time or desire to rinse, chop and serve fruit. Frozen fruit suppliers have bridged that gap between good inten tions and execution with pre-packaged frozen fruit. Even the most rushed households have time to grab a bag of frozen fruit and blend a creamy smooth ie or drop a handful of fruit over their oatmeal or salad to add a pop of color and nutrients to their meals. “Coming down to the remainder of the year, one of our exciting launches is our varietal specific offerings,” said Patrick Mateer, CEO of Seal the Seasons. “Our Ruby Junes are a specific variety of strawberry that’s naturally sweeter, have a higher Brix [Index] level than other commercially grown strawber ries. We’re thinking of it as the Honey crisp apple of the strawberry category. It’s really a noticeable difference in smell, in flavor and taste and we are launching that product across 1,500 grocery stores. It started shipping ear lier this month and we’ll start seeing it on shelves any day now. We’ll be ex panding that varietal offering across the country—our brand is all about lo cally grown, locally frozen, locally sold products. Ruby Junes are just available in the mid-Atlantic and the Carolinas of the east coast. We want to bring those same regional flavors to the east part of the country. In the northeast we’ll be launching our baby gold No. 5 peach later this year. Again, the pure peach variety for frozen and one that our cus tomers are really going to notice the dif ference.”
“There’s a human on the other side of the computer screen and the telephone. We’re all trying the best we can to create the world we want to live in. One of our core values here at Seal the Seasons is we believe that if we want to change something about the world, if we’re passionate about it and we try hard enough, we can create that change. You have to be patient with people. You have to come to people on their terms. Remember everyone is human.” — Patrick Mateer, Seal the Seasons
Mateer mentioned the frozen fruit category is enjoying the limelight and experiencing popularity much like the soymilk category previously did when consumers realized there was more to the category “than just plain old dairy milk” and ventured towards almond and oat milks. “People are trying to ex plore new innovations that have come out,” he said. “To that end, at Seal the Seasons, we’re launching a brand-new line of smoothie kits later this fall. Our smoothie kits are basically a really con venient and easy way to make a smooth ie—a shop quality smoothie at home without a lot of extra ingredients. We’ve combined our best locally grown fruits with super food gems. Each bag you get is a berry blend; it’s really delicious lo cally grown fruit. And then there’s these super food gems throughout which de pending on the flavor, like we have a plant-protein mix, the super food gems in there are pea protein, plant protein powder and powdered almond milk. All you have to do is add water and blend it up. The almond milk creates itself along with strawberries and bananas and all of a sudden you have a delicious plant protein strawberry banana smooth ie. We’re really excited to bring these easy and functional smoothies to more Americans and help more peoples start their smoothie journey and explore more of the category. We really want it to be accessible.”
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“At Benestar Brands we will continue ensure our portfolio of chicharron and meat snack brands are available when and where our consumers expect to find them, by focusing on tightly man aging our supply chain to deliver the highest level of customer service and quality,” Myers said. “Further we will in troduce breakthrough innovation that addresses the unmet needs our con sumer base in nutrition, taste, texture and convenience. One example was the award-winning partnership with Ta jin. Our 4505 Tajin flavored pork rinds are proving to be a crowd favorite and we’re excited to get that product in more stores and to a broader consumer audience.”
Growth Drivers In PG 16 / GROCERY INSIGHT
“The numbers that we see—percent growth and things like that—are still only really useful when lensed against the context of what last year looked like or even the previous year,” said Mark Singleton, VP of Sales and Marketing for Rudolph Foods. “There’s still a lot of noise in the numbers but overall people are continuing to discover that pork rinds have 7 grams of collagen, are a protein snack, zero carbs and un like what they’ve been taught all these years, we’re a genius junk food. We’ve got a good story to tell if people will just listen. Even though the category is flat, I have high hopes; well, I know it’s going to continue to grow just because household penetration is still rather low. When contextualized against pret zels and popcorn, we still have 1 out of 5 consumers eating them. If we get to 1 out of 3, that’s a 50 percent growth in the category. I think there’s tremendous runway for the category.”
“I’m really objecting to the word ‘diet,’” Singleton went on to say. “There couldn’t be a better trend for pork rinds than educated eating. People aren’t di eting. They have found what works for them. They’re sticking to it because they figured out they don’t have to be hungry to lose weight. They don’t have to be unhealthy to lose weight. They don’t have to starve to lose weight. Eat ing the right things at the right times at the right amounts when combined with exercise and adequate hydration leads to some miraculous stories.” “Everyone thinks we’re bubba food and I appreciate every [traditional pork rind consumer] with a paycheck who pays for a bag of pork rinds,” he said. “About one-third of our market is col lege educated women with $100,000plus income. That’s a totally different consumer and requires a totally differ ent product, by the way. You’re not go ing to get away with a cheap looking bag of homemade pork rinds selling to that consumer. It’s got to be elevated.”
Now that people understand they can eat healthier and still enjoy the taste of their food, the next phase of growth for the category includes ensuring flavors and textures are appetizing so that con sumers don’t bail on their better for you eating journey. “We’ve seen the catego ry start to include other sources of pro tein like plants and beverages to offer consumers more choices that fit their lifestyle,” Myers with Benestar Brands said. “But there is a high level of dissat isfaction with taste and texture of these snacks which look to mimic existing carb-laden snacks like chips. For that reason, consumers continue to crave meat-based protein snacks. In recent focus groups, consumers told us there is nothing like tearing into a meat stick. It satisfies an innate desire for flavor, tex ture and interaction with your food that you just can’t get with other snacks. So we expect continued growth and inno vation from meat-based protein snacks as consumers blur the lines between snacks and meals, where meat-based snacks satisfy like no other protein enriched snacks can. Consumers will continue to challenge brands to devel op holistic snacks options that not only give you the flavors and textures you crave, but with a better for you nutri tional profile that allows you to indulge without the guilt and help keep you on track.”This year Rudolph Foods is coming up with air-fry pork rinds which consum ers can prepare at home customized to their preferences. “Nothing tastes better than something right out of the oven,” Singleton said. “The same pel lets that we take to our plants—we fry them, we season them, we put them in bags—are going to be available all over America in an air-fry package so you can make your own and come up with your own great seasonings for them. That’s something that’s going to be re ally fun for pork rinds. And then we’re working on some pork rind salad top pers called Krutones; they’re going to be a wonderful hit. Italian herb and but ter garlic will be our first two launches –we’ll be launching those in January and they’ll be in salad aisles across America with a small pork rind crouton-sized that is a wonderful substitute for some one who is trying to get the carbs out of their diet. We’ve got some really excit ing plans there as well as continuing to push Pork Rind Appreciation Day; just a general awareness of our story.”
Pork Rinds
The perception and appearance of pork rinds have come a long way from the image of dusty convenience store shelves and crumbled bags in messy cars. Today, pork rinds are pre sented in vibrant bags and are available in tangy and decadent flavor profiles. Once a male dominated category, sup pliers’ efforts to elevate the category have taken the category to attracting more female shoppers. With a satisfying crunch and a punch of protein to help people feel fulfilled and guilt-free while snacking behind the wheel or behind their desks, pork rinds are attracting a wider net of consumers. More than half, or 51 percent, of con sumers prefer snacks with high protein content, says Benestar Brands’ CEO/ CFO Bruce Myers. “That is because con sumers look to snacks as meal replace ments,” Myers explained. “Pork snacks specifically fill a need for consumers that are looking for high protein snacks on the go and pork rinds are very versa tile in how they are consumed, whether as a standalone snack, with dips or as an ingredient in a larger dish. As we expand our field of vision beyond pork rinds, we also see that meat stick sales are up 22.4 percent. For this reason, we expect to see continued innovation in the protein-focused snacking category for the remainder of 2022 and into the future. And as we expand 4505 Butch er Snacks distribution in 2023, we are well positioned to participate in this growth.”
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Time and again the greeting cards category has proven to be an un derstated medium to stay connected with friends and family for consumers of all ages. Appreciation for the expe rience of receiving a colorful envelop with familiar handwriting is not lost on younger shoppers. One light spot in an otherwise stormy two years is that greeting cards allowed for friends and families to stay connected through social distancing. Cards are a simple yet powerful way to let someone know you’re thinking about them and that they matter. Grocery retailers that des ignate space to this category have be come a one-stop destination for shop pers who appreciate time saving and convenient shopping trips. This year Hallmark has been concen trating on how to better innovate the shopping experience for consumers. “The Covid-19 pandemic has acceler ated online shopping behavior, making a significant impact on the growth of e-commerce—forecasted to account for nearly 90 percent of global chain retail sales added in 2020, according to Edge by Ascential Retail Insight’s Glob al Covid-19 Sales Impact Report,” Amy McAnarney for Hallmark said earlier this year. “We know consumers want and expect a seamless retail experience —whenever they shop and wherever they shop. A primary focus for Hallmark is to innovate the shopping experience and partner with our retailers to make it easier for consumers to shop for their greeting cards. Hallmark is investing in capabilities that go beyond just creating a digital shopping experience—we’re helping consumers more easily connect with each other.”
“The owners continue to be com mitted to meeting the needs and de mands of our customers by responding in a timely manner to current market trends,” Garvey said. “Founded in 1982 by Jack and Vickie Gimbelman, Design er Greetings is celebrating our 40th An niversary in 2022. We take great pride in being a family-owned-and-operated company. Other companies may tout it, but we live and breathe it every day with the Gimbelman family members still at the helm. We just broke ground on a new warehouse facility adjacent to our offices in Edison, NJ that will en compass more than 200,000 square feet and will only further propel us in serv ing our grocery customers and consum ers with the same gold standard of ser vice they have come to expect from us.”
Avanti Press positioned its “Avan ti Perfect POG” to the trade in 2022 to very strong response according to com pany leaders. “This compact high-im pact Avanti-brand offering accelerates revenue-per-square-foot for grocers who give close study to that metric,” explained Chip Owen for Avanti Press. “Often positioned as an end-aisle attrac tor, the ‘Avanti Perfect POG’ delivers our positive, fun, smart, graphical greeting cards that draw quick shopper atten tion while enhancing the sales result for the entire greeting card category at grocery.”“With recent acquisitions, Designer Greetings broadened its greeting card offering with companies like Madison Park, Northern Exposure and Palm Press, offering a wide variety of looks and embellishments and more than 23,000 Greeting Card Designs,” said De signer Greetings’ Dawn Garvey. Opportunities for the Greeting Cards category and for Avanti Press to grow start with “product innovation and product differentiation,” Owen said. “That’s what shoppers want. These two items in combination have led our company to develop strong and lasting vendor relationships with the nation’s leading grocers. Especially in the last 10 years, Avanti Press has added opera tional excellence to that list. Our tagline ‘Avanti Press Delivers’ reinforces sameday shipping, fully in-stock delivery, our Made in the USA commitment, and other core values. Avanti Press plays the long game. We seek retail partners focused on successful and sustainable long-term differentiation in their mar kets.”“Designer Greetings continues to grow its core offering while also inno vating with new premium styles,” Gar vey said. “One such premium offering that is on the horizon is the launch of our pop-up greeting card line, Design er Pop, which is quickly becoming a favored preference in the greeting card industry. Our Designer Pop line will consist of intricate 3D pop-up greeting cards that are enhanced by high-end treatments, vibrant colors and comple mentary sentiments.”
Greeting Cards
Category Leadership In PG 18 / GROCERY INSIGHT
Avanti Press is a leader within the greeting cards category for its atten tion to speed and ability. Additionally, offering a product assortment that fits in a small retail footprint but packs a mighty punch is something which Avan ti Press brings to partnerships with gro cery retailers. “First things first, Avanti Press delivers a unique combination of ‘nimble’ with ‘muscle,’” Owen said. “Our strong foundation in both SBT and traditional wholesale models makes us nimble to the grocer’s business strate gy. The Avanti Press muscle is the con sistent retail sales productivity deliv ered by the world-class greeting cards in a small footprint. Our three brands —Avanti, A*Press, and America—each meet this criteria. Avanti Press is rat ed No. 1 by multiple chain retailers for both reasons: nimble operations and muscularDesignerproducts.”Greetings is a category leader because it’s committed to a high-quality of service. “Our nation al sales team is dedicated to assisting our merchandisers by providing a full service experience from pack outs, to maintaining the greeting card depart ment in-stores,” Garvey said. “Designer Greetings is able to successfully serve the customers of today’s marketplace by supplying our retailers, ensuring op timal product selection, a well-balanced pricing model, caption differentiation and“Thepresentation.”AvantiPress leadership team is passionate and sharp and a little crazy,” Owen said. “I thank my lucky stars ev ery day to have these teammates. Many companies including ours will share key strategies that worked, and certain ly, many ideas don’t work. At the end of the day, the winning innovations start and finish with a leader and her/his team who commit to improvement and excellence. We enjoy inviting customers to visit us and see our business for this reason. The magic at Avanti Press starts with the people.”
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Category Leadership In PG 20 / GROCERY INSIGHT
When Rocky Mountain Pies opened in the mid-2000s, Grandinetti and his team wanted to present a unique option for its retail customers. The company’s story goes back further to the 70s and 80s in the form of the restaurant chain Marie Callender Restaurant and Bakery Shops that opened throughout western states including California, Colorado, Idaho, Utah and Washington. In 1988, Grandinetti sold the Marie Callender locations and one year later founded another pie company—his first pie company—called Western Country Pies where Grandinetti and his team supplied pies to grocery bakeries.
Founder and President Mark Grandi netti said Rocky Mountain Pies is a cat egory leader due to “our innovation and willingness to work with our custom ers to creates points of differentiation products that will sell in their market ing area and grow their business.”
The challenges in the last couple of years have only strengthened the com pany’s relationships with retailers.
“We’ve known a lot of these people for 20-30 years,” Grandinetti said. “It’s done nothing but strengthen our relation ship, but there’s been some that have shown their true colors. [Regardless] we’re going to do our best to supply and keep store shelves full and if retailers do that, they’re going to be successful and we’re going to help them become suc cessful. We’re going to have fun. Food is fun and it creates excitement. That’s part of the magic. We still have that pas sion. We’ve got a group of core people that are just fantastic. That’s how we’re able to do what we do.”
Pies Pie suppliers have paid attention to the details and it’s paid off. Adding more fruit to their pies, adorning pies with lattice and using holiday-themed packaging to commemorate holidays has proven consumers tend to shop with their eyes. Pie is a category that fits into this shopping pattern. Beyond packaging, frothy meringues and bright fruit filling, suppliers are helping retail ers increase basket rings. Whether it’s acknowledging how limited in-store bakery ovens have become and provid ing retailers with par-baked pies that the most antiquated ovens can’t mess up, or developing a planogram that liter ally stops shopping carts in their tracks and promotes impulse buys year-round, suppliers are showing retailers that if presented correctly, shoppers will flock to their bakeries for pies every month of the Gardneryear. Pie Company’s attention to the quality of its products is one reason the company is a category leader. “We’ve always hung our hat on us ing a lot of fruit in our product, hav ing a signature flaky crust,” said Tom Cavanaugh, Vice President Sales and Marketing with Gardner Pie Company. “Staying true to our heritage which is making the best-tasting pie in our eyes that’s out there and then trying to man age the growth that we’ve experienced just through broadening the definition of what a pie is. Everybody has an ap ple, a cherry, a peach—the basics. We’ve extended that and have different flavors like a mango strawberry or a pina cola da. I say that cautiously because many of those flavors are where we’ve had to cut back just to increase our throughput now but our intention is to get back to broadening our definition of what a pie is and making sure the younger con sumer can relate and not pigeon hole it as something you get at grandma’s once a year. How do you broaden the defini tion of the category to ensure that peo ple continue to buy pies? Can you use a slice of pie as an inclusion in a milk shake? Can you take a peach pie and bake it in a smoker so you can get that hickory flavor if you will to the pie? And that makes it different. If you’re a bar becue afficionado or a barbecue restau rant, that has better meaning.” “We’re selling pies; if it’s not fun, then somehow we’ve missed the mark,” Ca vanaugh said. “We’re not selling bread and water—you must have this to sur vive. We’re upscale, better quality. We try to answer the traditionalists where you have a great tasting apple pie but we try to expand it a little bit by trying to take flavors people might not have thought of traditionally. ‘Wow, I never thought about pineapple in a pie but that tasted great’ type of thing. Tradi tionally that’s what makes us special and we need to get back to doing that. We’ve made some significant invest ments in our infrastructure and that hasn’t gone as fast as we’d like because of the labor and supply chain issues out there. We’re making an investment in our business to increase our capacity and increase our capabilities and we’ll start seeing some of that in 2023 and 2024.”“We’re trying to have a little bit of fun and brighten up your day,” he con tinued. “If you had a bad day, then we have a program selling wholes, halves and quarters that we’ve pitched to the retailers so that during the week if you’re not having a big party or it’s not a large gathering but maybe if you had a bad day at work, ‘I need to go home and have a glass of wine,’ and you want something to go with it, maybe you can pick up a slice or two and reward yourself. Have fun. That’s what it really needs to be all about.”
Af ter Western Country Pies, Grandinetti and his team sought out another way to bridge the gap to allow for consum ers to access restaurant quality pies at the retail level. Since its launch in 2006, Rocky Mountain Pies has expanded and currently offers its retail partners an as sortment of more than 700 SKUs in an effort to offer an unparalleled option for its retail “That’scustomers.howwe play,” Grandinetti said. “We go into an opportunity with a chain of stores, we’ll work with them, we’ll find out what’s important to them, and then we’ll make some suggestions of what we see and what we have in our product offering. We’ll work together to create a program that will grow incre mental sales. Without fail, every time somebody comes on board with us, and if they’ll allow us to work with them on their total program, they’ll have in creased sales. Without fail, we’ll pick them up over and above where they’re at every time. If you give people what they want, people support what they help create. Whoever that decision maker is, it makes them a hero if they can grow internally in their store chain. That’s what makes us different than a lot of our competitors; we’re willing to work with them that way.”
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IN CONVERSATION
Tell us how your career path led you to the grocery industry? How did you decide to join Raley’s in 2020? I actually exist because of grocery. My grandfather’s parents and my grand mother’s parents were both corner gro cers and my parents met at my grandfa ther’s store. My first job was as a bagger and a stocker at my grandpa’s store. I’ve always had an affinity for the grocery in dustry—grocery stores in general—and my grandpa ran one of those one-man shops; he worked all day every day of the week in the store, and I joined him when I could. I actually wanted to do something a little bit different. I didn’t have a lot of professional folks in my family, so I didn’t have role models from that perspective. I knew two profes sional jobs: doctors and lawyers. I didn’t want to touch people, and so I decided to become a lawyer. And truly I would watch Doctor Quinn, Medicine Woman with my grandmother and L.A. Law and those seemed to be the two ways to be a professional, so I decided to go to law school. I started my career as a lawyer working for law firms representing re tailers and food companies early in my career and ended up going in-house and worked at a number of in-house compa nies in different roles and went through roles that became more leadership driv en over the course of time. Most recently, I was at Columbia Sportswear where I was the VP of Le gal and I was helping lead their indirect procurement function, so a blended legal and business role. I was really en joying it and then I was called by a re cruiter who I had actually worked with before. She had been talking with Keith and Laura, and they were looking for something that is a blend of things and that’s always how my career has been: an unusual blend of things. They were looking for somebody with a legal back ground but who had business acumen who also had strategy and project man agement capability. She said ‘I remem ber you from this prior role. Would you be interested in talking to Laura and Keith on the phone?’ It was a real ly great conversation. Keith is a really thoughtful person who really gets to know people. He had actually done a lot of research on me, which was kind of remarkable. He said ‘I’ve seen every thing you’ve done. I’ve looked at your stuff online, and here’s what I think it says about you as a person. I think you are thoughtful; you care about people, and you are resilient and if that’s true, I’d like for you to come out and sit with me and talk about whether this would be a fit.’ I thought that was remarkable and just on that alone, I’ll come out and talk with you. A big part of why I joined was the nature of the opportunity but also the people. I had the opportunity to meet the leadership team on my second visit. It is good people looking to do the right thing in a thoughtful way. There are good but also highly capable, thoughtful and strategic folks here. What have been some of the high lights in your new role as President of the Raley’s operating division? You’ll hear me talk about the people a lot. I have to say the team is an incredi bly strong team and I love that we have a mix of people who have deep industry expertise, have been in the grocery in dustry for 20-30 plus years, as well as folks who come from other areas. The team is incredibly skilled, motivated, thoughtful and human-centric and so getting to work with that group of peo ple and to help continue to create and carry forward the vision has been a lot of fun. We’ve also continued to focus on our purpose-driven transformation stores. Under this new role, I got to open my first store which was our One Market store in the Roseville area. That was a really great experience because the way we think about those One Mar ket stores, these are our stores that have organic nutrition and education. We of fer a slightly different selection—more natural and organic product and also conventional product for convenience and then an education component that is meaningful. It’s meant to help people understand how to eat healthy even if they don’t naturally know how to do that. Opening that store was really fun because we do those with a test and learn. We want to make it better each time. It was a fun one to start with and we were overwhelmingly pleased with how well the community received it. Professionally, what makes the grocery industry a good fit for you? What do you enjoy the most about working in grocery? One thing that is different about gro cery from other things that I’ve done is I’ve always liked tactical things—things that you can touch and move that are real in people’s lives. Food to me is es sential. What I love about grocery is it’s not a thing people can choose to have; it’s a thing people must have in their day-to-day life. It creates a special op portunity to make that as meaningful as it can possibly be for people to make the experience, make the quality great. To me it’s an extra obligation to do that. That is something people have to have. Your opportunity is to make that as great of an experience for them as it possibly can be. Raley’s being a fam ily-owned company in the community, I will meet people who have a very per sonal experience with Raley’s as a com pany, as a part of the community and as truly part of their day-to-day lives. That’s really meaningful for us and our customers.Theother thing about that is interest ing and important is it’s also meaningful for our business. We have size scale and a level of capability and professionalism that puts us right on par with a number of large companies. We are set up like a large company, but we don’t have the constraints of a public company. We’ve still got the agility of a smaller company. We have a great combination of smaller company mindset and agility with larg er company skills and resources. That has allowed us to differentiate ourselves in what is obviously a dynamic industry in this particular moment. That makes a big difference. We don’t get constrained
PG 22 / GROCERY INSIGHT
Jennifer Warner, President of Raley’s Operating Division r
Cont'd on Pg 23
What do you feel makes Raley’s an industry leader? It is the combination of the strong commitment to family and communi ty paired with the strategic vision and ability to execute it. We have the benefit of having a large company vision, strat egy and people. We have a profession al management team that has a very strong vision, a very defined strategy and the ability to execute it well. We all care about each other as people, and we’re not constrained by a big public company set of parameters. That and paired with the fact you’ve got great people, commitment to community and family and people who have been in this company and the grocery industry for more than 30 years. It’s a really great mix of strong strategy, strong family community commitment, and then the kinds of people we need to be dynam ic and flexible and carry it forward in a way that is meaningful. We’ve shown a lot of that in the last several years as we’ve worked to transform the com pany, whether it’s the purpose-driven stores, the growth through acquisition, and thinking about continuing to move forward. How does Raley’s ensure its employees are equipped to improve their customers’ retail experience?
Q&A with Jennifer Warner, Raley’s r From Pg 22
PG 23 / GROCERY INSIGHT by some of the incredible bureaucracy you can see in really large companies. What trait(s) in yourself do you attribute most to your success? To give you some context on my background, I was raised mostly by my grandmother. And that was in part be cause my mother struggled with mental illness and homelessness. Those two are always two sides of the coin for me. I watched my mother experience the world in a way that many people didn’t have empathy for her. I watched how people viewed her, but I watched her find her own grace in that. That expe rience with my mom, it created a sense of empathy in me and a way of seeing value in every person that definitely carries through into my leadership. My team members always know that I care about them and that I value them as people, not just for what they’re con tributing, and so that creates a sense of trust that’s really important. My grandmother, on the other hand, gave me a secure foundation and a lev el of confidence that has created some sort of fearlessness in me. I’m not a particularly conventional person. I’m unconstrained by convention. If you tell me something is because it just is or that’s how we do it, that’s the kind of stuff I want to break apart. The combination of fearless, but not careless, I’m not going to be constrained by an outcome. What if there’s a bad outcome? Well, what if there is? You have to try anyway. The experience I hope that creates for the folks who work with me is they know that I care about them, and I trust them, we’re going to set an aggressive direction, but I’m also going to give them the room to experi ment in ways that are unconventional. And some of that is going to work and some of that is not. People feel comfort able giving it their all and letting things work or not work knowing I’ll be in it with them if it does work and in it with them if it doesn’t work. In shifting from being more of a ser vice provider a support function role to an operational leadership role, one thing I have found in my career is I just like to be helpful. There’s a different way of being helpful in an operational leadership role which is to empower other people to have their broadest level of contribution. And that has been really fun shifting into this role is to re frame what it means to be helpful as vi sion and empowerment and let them go into it. That’s been a rewarding part of the transition. What gives the grocery industry its resilience? It goes back to what I love about work ing in grocery, which is we are a thing that people must have. You have to be resilient. There is no other answer than to figure it out. I have had the good for tune of working in a number of different industries at this point, and I have never seen anyone scrappier, more fierce and able to just get in and make something happen than in the grocery industry. People are thoughtful and strategic and incredible executors. There’s the neces sity of being able to find a way to bring food to people that is not going to break them economically. How does grocery differ from the other industries you’ve worked in? The industry is dynamic, and the re ality is there’s not a fundamental dif ferentiator in grocery. Coming from apparel when you create a brand, one particular brand isn’t the same as an other. People are choosing to buy that particular brand. Whereas in grocery, to some degree you could say an apple is an apple. You have to find different ways to differentiate yourselves. I think that has started to become more and more experience of brand in grocery. The concept of brand in grocery is becoming increasingly important and something we’re mindful of. You have to find ways to differentiate yourselves and continue to be the party your customers want to choose to want to buy, when they can buy that same thing literally anywhere. Pace and velocity is another thing. The velocity of product coming through our stores and the level of thoughtful ness and planning it takes to do that and do that in the economic environment we have currently and the supply chain we have currently. I’m impressed with the level of agility and execution capability that folks in the grocery industry have to deal with that pace and that velocity of product. I joined the company at the onset of Covid, and everyone’s sleeves were rolled up. Everyone was fully in vested in finding every way you possi bly can to keep food on the shelves. It did create a sense of all-in community that has carried through.
One thing I’ve been impressed with here is the level of investment we make in our people. We have very deeply es tablished training programs. We value our store team resources. We’re very home-grown, deeply committed to training and there’s a whole lot of per sonal development in it as well to help people become expansive leaders. It’s not just grocery training; its human-cen tric leadership training. Servant leader ship is the foundation of all of that and a part of how we think about things. The further you go into leadership, the more it is your role to serve the organization and to serve the people that are in it. We are very committed to that; it’s a big part of the training.
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