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A Shelby Report Tribute

IGA: Putting Independent Retailers in a Position to Win In 1926, J. Frank Grimes founded the Independent Grocers Alliance (IGA) to help family-owned neighborhood grocery stores survive against the threat of emerging chains. His vision was to surround these businesses with an alliance of peer partnerships to give them equal footing against stiff competition without destroying their independent identities or community connections. Since then, the IGA brand has become a familiar sight, with its cheery red oval now appearing on more than 5,000 storefronts across the U.S. and around the globe. Some IGA stores are in their third or fourth generation of family ownership, and most have the feel and reputation of a true neighborhood grocery store. While the “Hometown Proud” feeling is a big part of the brand, upon closer scrutiny, it’s clear to see IGA encompasses much more than that in order to put IGA retailers in a position to win. IGA’s CEO attributes that legacy of brand value to a history of strong leadership. “In IGA’s first 90 years we have been fortunate to have two inspirational leaders,” said Mark Batenic, IGA president and CEO. “Founder J. J. Frank Grimes Frank Grimes led the company for 40 years. He made it grow and thrive. Then, in the 1950s, his son took over the business and, during difficult times, turned to an inspirational Baptist minister from North Carolina, Dr. Tom Haggai. Between J. Frank and Dr. Tom, they have inspired family-owned entrepreneurial grocery stores to thrive amongst the competition out there today.” For the last 90 years, IGA has provided a support system to independent retailers through resources and partnerships that help them grow and thrive in the face of intense chain competition. Even more impressive, the brand has allowed them to remain independent and connected with customers while strengthening their relationships with wholesalers and manufacturing partners. Its strategies have worked well for 90 years, but how will IGA position its independent retailers for a future in which they must become more digitally engaged with shoppers?

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Dr. Tom Haggai

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The Shelby Report of the Southeast • NOVEMBER 2016

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90th Anniversary Positioning IGA Grocers for the Future

In a time of cookie-cutter chains, IGA stores still stand out in the communities they serve, as distinctively unique today as they were when the brand was launched in 1926. “IGA is there to “The entrepreneurial business is thriving,” Mark Batenic, IGA complement and strengthen, not president and CEO, says. “IGA is in over 30 countries and 5,000 to smother. We start that discussion stores all over the world. Dr. Tom helped inspire the idea that at the beginning. Everything we do is with family-owned stores are community centers. They are more presumption and preference of both identities, important today than ever as society is more digitally oriented.” and all programs accommodate that as well.” IGA was founded to strengthen independent grocers against the emerging threat of chain store competition. But along the —Jim Walz, VP of IGA Brand Development way, the brand developed a strong food retail education program. It grew its ranks of thousands of storeowners across the U.S. and the world, encouraging their entrepreneurial spirit and community involvement, aligning them with strong brand partners and world-class educational programs, and ensuring competitive products and prices. “The independent retailer has equity in their identity and location,” according to Jim Walz, VP of IGA Brand Development. “Each IGA store features the store’s name. That’s actually part of our branding guidelines. IGA is there to complement and strengthen, not to smother. We start that discussion at the beginning. Everything we do is with presumption and preference of both identities, and all programs accommodate that as well.” “The ‘I’ stands for ‘independent,’ but going into the next 90 years it will stand more for ‘interdependent,’” Batenic added. “IGA grocers will always make their own decisions about how to best serve their marketplaces, but more and more they will Mark Batenic have to become interdependent on manufacturers and wholesalers. Shoppers have become more global because of the digital age we live in. They are as knowledgeable about products and services as the storeowner. So, IGA owners will become interdependent and rely on a network of resources, not simply on themselves.” “The ‘I’ stands for Today, IGA still serves families and communities. And while independence is still at the fore‘independent,’ but going into the next front of the brand, the “Alliance” portion of the name is becoming more significant than ever. 90 years it will stand more for ‘interdependent.’ IGA With stores in 46 of the United States and more than 30 countries, commonwealths and grocers will always make their own decisions about how to territories around the globe, IGA’s 5,000 “Hometown Proud” supermarket owners have best serve their marketplaces, but more and more they will have to entered a new era. become interdependent on manufacturers and wholesalers. Shoppers have become more global because of the digital age we live in. They are as knowledgeable about products and services as the storeowner. So, IGA owners will become interdependent and rely on a network of resources, not simply on themselves.”

National Retailer Advisory Board Serves to Guide IGA

—Mark Batenic, IGA President and CEO

A National Retailer Advisory Board (NRAB) guides IGA. It focuses on program development to increase the value of the IGA brand as a marketing differentiator. The board’s members include 12 IGA retailers, three representatives from Licensed Distribution Companies (LDC) wholesalers and four representatives from IGA Red Oval Partners. While the board meets quarterly, its executive committee meets monthly to review and facilitate the progress of agendas set by the board. “It’s my responsibility to help provide the leadership as to where we want to go and to bring the vision from other retailers to the table,” said NRAB Chairman Archie McGregor, owner of McGregor IGA Supermarkets in St. Maries, Idaho. “Our board also invites manufacturers and LDCs to the board meetings to hear their suggestions about how to make our business and their business more successful.” “As a board, our function is to make sure programs are retailer friendly and will deliver value to IGA retailers,” added Bill Price, NRAB Executive Committee member and owner of McMaken’s IGA in Brookville, Ohio. “I’m also there to give the retailer’s point of view and share my 40-plus years of knowledge in the food industry both on the retail and wholesale side.” According to Doug Fritsch, IGA SVP of retail and business development, IGA retailers have the ability to be nimble and make decisions, and the brand gives them the benefit of an entity that goes beyond a single store and recognition in a marketplace that can be confusing. “We depend on the National Retailer Advisory Board to assist and advance the IGA brand, to talk about issues and provide cost effective tools to help IGA retailers succeed in ways other independents do not have access to,” Fritsch said. “We realize the brand will not advance unless we put independent retailers in a position to win.” Executive committee member Kevin Young is the owner of three Young’s Payless IGA stores in Northern California. He was recognized as IGA Retailer of the Year in 2014 and is one of the board’s newer members. “I want to help create an atmosphere that keeps us relevant, like marketing programs to help us be successful as a group,” Young said. “I have three rural stores, and one was a pilot for IGA’s digital couponing program. They see that I’m willing to experiment and attract new customers while retaining seniors and Archie McGregor Baby Boomers.” Third-generation storeowner Gary Baker brought his Ohio-based multi-store operaA Young’s Payless store owned by Kevin Young tion under the IGA umbrella in 2004 and has served on the NRAB for three years. Baker’s IGA received the Ohio Grocers Association’s annual Pinnacle Award earlier in 2016 for operational excellence and contributions to the Ohio food industry. “We must maintain the great tradition of IGA, but we have to be relevant in the here and now,” he remarked. “That’s what the board is working hard to do. We must be relevant to today’s IGA grocer and our customers and those we’d like to have as customers. Our retailers need to have a digital presence beyond offering a website, and we’re looking to IGA to pioneer these programs for us.”

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90th Anniversary The Next Frontier of Shopper Engagement

The stores and brands that foster shopper loyalty are usually those that deliver a consistently personal and pleasant shop“Now, we’re constantly ping experience. IGA stores developing new media and digital are often recognized for content options for our retailers to help them meet the ever-evolving needs of their shoppers.” delivering on those points, but storeowners are —Jim Walz, VP of IGA Brand Development discovering that consumers now want to be engaged in new ways during their shopping visits. The question remains: How best do independent stores offer new programs and services and still retain a personal connection with their customers? “IGA has developed an overall marketing program that gives retailers access to programming in the marketplace,” Jim Walz, VP of IGA brand development, said. “It is available to the independent retailer and is further customized for them. It recognizes the fact they are independent and don’t have a full-time staff of marketing people. We started five years ago with a website program, making it possible for every IGA store to have a presence online. Now, we’re constantly developing new media and digital content options for our retailers to help them meet the ever-evolving needs of their shoppers.” Jim Walz “We’re grocers first,” said Gary Baker, owner of several Baker’s IGA stores in eastern Ohio. “IGA understands we don’t have the time to figure out how to establish or maintain a website. So, they provide these opportunities to us, and that’s half of the battle.” According to Walz, using new media opportunities helps IGA retailers better engage shoppers and connect them with value promotions offered by consumer packaged goods (CPG) manufacturing partners though email promotion programs. The brand last year launched a website-based shopper education program focused on health and

wellness and has just launched an online shopping program. IGA additionally is rolling out a program to offer retailers an option to manage their social media content through the brand. IGA also works with partners to leverage relationships with product manufacturers in bringing more value to the customer shopping experience. In 2013, IGA engaged reach | influence (reach), a marketing and analytics company focused on loyalty and digital coupon solutions for the small- and mid-market retailers, to develop the IGA Performance Insights program to bring incremental dollars from manufacturing partners to IGA customers. Participating CPG partners bring Gary Baker a value promotion exclusively to IGA shoppers, then transaction data is gathered to help the CPGs understand how their products move during the promotion One of Baker’s stores periods and gain other insights about their brands. “We’ve been involved since the inception of the Performance Insights program,” said Richard Chadwick, owner of Everyday IGA in Great Falls, Montana. “The customer doesn’t have to do anything but purchase products and the discount is applied.” Reach currently is working on launching a digital coupon platform for IGA stores. This technology will allow shoppers to have real-time coupons as they’re going through the checkout lane. “We’re aggregating coupons from nationally syndicated sources and IGA’s relationships with major manufacturers,” noted Eric Green, CEO of reach. “If I can do my part to help level the playing field and bring some price equality to help independents thrive and grow, that’s what our business is about.”

Product Differentiation Is Key for IGA Retailers

IGA offers private label brand products that have become strong marketplace differentiators largely due to consistent quality standards and effective marketing programs. Innovations within the IGA Exclusive Brand line include signature products and an upcoming organic line, as well as promotional activities that inspire product loyalty, such as IGA’s Hometown Label Savers. Launched in 2014, this community-based marketing program encourages community nonprofit organizations to collect IGA Exclusive Brand product barcodes in exchange for funding toward organizational needs. The IGA Hometown Label Savers program returns 10 cents for each qualifying label collected from shoppers and submitted to IGA USA by the participating organization. “We know of no other private label program that produces 10 cents per label,” said Dave Bennett, SVP of procurement and exclusive brands for IGA USA. “Most are a few cents or a nickel, so our program gives back double what other private label programs do for nonprofits.” Dave Bennett “We partnered with Toby’s House, a crisis nursery being built at Great Falls, where parents can drop off children without notice for up to 72 hours,” Richard Chadwick, owner of Everyday IGA in Great Falls, Montana, said. “For every label returned with the IGA PLU (price look up) code, IGA will donate 10 cents

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to Toby’s House. We’re partnering this with an in-store program where shoppers can donate change at the registers. We have shelf talkers with the Toby’s House logo in front of IGA products and promote the fundraiser in our ad every week. We just started this in July but already expect results to be terrific.” IGA also is developing two Richard new product programs to Chadwick launch in 2017. A private label offering will benefit the Partnership for Drug Free Kids. Shoppers simply purchase specific products—like water, ice cream and hamburger and hot dog buns—during the promotional period and a few cents for each qualifying item purchased will be donated to the cause. IGA previously raised $1.25 million over a five-year period for the Wounded Warrior Project. The Alliance also will roll out a new online educational program, in conjunction with GMA and CPG companies, to help shoppers learn more about the contents and origin of the products they purchase from IGA stores. Emphasizing health and wellness “We will continue to emphasize health and wellness in our product lines and are introducing a simple organic line under the IGA brand,” Bennett added. “We expect to have 21 SKUs including tomatoes, vegetables, pasta sauces, red beans, pinto beans, black beans and microwave popcorn on store shelves by the end of the year. In the future, we will be introducing new label designs that feature nutritional information, and we also expect to offer cage-free eggs by 2025.” Perhaps one of IGA’s most recognizable label promo-

tion events is IGA Days. This national overlay program is held annually in October and February, featuring sweepstakes that inspire shopper loyalty, and offering incentive rewards to top retailers. “The IGA Days, along with other customer appreciation events such as Kidsfest in July and August and our IGA Hometown Healthy Challenge in February help drive home to the local community that we’re community focused,” said Kevin Young, owner of three Young’s Payless IGA stores in Northern California. “During our community events, people will be here all day long, interacting with employees and myself.” Retailers who participate in IGA’s Performance Insights Program have additional Kevin Young opportunities to share promotional savings with their customers with two promotions supported by Red Oval partners and two private label promotions. These also generally coincide with IGA Days. “It’s a matter of making sure we continue to provide relevant, quality products within our private label,” Bennett explained. “But we also must keep up with trends in new item development or expanded category offerings, like single-serve coffee items, while continuing to offer savings to shoppers.”

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Education Offered Through the IGA Coca-Cola Institute The IGA Coca-Cola Institute is a people development organization developed by IGA and supported by The Coca-Cola Co., with the mission of advancing leadership and vocational learning to support the growth of people, workplaces and communities. Dedicated to providing learning resources for food retailers worldwide, this educational institution serves more than 8,000 businesses with blended training programs that include 100-plus industry-specific online courses divided into eight different libraries. The Institute also provides retailers and associations with their own branded online corporate universities. “The Institute has an outstanding library of courses that can play a vital role in preparing employees for their duties and even in their pursuit of a college degree,” said Paulo Goelzer, president of the IGA Coca-Cola Institute. “This online training, blended with on-the-job training, coaching, job shadowing and classroom experience in the store are all part of the employee development process.” Focusing on service and developing skills that will help associates prepare for longterm careers in the industry, the Institute provides a learning curriculum with insights into communication, teamwork and goal setting that helps associates develop valuable life skills that will serve them in any field. Paulo Goelzer “From learning plans to course materials, our training programs are specific to independent retailers,” Goelzer added. “At the end of each session we solicit feedback and constantly update our courses.”

NOVEMBER 2016 • The Shelby Report of the Southeast

90th Anniversary IGA storeowners decide how they want to use the Institute training for their employees. They can blend their own training methods with the online courses if they wish. Because they retain their independence, the decision is in their hands. “One retailer told me she used the Institute for pre-employment training,” Goelzer remarked. “If employees did not complete or could not pass the course, they would not be hired. The result was employee turnover was reduced by 50 percent.” The Institute often serves as a store’s human resources department, freeing up small businesses from having to provide those functions, while augmenting the training process for storeowners with multiple locations. Consistency from store to store is imperative as well. Along with main sponsor CocaCola, Goelzer noted other large manufacturers supporting the Institute include Anheuser-Busch, The J.M. Smucker Co. and Procter & Gamble. He credits the participation of these major brands with helping ensure store associates receive the product knowledge and safety training they need, but notes this is only a part of their role in the Institute. They also are there to help secure the grocery landscape of the future, ensuring independent grocers remain strong, particularly as superstore competition looms larger. “They recognize that the Institute helps family businesses that don’t have the resources to compete, grow and prosper,” he explained. “They understand that strong independent retailers help retain market dynamics and ensure that customers will have access to national brands and not just select store brands.” Since being founded in 1988, the Institute has expanded beyond the IGA brand and now serves 8,000 businesses throughout the foodservice industry in the U.S. and abroad. Its corporate university training is offered to the National Grocers Association (NGA) and the Retail Learning Institute, as well as IGA storeowners and their employees.

The IGA Alliance and Red Oval Partners

When J. Frank Grimes envisioned IGA more than The Red Oval Partners have this unique opportunity 90 years ago, he realized he would need to develop to communicate with independent storeowners that a strong alliance between manufacturers, suppliers, they wouldn’t have outside of the network. In turn, distribution companies and independent retailers. our retailers rely on and give preference to the Red Not only would that coalition secure the early success O v a l Partners.” of the IGA brand, it would help ensure brand lead“If I’m having an issue ership in the decades to come. with a supplier or with Dr. Haggai further recognized the my merchandiser, “IGA’s alliance with our Red need for a national brand platform to IGA gives me a Oval partners gives us information, streamline the funding process for voice,” Kevin insight and promotional tools that a its marketing events, and conceived Young, owner stand-alone independent would not be able to the Red Oval Family Partner of three get. It allows independent retailers to keep their program. He personally extended Young ’s local ‘Hometown Proud’ feel but take advantage of offers to leading food manufacturP a y l e s s national marketing programs by leveraging our ers and service companies to join IGA stores stores together.” the program, which launched in in Northern 1986 with 30 charter Red Oval Partner California, — Bill Price, owner of McMaken’s IGA, companies. says. “The Red Brookville, Ohio In the years since, many of the world’s Oval Partners look national brand manufacturers have joined this at my stores as part of an partnership to support IGA’s independent retailers. international group rather than Today, more than 30 national brands work some rural together as Red Oval Partners to sponsor stores in McMaken’s IGA many of the promotions, events and programs the middle that IGA of nowhere. retailers They create bring to the promotions local store for IGA, and commuwhich gives nity. us oppor“It really tunities for is something pricing and s p e c i a l ,” said Heidi Huff, IGA’s service. The partnership gives us a marketing director. voice where we would not normally “There is nothing else have that voice. I would have such a like it, this relation- tough time without it.” ship between retailers IGA retailers have the additional and national brands. support of the IGA Alliance, a unique Heidi Huff

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partnership that includes leading wholesalers known as IGA Licensed Distribution Centers, along with IGA Red Oval Partners. This coalition of food manufacturers and service providers offers resources that are unavailable to other independents. “The Alliance helps us to gather data and create insights around our own independents, which enables us to help manufacturers better go to market with independent stores,” Huff added. “What is happening at the independent level is different than a chain level. We don’t dictate like the chains, but we put together programs understanding independents and how they work. We can create a customized annual marketing plan with each Red Oval Partner for IGA stores.” “IGA’s alliance with our Red Oval partners gives us information, insight and promotional tools that a stand-alone independent would not be able to Bill Price get,” explained Bill Price, owner of McMaken’s IGA in Brookville, Ohio. “It allows independent retailers to keep their local ‘Hometown Proud’ feel but take advantage of national marketing programs by leveraging our stores together.”

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The Shelby Report of the Southeast • NOVEMBER 2016


90th Anniversary IGA Stores Are Known for Their Community Involvement

When disasters like fires or floods occur, most IGA storeowners will acknowledge they’re one of the first to respond in lending a hand to the community. “We had some wildfires in our area, and the fire department put out a call for bottled water through social media,” said Archie McGregor of McGregor IGA Supermarkets in St. Maries, Idaho. “We immediately got some water to them but we also put bottled water on sale for customers who wished to help with the donation. It was unbelievable how much water we moved. That’s the value of an independent store in our communities. When there’s a need, we’re there to support and seldom take any credit. “We are truly a community center,” echoed Richard Chadwick, speaking of his Montana stores. “We have a lot of long-term employees who know our customers and their children by name. We provide food donations for a school or football team’s fundraising dinners and bottled water for Richard Chadwick’s Everyday IGA in cause-related walks and runs. I


Looking Ahead to the Next 90

“That’s the value of an independent store in our communities. don’t think there’s a week When there’s a need, we’re there to support that goes by where we aren’t and seldom take any credit.” trying to do something for the community.” —Archie McGregor, McGregor IGA Supermarkets “There are many ways a store can connect with the community at large through cause marketing, but what happens is more than just raising money,” Jim Walz, VP of IGA brand development, says. “The IGA retailer enables something to happen in their community; they engage the community with their store.” The brand also is developing ways to engage shoppers through digital content and last year introduced IGA Better Choices (, a website-based shopper education program focusing on health and wellness, product freshness and sustainability. The program launched in the summer of 2015 with the help of IGA Health and Wellness Advisor and registered dietitian Kim Kirchherr, and is linked through the IGA and retailer websites. “The uniqueness about this program is embedded in the title,” Walz points out. “It is about helping shoppers make better choices by providing them with digital content that is accurate, reliable and scientific. It would be all but impossible for any independent store to do a program like this on its own.”

In 1926, IGA became a solution to uncertainty for themselves in a better position to win with shoppers as well as in the industry? independent grocery stores across the U.S. As new “Interdependence vs. generations of shoppers and advances in techindependence is nology have pushed for change in the a tough chalindustry, IGA has responded by deliv“Retailers can lenge,” said ering personal service, shopping bring shoppers into their stores with digital devices, but when they walk through Kevin Young, convenience and product value in the door it’s that personal touch that will allow owner of serving its customers. But how them to continue to win going forward. Even the mass Young ’s will IGA’s independent grocers marketers are realizing that mass marketing does not Payless adapt to increasingly crowded work any more. With the shopper, it’s always going to be stores in competition ramped up by the personal, along with extraordinary service. We call it California. forces of social media, online ‘Hometown Proud Way to Serve.’” “ H o w e v e r, shopping and digital couponing? successful “Going forward into our next 90 —Mark Batenic, IGA President and CEO retailers know we will be digitally savvy, but we will they have to work also need to connect personally with as group and share best shoppers who come into our stores,” President practices.” and CEO Mark Batenic says. “Retailers can bring shop“The industry is changing, and time is not in our favor,” pers into their stores with digital devices, but when they walk through the door it’s that personal touch that will cautioned Archie McGregor, owner of McGregor’s IGA allow them to continue to win going forward. Even the Supermarkets in Idaho. “We have to look hard to make mass marketers are realizing that mass marketing does decisions today that will put us in a position to win not work any more. With the shopper, it’s always going tomorrow. We must reach out to the younger generation. to be personal, along with extraordi- They’re the ones who are going to determine the future.” To address that need, IGA is providing resources to help nary service. We call it ‘Hometown new store operators start their businesses and is particuProud Way to Serve.’” But how will IGA retailers use larly interested in fostering relationships with small the tools of interdependence to put grocery companies with five to 20 stores. “Regional chains need to be part of an organization,” Batenic explained. “They need a larger footprint that allows them to retain their local flavor. With IGA they can retain everything that makes them unique, but they’ll have access to programs and educational benefits they would not have had on their own.” Some might say that there is no need to preserve the

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model of family-owned grocery stores in this new digital age. So, is there room for the independent retailer in the grocery landscape of the future? “Not everyone wants to shop at Walmart or Kroger,” Batenic points out. “There’s always something about shopping local, shopping small. People like to support people who support them. There’s an emotional connection you can’t put a price on. The independent family business has always been there and will always continue to be there. We have what you need when you need it, and we know you by name.” And it is an initiative built around IGA’s focus on taking care of people that will be the true differentiator for IGA going forward, added IGA SVP of Retail and Business Development Doug Fritsch. “One commonality that can take place in every IGA store and is hard to duplicate in a big box or chain is that our retailers own an extraordinary service proposition Doug Fritsch that makes shoppers think twice before going down the street,” Fritsch said. “They take care of their shoppers, recognize them by name and train their associates to be polite and courteous. We are building on that proposition with our prototype ‘Hometown Proud Way to Serve’ program. We’re also training our associates to feel more empowered and enabled to take care of shoppers and help create an extraordinary shopping experience for them.” So, while some of the grocery world might persist in embracing mass marketing and supersizing, as IGA enters its next 90 years, its independent retailers will serve their customers with a Hometown Proud focus that is the hallmark of the IGA brand. That means greeting customers with a smile, calling them by name and generally providing a personalized shopping experience. But IGA grocers also will be adapting to a new digital age in which customers demand to connect when—and where— they see fit. So that means IGA retailers will be reaching out to their customers in myriad new ways to ensure that IGA will remain relevant going forward.

10/10/16 10:05 AM

IGA 90th Anniversary  

IGA 90th Anniversary

IGA 90th Anniversary  

IGA 90th Anniversary